As filed with the Securities and Exchange Commission on July 11, 2007

Registration No. 333-142535

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

 

Amendment No. 3

to

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

 

 

Cumberland Pharmaceuticals Inc.

(Exact name of registrant as specified in its charter)

 

 

 

2525 West End Avenue, Suite 950

Nashville, Tennessee 37203

(615) 255-0068

(Address, including zip code, and telephone number, including

area code, of registrant’s principal executive offices)

 

 

A.J. Kazimi

Chairman and CEO

2525 West End Avenue, Suite 950

Nashville, Tennessee 37203

(615) 255-0068

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

 

 

Copies to:

 

 

 

 

Approximate date of commencement of proposed offering to the public:  As soon as practicable after this registration statement becomes effective.

 

 

 

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box:  o

 

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

 

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

 

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

 

 

 

 

 

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

 

Part II

 

Information not required in prospectus

 

 

The expenses relating to the registration of the shares of common stock being offered hereby, other than underwriting discounts and commissions, will be borne by us. Such expenses are estimated to be as follows:

 

 

 

Our charter and bylaws provide for indemnification of our directors to the fullest extent permitted by the Tennessee Business Corporation Act, as amended from time to time. Our directors shall not be liable to the corporation or its shareholders for monetary damages for breach of fiduciary duty as a director. The Tennessee Business Corporation Act provides that a Tennessee corporation may indemnify its directors and officers against expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by them in connection with any proceeding, whether criminal or civil, administrative or investigative if, in connection with the matter in issue, the individual’s conduct was in good faith, and the individual reasonably believed: in the case of conduct in the individual’s official capacity with the corporation, that the individual’s conduct was in its best interest; and in all other cases, that the individual’s behavior was at least not opposed to its best interest; and in the case of a criminal proceeding, the individual had no reason to believe the individual’s conduct was unlawful. In addition, we have entered into indemnification agreements with our directors. These provisions and agreements may have the practical effect in certain cases of eliminating the ability of our shareholders to collect monetary damages from directors. We believe that these contractual agreements and the provisions in our charter and bylaws are necessary to attract and retain qualified persons as directors.

 

 

In September 2003, we borrowed $500,000 from nine existing and accredited shareholders pursuant to uncollateralized secured notes payable with original maturity dates of 130 days. These notes bore interest at 12% for the first 30 days and 15% thereafter. The holders of the notes had, at their option, until the maturity date of the notes payable, the right to convert all or a portion of the unpaid principal and interest into shares of our common stock at a rate of $12.00 per share. We also issued to these lenders options to purchase shares of our common stock, at an exercise price of $12.00 per share, and at the rate of 1,540 shares of common stock per $50,000 face value of the notes. If we had not prepaid all amounts due and owing under the notes, we agreed to grant additional options at the rate of 770 shares of common stock per $50,000 face value on each of (i) the 30th day after the date of the notes and (ii) on a continuing basis, each successive 30-day period thereafter, or portion thereof, as the notes remained outstanding. At December 31, 2003, the notes payable had not been prepaid, so we granted options to acquire an additional 30,800 shares. We amended the notes agreements in January 2004 to extend the maturity date 130 days. The amendments granted an additional option to

 

II-1

 

Part II

 

purchase 1,540 shares per $50,000 face value upon extension of the notes and contained similar provisions for granting options in the event of nonpayment on the agreed-upon due dates. Based on the extension of the maturity date, rights to purchase a total of 61,600 shares were earned by the holders of the notes in 2004. We repaid these notes or settled these notes in shares in May 2004. The issuance of these securities was exempt from registration under the Securities Act in reliance on Section 4(2) of the Securities Act.

 

In September 2003, we borrowed $1,000,000 from S.C.O.U.T. Healthcare Fund, L.P., or S.C.O.U.T., in the form of a convertible promissory note with a maturity date of September 2004. The President and majority shareholder of the general partner of S.C.O.U.T., Dr. Lawrence W. Greer, serves on our board of directors. Pursuant to the terms of the note, on its maturity date, S.C.O.U.T. converted the principal value of the note plus all interest accrued at a fixed rate of ten percent per annum into 91,667 shares of our common stock at a price of $12.00 per share.

 

On April 15, 2004, we issued 43,000 common shares at $12.00 per share, for an aggregate consideration of $516,000 and a five-year warrant to purchase 20,000 common shares at $12.00 per share to S.C.O.U.T., which represented to us that it was an accredited investor. This issuance was exempt from registration under the Securities Act in reliance on Section 4(2) of the Securities Act.

 

By an offering memorandum dated April 1, 2005, we offered 100,000 shares of our common stock at a purchase price of $18.00 per share. Thirty investors subscribed for 100,000 shares in the aggregate, for an aggregate consideration of $1,800,000. This issuance was exempt from registration under the Securities Act in reliance on Section 4(2) of the Securities Act.

 

By an offering memorandum dated May 5, 2005, we received approximately $2,000,000 from approximately 41 investors in exchange for uncollateralized convertible promissory notes with a maturity date six months from the date of issuance. Upon maturity, the principal and accrued interest payable on the notes converted into 112,916 shares of common stock at a rate of $18.00 per share. This issuance was exempt from registration under the Securities Act in reliance on Section 4(2) of the Securities Act.

 

In April 2006, we issued a ten-year warrant to purchase 1,979 common shares at $18.00 per share to Bank of America. The issuance of this security was exempt from registration under the Securities Act in reliance on Section 4(2) of the Securities Act.

