Document:

Exhibit 10.5

 

Execution Version

 

CONFIDENTIAL

 

 

 

Deerfield Management Company, L.P.

780 Third Avenue, 37th Floor

New York, New York 10017

 

December 10, 2020

 

Neos Therapeutics, Inc.

2940 N. Hwy 360, Suite 400

Grand Prairie, TX 75050

Attention: Richard Eisenstadt

 

Aytu Bioscience, Inc.

373 Inverness Parkway, Suite 206

Englewood, CO 80112

Attention: Josh Disbrow

 

Re:         Letter
Agreement re: Consent and Modifications to Loan Documents

 

Ladies and Gentlemen:

 

Reference is made to
that certain Facility Agreement, dated as of May 11, 2016 (amended by the First Amendment to Facility Agreement, dated as
of June 1, 2017, the Second Amendment to Facility Agreement, dated as of November 5, 2018, the Third Amendment to Facility
Agreement, dated as of March 29, 2019, the Fourth Amendment to Facility Agreement, dated as of October 2, 2019, and the
Fifth Amendment to Facility Agreement, dated as of May 6, 2020, as the same may be further amended, restated, supplemented
or otherwise modified from time to time hereafter, the “Facility Agreement”; capitalized terms used herein without
definition have the respective meanings ascribed to them in the Facility Agreement) between Neos Therapeutics, Inc., a Delaware
corporation (the “Borrower”), and the lenders from time to time party thereto (the “Lenders”,
 “we” or “us”). The Borrower has advised us that, pursuant to that certain Agreement and Plan
of Merger, among the Borrower, Aytu Bioscience, Inc., a Delaware corporation (“Aytu”; and together with
its Subsidiaries (prior to giving effect to the Merger), the “Aytu Group”), and Neutron Acquisition Sub., Inc..
a Delaware corporation, dated as of the date hereof (together with all exhibits, schedules and disclose letters thereto, the “Merger
Agreement”), Aytu intends to acquire the Borrower (the “Merger” and, together with the other transactions
contemplated by the Merger Agreement, the “Transactions”) and, in connection therewith, (a) the Borrower
has requested that the Lenders consent to the issuance of the Convertible Note (as defined below) on the date hereof, (b) the
Borrower and Aytu have requested that, on the Closing Date (as defined below), the Lenders (i) consent to the consummation
of the Merger, (ii) waive the Event of Default due to the Change of Control that would arise without such consent, and (iii) agree
to certain other amendments to, and waivers of, provisions of the Facility Agreement and the other Loan Documents, in each case
as set forth in the term sheet attached hereto as Annex A (the “Term Sheet”), (c) the Borrower has
requested that, on the Closing Date, the Lenders irrevocably waive (i) (A) the Going Concern Condition (as defined in
that certain letter agreement by and among the Borrower and the Lenders dated as of November 6, 2020) for each of the fiscal
quarters ended June 30, 2020 and September 30, 2020 and each other fiscal quarter ending thereafter and prior to the
Closing Date and (B) any Event of Default that would arise without such waiver due to the failure to satisfy the Going Concern
Condition (as defined in that certain letter agreement by and among the Borrower and the Lenders dated as of November 6, 2020)
for each of the fiscal quarters ended June 30, 2020 and September 30, 2020 and each other fiscal quarter ending thereafter
and prior to the Closing Date as required pursuant to Section 5.1(v) of the Facility Agreement and (ii) the right
to impose the default rate of interest under Section 2.8 of the Facility Agreement, or to collect interest accruing at such
default rate of interest, that Lenders had a lawful right to collect or apply with respect to any such Event of Default for failure
to satisfy such Going Concern Condition, and (d) the Borrower has requested that, on the Closing Date, the Lenders consent
to certain amendments to, and waivers of, provisions of the ABL Agreement or other ABL Documents (such amendments, collectively,
the “ABL Modification”) on the terms of the commitment letter attached hereto as Annex B (the “ABL
Commitment Letter”). The consent, waiver and other amendments and modifications described in the foregoing clauses
(b) through (d) are sometimes hereinafter referred to collectively as the “Closing Date Modifications”.
This letter agreement, including the Term Sheet and the Conditions Annex attached hereto and thereto are herein referred to collectively
as the “Letter Agreement.” The date on which the Merger is consummated is referred to as the “Closing
Date,” which shall be the date on which all conditions under this Letter Agreement are satisfied (or waived in writing
by the Lenders).

 

    

    

    

 

1.            Consent.
The Borrower has advised us that, on the date hereof, the Borrower intends to issue to Aytu that certain Unsecured Convertible
Promissory Note in the form attached hereto as Annex B (the “Convertible Note”), the proceeds of which,
if any, will be used by the Borrower to pay certain of its general corporate expenses during the period from the date hereof until
the Closing Date. In connection therewith, the Borrower has requested that the Lenders consent to the issuance of the Convertible
Note and the incurrence of the Indebtedness contemplated thereby. Provided that the Borrower and Aytu shall have executed
and delivered to the Lenders a subordination agreement, in the form attached hereto as Annex C (the “Convertible
Note Subordination Agreement”), and notwithstanding anything to the contrary set forth in the Facility Agreement or any
other Loan Document, the Lenders hereby consent to the Borrower’s issuance of the Convertible Note and incurrence of the
Indebtedness thereunder.

 

2.            Closing
Date Modifications. Upon the terms of this Letter Agreement, and subject only to the conditions set forth in Section 3
below and in the Conditions Annex, the Lenders agree that they shall be obligated to consummate the Closing Date Modifications
on the Closing Date.

 

3.            Conditions
to Closing Date Modifications. The effectiveness of the Lenders’ obligation to consummate the Closing Date Modifications
shall be subject solely to the satisfaction of the conditions precedent set forth in (a) this Section 3 and (B) the
Conditions Annex. Subject to the satisfaction of the conditions set forth in this Section 3 and the Conditions Annex,
the only representations relating to the Merger, Aytu and its Subsidiaries and the Borrower and its subsidiaries and their respective
businesses the accuracy of which shall be a condition to the Lenders consummation of the Closing Date Modifications shall be (i) such
of the representations made by Aytu and its Affiliates with respect to Aytu and its Affiliates or the related business, financials
or entities in the Merger Agreement as are material to the interests of the Lenders, but only to the extent that the Borrower or
its Affiliates have the right (taking into account any applicable cure provisions) to terminate its or their obligations under
the Merger Agreement or otherwise decline or refuse to close or consummate the Merger as a result of a breach (or failure to be
accurate, true or correct) of any such representations in the Merger Agreement (the representations in this clause (i),
the “Specified Merger Agreement Representations”) and (ii) the Specified Representations (as defined below).
For purposes hereof, “Specified Representations” means the representations and warranties set forth in Sections
3.1(c), 3.1(g), 3.1(i), 3.1(q) (solely as it relates to the execution, delivery and performance of the Amendment Documentation
(as defined in the Conditions Annex)), 3.1(aa), 3.1(hh), 3.1(pp), and 3.1(qq) of the Facility Agreement, in each case after giving
effect to the Merger and in each case with respect to both the Borrower and its Subsidiaries and Aytu and its other Subsidiaries.
The provisions of this Section 3 are collectively referred to as the “Closing Certainty Provision”.

 

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4.            No
MNPI. At or prior to 9:30 a.m. (New York City time) on the first (1st) business day following the date of this
Letter Agreement, each of the Borrower and Aytu shall file a current report on Form 8-K (the “Announcing Form 8-Ks”)
with the Securities and Exchange Commission (the “SEC”) describing the terms of the transactions contemplated
by this Letter Agreement and by the Merger Agreement (including, without limitation, the Transactions) and disclosing any other
material non-public information (in the context of United States of America federal securities laws) provided or made available
to the Lenders, the Agent, the Lender, any of their affiliates or any of their officers, directors, employees, attorneys, advisors,
representatives or agents (all such persons and entities, collectively, the “Applicable Persons”) by either
the Borrower or Aytu or any of the Borrower’s or Aytu’s Subsidiaries or Affiliates or any of their or their respective
Subsidiaries’ or Affiliates’ officers, directors, employees, attorneys, representatives or agents prior to the filing
of the Announcing Form 8-Ks. Each of the Announcing Form 8-Ks shall include as exhibits thereto this Letter Agreement
(including the annexes hereto) and the Merger Agreement (in each case, without redaction). Each of the Borrower and Aytu represents
and warrants to the Lenders, the Agent, the Lenders and each other Applicable Person that, from and after the filing of its applicable
Announcing Form 8-K, no Applicable Person shall be (or shall be deemed to be) in possession of any material non-public information
regarding either the Borrower or Aytu, any of the Borrower’s or Aytu’s Subsidiaries or Affiliates received from, or
made available by, the Borrower or Aytu or any of the Borrower’s or Aytu’s respective Subsidiaries or Affiliates or
any of their or their respective Subsidiaries’ or Affiliates’ officers, directors, employees, attorneys, advisors,
representatives or agents. Notwithstanding any affirmative disclosure obligations of the Borrower pursuant to the terms of this
Letter Agreement, each of the Borrower and Aytu shall not, and shall cause each of their respective Subsidiaries and Affiliates
and each of their and their respective Subsidiaries’ and Affiliates’ officers, directors, employees, attorneys, advisors,
representatives and agents to not, provide any of the Applicable Person with any material non-public information regarding either
the Borrower or Aytu, any of the Borrower’s or Aytu’s respective Subsidiaries or Affiliates or the Transactions from
and after the filing of the Announcing Form 8-Ks with the SEC without the express prior written consent of the Lenders, it
being acknowledged and agreed that any such consent given prior to the date hereof shall be ineffective from and after the date
of the Announcing Form 8-Ks. Each of the Borrower and Aytu hereby acknowledges and agrees that no Applicable Person shall
have any duty of trust or confidence with respect to any material non-public information provided to any Applicable Person in breach
of, or otherwise possessed by any Applicable Person as a result of a breach of, any of the foregoing covenants. Notwithstanding
anything to the contrary contained herein, in the event of a breach of any of the foregoing covenants, in addition to any other
remedies available at law or in equity, the Lenders and their Affiliates shall have the right to make a public disclosure, in the
form of a press release, public advertisement or otherwise, of the applicable material non-public information without the prior
approval by the Borrower, Aytu or any other Person. For the avoidance of doubt, the parties hereto acknowledge and agree that nothing
contained in this Section 4 shall limit the obligations of the Borrower under, or the rights of the Lenders under,
Section 5.1(xiii) of the Facility Agreement.

 

5.            Acceptance/Expiration
of Letter Agreement.

 

(a)          This
Letter Agreement and the agreements of the Lenders set forth herein shall automatically terminate at 11:59 p.m. (New York
Time) on December 10, 2020 (the “Acceptance Deadline”), without further action or notice unless signed
counterparts of this Letter Agreement (and all components thereof) shall have been fully delivered by email to each Lenders by
such time.

 

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(b)           If
this Letter Agreement is accepted by the Borrower and Aytu as provided above, the agreements of the Lenders set forth herein, other
than the consent set forth in Section 1 hereof, will automatically terminate without further action or notice upon
the earliest to occur of (i) the consummation of the Merger after giving effect to the Amendment Documentation (as defined
in the Conditions Annex), (ii) the date of the definitive termination of the Merger Agreement in accordance with Section 8.1
thereof, and (iii) September 10, 2021.