 

Since January 1, 2004, we have granted options to purchase 287,610 shares of our common stock under the 1999 Option Plan to our employees, directors and consultants at exercise prices ranging from $12.00 to $22.00 per share. Of these, an aggregate of 775 shares of our common stock were issued upon the exercise of stock options.

 

Since January 1, 2004, we also issued an aggregate of 75,645 shares of common stock as compensation for services pursuant to contracts. Restricted-stock legends were affixed to the securities issued in these transactions. Our board of directors determined that the fair value of the services received equaled the value of the stock granted with values ranging from $12.00 to $22.00 per share. The issuances of common stock in connection with awards of restricted stock were exempt either pursuant to Rule 701 or pursuant to Section 4(2) of the Securities Act as transactions by an issuer not involving a public offering.

 

The issuances of securities described in the first six paragraphs of Item 15 were exempt from registration under the Securities Act of 1933, as amended, in reliance on Section 4(2) of the Securities Act of 1933, as amended, and/or Regulation D promulgated thereunder, as transactions by an issuer not involving any public offering. The purchasers of the securities in these transactions represented that they were accredited investors and they were acquiring the securities for investment only and not with a view

 

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Part II

 

toward the public sale or distribution thereof. Such purchasers received written disclosures that the securities had not been registered under the Securities Act of 1933, as amended, and that any resale must be made pursuant to a registration statement or an available exemption from registration. All purchasers either received adequate financial statement or non-financial statement information about the registrant or had adequate access, through their relationship with the registrant, to financial statement or non-financial statement information about the registrant. The sale of these securities was made without general solicitation or advertising.

 

The issuances of securities described in the seventh and eighth paragraphs of Item 15 were exempt from registration under the Securities Act of 1933, as amended, in reliance on either (1) Rule 701 of the Securities Act of 1933, as amended, as offers and sales of securities pursuant to compensatory benefit plans and contracts relating to compensation in compliance with Rule 701 or (2) Section 4(2) of the Securities Act as transactions by an issuer not involving any public offering.

 

All certificates representing the securities issued in these transactions described in this Item 15 included appropriate legends setting forth that the securities had not been offered or sold pursuant to a registration statement and describing the applicable restrictions on transfer of the securities. There were no underwriters employed in connection with any of the transactions set forth in this Item 15.

 

 

(a)

 

 

II-3

 

Part II

 

II-4

 

Part II

 

 

 

 

 

All other schedules have been omitted because they are not applicable.

 

 

The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

 

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers, and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer, or controlling person of the registrant in the successful defense of any action, suit, or proceeding) is asserted by such director, officer, or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.

 

The undersigned registrant hereby undertakes that:

 

1)  For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to

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Part II

 

Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective.

 

2)  For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

II-6

 

Signatures

 

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Amendment No. 3 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Nashville, State of Tennessee, on the 11th day of July, 2007.

 

CUMBERLAND PHARMACEUTICALS INC.

 

A.J. Kazimi
Chairman and CEO
(Principal Executive Officer)

 

Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 3 to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

 

S-1

 

Exhibit Index

 

 

 

EXHIBIT 4.6.1

CUMBERLAND PHARMACEUTICALS INC.
2007 LONG-TERM INCENTIVE COMPENSATION PLAN
INCENTIVE STOCK OPTION AGREEMENT

     This Option Agreement is entered into and effective on ___, by and between Cumberland Pharmaceuticals Inc., a Tennessee corporation (the “Company”), and ___, (the “Participant”).

     WHEREAS, the Company has adopted the 2007 Long-Term Incentive Compensation Plan (the “Plan”), which is administered by the Company’s Board of Directors (the “Board”); and

     WHEREAS, as an increased incentive to contribute to the Company’s future success and prosperity, the Company will, subject to the Participant continuing to provide services to the Company (or any of its current or future subsidiaries), provide the Participant an opportunity to acquire shares of the Company’s common stock, no par value (the “Stock”).

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

     1. Grant of Option. Subject to the terms of the Plan and the terms of this Option Agreement, the Company grants to the Participant an option (the “Option”) to purchase from the Company up to ___shares of Stock (the “Shares”), subject to adjustment as provided in the Plan. This Option is intended to qualify as an incentive stock option (an “ISO”) within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended.

     2. Exercise Price. If the Option is exercised, the purchase price per Share shall be ___.

     3. Method of Exercise. The Option granted under this Agreement shall be exercisable from time to time, in whole or in part, by written notice in the manner set forth in Section 8 hereof, accompanied by payment of the purchase price for the Shares which the Participant elects to purchase by cash, check, or such other instrument as the Company may accept. The Company shall make prompt delivery of such Shares; provided that if any law or regulation which requires the Company to take any action with respect to the Shares specified in such notice before issuance thereof, then the date of delivery of such Shares shall be extended for the period necessary to take such action.

4. Vesting.

          (a) Participant shall become vested in the Option up to the amount of ___ shares on the 31^st day of each December during the ___year period from ___to ___, subject to the achievement of certain Performance Criteria and amount of time contributed, as determined in the sole and absolute discretion of the Board.

          (b) Upon the Participant’s Employment Termination, the Option, to the extent unvested, shall lapse and be cancelled, and be of no further force and effect, as of midnight of such date, unless the Board resolves (under Section 4(b) of the Plan) to cancel or cause the forfeiture of the Incentive Option at an earlier time.

          (c) Upon an Acquisition Event and/or a Change in Control Event, the Option will vest to the extent provided in the Plan.

     5. Termination of Option; Restrictions on Exercise. Except as otherwise stated in this Agreement, this Option, to the extent not previously exercised, shall expire on the ___anniversary (the “Expiration Date”) of the date of this Agreement. The following additional provisions shall apply to the exercise of this Option:

          (a) Termination of Employment. Except as otherwise provided in this Agreement or in the Plan, if Participant’s employment with the Company or any of its subsidiaries is terminated by the Participant or the Company, this Option, to the extent that it is vested in accordance with the applicable provisions of Section 4 hereof, may not be exercised after the earlier of (i) ninety (90) days after such termination or (ii) the expiration date of this Option stated above. Except as expressly set forth otherwise herein, this Option shall terminate in all other respects upon such termination of employment.

          (b) Death of Participant. If the Participant’s employment with the Company is terminated due to his/her death during the term of this Option, the Participant’s legal representative, or the person so entitled under the Participant’s last will and testament, or under applicable intestate laws, shall have the right to exercise this Option for the number of shares to which the Participant was entitled in accordance with applicable provisions of Section 4 hereof, and such right shall expire and this Option shall terminate on the Expiration Date. Except as expressly set forth otherwise herein, this Option shall terminate in all other respects upon such termination of employment.

     6. Provisions of Plan. This Option is subject to the Plan as defined herein. The terms and provisions of the Plan as it may be amended from time to time are hereby incorporated herein by reference. In the event of a conflict between the terms or provisions contained herein and the terms or provisions of the Plan, the applicable terms and provisions of the Plan will govern and prevail; however, in the event of a conflict regarding specific terms and provisions addressing the duration of this Option after termination of employment, the terms and provisions of this Option will govern.

     7. Tax Treatment of Option. This Option is intended to qualify as an ISO within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended. This Option will automatically be converted to a nonqualified option to the extent that the Option or exercise thereof does not meet the conditions of the Internal Revenue Code, as amended, to maintain status as an ISO. The Participant is responsible for any federal, state, local, or foreign tax, including income tax, social security tax, payroll tax, payment on account, or other tax-related withholding with respect to this Option (including the grant, vesting and exercise of the Option and the receipt of Stock and sale of Stock). The Company does not guarantee any particular tax treatment or results in connection with the grant, vesting or exercise of the Option.

     8. Notices. Any notice, request, instruction or other document given under this Option Agreement shall be in writing and shall be addressed and delivered in the case of the Company, to the Secretary of the Company at the principal office of the Company and, in the

case of the Participant, the Participant’s address as set forth herein or to such other address as the Participant may provide in a written notice to the Company, a copy of which shall be on file with the Secretary of the Company.

     9. Governing Law. This Option Agreement shall be construed in accordance with and governed by the law of the State of Tennessee, without giving effect to the conflict of law provisions thereof.

     10. Relation to Other Benefits. Unless otherwise provided, the benefits received by the Participant under this Agreement will not be taken into account or treated as normal salary or compensation in determining any benefits to which the Participant may be entitled under any profit sharing, retirement, bonus, long service, or other benefit or compensation plan maintained by the Company, including the amount of any life insurance coverage available to any beneficiary of the Participant under any life insurance plan covering employees of the Company, or as part of the calculation of any severance, resignation, termination, redundancy or end of service payments. The grant of this Option does not create any contractual or other right to receive future grants of Options, or benefits in lieu of Options, even if the Participant has a history of receiving Options or other stock awards.

     IN WITNESS WHEREOF, each of the parties hereto has caused this Option Agreement to be executed by its duly authorized representative.

OPTION NO. _________________

FOR FUTURE USE

NOTICE OF EXERCISE

Cumberland Pharmaceuticals Inc.:

     The undersigned hereby elects to exercise the purchase rights granted thereto pursuant to the attached Option Agreement # ___. In accordance with the terms thereof, the undersigned elects to purchase ______ shares of Common Stock of Cumberland Pharmaceuticals Inc. and tenders herewith payment of the purchase price for such shares in full.

     In exercising such rights, the undersigned hereby confirms and acknowledges that the shares of Common Stock are being acquired solely for investment, and that the undersigned will not offer, sell, or otherwise dispose of any such shares of Common Stock, except under circumstances that will not result in a violation of the Securities Act of 1933, as amended, or any state securities laws.

     Please issue and deliver to the undersigned a certificate or certificates representing said shares of Common Stock in the name of the undersigned. Please issue and deliver to the undersigned a new Option for any unexercised portion of the attached Option in the name of the undersigned.

Date: _____________

Delivery Information:		Address:
		City, State, Zip:
		Phone Number:
				(for express mailing purposes)

$_________________________

Payment Attached

EXHIBIT 4.6.2

CUMBERLAND PHARMACEUTICALS INC.
2007 LONG-TERM INCENTIVE COMPENSATION PLAN
NONSTATUTORY STOCK OPTION AGREEMENT

     This Option Agreement is entered into and effective on ___, by and between Cumberland Pharmaceuticals Inc., a Tennessee corporation (the “Company”), and ___, (the “Participant”).

     WHEREAS, the Company has adopted the 2007 Long-Term Incentive Compensation Plan (the “Plan”), which is administered by the Company’s Board of Directors (the “Board”); and

     WHEREAS, as an increased incentive to contribute to the Company’s future success and prosperity, the Company will, subject to the Participant continuing to provide services to the Company (or any of its current or future subsidiaries), provide the Participant an opportunity to acquire shares of the Company’s common stock, no par value (the “Stock”).

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

     1. Grant of Option. Subject to the terms of the Plan and the terms of this Option Agreement, the Company grants to the Participant an option (the “Option”) to purchase from the Company up to ___shares of Stock (the “Shares”), subject to adjustment as provided in the Plan. This Option is not intended to qualify as an incentive stock option within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended.