 

(c)           Each
of the parties hereto agrees that this Letter Agreement, if accepted by the Borrower and Aytu prior to the Acceptance Deadline
as provided above, is a binding and enforceable agreement (subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization and other similar laws relating to or affecting creditors’ rights generally and general principles of equity
(whether considered in a proceeding in equity or law)) with respect to the subject matter contained herein (including an agreement
to negotiate in good faith the Amendment Documentation by the parties in a manner consistent with this Letter Agreement). Nothing
in this Letter Agreement shall be deemed to require Aytu to consummate the Merger.

 

6.            Miscellaneous.
Each of Section 6.3, 6.4, 6.6, 6.7, 6.8 and 6.11 of the Facility Agreement is hereby incorporated herein by reference, mutatis
mutandis (to be interpreted, except with respect to Section 6.11 of the Facility Agreement (which shall only cover the
Borrower and its Subsidiaries), to include coverage of Aytu and its Subsidiaries as if they were Loan Parties), as if fully set
forth herein.

 

[Signature Pages Follow]

 

    4

    

    

 

Please indicate acceptance
of the terms hereof by signing a counterpart of this Letter Agreement and returning it to the Lenders, together with the Term Sheet
and the Conditions Annex attached to it, by no later than the Acceptance Deadline.

 

	 	Sincerely,
	 	 	 
	 	LENDERS:
	 	 
	 	DEERFIELD PRIVATE DESIGN FUND III, L.P.
	 	 	 
	 	By:      Deerfield Mgmt III, L.P., its General Partner
	 	By:       J.E. Flynn Capital III, LLC, its General Partner
	 	 	 
	 	By:	/s/ David J. Clark
	 	Name:	David J. Clark
	 	Title:	Authorized Signatory
	 	 	 
	 	 	 
	 	DEERFIELD PARTNERS, L.P.
	 	 	 
	 	By:       Deerfield Mgmt, L.P., its General Partner
	 	By:       J.E. Flynn Capital, LLC, its General Partner
	 	 
	 	 	 
	 	By:	/s/ David J. Clark
	 	Name:	David J. Clark
	
	Title:	Authorized Signatory

 

    

    

    

 

Agreed
to and accepted as of the date first

above
written:

 

BORROWER:

 

NEOS THERAPEUTICS, INC.

 

 

	By:	/s/ Richard Eisenstadt	 
	Name: Richard Eisenstadt
	Title:   Chief Financial Officer

 

ACKNOWLEDGED and
accepted as of the date first

above
written:

 

guarantors:

 

neos
therapeutics commercial, llc

 

 

	By:	/s/ Richard Eisenstadt	 
	Name: Richard Eisenstadt	 
	Title:   Chief Financial Officer	 

 

neos
therapeutics BRANDS, llc

 

	By:	/s/ Richard Eisenstadt	 
	Name: Richard Eisenstadt
	Title:   Chief Financial Officer

 

neos
therapeutics, l.p.

 

 

	By:	/s/ Richard Eisenstadt	 
	Name: Richard Eisenstadt
	Title:   Chief Financial Officer

 

PHARMAFAB
TEXAS, llc

 

 

	By:	/s/ Richard Eisenstadt	 
	Name: Richard Eisenstadt
	Title:   Chief Financial Officer

 

    

    

    

 

AYTU
BIOSCIENCE, INC.

 

 

	By:	/s/ Josh Disbrow	 
	Name: Josh Disbrow
	Title:   Chief Executive Officer

 

    - 7 -

    

    

 

Annex
A

 

Summary
of CLOSING DATE MODIFICATIONS TO

FACILITY
AGREEMENT AND OTHER DOCUMENTS

 

Capitalized Terms used herein without
definition shall have the meanings assigned to them in the letter agreement (such letter agreement, together with the below-defined
Term Sheet and the Conditions Annex attached hereto and thereto, the “Letter Agreement”) to which this Summary
of Terms and Conditions (this “Term Sheet”) is attached, or if not defined therein, in Facility Agreement.

 

Closing Date Modification Terms

 

Except as otherwise described in this Term
Sheet or otherwise in the Letter Agreement, the terms and conditions of the Facility Agreement and the other Loan Documents will
be substantially the same as those in effect on the date hereof.

 

	Closing Date Prepayment and Related Waivers:	
        ·     Borrower
        will prepay $15,000,000 of the principal of the Loan on the Closing Date in lieu of payment contemplated by Section 2.3(a)(v) of
        the Facility Agreement (the “Prepayment”).

         

        ·     Payment
        of the 6.25% prepayment fee contemplated by clause (ii) of the definition of “Prepayment Fees and Make Whole Interest”
        in Section 2.3(b) of the Facility Agreement will be waived with respect to the Prepayment (but not with respect to any
        other or subsequent payment, prepayment or repayment of any principal of the Loans; provided that the “make whole”
        interest payment contemplated by clause (iii) of such definition will be required to be paid assuming the Prepayment is made
        as of May 11, 2021 (i.e., make whole interest shall be payable in respect of the period from Closing Date through May 11,
        2021 as if the make whole period did not end until such date).

         

        ·     For
        purposes of clarity, except as expressly set forth above, each and every one of the payment obligations of the Loan Parties under
        the Loan Documents (including, without limitation, the payments contemplated by Section 2.3(a)(iv) of the Facility Agreement
        and the Exit Payments) shall remain in full force and effect after the consummation of the Closing Date Modifications.

         

	Consents, Waivers and Certain Amendments:	
        Subject to the terms and conditions of
        this Letter Agreement, on the Closing Date, (a)Lenders will consent to the consummation of the Merger and will waive any Event
        of Default resulting from the Change of Control that would otherwise result without such consent (including the right to impose
        any default rate of interest in connection therewith), (b) Lenders will irrevocably waive any Event of Default pursuant to
        Section 5.1(v) of the Facility Agreement for the failure to satisfy the Going Concern Condition (as defined in that certain
        letter agreement by and among the Borrower and the Lenders dated as of November 6, 2020) for each of the fiscal quarters ended
        June 30, 2020 and September 30, 2020 and each other fiscal quarter ending thereafter and prior to the Closing Date (including
        the right to impose any default rate of interest in connection therewith) and (c) Lenders will agree to such waivers and modifications
        to the Loan Documents as are reasonably necessary (as determined by the Lenders and the Borrower) to reflect the consummation of
        the Merger and the status of the Borrower as a wholly-owned subsidiary of Aytu, including without limitation:

         

        ·    Section 5.1(xiv) (reporting;
        waiving the prohibition of any action that would cause termination of registration of Borrower’s Common Stock under the Exchange
        Act)

         

        ·    Section 5.2(i) (fundamental
        changes to permit the Merger)

         

        ·    Section 5.2(xiii) (modifications
        to governing documents in connection with the Merger)

         

 

     

    

    

 

	New Guarantors:	
        Each member of the Aytu Group, other than
        Excluded Foreign Subsidiaries (as defined below) (the “New Guarantors”), shall, on the Closing Date, execute
        and deliver a Joinder to Guaranty and Security Agreement in the form attached as Annex I to the Guaranty and Security Agreement
        (collectively, the “Joinders”) and thereby become a Grantor thereunder and a Guarantor under the Loan Documents.

         

        “Excluded Foreign Subsidiary”
        means, for any taxable year of such foreign subsidiary to which Section 956(a) of the Code (as defined below) applies
        with respect to the domestic Loan Party of which such foreign subsidiary is a subsidiary, any foreign subsidiary which is a controlled
        foreign corporation (as defined in the Internal Revenue Code of 1986, as amended (the “Code”), and any Treasury
        Regulations promulgated thereunder) that has not guaranteed or pledged any of its assets to secure, or with respect to which there
        shall not have been pledged two-thirds or more of the voting equity interests to secure, any indebtedness (other than the Obligations)
        of a Loan Party.

         

	Collateral of New Guarantors:	
        ·     The
        Liens granted to the Collateral Agent by the New Guarantors shall be first-priority perfected Liens subject only to (i) Permitted
        Liens, (ii) Liens securing purchase money obligations owed by Aytu and its Subsidiaries not to exceed $250,000 in the aggregate
        at any time outstanding and (iii) any Liens in support of any royalty obligations owed by Aytu to any Lender or any Affiliate
        of a Lender.

         

        ·     The
New Guarantors will not grant any Liens on their assets to secure any obligations under the ABL Documents, and the ABL Agent shall
execute and deliver a consent, which consent shall be in form and substance reasonably acceptable to the Lenders (the “ABL
Agent Consent”), pursuant to which the ABL Agent shall consent to the arrangements contemplated by this Letter Agreement.

         

	Elimination of Conversion Feature:	The right of the Lenders to convert Loans into Conversion Shares, and the right of the Borrower to make payments in Freely Tradeable Shares, shall be eliminated in its entirety. In addition, the Notes shall be replaced with promissory notes that do not contain conversion features, and all provisions in the Facility Documents  relating to Conversion Shares, Freely Tradeable Shares, and related terms and all provisions including references to (or references to defined terms contained in) the Notes shall be eliminated (including the payment deferral described in the proviso to Section 2.3(a)(iv) of the Facility Agreement) and/or amended, as applicable, to reflect the termination of the conversion features.

                                                                                 

 

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	Amendments to Affirmative Covenants:	
        The Facility Agreement will be amended
        to provide that the following (but only the following) affirmative covenants will apply to Aytu and its Subsidiaries (other than
        the Borrower and its Subsidiaries, as to whom all affirmative covenants contained in Section 5.1 of the Facility Agreement,
        as modified by the Closing Date Modifications, will continue to apply):

         

        ·     Section 5.1(i) (Maintain
        Existence and Qualification)

         

        ·     Section 5.1(ii) (Compliance
with Laws)

         

        ·     Section 5.1(iii) (Authorizations)

         

        ·     Section 5.1(iv) (Notices
of Default, Proceedings, Material Adverse Effect Occurrences, Etc.; Additional Information Requests)

         

        ·     Section 5.1(v) (Financial
        Statements, SEC Reports, Etc.) (excluding any requirement to deliver a Compliance Certificate reflecting Aytu and its Subsidiaries
        (other the Borrower and its Subsidiaries) are in compliance with Section 5.3 of the Facility Agreement but provided that the
        SEC reports shall disclose compliance by the Borrower and its Subsidiaries with the financial covenants and any material non-public
        information contained in the related Compliance Certificate)

         

        ·     Section 5.1(vi) (Expense
Reimbursement)

         

        ·     Section 5.1(xiii) (Disclosure;
No MNPI)

         

        ·     Section 5.1(xv) (Further
Assurances)

         

        ·     Section 5.1(xvi) (Insurance)

         

        ·     Section 5.1(xviii) (Name
Changes)

         

        ·     Section 5.1(xix) (Intellectual
Property)

         

        ·     Section 5.1(xx) (Deposit
Accounts and Other Accounts)

         

 

     - 10 -

    

    

 

	Amendments to Negative Covenants:	
        The Facility Agreement will be amended
        to provide that the following (but only the following) negative covenants will apply to Aytu and its Subsidiaries (other than the
        Borrower and its Subsidiaries, as to whom all affirmative covenants contained in Section 5.1 of the Facility Agreement, as
        modified by the Closing Date Modifications, will continue to apply); provided that the additional exceptions, qualifications
        and baskets described below shall be included and shall be applicable to Aytu and its Subsidiaries (other than the Borrower and
        its Subsidiaries):

         

        ·     Section 5.2(i)(a) and
(c) (Fundamental Changes)

         

        ·     Section 5.2(iii) (Liens;
Disposition of Loan Documents Rights and Obligations); provided that the following will be added to the definition of “Permitted
Liens” for Aytu and its Subsidiaries (other than the Borrower and its Subsidiaries):

         

        o     Liens
        securing purchase money obligations owed by Aytu and its Subsidiaries (other than the Borrower and its Subsidiaries) not to exceed
        $250,000 in the aggregate at any time outstanding; and

         

        o     Liens
        securing any royalty obligations owed by Aytu to any Lender or any Affiliate of a Lender

         

        ·     Section 5.2(iv) (Indebtedness);
        provided that the definition of “Permitted Indebtedness” will be amended to provide that Aytu and its Subsidiaries
        (other than the Borrower and its Subsidiaries) shall be permitted, (i) from and after the 91st day after the Closing
        Date, to incur unsecured Indebtedness in an aggregate amount outstanding not to exceed an amount to be agreed that is subordinated
        in right of payment to the Obligations pursuant to a subordination agreement substantially similar in form and substance to the
        Convertible Note Subordination Agreement or otherwise in form and substance reasonably acceptable to the Lenders, (ii) to
        incur purchase money obligations in an aggregate amount not to exceed $250,000 outstanding at any time and (iii) to incur
        unsecured indebtedness in an aggregate amount outstanding at any time not to exceed $1,000,000.

         

        ·     Section 5.2(vi) (Asset
        Sales and Other Dispositions); provided that Aytu and its Subsidiaries (other than the Borrower and its Subsidiaries) shall
        be permitted to effect a divestiture of the Mioxsys product line and related IP. For purposes of clarity, the foregoing shall not
        limit assets sales and dispositions between the Loan Parties (including the New Guarantors).

         

        ·     Section 5.2(x) (Nature
of Business)

         

        ·     Section 5.2(xi)(b) (Payments
on Certain Indebtedness)

         

        ·     Section 5.2(xii) (Transactions
with Affiliates) (except to the extent otherwise expressly permitted by the Facility Agreement)

         

        ·     Section 5.2(xiii) (Modification
to Governing Documents); provided that Aytu and its Subsidiaries (other than the Borrower and its Subsidiaries) shall not
be subject to the obligation to notify the Lenders of any changes to such Person’s Organizational Documents that are not
materially adverse to the interests of the Secured Parties

         

        ·     Section 5.2(xiv) (Burdensome
Restrictions)

         

        ·     Section 5.2(xv) (Deposit
Accounts; Cash and Other Asset Deposits)

         

 

     - 11 -

    

    

 

	Amendments to Events of Default:	
        The Events of Default will be amended to
        apply generally to events affecting Aytu and its Subsidiaries (and will continue to apply the Borrower and its Subsidiaries); provided
        that:

         

        ·     the definition of “Change of Control” will be amended to reflect the ownership structure of Aytu and its
        Subsidiaries after giving effect to the Merger.

	Other Modifications:	The Facility Agreement and the other Loan Documents will also be amended to the extent necessary to give effect to the other provisions of this Term Sheet, including, without limitation, to reflect that (a) Aytu nor any of its Subsidiaries will be Subsidiaries of the Borrower (b) the Collateral of Aytu will not also be pledged to secure the obligations under the ABL Documents and (c) to give effect to any further reasonably necessary modifications related to the Merger.
	Intercreditor:	The Lenders will work in good faith with the ABL Agent to amend or otherwise modify the Intercreditor Agreement to the extent necessary to give effect to (a) the provisions of this Term Sheet, (b) the Closing Date Modifications (including to ABL Commitment Letter on the terms described in Annex B) and/or (c) the Merger.
	Miscellaneous:	The Amendment Documentation (as defined in the Conditions Annex) will contain customary provisions for amendments of the type contemplated by this Letter Agreement, including, without limitation, customary non-novation language and reaffirmation of the Obligations and the Liens granted by the Loan Parties.

 

     - 12 -

    

    

 

CONDITIONS ANNEX

 

The effectiveness of
the Lenders’ obligation to enter into the Amendment Documentation (defined below) shall be subject solely to the satisfaction
(or waiver in writing by the Lenders in their sole discretion) of the following conditions and the conditions in Section 3
of the Letter Agreement. Capitalized terms used but not otherwise defined herein have the meanings assigned to such terms in the
Letter Agreement (or, if not defined therein, in the Term Sheet) to which this Conditions Annex is attached.

 

1.            The
definitive agreement evidencing the Closing Date Modifications, the Joinders, the ABL Agent Consent and the other documents and
certificates executed or delivered in connection therewith (collectively, the “Amendment Documentation”), which
(a) shall be consistent, in all material respects, in each case, with the Letter Agreement and the Term Sheet, (c) shall
otherwise be satisfactory to the Agent, the Lenders, Aytu and the Borrower and (c) shall have been executed and delivered
by the Borrower and each other Loan Party party thereto to the Collateral Agent and the Lenders. The Collateral Agent and the Lenders
shall have received (i) executed legal opinions and resolutions in form and substance reasonably satisfactory to the Collateral
Agent and the Lenders, (ii) lien searches in the jurisdiction of organization (and at the location of the chief executive
office, where applicable and appropriate) of each New Guarantor, (iii) a certificate of the chief financial officer (or other
officer with reasonably equivalent responsibilities) of Aytu certifying that Aytu and its Subsidiaries, taken as a whole, after
giving effect to the consummation of the Merger, are Solvent, (iv) customary officer’s and secretary’s certificates
attaching the organizational documents of the Borrower and each Guarantor (including the New Guarantors), and (vi) documents
(including, without limitation insurance certificates and UCC-1 financing statements) effecting the requirements of clause 7
of this Annex I.

 

2.            The
Specified Merger Agreement Representations shall be true and correct in all material respects to the extent required by the Closing
Certainty Provision.

 

3.            The
Specified Representations shall be true and correct in all material respects (unless such Specified Representations are already
subject to materiality, and in such event, in all respects) as of the Closing Date or, to the extent any such Specified Representation
specifically relates to an earlier date, as of such earlier date.

 

4.            Substantially
concurrently with the execution and delivery of the Amendment Documentation, the Merger shall be consummated in accordance with
the terms of Merger Agreement without giving effect to (a) any amendments, modifications or supplements thereof or (b) waivers
or consents thereunder by the Borrower or its Affiliates, in the case of each of clauses (a) and (b) above
in this Section 4, that are materially adverse to the interests of the Collateral Agent and the Lenders and that have
not been consented to in writing (such consent not to be unreasonably withheld, conditioned or delayed) by the Lenders; it being
understood that (x) any increase in the merger consideration under the Merger Agreement or (y) any change to the definition
of “Company Material Adverse Effect” in the Merger Agreement shall, in each case, be deemed materially adverse to the
interests of the Agent and the Lenders.

 

5.            On
the Closing Date, after giving effect to the consummation of the Merger, neither Aytu nor any of its Subsidiaries shall have any
outstanding Indebtedness other than Permitted Indebtedness (which shall include all Indebtedness contemplated by the Term Sheet).

 

6.            All
actions necessary to establish that the Collateral Agent (for the benefit of itself, the Lenders and the other secured parties
under the Loan Documents) will have perfected first priority security interests (subject to Permitted Liens (which shall include
all Liens contemplated by the Term Sheet)) in the Collateral owned by each New Guarantor shall have been taken.

 

     1

    

    

 

7.            All
expenses, fees and other amounts required to be paid on the Closing Date pursuant to the Letter Agreement (including, without limitation,
the Term Sheet) shall have been paid in cash.

 

8.            With
respect to the New Guarantors, the Lenders shall have received at least five (5) Business Days prior to the Closing Date all
documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money
laundering rules and regulations, including, without limitation, the PATRIOT Act, that has been reasonably requested by the
Agent or any Lender at least ten (10) days in advance of the Closing Date.

 

9.            The
Prepayment shall have been made in cash in immediately available funds.

 

     2

    

    

 

ANNEX B

 

ABL Commitment Letter

 

[Attached.]

 

    	 	1	 

     

    

 

ANNEX C

 

Form of Convertible Note

 

[Attached.]

 

    	 	1	 

     

    

 

ANNEX D

 

Form of Convertible Note Subordination
Agreement

 

This SUBORDINATION
AGREEMENT (this “Agreement”), dated as of [●], 202[●], is entered into by and among (i) AYTU
BIOSCIENCE, INC., a Delaware corporation (“Subordinated Lender”), (ii) NEOS THERAPEUTICS, INC.,
a Delaware corporation (“Borrower”), and (iii) DEERFIELD PRIVATE DESIGN FUND III, L.P. and DEERFIELD PARTNERS,
L.P. (each, a “Lender” and, collectively, the “Lenders”, and, together with any other institutions
or other entities from time to time parties to the Facility Agreement (as hereinafter defined) as Lenders, the “Senior
Lenders”).

 

RECITALS

 

A.           Borrower
and Lenders have entered into a Facility Agreement, dated as of May 11, 2016 (as the
same has been amended prior to the date hereof and as the same may be further amended, restated, supplemented or otherwise modified
from time to time hereafter, the “Facility Agreement”) pursuant to which, among other things, Lenders agreed,
subject to the terms and conditions set forth in the Facility Agreement, to make certain loans and financial accommodations to
Borrower.

 

B.           All
of Borrower’s obligations to Senior Lenders under the Facility Agreement and the other Senior Loan Documents (as hereinafter
defined) are secured by liens on and security interests in the Collateral (as defined in the Facility Agreement).

 

C.           On
the date hereof, Borrower has issued to Subordinated Lender that certain Unsecured Convertible Promissory Note in the aggregate
principal amount of up to $5,000,000 (the “Subordinated Note”).

 

D.           As
an inducement to and as one of the conditions precedent to the agreement of Senior Lenders to consent to the transactions contemplated
by the Subordinated Loan Documents (as hereinafter defined), Lenders have required the execution and delivery of this Agreement
by Subordinated Lender and Borrower in order to set forth the relative rights and priorities of Senior Lenders and Subordinated
Lender under the Senior Loan Documents and the Subordinated Loan Documents (as hereinafter defined).

 

AGREEMENT

 

NOW, THEREFORE, in
order to induce the Lenders to consent to the transactions contemplated by the Subordinated Loan Documents, and for other good
and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the parties hereto hereby covenant and
agree as follows:

 

1.            Definitions.
All capitalized terms used but not defined herein shall have the respective meanings ascribed thereto in the Facility Agreement.
In addition, the following terms shall have the following meanings in this Agreement:

 

“Agreement”
shall have the meaning ascribed thereto in the preamble hereof.

 

“Bankruptcy
Code” shall mean Title 11 of the United States Code, as amended from time to time, and any successor statute and all
rules and regulations promulgated thereunder.

 

“Borrower”
shall have the meaning ascribed thereto in the preamble hereof.

 

     

     

    

 

“Distribution”
shall mean, with respect to any indebtedness or other obligation, (a) any payment or distribution by any Person of cash or
other property, by set-off or otherwise, on account of such indebtedness or obligation, including, without limitation, at maturity
of such indebtedness, (b) any redemption, purchase or other acquisition of such indebtedness or obligation by any Person,
or (c) the granting of any lien or security interest to or for the benefit of the holders of such indebtedness or obligation
in or upon any property of any Person.