     2. Exercise Price. If the Option is exercised, the purchase price per Share shall be ___.

     3. Method of Exercise. The Option granted under this Agreement shall be exercisable from time to time, in whole or in part, by written notice in the manner set forth in Section 8 hereof, accompanied by payment of the purchase price for the Shares which the Participant elects to purchase by cash, check, or such other instrument as the Company may accept. The Company shall make prompt delivery of such Shares; provided that if any law or regulation which requires the Company to take any action with respect to the Shares specified in such notice before issuance thereof, then the date of delivery of such Shares shall be extended for the period necessary to take such action.

     4. Vesting.

          (a) Participant shall become vested in the Option up to the amount of ___shares on the 31^st day of each December during the ___year period from ___to ___, subject to the achievement of certain Performance Criteria and amount of time contributed, as determined in the sole and absolute discretion of the Board.

          (b) Upon the Participant’s Employment Termination (or the termination of the consulting engagement), the Option, to the extent unvested, shall lapse and be cancelled, and be of no further force and effect, as of midnight of such date, unless the Board resolves (under Section 4(b) of the Plan) to cancel or cause the forfeiture of the Option at an earlier time.

          (c) Upon an Acquisition Event and/or a Change in Control Event, the Option will vest to the extent provided in the Plan.

     5. Termination of Option; Restrictions on Exercise. Except as otherwise stated in this Agreement, this Option, to the extent not previously exercised, shall expire on the ___anniversary (the “Expiration Date”) of the date of this Agreement. The following additional provisions shall apply to the exercise of this Option:

          (a) Termination of Employment. Except as otherwise provided in this Agreement or in the Plan, if Participant’s employment with the Company or any of its subsidiaries is terminated by the Participant or the Company (or if the Participant’s consulting engagement is terminated), this Option, to the extent that it is vested in accordance with the applicable provisions of Section 4 hereof, may not be exercised after the earlier of (i) ninety (90) days after such termination or (ii) the expiration date of this Option stated above. Except as expressly set forth otherwise herein, this Option shall terminate in all other respects upon such termination of employment (or consulting engagement).

          (b) Death of Participant. If the Participant’s employment (or consulting engagement) with the Company is terminated due to his/her death during the term of this Option, the Participant’s legal representative, or the person so entitled under the Participant’s last will and testament, or under applicable intestate laws, shall have the right to exercise this Option for the number of shares to which the Participant was entitled in accordance with applicable provisions of Section 4 hereof, and such right shall expire and this Option shall terminate on the Expiration Date. Except as expressly set forth otherwise herein, this Option shall terminate in all other respects upon such termination of employment (or consulting engagement).

     6. Provisions of Plan. This Option is subject to the Plan as defined herein. The terms and provisions of the Plan as it may be amended from time to time are hereby incorporated herein by reference. In the event of a conflict between the terms or provisions contained herein and the terms or provisions of the Plan, the applicable terms and provisions of the Plan will govern and prevail; however, in the event of a conflict regarding specific terms and provisions addressing the duration of this Option after termination of employment (or consulting engagement), the terms and provisions of this Option will govern.

     7. Tax Treatment of Option. The Participant is responsible for any federal, state, local, or foreign tax, including income tax, social security tax, payroll tax, payment on account, or other tax-related withholding with respect to this Option (including the grant, vesting and exercise of the Option and the receipt of Stock and sale of Stock). The Company does not guarantee any particular tax treatment or results in connection with the grant, vesting or exercise of the Option.

     8. Notices. Any notice, request, instruction or other document given under this Option Agreement shall be in writing and shall be addressed and delivered in the case of the Company, to the Secretary of the Company at the principal office of the Company and, in the case of the Participant, the Participant’s address as set forth herein or to such other address as the

Participant may provide in a written notice to the Company, a copy of which shall be on file with the Secretary of the Company.

     9. Governing Law. This Option Agreement shall be construed in accordance with and governed by the law of the State of Tennessee, without giving effect to the conflict of law provisions thereof.

     10. Relation to Other Benefits. Unless otherwise provided, the benefits received by the Participant under this Agreement will not be taken into account or treated as normal salary or compensation in determining any benefits to which the Participant may be entitled under any profit sharing, retirement, bonus, long service, or other benefit or compensation plan maintained by the Company, including the amount of any life insurance coverage available to any beneficiary of the Participant under any life insurance plan covering employees of the Company, or as part of the calculation of any severance, resignation, termination, redundancy or end of service payments. The grant of this Option does not create any contractual or other right to receive future grants of Options, or benefits in lieu of Options, even if the Participant has a history of receiving Options or other stock awards.

     IN WITNESS WHEREOF, each of the parties hereto has caused this Option Agreement to be executed by its duly authorized representative.

OPTION NO. _________________

FOR FUTURE USE

NOTICE OF EXERCISE

Cumberland Pharmaceuticals Inc.:

     The undersigned hereby elects to exercise the purchase rights granted thereto pursuant to the attached Option Agreement # ___. In accordance with the terms thereof, the undersigned elects to purchase ______ shares of Common Stock of Cumberland Pharmaceuticals Inc. and tenders herewith payment of the purchase price for such shares in full.

     In exercising such rights, the undersigned hereby confirms and acknowledges that the shares of Common Stock are being acquired solely for investment, and that the undersigned will not offer, sell, or otherwise dispose of any such shares of Common Stock, except under circumstances that will not result in a violation of the Securities Act of 1933, as amended, or any state securities laws.

     Please issue and deliver to the undersigned a certificate or certificates representing said shares of Common Stock in the name of the undersigned. Please issue and deliver to the undersigned a new Option for any unexercised portion of the attached Option in the name of the undersigned.