 

“Enforcement
Action” shall mean (a) to take from or for the account of Borrower or any guarantor of the Subordinated Loan(s),
by set-off or in any other manner, the whole or any part of any moneys which may now or hereafter be owing by Borrower or any such
guarantor with respect to the Subordinated Loan (other than as expressly provided in Section 2.1 below); (b) to
sue for payment of, or to initiate or participate with others in any suit, action or proceeding against Borrower or any such guarantor,
including, without limitation, commencement of an involuntary proceeding against Borrower under the Bankruptcy Code, to (i) enforce
payment of or to collect the whole or any part of the Subordinated Loan (which shall include, for the avoidance of doubt, any demand
or collection of payment at maturity), or (ii) commence judicial enforcement of any of the rights and remedies under the Subordinated
Loan Documents or applicable law with respect to the Subordinated Loan; (c) to accelerate the Subordinated Loan(s); (d) to
exercise any put option or to cause Borrower or any such guarantor to honor any redemption or mandatory prepayment obligation under
any Subordinated Loan Document; or (e) to take any action under the provisions of any state or federal law, including, without
limitation, the Uniform Commercial Code, or under any contract or agreement, to enforce, foreclose upon, take possession of or
sell any property or assets of Borrower or any such guarantor, including the Collateral.

 

“Facility
Agreement” shall have the meaning ascribed thereto Recital A.

 

“Lender”
and “Lenders” shall have the meanings ascribed thereto in the preamble hereof.

 

“Paid in Full”
or “Payment in Full” shall mean, with respect to the Senior Loans, the date of the full payment in cash and
satisfaction in full of all of the obligations under the Senior Loan Documents (other than inchoate indemnity obligations for which
a claim has not yet been made and any other obligations which, by their terms survive the termination of the Senior Loan Documents),
and the termination of all obligations of Senior Lenders under the Senior Loan Documents (including, without limitation, any commitment
to lend), and the termination of the Senior Loan Documents.

 

“Person”
shall mean any natural person, corporation, general or limited partnership, limited liability company, firm, trust, association,
government, governmental agency or other entity, whether acting in an individual, fiduciary or other capacity.

 

“Proceeding”
shall mean any voluntary or involuntary insolvency, bankruptcy, receivership, custodianship, liquidation, dissolution, reorganization,
assignment for the benefit of creditors, appointment of a custodian, receiver, trustee or other officer with similar powers or
any other proceeding for the liquidation, dissolution or other winding up of a Person.

 

“Senior Lenders”
shall have the meaning ascribed thereto in the preamble hereof.

 

“Senior Loan(s)”
shall mean all obligations, liabilities and indebtedness of every nature of Borrower from time to time owed to Senior Lenders under
the Facility Agreement and the other Senior Loan Documents, whether now existing or hereafter created, whether primary, secondary,
direct, contingent, fixed or otherwise, heretofore, now and from time to time hereafter owing, due or payable, whether before or
after the filing of a Proceeding under the Bankruptcy Code, together with (a) any amendments, modifications, renewals, refinancings,
replacements or extensions thereof, and (b) any interest accruing thereon after the commencement of a Proceeding, without
regard to whether or not such interest, fees, costs or expenses are an allowed claims in any such Proceeding.

 

    	 	3	 

     

    

 

“Senior Loan
Documents” shall mean the Facility Agreement, and all promissory notes or other instruments evidencing the Senior Loan
or the obligation to pay the Senior Loan, any guaranties with respect to the Senior Loan, any security agreement or other collateral
document securing the Senior Loan and all other documents, agreements and instruments now existing or hereafter entered into evidencing
or pertaining to all or any portion of the Senior Loan.

 

“Subordinated
Lender” shall have the meaning ascribed thereto in the preamble to this Agreement.

 

“Subordinated
Loan(s)” shall mean all obligations, liabilities and indebtedness of every nature of Borrower from time to time owed
to Subordinated Lender pursuant to the Subordinated Loan Documents, whether now existing or hereafter created, whether primary,
secondary, direct, contingent, fixed or otherwise, heretofore, now and from time to time hereafter owing, due or payable, whether
before or after the filing of a Proceeding under the Bankruptcy Code together with any amendments, modifications, renewals or extensions
thereof.

 

“Subordinated
Loan Documents” shall mean the Subordinated Note, any other agreement, promissory note or other instrument evidencing
the Subordinated Loan, any guaranty with respect to the Subordinated Loan, any security agreement or other collateral document
securing the Subordinated Loan and all other documents, agreements and instruments now existing or hereafter entered into evidencing
or pertaining to all or any portion of the Subordinated Loan.

 

“Subordinated
Note” shall have the meaning ascribed thereto in Recital C.

 

2.           Subordination.

 

2.1.          Subordination
of Subordinated Loans to Senior Loans. Borrower covenants and agrees, and Subordinated Lender likewise covenants and agrees
that, notwithstanding anything to the contrary contained in any of the Subordinated Loan Documents, the payment of any and all
of the Subordinated Loans shall be subordinate and subject in right and time of payment, to the extent and in the manner hereinafter
set forth, to the Payment in Full of all Senior Loans. Each holder of the Senior Loans, whether now outstanding or hereafter created,
incurred, assumed or guaranteed, shall be deemed to have consented to the Subordinated Loans in reliance upon the provisions contained
in this Agreement. Until the Senior Loans have been Paid in Full, Borrower shall not make, and Subordinated Lenders shall not accept,
any Distribution on account of any Subordinated Loan, other than (i) regularly scheduled payments
of capitalized payments-in-kind of accrued interest (but not, for the sake of clarity, any payments in cash) on the Subordinated
Loan due and payable on a non-accelerated basis, (ii) payments effected through conversion of indebtedness under the Subordinated
Loan to common stock of Borrower (or other qualified capital stock (on terms and conditions reasonably satisfactory to Senior Lenders)
of Borrower) and (iii) payments effected through conversion of the indebtedness under the Subordinated Loan to other indebtedness
so long as, to the extent Borrower is an obligor thereunder, such convertible indebtedness is subject to a subordination agreement
on the same terms and conditions of this Agreement and otherwise satisfactory to Senior Lenders. Subordinated Lender expressly
acknowledges and agrees that if Borrower’s failure to make any payments due and payable to the Subordinated Lender under
the Subordinated Loan Documents is due solely to this Agreement prohibiting any such payments, such failure shall not constitute
a default or event of default under the Subordinated Loan Documents.

 

    	 	4	 

     

    

 

2.2.          Subordinated
Loan Standstill. Until the Senior Loans are Paid in Full, Subordinated Lender shall not, without the prior written consent
of Senior Lenders, take any Enforcement Action with respect to the Subordinated Loans.

 

2.3.          Incorrect
Payments. If any Distribution on account of the Subordinated Loan not permitted to be made by Borrower or accepted by Subordinated
Lender under this Agreement is made to and received by Subordinated Lender, such Distribution shall not be commingled with any
of the assets of Subordinated Lender, shall be held in trust by Subordinated Lender for the benefit of Senior Lenders and shall
be promptly paid over to the Senior Lenders for application in accordance with the Senior Loan Documents to the payment of the
Senior Loans then remaining unpaid, until all of the Senior Loans are Paid in Full.

 

2.4.          Subordination
of Liens and Security Interests; Agreement Not to Contest; Agreement to Release any Liens. Subordinated Lender hereby acknowledges,
agrees, represents and warrants that none of the Subordinated Loans nor any portion thereof is as of the date hereof, or at any
time in the future shall be, secured by any lien or security interest in any of the Collateral, the equity interests in Borrower
or any other asset of Borrower, or guaranteed by any Person. Without limiting the foregoing, until the Senior Loans have been Paid
in Full, all liens and security interests of Subordinated Lender in the Collateral, if any, shall be and hereby are subordinated
for all purposes and in all respects to the liens and security interests of Senior Lenders in the Collateral, regardless of the
time, manner or order of perfection of any such liens and security interests and regardless of any failure, whether intervening
or continuing, of Senior Lenders’ liens and security interests to be perfected; provided, however, that each
of the parties hereto acknowledges and agrees that the existence of any lien or security interest of Subordinated Lender would
constitute an automatic and immediate Event of Default under the Facility Agreement and a breach of this Agreement. Subordinated
Lender agrees that it will not at any time contest the validity, perfection, priority or enforceability of the Senior Loans, the
Senior Loan Documents, or the liens and security interests of Senior Lenders in the Collateral securing the Senior Loans. In the
event that any lien or security interest arises in favor of Subordinated Lender, immediately upon Senior Lenders’ request,
Subordinated Lender shall or shall cause its agent to promptly execute and deliver to Senior Lenders such termination statements
and releases as Senior Lenders shall reasonably request to effect the release of the liens and security interests of Subordinated
Lender in any such Collateral.

 

2.5.          Sale,
Transfer or other Disposition of Subordinated Loan. The Subordinated Lender shall not sell, assign, pledge, dispose of or otherwise
transfer all or any portion of the Subordinated Loans or any Subordinated Loan Document without the prior written consent of the
Senior Lenders. Without limiting the foregoing, if any such sale, assignment, pledge, disposition or other transfer is made in
contravention of this Agreement, the subordination effected hereby shall survive such sale, assignment, pledge, disposition or
other transfer of all or any portion of the Subordinated Loans, and the terms of this Agreement shall be binding upon the successors
and assigns of the Subordinated Lender.

 

2.6.          Legends.
Until the termination of this Agreement in accordance with Section 8 hereof, Subordinated Lender will cause to be clearly,
conspicuously and prominently inserted on the face of each Subordinated Loan Document, the following legend:

 

“This
instrument or other agreement and the indebtedness, rights and obligations evidenced hereby are subordinate in the manner and to
the extent set forth in that certain Subordination Agreement, dated as of [●], 202[●] (as amended, restated, supplemented
or modified from time to time, the “Subordination Agreement”), by and among (I) neos therapeutics, inc.
(the “Company”), (II) the Subordinated Lender identified therein, and (III) Deerfield Private Design
Fund III, L.P. and DEERFIELD PARTNERS, L.P., AND THEIR RESPECTIVE successors and assigns (the “Senior LenderS”),
to certain indebtedness, rights and obligations of Obligors to the Senior LenderS, and all liens and security interests of Senior
Lender securing the same, all as described in the Subordination Agreement, and each holder and transferee of this instrument or
agreement, by its acceptance hereof, irrevocably agrees to be bound by the provisions of the Subordination Agreement.”

 

    	 	5	 

     

    

 

2.7.         Liquidation,
Dissolution, Bankruptcy. In the event of any Proceeding involving Borrower:

 

(a)            Any
Distribution, whether in cash, securities or other property, that would otherwise, but for the terms hereof, be payable or deliverable
in respect of the Subordinated Loan, shall be paid or delivered directly to the Senior Lenders (to be held and/or applied by Senior
Lenders in accordance with the terms of the Senior Loan Documents) until all of the Senior Loans are Paid in Full. Subordinated
Lender irrevocably authorizes, empowers and directs any debtor, debtor in possession, receiver, trustee, liquidator, custodian,
conservator or other Person having authority, to pay or otherwise deliver all such Distributions to Senior Lenders. Subordinated
Lender also irrevocably authorizes and empowers Senior Lenders, in the name of Subordinated Lender, to demand, sue for, collect
and receive any and all such Distributions.

 

(b)            Subordinated
Lender agrees that Senior Lenders may consent to the use of cash collateral or provide financing to the Borrower on such terms
and conditions and in such amounts as Senior Lenders, in their sole discretion, may decide and, in connection therewith, the Borrower
may grant to Senior Lenders liens and security interests upon all of the property of Borrower, which liens and security interests
(i) shall secure payment of the Senior Loans (whether such Senior Loans arose prior to the commencement of any Proceeding
or at any time thereafter) and all other financing provided by Senior Lenders during the Proceeding, and (ii) shall be superior
in priority to the liens and security interests, if any, in favor of Subordinated Lender on the property of Borrower. Subordinated
Lender agrees that it will not object to or oppose a sale or other disposition of any property securing all of any part of the
Senior Loans free and clear of security interests, liens or other claims of Subordinated Lender under Section 363 of the Bankruptcy
Code or any other provision of the Bankruptcy Code if Senior Lenders have consented to such sale or disposition. Subordinated Lender
agrees not to assert any right it may have to “adequate protection” of Subordinated Lender’s interest in any
Collateral in any Proceeding. Subordinated Lender waives any claim it may now or hereafter have arising out of Senior Lenders’
election, in any Proceeding instituted under the Bankruptcy Code, of the application of Section 1111(b)(2) of the Bankruptcy
Code, and/or any borrowing or grant of a security interest under Section 364 of the Bankruptcy Code by the Borrower, as debtor
in possession. Subordinated Lender further agrees that it will not seek to participate or participate on any creditors’ committee
of the Borrower without Senior Lenders’ prior written consent.

 

    	 	6	 

     

    

 

(c)            Subordinated
Lender agrees to execute, verify, deliver and file any proofs of claim in respect of the Subordinated Loans requested by Senior
Lenders in connection with any such Proceeding and hereby irrevocably authorizes, empowers and appoints Senior Lenders as its agent
and attorney-in- fact to (i) execute, verify, deliver and file such proofs of claim upon the failure of Subordinated Lender
promptly to do so prior to thirty (30) days before the expiration of the time to file any such proof of claim, and (ii) vote
such claim in any such Proceeding upon the failure of Subordinated Lender to do so prior to fifteen (15) days before the expiration
of the time to vote any such claim; provided, however, that Senior Lenders shall have no obligation to execute, verify, deliver,
file and/or vote any such proof of claim. In the event that Senior Lenders vote any claim in accordance with the authority granted
hereby, Subordinated Lender shall not be entitled to change or withdraw such vote. Subordinated Lender hereby assigns to Senior
Lenders or their nominee (and will, upon request of Senior Lenders, reconfirm in writing the assignment to Senior Lenders or its
nominee of) all of its rights under such claims.

 

(d)            The
Senior Loans shall continue to be treated as the Senior Loans and the provisions of this Agreement shall continue to govern the
relative rights and priorities of Senior Lenders and Subordinated Lender even if all or part of the Senior Loans or the security
interests securing the Senior Loans are subordinated, set aside, avoided, invalidated or disallowed in connection with any such
Proceeding, and this Agreement shall be reinstated if at any time any payment of any of the Senior Loans is rescinded or must otherwise
be returned by any holder of the Senior Loans or any representative of such holder.

 

3.           Modifications.

 

3.1.          Modifications
to Senior Loan Documents. Senior Lenders may at any time and from time to time without the consent of Subordinated Lenders,
without providing any notice to the Senior Lenders, without incurring liability to Subordinated Lenders and without impairing or
releasing the obligations of Subordinated Lender under this Agreement, change the manner or place of payment or alter any of the
terms of the Senior Loans, or amend in any manner any agreement, note, guaranty or other instrument evidencing or securing or otherwise
relating to the Senior Loans.

 

3.2.          Modifications
to Subordinated Loan Documents; Maximum Principal Amount of Subordinated Loan. Until the Senior Loans have been Paid in Full,
and notwithstanding anything to the contrary contained in the Subordinated Loan Documents, Subordinated Lender shall not, without
the prior written consent of the Senior Lenders, agree to any amendment, modification or supplement to the Subordinated Loan Documents
other than, so long as a copy is provided to Senior Lenders, an amendment for the sole purpose of extending the maturity date of
the Subordinated Loans. Nothing herein, including the provisions of this Agreement pertaining to subordination of liens on the
Collateral, shall be construed to imply Senior Lenders’ consent to any Subordinated Loan Document which grants a lien upon
any of the Collateral or the making of any other loans or other advances by Subordinated Lender.

 

4.           Waiver
of Certain Rights by Subordinated Lender.

 

4.1.          Marshaling.
Subordinated Lender hereby waives any rights it may have under applicable law to assert the doctrine of marshaling or to otherwise
require Senior Lenders to marshal any property of Borrower or any other guarantor of the Senior Loans for the benefit of Subordinated
Lender.

 

    	 	7	 

     

    

 

4.2.          Rights
Relating to Senior Lenders’ Actions with respect to the Collateral. Subordinated Lender hereby waives, to the extent
permitted by applicable law, any rights which it may have to enjoin or otherwise obtain a judicial or administrative order preventing
any Senior Lender from taking, or refraining from taking, any action with respect to all or any part of the Collateral. Without
limitation of the foregoing, Subordinated Lender hereby agrees (a) that it has no right to direct or object to the manner
in which Senior Lender enforces its rights and remedies with respect to, or applies the proceeds of the Collateral resulting from
the exercise by any Senior Lender of rights and remedies under the Senior Loan Documents to the Senior Loans, and (b) that
no Senior Lender has assumed any obligation to act as the agent for Subordinated Lender with respect to the Collateral.

 

4.3.          Rights
Relating to Disclosures. Subordinated Lender hereby agrees that Senior Lenders have not assumed any obligation or duty to disclose
information regarding Borrower or the Senior Loans to Subordinated Lender, and Senior Lenders shall not have a special or fiduciary
relationship to Subordinated Lender. Subordinated Lender hereby fully waives and releases Senior Lenders from any affirmative disclosures
which may be required of Senior Lenders under applicable law.

 

5.            Construction.
The terms of this Agreement were negotiated among business persons sophisticated in the area of business finance, and accordingly,
in construing the terms of this Agreement, no rule or law which would require that this instrument be construed against the
party who drafted this instrument shall be given any force or effect.

 

6.            Modification
of this Agreement. No modification or waiver of any provision of this Agreement, or consent to any departure by any party from
the terms hereof, shall be effective in any event unless the same is in writing and signed by Senior Lenders or such other holder
of the Senior Loans and Subordinated Lender or such other holder of the Subordinated Loans, and then such modification, waiver
or consent shall be effective only in the specific instance and for the specific purpose given. Any notice to or demand on any
party hereto in any event not specifically required hereunder shall not entitle the party receiving such notice or demand to any
other or further notice or demand in the same, similar or other circumstances unless specifically required hereunder.

 

7.            Further
Assurances. Each party to this Agreement promptly will execute and deliver such further instruments and agreements and do such
further acts and things as may be reasonably requested in writing by any other party hereto that may be necessary or desirable
in order to effect fully the purposes of this Agreement.

 

8.            Continuing
Agreement. This is a continuing agreement and will remain in full force and effect until all of the obligations under the Senior
Loan Documents have been Paid in Full after which this Agreement shall terminate without further action on the part of the parties
hereto; provided, that if any payment is, subsequent to such termination, recovered from any holder of Senior Loans, this
Agreement shall be reinstated. This Agreement will continue to be effective or will be reinstated, as the case may be, if at any
time payment of all or any part of the Senior Loan Documents or the obligations thereunder is rescinded or must otherwise be returned
by Senior Lenders upon insolvency, bankruptcy, or reorganization of any Obligor or otherwise, all as though such payment had not
been made.

 

    	 	8	 

     

    

 

9.            Notices.
Any notice, request or other communication to be given or made under this Agreement shall be in writing. Such notice, request or
other communication shall be deemed to have been duly given or made when it shall be delivered by hand, overnight mail, international
courier (confirmed by facsimile), electronic mail or facsimile to the party to which it is required or permitted to be given or
made at such party’s address specified below or at such other address as such party shall have designated by notice to the
other parties:

 

If to Senior
Lenders at:

 

Deerfield Management Company,
L.P. 

780 Third Avenue, 37th
Floor 

New York, NY 10017 

Attn: David J. Clark 

Email: dclark@deerfield.com

 

If to Borrower, at:

 

Neos Therapeutics, Inc. 

2940 N. Hwy 360, Suite 400 

Grand Prairie, TX 75050 

E-mail: reisenstadt@neostx.com 

Attention: Richard Eisenstadt

 

If to Subordinated Lender, at:

 

Aytu Bioscience, Inc. 

373 Inverness Parkway, Suite 206 

Englewood, CO 80112 

Email: 

Attention:

 

If mailed, notice shall be deemed to be
given five (5) days after being sent, and if sent by personal delivery, email or prepaid courier, notice shall be deemed to
be given when delivered.

 

10.          Successors
and Assigns. This Agreement shall inure to the benefit of, and shall be binding upon, the respective successors and assigns
of Senior Lenders, Subordinated Lender and Borrower; provided, however, that neither Subordinated Lender nor Borrower
may assign this Agreement in whole or in part without the prior written consent of Senior Lenders or as permitted by Section 2.5.
Senior Lenders may, from time to time, without notice to Subordinated Lender, assign or transfer any or all of the Senior Loans
or any interest therein to any Person and, notwithstanding any such assignment or transfer, or any subsequent assignment or transfer,
the Senior Loans shall, subject to the terms hereof, be and remain the Senior Loans for purposes of this Agreement, and every permitted
assignee or transferee of any of the Senior Loans or of any interest therein shall, to the extent of the interest of such permitted
assignee or transferee in the Senior Loans, be entitled to rely upon the subordination provided under this Agreement and shall
be entitled to enforce the terms and provisions hereof to the same extent as if such assignee or transferee were initially a party
hereto.

 

11.          No
Waiver or Novation. No waiver shall be deemed to have been made by any party to this Agreement of any of its rights under this
Agreement unless the same shall be in writing and duly signed by its duly authorized officers, and each waiver, if any, shall be
a waiver only with respect to the specific instance involved and shall in no way impair the rights of any party to this Agreement
in any other respect at any time. No executory agreement shall be effective to change, modify or to discharge, in whole or in part,
this Agreement, unless such executory agreement is in writing and duly signed by the duly authorized officers of each party to
this Agreement.

 

    	 	9	 

     

    

 

12.         APPLICABLE
LAW; CONSENT TO JURISDICTION.

 

12.1.        As
part of the consideration and mutual promises being exchanged and given in connection with this Agreement, the parties hereto agree
that all claims, controversies and disputes of any kind or nature arising under or relating in any way to the enforcement or interpretation
of this Agreement or to the parties’ dealings, rights or obligations in connection herewith, including disputes relating
to the negotiations for, inducements to enter into, or execution of, this Agreement, and disputes concerning the interpretation,
enforceability, performance, breach, termination or validity of all or any portion of this Agreement shall be governed by the laws
of the State of New York without giving effect to any laws, rules or provisions that would cause the application of the laws
of any jurisdiction other than the State of New York.

 

12.2.        The
parties hereto agree that all claims, controversies and disputes of any kind or nature relating in any way to the enforcement or
interpretation of this Agreement or to the parties’ dealings, rights or obligations in connection herewith, shall be brought
exclusively in the state and federal courts sitting in The City of New York, borough of Manhattan. With respect to any such claims,
controversies or disputes, each of the Parties hereby irrevocably:

 

12.2.1.      submits
itself and its property, generally and unconditionally, to the personal jurisdiction of the aforesaid courts and agrees that it
will not bring any action in any court or tribunal other than the aforesaid courts;

 

12.2.2.      waives,
and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding (A) any claim
that it is not personally subject to the jurisdiction of the above named courts for any reason other than the failure to serve
process in accordance with this Section 12, (B) any claim that it or its property is exempt or immune from jurisdiction
of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment,
attachment in aid of execution of judgment, execution of judgment or otherwise) and (C) to the fullest extent permitted by
the applicable law, any claim that (1) the suit, action or proceeding in such court is brought in an inconvenient forum, (2) the
venue of such suit, action or proceeding is improper or (3) this Agreement, or the subject matter hereof, may not be enforced
in or by such courts; and

 

12.2.3.      WAIVES
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY DISPUTE ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE
EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER
VOLUNTARILY AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 12.