Date: ______________

Delivery Information:		Address:
		City, State, Zip:
		Phone Number:
				(for express mailing purposes)

$_________________________

Payment Attached

EXHIBIT 4.7

CUMBERLAND PHARMACEUTICALS INC.
2007 DIRECTORS’ INCENTIVE PLAN
NONSTATUTORY STOCK OPTION AGREEMENT

     This Option Agreement is entered into and effective on ___, by and between Cumberland Pharmaceuticals Inc., a Tennessee corporation (the “Company”), and ___, (the “Participant”).

     WHEREAS, the Company has adopted the 2007 Directors’ Incentive Plan (the “Plan”), which is administered by the Compensation Committee of the Company’s Board of Directors (the “Board”); and

     WHEREAS, as an increased incentive to contribute to the Company’s future success and prosperity, the Company will, subject to the Participant continuing to serve on the Board, provide the Participant an opportunity to acquire shares of the Company’s common stock, no par value (the “Stock”).

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

     1. Grant of Option. Subject to the terms of the Plan and the terms of this Option Agreement, the Company grants to the Participant an option (the “Option”) to purchase from the Company up to ___shares of Stock (the “Shares”), subject to adjustment as provided in the Plan. This Option is not intended to qualify as an incentive stock option within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended.

     2. Exercise Price. If the Option is exercised, the purchase price per Share shall be ___.

     3. Method of Exercise. The Option granted under this Agreement shall be exercisable from time to time, in whole or in part, by written notice in the manner set forth in Section 8 hereof, accompanied by payment of the purchase price for the Shares which the Participant elects to purchase by cash, check, or such other instrument as the Company may accept. The Company shall make prompt delivery of such Shares; provided that if any law or regulation which requires the Company to take any action with respect to the Shares specified in such notice before issuance thereof, then the date of delivery of such Shares shall be extended for the period necessary to take such action.

     4. Vesting.

          (a) Participant shall become vested in the Option up to the amount of ___shares on the 31^st day of each December during the ___year period from ___to ___.

          (b) If the Participant ceases to serve on the Board for any reason, the Option, to the extent unvested, shall be forfeited, automatically cancelled, and be of no further force and effect, as of midnight of such date.

          (c) Upon an Acquisition Event and/or a Change in Control Event, the Option will vest to the extent provided in the Plan.

     5. Termination of Option; Restrictions on Exercise. Except as otherwise stated in this Agreement, this Option, to the extent not previously exercised, shall expire on the tenth anniversary (the “Expiration Date”) of the date of this Agreement. The following additional provisions shall apply to the exercise of this Option:

          (a) Termination of Board Service. If the Participant ceases to serve on the Board for any reason, this Option, to the extent that it is vested in accordance with the applicable provisions of Section 4 hereof, may not be exercised after the earlier of (i) two (2) years after such termination or (ii) the Expiration Date of this Option stated above. Except as expressly set forth otherwise herein, this Option shall terminate in all other respects upon such termination.

          (b) Death of Participant. If the Participant’s Board service with the Company is terminated due to his/her death during the term of this Option, the Participant’s legal representative, or the person so entitled under the Participant’s last will and testament, or under applicable intestate laws, shall have the right to exercise this Option for the number of shares to which the Participant was entitled in accordance with applicable provisions of Section 4 hereof, and such right shall expire and this Option shall terminate on the Expiration Date. Except as expressly set forth otherwise herein, this Option shall terminate in all other respects upon the Participant’s death.

     6. Provisions of Plan. This Option is subject to the Plan as defined herein. The terms and provisions of the Plan as it may be amended from time to time are hereby incorporated herein by reference. In the event of a conflict between the terms or provisions contained herein and the terms or provisions of the Plan, the applicable terms and provisions of the Plan will govern and prevail; however, in the event of a conflict regarding specific terms and provisions addressing the duration of this Option after termination of Board service, the terms and provisions of this Option will govern.

     7. Tax Treatment of Option. The Participant is responsible for any federal, state, local, or foreign tax, including income tax, social security tax, payroll tax, payment on account, or other tax-related withholding with respect to this Option (including the grant, vesting and exercise of the Option and the receipt of Stock and sale of Stock). The Company does not guarantee any particular tax treatment or results in connection with the grant, vesting or exercise of the Option.

     8. Notices. Any notice, request, instruction or other document given under this Option Agreement shall be in writing and shall be addressed and delivered in the case of the Company, to the Secretary of the Company at the principal office of the Company and, in the case of the Participant, the Participant’s address as set forth herein or to such other address as the Participant may provide in a written notice to the Company, a copy of which shall be on file with the Secretary of the Company.

     9. Governing Law. This Option Agreement shall be construed in accordance with and governed by the law of the State of Tennessee, without giving effect to the conflict of law provisions thereof.

     10. Relation to Other Benefits. Unless otherwise provided, the benefits received by the Participant under this Agreement will not be taken into account or treated as normal salary or compensation in determining any benefits to which the Participant may be entitled under any profit sharing, retirement, bonus, long service, or other benefit or compensation plan maintained by the Company, including the amount of any life insurance coverage available to any beneficiary of the Participant under any life insurance plan covering employees of the Company, or as part of the calculation of any severance, resignation, termination, redundancy or end of service payments. The grant of this Option does not create any contractual or other right to receive future grants of Options, or benefits in lieu of Options, even if the Participant has a history of receiving Options or other stock awards.

     IN WITNESS WHEREOF, each of the parties hereto has caused this Option Agreement to be executed by its duly authorized representative.