 

    	 	10	 

     

    

 

13.          Miscellaneous.

 

13.1.        Conflict.
In the event of any conflict between any term, covenant or condition of this Agreement and any term, covenant or condition of any
of the Subordinated Loan Documents, the provisions of this Agreement shall control and govern.

 

13.2.        Headings.
The paragraph headings used in this Agreement are for convenience only and shall not affect the interpretation of any of the provisions
hereof.

 

13.3.        Counterparts.
This Agreement and any amendment hereto may be executed and delivered in any number of counterparts, and by the different parties
hereto in separate counterparts, each of which when executed shall be deemed to be an original, but all of which taken together
shall constitute one and the same agreement. In the event that any signature to this Agreement or any amendment hereto is delivered
by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “.pdf” signature page were an original thereof. No party hereto shall raise the use of a facsimile
machine or e-mail delivery of a “.pdf” format data file to deliver a signature to this Agreement or any amendment hereto
or the fact that such signature was transmitted or communicated through the use of a facsimile machine or e-mail delivery of a
 “.pdf” format data file as a defense to the formation or enforceability of a contract, and each party hereto forever
waives any such defense.

 

13.4.        Severability.
In the event that any provision of this Agreement is deemed to be invalid, illegal or unenforceable by reason of the operation
of any law or by reason of the interpretation placed thereon by any court or governmental authority, the validity, legality and
enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby, and the affected
provision shall be modified to the minimum extent permitted by law so as most fully to achieve the intention of this Agreement.

 

13.5.        Relative
Rights. This Agreement shall define the relative rights of Senior Lenders and Subordinated Lender. Nothing in this Agreement
shall (a) impair, as between Borrower and Senior Lenders, the obligation of Borrower with respect to the payment of the Senior
Loans and the Subordinated Loans in accordance with their respective terms, or (b) affect the relative rights of Senior Lenders
or Subordinated Lender with respect to any other creditors of Borrower.

 

13.6.        Entire
Agreement. This Agreement (including the documents and instruments referred to herein) constitutes the entire agreement and
supersedes all other prior agreements and understandings, both written and oral, among the parties with respect to the subject
matter hereof.

 

13.7.        Interpretative
Matters. Unless otherwise indicated or the context otherwise requires, (a) all references to Sections, Schedules, Appendices
or Exhibits are to Sections, Schedules, Appendices or Exhibits contained in or attached to this Agreement, (b) words in the
singular or plural include the singular and plural and pronouns stated in either the masculine, the feminine or neuter gender shall
include the masculine, feminine and neuter, (c) the words “hereof,” “herein” and words of similar
effect shall reference this Agreement in its entirety, and (d) the use of the word “including” in this Agreement
shall be by way of example rather than limitation.

 

[SIGNATURES APPEAR ON FOLLOWING PAGES]

 

    	 	11	 

     

    

 

IN WITNESS WHEREOF,
intending to be legally bound, and intending that this Agreement constitute an instrument executed and delivered under seal, the
parties have caused this Agreement to be executed under seal as of the date first written above.

 

	 	SENIOR LENDERS;
	 	 
	 	DEERFIELD PRIVATE DESIGN FUND III,
    L.P.

 

	 	By:	Deerfield
    Mgmt III, L.P., its General Partner
	 	By:	J.E. Flynn Capital III,
    LLC, its General Partner

 

	 	By:	
	 	Name:	David J.
    Clark
	 	Title:	Authorized Signatory

 

	 	DEERFIELD PARTNERS, L.P.

 

	 	By:	Deerfield Mgmt, L.P., its General Partner
	 	By:	J.E. Flynn Capital, LLC, its General Partner

 

	 	By:	
	 	Name:	David J.
    Clark
	 	Title:	Authorized Signatory

 

    	 	1	 

     

    
 

	 	SUBORDINATED LENDER:
	 	 
	 	AYTU BIOSCIENCE, INC.

 

	 	By:	 
	 	Name:	 
	 	Title:	 

 

    	 	2	 

     

    

 

	 	BORROWER:
	 	 
	 	NEOS THERAPEUTICS, INC.

 

	 	By:	 
	 	Name:	 
	 	Title:	 

 

    	 	3Exhibit 10.6

 

Execution
Version

 

LIMITED WAIVER

 

This LIMITED WAIVER
(this “Waiver”), dated as of December 10, 2020, is entered into by and among NEOS THERAPEUTICS, INC.,
a Delaware corporation (the “Borrower”), NEOS THERAPEUTICS COMMERCIAL, LLC, a Delaware limited liability company
(“Commercial”), NEOS THERAPEUTICS BRANDS, LLC, a Delaware limited liability company (“Brands”),
NEOS THERAPEUTICS, LP, a Texas limited partnership (“Neos LP”), and PHARMAFAB TEXAS, LLC, a Texas limited liability
company (“PharmaFab”, together with Commercial, Brands and Neos LP, each individually a “Guarantor”,
and collectively, the “Guarantors”), DEERFIELD PRIVATE DESIGN FUND III, L.P. (“DP3”) and
DEERFIELD PARTNERS, L.P. (“DP”; and together with DP3, collectively, the “Lenders” and each,
a “Lender”) and DEERFIELD MGMT, L.P., as collateral agent for itself, the Lenders and the other Secured Parties
(in such capacity, together with its successors and assigns in such capacity, “Collateral Agent”).

 

W I T N E S S E T H:

 

WHEREAS, the
Borrower and the Lenders are parties to that certain Facility Agreement, dated as of May 11, 2016 (as amended by (a) that
certain First Amendment to Facility Agreement, dated as of June 1, 2017, by and among the Borrower, the Guarantors party thereto
and the Lenders, (b) that certain Second Amendment to Facility Agreement, dated as of November 5, 2018, by and among
the Borrower, the Guarantors party thereto and the Lenders, (c) that certain Third Amendment to Facility Agreement, dated
as of March 26, 2019, by and among the Borrower, the Guarantors party thereto and the Lenders, (d) that certain Fourth
Amendment to Facility Agreement, dated as of October 2, 2019, by and among the Borrower, the Guarantors party thereto and
the Lenders, (e) that certain Consent, dated as of April 6, 2020, by and among the Borrower, the Guarantors party thereto
and the Lenders, (f) that certain Fifth Amendment to Facility Agreement, dated as of May 6, 2020, by and among the Borrower,
the Guarantors party thereto and the Lenders, (g) that certain Limited Waiver (the “August 2020 Waiver”),
dated as of August 10, 2020, by and among the Borrower, the Guarantors party thereto and the Lenders; and (h) that certain
Limited Waiver (the “November 2020 Waiver”), dated as of November 6, 2020, by and among the Borrower,
the Guarantors party thereto and the Lenders, and as further amended, restated, supplemented or otherwise modified from time to
time prior to the date hereof, the “Existing Facility Agreement;” and the Existing Facility Agreement, as modified
by this Waiver, the “Facility Agreement”), pursuant to which the Lenders agreed to make certain loans and other
financial accommodations to Borrower;

 

WHEREAS, pursuant
to Section 5.1(v) of the Existing Facility Agreement, no financial statements delivered under such Section shall
include any explanatory paragraph expressing substantial doubt as to going concern status (a “Going Concern Exception;”
and the requirement that there be no such Going Concern Exception, the “Going Concern Condition”);

 

WHEREAS, the
Borrower (a) previously notified the Lenders and the Collateral Agent that the quarterly financial statements of the Borrower
and its Subsidiaries with respect to the fiscal quarter ended June 30, 2020 (the “Initial Subject Fiscal Quarter”),
would contain a Going Concern Exception; (b) has notified the Lenders and the Collateral Agent that the quarterly financial
statements of the Borrower and its Subsidiaries with respect to the fiscal quarter ended September 30, 2020; (the “Q3
Subject Fiscal Quarter”); and (c) has notified the Lenders and the Collateral Agent that each of (i) the quarterly
and annual financial statements of the Borrower and its Subsidiaries with respect to the fiscal quarter and year ending December 31,
2020 (the “Q4 Subject Fiscal Quarter”), (ii) the quarterly financial statements of the Borrower and its
Subsidiaries with respect to the fiscal quarter ending March 31, 2021 (the “Q1-21 Subject Fiscal Quarter”)
and (iii) the quarterly financial statements of the Borrower and its Subsidiaries with respect to the fiscal quarter ending
June 30, 2021 (the “Q2-21 Subject Fiscal Quarter”; and together with the Initial Subject Fiscal Quarter,
the Q3 Subject Fiscal Quarter, the Q4 Subject Fiscal Quarter, the Q1-21 Subject Fiscal Quarter and the Q2-21 Subject Fiscal Quarter,
each a “Subject Fiscal Quarter” and collectively, the “Subject Fiscal Quarters”), may contain
a Going Concern Exception;

 

     

     

    

 

WHEREAS, pursuant
to the August 2020 Waiver, the Borrower requested, and the Lenders and the Collateral Agent agreed, to irrevocably waive the
Going Concern Condition solely with respect to the Initial Subject Fiscal Quarter and solely during the period commencing on August 10,
2020 and ending on the earliest to occur of (a) the date on which the quarterly financial statements for the fiscal quarter
ending September 30, 2020, are filed with the SEC, (b) November 9, 2020 and c) the first date after August 10,
2020 on which an Event of Default (other than, for the avoidance of doubt, an Event of Default arising solely as a result of the
failure of the Borrower to satisfy the Going Concern Condition with respect to the Initial Subject Fiscal Quarter) has occurred
and is continuing under the Facility Agreement;

 

WHEREAS, pursuant
to the November 2020 Waiver, the Borrower requested, and the Lenders and the Collateral Agent agreed, to extend the duration
of waivers granted under the August 2020 Waiver solely during the pendency of the Existing Waiver Period (as defined below),
and to irrevocably waive the Going Concern Condition solely with respect to the Q3 Subject Fiscal Quarter and solely during the
period commencing on November 6, 2020 and ending on the earliest to occur of (a) the date on which the quarterly financial
statements for the fiscal quarter and year ending December 31, 2020, are filed with the SEC, (b) March 31, 2021,
and (c) the first date after November 6, 2020 on which an Event of Default (other than, for the avoidance of doubt, an
Event of Default arising solely as a result of the failure of the Borrower to satisfy the Going Concern Condition with respect
to the Initial Subject Fiscal Quarter) has occurred and is continuing under the Facility Agreement (such period, the “Existing
Waiver Period”);

 

WHEREAS, the Borrower
is contemporaneously entering into that certain Agreement and Plan of Merger, among Aytu Bioscience, Inc., a Delaware corporation
(“Aytu”), and Neutron Acquisition Sub, Inc., a Delaware corporation, dated as of the date hereof (the “Merger
Agreement” and the merger contemplated thereby, the “Merger”), and in connection therewith, the Lenders,
the Borrower and Aytu are entering into a letter agreement, dated as of the date hereof (the “Letter Agreement”);

 

WHEREAS, the
Letter Agreement and the waivers granted hereunder will expire on the earliest to occur of (a) the consummation of the Merger,
(b) any termination of the Merger Agreement, and (c) September 10, 2021 (such earliest date, the “Merger-Related
Termination Date”);

 

WHEREAS, the
Borrower has requested that the Lenders and the Collateral Agent extend the Existing Waiver Period and continue to irrevocably
waive the Going Concern Condition solely with respect to (a) the Initial Subject Fiscal Quarter, solely during the period
commencing on August 10, 2020 and ending on the earlier to occur of (i) the first
date following the waiver on which an Event of Default has occurred and is continuing (other than, for the avoidance of doubt,
an Event of Default arising solely as a result of the failure of the Borrower to satisfy the Going Concern Condition with respect
to any Subject Fiscal Quarter) has occurred and is continuing under the Facility Agreement and (ii) the Merger-Related
Termination Date (the “Extended Waiver Period”) and (b) the Q3
Subject Fiscal Quarter, solely during the period commencing on November 6, 2020 and ending
on the conclusion of the Extended Waiver Period;

 

     2 

     

    

 

WHEREAS, the
Borrower has requested that the Lenders and the Collateral Agent irrevocably waive the Going Concern Condition (a) solely
with respect to the Q4 Subject Fiscal Quarter and solely with respect to the period commencing on the date on which the financial
statements for the fiscal year ending December 31, 2020, are filed with the SEC and ending
on the earlier to occur of (i) the first date following the waiver on which an Event of Default has occurred and is continuing
(other than, for the avoidance of doubt, an Event of Default arising solely as a result of the failure of the Borrower to satisfy
the Going Concern Condition with respect to any Subject Fiscal Quarter) has occurred and is continuing under the Facility
Agreement and (ii) the Merger-Related Termination Date (the “Q4 Subject Fiscal Quarter Additional Waiver Period”),
(b) solely with respect to the Q1-21 Subject Fiscal Quarter and solely with respect to the period commencing on the date on
which the financial statements for the fiscal quarter ending March 31, 2021, are filed with the SEC and ending
on the earlier to occur of (i) the first date following the waiver on which an Event of Default has occurred and is continuing
(other than, for the avoidance of doubt, an Event of Default arising solely as a result of the failure of the Borrower to satisfy
the Going Concern Condition with respect to any Subject Fiscal Quarter) has occurred and is continuing under the Facility
Agreement and (ii) the Merger-Related Termination Date (the “Q1-21 Subject Fiscal Quarter Additional Waiver Period”)
and (c) solely with respect to the Q2-21 Subject Fiscal Quarter and solely with respect to the period commencing on the date
on which the financial statements for the fiscal quarter ending June 30, 2021, are filed with the SEC and ending
on the earlier to occur of (i) the first date following the waiver on which an Event of Default has occurred and is continuing
(other than, for the avoidance of doubt, an Event of Default arising solely as a result of the failure of the Borrower to satisfy
the Going Concern Condition with respect to any Subject Fiscal Quarter) has occurred and is continuing under the Facility
Agreement, and (ii) the Merger-Related Termination Date (the “Q2-21 Subject Fiscal Quarter Additional Waiver Period”;
and together with the Q4 Additional Waiver Period, the Q1-21 Additional Waiver Period and the Extended Waiver Periods, the “Waiver
Periods”; and each, a “Waiver Period”); and

 

WHEREAS, on
the terms and subject to the conditions set forth herein, the Lenders party hereto, constituting at least Required Lenders, are
willing to waive the Going Concern Condition solely with respect to each Subject Fiscal Quarter and solely during the pendency
of the Waiver Period applicable thereto;

 

NOW, THEREFORE,
in consideration of the mutual agreements, provisions and covenants contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

SECTION 1.    Defined
Terms. Capitalized terms used herein (including in the preamble and recitals above) but not otherwise defined herein shall
have the respective meanings ascribed to such terms in the Facility Agreement.

 

SECTION 2.    Waiver.
Subject to the terms and conditions of this Waiver, and in reliance upon the representations and warranties of the Loan Parties
set forth in Section 4 below, the Lenders party hereto, constituting at least Required Lenders, and the Collateral
Agent hereby irrevocably waive the Going Concern Condition (a) solely with respect to the Initial Subject Fiscal Quarter and
the Q3 Subject Fiscal Quarter, solely during the pendency of the Extended Waiver Period, (b) solely with respect to the Q4
Subject Fiscal Quarter, solely during the pendency of the Q4 Subject Fiscal Additional Waiver Period, (c) solely with respect
to the Q1-21 Subject Fiscal Quarter, solely during the pendency of the Q1-21 Subject Fiscal Additional Waiver Period and (d) solely
with respect to the Q2-21 Subject Fiscal Quarter, solely during the pendency of the Q2-21 Subject Fiscal Additional Waiver Period.
For the avoidance of doubt, the parties hereto acknowledge and agree that nothing contained in this Waiver or the Letter Agreement
shall constitute, or obligate any of the Lenders or the Collateral Agent to grant, a waiver in respect of any financial statements
of Aytu.

 

SECTION 3.    Conditions.
The effectiveness of this Waiver is subject to the satisfaction of the following conditions precedent:

 

(a)       the
execution and delivery of this Waiver by the Borrower, the Guarantors, the Lenders party hereto (constituting at least Required
Lenders) and the Collateral Agent;

 

     3 

     

    

 

(b)       the
representations and warranties in Section 4 hereof being true, correct and complete in all material respects (without
duplication of any materiality qualifier), except to the extent that any such representation or warranty relates to a specific
earlier date, in which case such representation and warranty shall be true and correct in all material respects as of such earlier
date (without duplication of any materiality qualifier);

 

(c)       on
the date hereof, the Merger Agreement shall have been entered into by the Borrower and the other parties thereto, and the Letter
Agreement shall have been entered into by the Borrower and the Lenders party hereto; and

 

(d)       immediately
after giving effect to this Waiver, no Default or Event of Default has occurred and is continuing.

 

SECTION 4.    Representations
and Warranties. Each Loan Party Obligor party hereto hereby represents and warrants to each of the Secured Parties as follows
as of the date hereof:

 

(a)       Each
Loan Party Obligor is validly existing as a corporation, limited liability company or limited partnership, as applicable, and is
in good standing under the laws of the jurisdiction of its incorporation, organization or formation, as applicable. Each Loan Party
Obligor (i) has full power and authority (and all governmental licenses, authorizations, permits (including all Health Care
Permits and other Permits), consents and approvals) to (A) own its properties and conduct its business and (B) to (x) enter
into, and perform its obligations under, this Waiver and the other Loan Documents and (y) consummate the transactions contemplated
under this Waiver and the other Loan Documents, and (ii) is duly qualified as a foreign corporation, limited liability company
or limited partnership, as applicable, and licensed and in good standing, under the laws of each jurisdiction where its ownership,
lease or operation of property or the conduct of its business requires such qualification or license, in each case of this clause
(ii), where the failure to be so qualified, licensed or in good standing could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect.

 

(b)      The
execution, delivery and performance of this Waiver and the other Loan Documents, in each case, have been duly authorized by each
Loan Party Obligor, and no further consent or authorization is required by any Loan Party Obligor, any Loan Party Obligor’s
board of directors (or other equivalent governing body) or the holders of any Loan Party Obligor’s Stock. This Waiver has
been duly executed and delivered by each of the Loan Party Obligors and constitutes a valid, legal and binding obligation of each
Loan Party Obligor, enforceable in accordance with its terms, except as such enforceability may be limited by applicable insolvency,
bankruptcy, reorganization, moratorium or other similar laws affecting creditors’ rights generally (whether enforcement is
sought by proceedings in equity or at law). The execution, delivery and performance of this Waiver by each Loan Party Obligor party
hereto and the consummation of the transactions contemplated hereby will not (A) conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any Lien upon any
assets of any such Loan Party Obligor pursuant to, any agreement, document or instrument to which such Loan Party Obligor is a
party or by which any Loan Party Obligor is bound or to which any of the assets or property of any Loan Party Obligor is subject,
except, with respect to this clause (A), as could not reasonably be expected, individually or in the aggregate, to have
a Material Adverse Effect, (B) result in any violation of or conflict with the provisions of such Loan Party Obligor’s
Organizational Documents, (C) result in the violation of any Applicable Law, (D) result in the violation of any judgment,
order, rule, regulation or decree of any Governmental Authority, or (E) violate, conflict with or cause a breach or default
under any agreement or instrument binding upon it, except, with respect to clauses (C) and (E) only, as
could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. No consent, approval, Authorization
or order of, or registration or filing with any Governmental Authority is required for (i) the execution, delivery and performance
of this Waiver.

 

     4 

     

    

 

(c)       Immediately
after giving effect to this Waiver (including Section 2 hereof) the representations and warranties of the Loan Party
Obligors contained in the Loan Documents shall, in each case, be true, correct and complete in all material respects (without duplication
of any materiality provision contained therein) on and as of the date hereof (or any earlier date with respect to which any such
representation or warranty relates).

 

(d)       Immediately
after giving effect to this Waiver (including Section 2 hereof), no Default or Event of Default shall have occurred
and be continuing.

 

SECTION 5.    Fees,
Costs and Expense Reimbursement. The Loan Party Obligors agree to pay on the date of this Waiver all fees, costs and expenses
(including attorneys’ fees) incurred by the Secured Parties in connection with this Waiver and any other Loan Document and
the transactions contemplated hereby and thereby.

 

SECTION 6.    Captions.
Captions used in this Waiver are for convenience only and shall not modify or affect the interpretation or construction of this
Waiver.

 

SECTION 7.    Counterparts.
This Waiver may be executed in several counterparts, and by each party hereto on separate counterparts, each of which and any photocopies,
facsimile copies and other electronic methods of transmission thereof shall be deemed an original, but all of which together shall
constitute one and the same agreement.

 

SECTION 8.    Severability.
If any provision of this Waiver shall be invalid, illegal or unenforceable in any respect under any Applicable Law, the validity,
legality and enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby. The parties
hereto shall endeavor in good faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions
the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provision.

 

SECTION 9.    Entire
Agreement. The Facility Agreement, as modified hereby, together with all other Loan Documents, contains the entire understanding
among the parties hereto with respect to the matters covered thereby and supersedes any and all other written and oral communications,
negotiations, commitments and writings with respect thereto.

 

SECTION 10.  Successors;
Assigns. This Waiver shall be binding upon the Borrower, the other Loan Party Obligors, the Lenders and the Collateral
Agent and their respective successors and permitted assigns, and shall inure to the benefit of the Borrower, the other Loan Party
Obligors, the Lenders, the Collateral Agent and the other Secured Parties and the successors and assigns of the Lenders, the Collateral
Agent and the other Secured Parties. No other Person shall be a direct or indirect legal beneficiary of, or have any direct or
indirect cause of action or claim in connection with, this Waiver or any of the other Loan Documents. No Loan Party Obligor may
assign or transfer any of its rights or obligations under this Waiver without the prior written consent of the Collateral Agent
and each Lender, and any prohibited assignment or transfer shall be absolutely void ab initio.

 

SECTION 11.   Governing
Law. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS WAIVER SHALL BE GOVERNED BY
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED
IN SUCH STATE. SECTION 6.4 OF THE FACILITY AGREEMENT IS INCORPORATED HEREIN, MUTATIS MUTANDIS.

 

     5 

     

    

 

SECTION 12.  Reaffirmation
and Ratification; No Novation. Each Loan Party Obligor party hereto as debtor, grantor, pledgor, guarantor, assignor, or
in any other similar capacity in which such Person grants Liens in its property or otherwise acts as accommodation party or guarantor,
as the case may be pursuant to the Loan Documents, hereby (i) ratifies and reaffirms all of its payment and performance obligations,
contingent or otherwise, under the Facility Agreement and each other Loan Document to which it is a party and (ii) to the
extent such Person granted Liens or security interests in any of its property pursuant to any Loan Documents as security for or
otherwise guaranteed the Obligations under or with respect to the Loan Documents, ratifies and reaffirms such guarantee and grant
(and the validity and enforceability thereof) of Liens and confirms and agrees and acknowledges that such Liens and security interests,
and all Collateral heretofore pledged as security for such obligations, continue to be and remain collateral for such obligations
from and after the date hereof and from and after the date hereof. Each Loan Party Obligor party hereto hereby consents to this
Waiver and acknowledges that the Facility Agreement and each other Loan Document remains in full force and effect and is hereby
ratified and reaffirmed. The execution and delivery of this Waiver shall not operate as a waiver of any right, power or remedy
of the Collateral Agent, the Lenders or any other Secured Party, constitute a waiver of any provision of the Facility Agreement
or any other Loan Document or serve to effect a novation of the obligations (including the Obligations). For the avoidance of doubt,
this Waiver is not intended by the parties to be, and shall not be construed to be, a novation of the Facility Agreement and the
other Loan Documents or an accord and satisfaction in regard thereto.