OPTION NO. _________________

FOR FUTURE USE

NOTICE OF EXERCISE

Cumberland Pharmaceuticals Inc.:

     The undersigned hereby elects to exercise the purchase rights granted thereto pursuant to the attached Option Agreement # ___. In accordance with the terms thereof, the undersigned elects to purchase ______ shares of Common Stock of Cumberland Pharmaceuticals Inc. and tenders herewith payment of the purchase price for such shares in full.

     In exercising such rights, the undersigned hereby confirms and acknowledges that the shares of Common Stock are being acquired solely for investment, and that the undersigned will not offer, sell, or otherwise dispose of any such shares of Common Stock, except under circumstances that will not result in a violation of the Securities Act of 1933, as amended, or any state securities laws.

     Please issue and deliver to the undersigned a certificate or certificates representing said shares of Common Stock in the name of the undersigned. Please issue and deliver to the undersigned a new Option for any unexercised portion of the attached Option in the name of the undersigned.

Date: _______________

Delivery Information:		Address:
		City, State, Zip:
		Phone Number:
				(for express mailing purposes)

$_________________________

Payment Attached

EXHIBIT 10.1

*Certain portions of this exhibit have been omitted pursuant to a request for confidential
treatment which has been filed separately with the SEC.

MANUFACTURING AND SUPPLY AGREEMENT
for
N-ACETYLCYSTEINE

CUMBERLAND PHARMACEUTICALS INC.

and

BIONICHE LIFE SCIENCES, INC.

January 15, 2002

MANUFACTURING AND SUPPLY
AGREEMENT FOR N-ACETYLCYSTEINE

THIS AGREEMENT is made and entered into as of the 15th day of January, 2002.

BY AND BETWEEN:

CUMBERLAND PHARMACEUTICALS INC., a corporation organized and existing under the laws of Tennessee, United States, with its principal offices located at 209 Tenth Avenue South, Suite 332, Nashville, Tennessee, 37203 (hereinafter referred to as “CUMBERLAND”)

AND:

BIONICHE LIFE SCIENCES INC., a corporation organized and existing under the laws of Ontario, Canada, with its principal place of business located at 231 Dundas Street, East Belleville, Ontario, Canada K8N 1E2 (hereinafter referred to as “BIONICHE”);

WHEREAS, CUMBERLAND is the owner of certain intellectual property rights with respect to a Drug Product (as hereinafter defined);

WHEREAS, BIONICHE has the expertise and the manufacturing facility suitable for the pharmaceutical preparation and production of the Drug Product;

WHEREAS, CUMBERLAND wishes to have BIONICHE manufacture the Drug Product on an exclusive basis for sale in the Territory (as hereinafter defined) and BIONICHE wishes to supply the Drug Product on an exclusive basis to CUMBERLAND on and subject to the terms and conditions set out herein;

NOW, THEREFORE, in consideration of the premises and the undertakings, terms, conditions and covenants set forth below, the parties hereto agree as follows:

1. DEFINITIONS

     1.1 AFFILIATE shall mean, with respect to any Person, any other Person that controls, is controlled by or is under common control with, such Person. A Person shall be regarded as in control of another Person if such Person owns, or directly or indirectly controls, more than fifty percent (50%) of the voting securities (or comparable equity interests) or other ownership interests of the other Person, or if such Person directly or indirectly possesses the power to direct or cause the dⁱrection of the management or policies of the other Person, whether through the ownership of voting securities, by contract or any other means whatsoever.

     1.2 BUFFER SOLUTION shall mean the buffer solution used for the manufacture of the Drug Product.

     1.3 BULK DRUG SUBSTANCE shall mean the active ingredients in the Drug Product.

     1.4 cGMP or GMP shall have the meaning set forth in Schedule I.

     1.5 CONFIDENTIAL INFORMATION shall have the meaning set forth in Article 9.

     1.6 DEVELOPMENT shall mean all work necessary to develop a process to manufacture the Drug Product in full accord with cGMP and to supply the Drug Product conforming to the Specifications. Development activities shall include, but not be limited to, pilot batches, scale-up batches, validation of the manufacturing process, and successful completion of the Drug Product manufacture and delivery as defined in Schedule I attached hereto.

     1.7 DRUG PRODUCT shall mean the N-Acetylcysteine pharmaceutical product developed by CUMBERLAND and marketed under the trade name ACETADOTE or any other trade name selected by CUMBERLAND.

     1.8 EXCIPIENT shall mean any inert substance selected by CUMBERLAND and used to give the Drug Product proper consistency.

     1.9 FACILITY shall mean the manufacturing facility and the real property underlying such manufacturing facility operated by Bioniche Teoranta, an Affiliate of BIONICHE, located at Inverin, Co. Galway, Republic of Ireland.

     1.10 FDA shall mean the United States Food and Drug Administration (FDA) or any successor entity thereto.

     1.11 IN-PROCESS SOLUTION shall mean all Buffer Solutions and Excipients needed to produce Drug Product in the finished dosage form set forth in Schedule I.

     1.12 INVENTION shall have the meaning set forth in Paragraph 9.4.

     1.13 LABELING shall mean all labels and other written, printed, or graphic matter upon: (i) the Drug Product or any container or wrapper utilized with the Drug Product and (ii) any written material accompanying the Drug Product, including without limitation, package inserts.

     1.14 MANUAL shall mean the Manufacturing Project Manual attached as Schedule II to this Agreement and reviewed and accepted by CUMBERLAND and BIONICHE, the terms and provisions of which are incorporated by reference as though fully set forth herein.

     1.15 MANUFACTURE shall mean the act of compounding, component preparations, filling, packaging, testing and any other pharmaceutical manufacturing procedures, or any part thereof, involved in manufacturing the Drug Product from the Bulk Drug Substance.

     1.16 PERSON shall mean an individual, corporation, partnership, limited liability company, or any other form of entity not specifically listed herein.

     1.17 SPECIFICATIONS shall mean those specifications set forth in Attachment I to the Manual.

     1.18 TERRITORY shall have the meaning set forth in Schedule III.

2. DEVELOPMENT AND MANUFACTURING

     2.1 Initiation: Upon request by CUMBERLAND and subject to the provisions hereof, BIONICHE, directly or through an Affiliate thereof, shall Manufacture and package at the Facility all of CUMBERLAND’s requirements for Drug Product in the Territory in the batch size set forth in Schedule I in accordance with the terms hereof, including without limitation, Schedules I and II hereof, the Specifications, and all applicable laws and regulations. Prior to distributing and selling the Drug Product, CUMBERLAND shall prepare and file submissions to the FDA in order to obtain and maintain during the term hereof regulatory approval of the Drug Product, BIONICHE shall prepare and test the Drug Product in accordance with cGMP.

     2.2 Documentation: BIONICHE shall provide CUMBERLAND with required supporting documentation for the manufacture of the Drug Product in a form suitable for CUMBERLAND’s submission to the FDA or applicable governmental authorities for any country into which the Drug Product will be distributed. BIONICHE shall provide draft Chemistry, Manufacturing, and Controls sections for CUMBERLAND’s FDA submissions,

     2.3 Bulk Drug Substance Supply: BIONICHE shall be responsible for the supply of all Bulk Drug Substance in accordance with Schedules I and II hereto; provided that the supply of Bulk Drug Substance shall be exclusively from such suppliers and in such grades as have been approved in writing by CUMBERLAND as reflected on an approved list to be attached hereto as Schedule IV, and provided further that such suppliers and

grades may not be changed without CUMBERLAND’s prior written consent, which consent shall not be unreasonably withheld or delayed. BIONICHE shall maintain, at its expense, secure storage areas for the Bulk Drug Substance at the Facility.

     2.4 Supply of Components: BIONICHE shall be responsible for the supply of all Buffer Solution, Excipients, and all other components of the finished Drug Product in accordance with Schedules I and II hereto; provided that the supply of these components shall be exclusively from such suppliers and in such grades as have been approved in writing by CUMBERLAND as reflected on an approved list to be attached hereto as Schedule IV, and provided further that such suppliers and grades may not be changed without CUMBERLAND’s prior written consent which consent shall not be unreasonably withheld or delayed. BIONICHE shall maintain, at its expense, secure storage areas for the Buffer Solution, Excipients, and all other components at the Facility.

     2.5 Delivery Terms: All deliveries of Drug Product under this Agreement shall be made by BIONICHE to CUMBERLAND in the manner set forth in Schedule I. CUMBERLAND shall, within twenty (20) working days after its receipt of any shipment, notify BIONICHE in writing, of any claim relating to a Drug Product not conforming to GMP or to the Specifications, and, failing such notification, notwithstanding Paragraph 5.1 of this Agreement, CUMBERLAND shall be deemed to have accepted the Drug Product. If BIONICHE disputes CUMBERLAND’s claim that the Drug Product is non-conforming, then such dispute shall be resolved by an independent testing organization of recognized repute within the pharmaceutical industry mutually agreed upon by BIONICHE and CUMBERLAND, the appointment of which shall not be unreasonably withheld or delayed by either party. In such event, CUMBERLAND shall ship the testing organization representative samples of the Drug Product from the disputed production lot, and the fees and costs of such testing organization and related shipping and supply costs shall be borne by the party whose position is not sustained by the testing organization. Should CUMBERLAND’s claim of non-conformity be sustained by the testing organization, BIONICHE shall, at CUMBERLAND’S sole option, (a) credit towards future orders, or (b) refund within thirty (30) days thereof; the payment for such non-conforming goods, plus the cost to CUMBERLAND of Manufacturing and shipping the related Bulk Drug Substance and components.

     2.6 Forecasts: In order to permit BIONICHE to regularly supply CUMBERLAND with Drug Product hereunder, at least [***] prior to its first requested delivery date, CUMBERLAND shall provide BIONICHE a non-binding twelve (12) month rolling forecast (the “Forecast”) of CUMBERLAND’s estimated requirements of Drug Product, itemized for use as commercial product or Regulatory Samples (as defined below), for the term of this Agreement. The Forecast shall be reviewed and updated by CUMBERLAND on a monthly basis, with copies delivered to BIONICHE. BIONICHE shall have an opportunity to confirm its ability to deliver the quantities set out in the Forecast and each update thereto, or to request amendments thereto to ensure its ability to supply. Once accepted by BIONICHE, the first three (3) months of each Forecast shall constitue a firm order for Drug Product. Each such Forecast shall reflect a good faith attempt by CUMBERLAND to estimate quantity requirements of Drug Product, based on anticipated demand therefore.