 

SECTION 13.  Effect
on Loan Documents.

 

(a)       The
Facility Agreement, as modified hereby, and each of the other Loan Documents, shall be and remain in full force and effect in accordance
with their respective terms and hereby are ratified and confirmed in all respects. The execution, delivery, and performance of
this Waiver shall not operate, except with respect to the waiver expressly set forth herein, as a waiver of, consent to, or a modification
or amendment of, any right, power, or remedy of any Secured Party under the Facility Agreement or any other Loan Document. Except
for the waiver expressly set forth herein, the Facility Agreement and the other Loan Documents shall remain unchanged and in full
force and effect. The waiver set forth herein is limited to the specified provisions of this Waiver, shall not apply with respect
to any facts or occurrences other than those on which the same are based, shall neither excuse future non-compliance with this
Waiver, the Facility Agreement and the other Loan Documents nor operate as a waiver of any Default or Event of Default, shall not
operate as a consent to any further or other matter under this Waiver, the Facility Agreement and the other Loan Documents and
shall not be construed as an indication that any waiver of covenants or any other provision of this Waiver, the Facility Agreement
or any other Loan Document will be agreed to, it being understood that the granting or denying of any waiver which may hereafter
be requested by Borrower or any other Loan Party Obligor remains in the sole and absolute discretion of the Collateral Agent and
the Lenders.

 

(b)       Upon
the effectiveness of this Waiver, each reference in the Facility Agreement to “this Agreement”, “hereunder”,
 “herein”, “hereof” or words of like import referring to the Facility Agreement, and each reference in the
other Loan Documents to “the Facility Agreement”, “thereunder”, “therein”, “thereof”
or words of like import referring to the Facility Agreement, shall mean and be a reference to the Facility Agreement as modified
by this Waiver.

 

(c)       This
Waiver is a Loan Document.

 

     6 

     

    

 

SECTION 14.  Guarantors’
Acknowledgment and Agreement. Although the Guarantors party hereto have been informed of the matters set forth herein and
have agreed to the same, each such Guarantor understands, acknowledges and agrees that none of the Secured Parties has any obligations
to inform such Guarantor of such matters in the future or to seek its acknowledgment or agreement to future amendments, restatements,
supplements, changes, modifications, waivers or consents, and nothing herein shall create such a duty.

 

SECTION 15.  Release.

 

(a)       As
of the date of this Waiver, each Loan Party Obligor, for itself and on behalf of its successors, assigns, Subsidiaries and such
Loan Party Obligor’s and its Subsidiaries’ officers, directors (and any equivalent governing body), employees, agents,
representatives, advisors, consultants, accountants and attorneys, and any Person acting for or on behalf of, or claiming through
it (collectively, the “Releasing Persons”), hereby waives, releases, remises and forever discharges each Secured
Party, each of their respective Affiliates and successors in title, and past, present and future officers, directors, employees,
limited partners, general partners, investors, attorneys, assigns, subsidiaries, shareholders, trustees, agents and other professionals
of the foregoing entities and all other Persons and entities to whom any Secured Party would be liable if such Persons were found
to be liable to such Releasing Persons (each a “Releasee” and collectively, the “Releasees”),
from any and all past, present and future claims, suits, liens, lawsuits, amounts paid in settlement, debts, deficiencies, disbursements,
demands, obligations, liabilities, causes of action, damages, losses, costs and expenses of any kind or character, whether based
in equity, law, contract, tort, implied or express warranty, strict liability, criminal or civil statute or common law (each a
 “Claim” and collectively, the “Claims”), whether known or unknown, fixed or contingent, direct,
indirect, or derivative, asserted or unasserted, matured or unmatured, foreseen or unforeseen, past or present, liquidated or unliquidated,
suspected or unsuspected, which such Releasing Persons ever had from the beginning of the world until (and including) the date
hereof, against any such Releasing Person which relates, directly or indirectly, to the Facility Agreement, any other Loan Document,
any Equity Document, the Stock owned by any Releasee or to any acts or omissions of any such Releasee with respect to the Facility
Agreement, any other Loan Document, any Equity Document, or any Stock owned by any Releasee, or to the lender-borrower relationship
evidenced by the Facility Agreement and the other Loan Documents (including as modified hereby, as applicable) or the Stock holder
relationship evidenced by the Equity Documents.

 

(b)      As
to each and every Claim released hereunder, each Loan Party Obligor hereby agrees, represents and warrants that it has received
the advice of legal counsel with regard to the releases contained herein, and having been so advised, specifically waives the benefit
of the provisions of Section 1542 of the Civil Code of California which provides as follows:

 

“A GENERAL RELEASE DOES NOT
EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”

 

(c)       As
to each and every Claim released hereunder, each Loan Party Obligor also waives the benefit of each other similar provision of
applicable federal, state or foreign law (including without limitation the laws of the State of New York), if any, pertaining to
general releases after having been advised by legal counsel to such Loan Party Obligor with respect thereto.

 

     7 

     

    

 

(d)       Each
Loan Party Obligor acknowledges that it may hereafter discover facts different from or in addition to those now known or believed
to be true with respect to such Claims and agrees that this Waiver shall be and remain effective in all respects notwithstanding
any such differences or additional facts. Each Loan Party Obligor understands, acknowledges and agrees that the release set forth
above in this Section 15 may be pleaded as a full and complete defense and may be used as a basis for an injunction
against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such
release.

 

(e)       Each
Loan Party Obligor hereby agrees, represents, and warrants that (i) neither such Loan Party Obligor nor any other Releasing
Person has voluntarily, by operation of law or otherwise, assigned, conveyed, transferred or encumbered, either directly or indirectly,
in whole or in part, any right to or interest in any of the Claims released pursuant to this Section 15; (ii)(A) this
Waiver has been entered into (1) without force or duress and (2) of the free will of each such Person and (B) the
decision of such undersigned to enter into this Waiver is a fully informed decision and such undersigned is aware of all legal
and other ramifications of each such decision; and (iii) such Loan Party Obligor has (A) read and understands this Waiver
(including the release granted in this Section 15 and the Facility Agreement), (B) consulted with and been represented
by independent legal counsel of its own choosing in negotiations for and the preparation of this Waiver, (C) read this Waiver
in full and final form, and (D) been advised by its counsel of its rights and obligations under this Waiver.

 

(f)        Each
Loan Party Obligor, for itself and on behalf of each other Releasing Person, hereby absolutely, unconditionally and irrevocably
covenants and agrees with and in favor of each Releasee above that it will not sue (at law, in equity, in any regulatory proceeding
or otherwise) any Releasee on the basis of any Claim released, remised and discharged by such Person pursuant to the above release
in this Section 15. Each Loan Party Obligor further agrees that it shall not dispute the validity or enforceability
of this Waiver, the Facility Agreement, any of the other Loan Documents, or any Equity Document, or any of its obligations hereunder
or thereunder, or the creation, validity, perfection, priority, enforceability or the extent of the Collateral Agent’s security
interest or Lien on any item of Collateral under the Facility Agreement, the Security Agreement and the other Loan Documents or
the providing of any “control” (within the meaning of Articles 8 and 9 under the applicable UCC) under any Control
Agreement or any other Loan Document. If any Loan Party Obligor or any other Releasing Person breaches or otherwise violates the
foregoing covenant and provisions, such Loan Party Obligor, for itself and its Releasing Persons, agrees to pay, in addition to
such other damages as any Releasee may sustain as a result of such violation, all attorneys’ fees, expenses and costs and
any other fees, expenses and costs incurred by such Releasee as a result of such breach or violation.

 

(g)      The
provisions of this Section 15 shall survive the termination of the Facility Agreement, the other Loan Documents and
the Equity Documents and the payment in full of the Obligations.

 

[Signature Pages Follow]

 

     8 

     

    

 

IN WITNESS WHEREOF,
the Parties have executed this Waiver as of the date first set forth above.

 

	 	BORROWER:	 
	 	 	 	 
	 	NEOS THERAPEUTICS, INC.,	 
	 	a Delaware corporation	 
	 	 	 	 
	 	By:	/s/ Richard Eisenstadt	 
	 	Name:	Richard Eisenstadt	 
	 	Title:	Chief Financial Officer	 

 

	 	GUARANTORS:	 
	 	 	 	 
	 	NEOS THERAPEUTICS COMMERCIAL, LLC, a Delaware limited liability company
	 	 	 	 
	 	By:	/s/ Richard Eisenstadt	 
	 	Name:	Richard Eisenstadt	 
	 	Title:	Chief Financial Officer	 

 

	 	NEOS THERAPEUTICS BRANDS, LLC,	 
	 	a Delaware limited liability company	 
	 	 	 	 
	 	By:	/s/ Richard Eisenstadt	 
	 	Name:	Richard Eisenstadt	 
	 	Title:	Chief Financial Officer	 

 

	 	NEOS THERAPEUTICS, LP,	 
	 	a Texas limited partnership	 
	 	 	 	 
	 	By:	PharmaFab Texas, LLC, its general partner
	 	 	 	 
	 	By:	/s/ Richard Eisenstadt	 
	 	Name:	Richard Eisenstadt	 
	 	Title:	Chief Financial Officer	 

 

Signature
Page – Neos Therapeutics Waiver

 

     

     

    

 

	 	PHARMAFAB TEXAS, LLC,	 
	 	a Texas limited liability company	 
	 	 	 	 
	 	By:	/s/ Richard Eisenstadt	 
	 	Name:	Richard Eisenstadt	 
	 	Title:	Chief Financial Officer	 

 

Signature
Page – Neos Therapeutics Waiver

 

     

     

    

 

	 	COLLATERAL AGENT:	 
	 	 	 	 
	 	Deerfield Mgmt, L.P.	 
	 	 	 	 
	 	By:	J.E. Flynn Capital, LLC, General Partner	 
	 	 	 	 
	 	By:	/s/ David J. Clark	 
	 	Name:	David J. Clark	 
	 	Title:	Authorized Signatory	 

 

	 	LENDERS:	 
	 	 	 	 
	 	DEERFIELD PRIVATE DESIGN FUND III, L.P.	 
	 	 	 	 
	 	By:	Deerfield Mgmt III, L.P., its General Partner	 
	 	By:	J.E. Flynn Capital III, LLC, its General Partner	 
	 	 	 	 
	 	By:	/s/ David J. Clark	 
	 	Name:	David J. Clark	 
	 	Title:	Authorized Signatory	 

 

	 	DEERFIELD PARTNERS, L.P.	 
	 	 	 	 
	 	By:	Deerfield Mgmt, L.P.,	 
	 	 	its General Partner	 
	 	 	 	 
	 	By:	J.E. Flynn Capital,
LLC,	 
	 	 	its General Partner	 
	 	 	 	 
	 	By:	/s/ David J. Clark	 
	 	 	Name: David J. Clark	 
	 	 	Title: Authorized Signatory	 

 

Signature
Page – Neos Therapeutics Waiver

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