     2.7 Periodic Orders: A purchase order (the “Purchase Order”) shall be provided by CUMBERLAND to BIONICHE with respect to Drug Product to be supplied at least [***] prior to the scheduled delivery date of such Drug Product. Such Purchase Order shall specify the quantities ordered by CUMBERLAND for delivery by BIONICHE hereunder and the requested delivery date therefore, and, once delivered to BIONICHE, and shall be firm and binding on the parties (the “Delivery Date”). Each such Purchase Order shall become firm and binding on the parties and, except as specifically provided for herein, may not be increased or decreased by more than [***] from the quantities shown in the Forecast accepted by BIONICHE pursuant to Section 2.6 without the prior written approval of the parties. If CUMBERLAND requires quantities of Drug Product exceeding those mentioned in the Forecast, as updated, BIONICHE shall deliver the amount indicated in the Forecast on the scheduled Delivery Date and shall use reasonable efforts to supply the additional amount exceeding such Forecast on the scheduled Delivery Date, but shall have no liability for failure to deliver the additional amount. Each Purchase Order shall constitute a separate agreement to purchase Drug Product but where in conflict with the terms and conditions of this Agreement, this Agreement, and not the standard terms and conditions set forth in the purchase orders, shall govern the Manufacturing, purchase and sale of the Drug

     Product under this Agreement. Any Purchase Order for Drug Product shall be placed in the minimum amounts listed below or in integral multiples thereof.

For the 10mL form of Drug Product                    [***]
For the 30mL form of Drug Product                    [***]

     2.8 Failure to Supply: Subject to the provisions of Article 7, BIONICHE shall supply all of the Drug Product ordered by CUMBERLAND within [***] of receipt of a written order from CUMBERLAND. If BIONICHE is unable to meet its supply obligations with respect to any Purchase Order, CUMBERLAND shall be free to procure from third parties part or all of the quantities of the Drug Product covered by the relevant Purchase Order. In the event that BIONICHE is unable to supply the Drug Product to CUMBERLAND for any reason other than for Force Majeure or failure of CUMBERLAND to fulfill its obligations hereunder, BIONICHE will reimburse CUMBERLAND for any increase in the price of obtaining the Drug Product from an alternate supplier; provided that such replacement Drug Product was purchased on reasonable commercial terms, and provided further that such failure to supply was in respect of Drug Product that was the subject of a Purchase Order provided by CUMBERLAND and accepted by BIONICHE under Paragraph 2.7. Should BIONICHE reimburse CUMBERLAND as set out in this paragraph, BIONICHE shall have no further liability to CUMBERLAND for said failure to supply.

     2.9 Payment for the Drug Product: At the time of each shipment, BIONICHE shall invoice CUMBERLAND for BIONICHE’s manufacturing services at the prices set forth in Schedule I. Payment shall be made in Canadian dollars within [***] of each such shipment of conforming Product in accordance with the terms hereof.

2.10 Price Variations:

     (a) Prices are as set on Schedule I for the term hereof unless changed pursuant to Paragraph 2.10(b).

     (b) Subject to Subparagraph 2.10(c), prices are subject to annual adjustment beginning two (2) years after the date hereof. Price increases or decreases will be commensurate with documented Manufacturing cost increases or decreases since the date that the then-current prices became effective. For purposes hereof, “Manufacturing cost” shall mean, with respect to the Drug Product, BIONICHE’s actual and documented cost of raw materials, direct labor, Manufacturing, packaging, and overhead amounts directly applicable to such Manufacturing costs (including appropriately amortized capital equipment costs and excluding non-manufacturing overhead and allocations and excluding costs representing Manufacturing changes for which CUMBERLAND does not provide prior written consent pursuant to Article 8), calculated in accordance with generally accepted accounting principles consistently applied (the allocation of overhead to be consistent with BIONICHE’s allocation of overhead as of the date of this Agreement). CUMBERLAND reserves the right to audit the records of BIONICHE in order to determine that such increases and/or decreases are appropriate. Any increase in price shall not exceed the twelve (12) month percent increase in the Producer Price Index as published by the U.S. government and shall be further subject to a maximum increase of five percent (5%) per year over the life of the Agreement.

     (c) Notwithstanding any of the contrary herein contained, should CUMBERLAND: (i) request a change in Specifications, or (ii) unreasonably withhold the consent requested under Paragraphs 2.3 or 2.4, which request or refusal results in an increase in Manufacturing Costs, BIONICHE shall be entitled to pass on such costs to CUMBERLAND immediately in the form of a Drug Product price increase.

3. TERM AND TERMINATION

     3.1 Term: This Agreement shall commence on the date first above written and will continue until the fifth anniversary of the date on which the FDA grants approval to market and sell the Drug Product, unless sooner terminated pursuant to Paragraphs 3.2 or 3.3 hereof. Subject to Paragraphs 3.2 and 3.3, the Agreement shall be automatically renewed for successive three-year terms unless either party notifies the other party in writing at least twelve (12) months in advance of the expiration of the then current term that the party is terminating the Agreement.

     3.2 Termination: This Agreement may be terminated at any time upon the occurrence of any of the following events:

     (a) Default: Thirty (30) days following written notice, by either party to the other party, in the event that the other party breaches any provision of this Agreement, and such party fails to remedy the breach prior to the expiration of the thirty (30) day period; provided that, in the case of nonpayment of sums due hereunder, the remedy period shall be decreased to ten (10) days.

     (b) Insolvency: Written notice by either party to the other upon insolvency or bankruptcy of the other party, and the failure of any such insolvency or bankruptcy to be dismissed within sixty (60) days.

     (c) Force majeure: If, as a result of causes described in Paragraph 7.1, either party is unable to fully perform its obligations hereunder for a period of one hundred fifty (150) consecutive days, the other party shall have the right to terminate this Agreement upon at least thirty (30) days prior written notice; provided that if the required performance is met during that thirty-day period, this Agreement shall continue in full force and effect as if the notice had not been given.

     (d) Costs: Immediately upon written notice by BIONICHE to CUMBERLAND if the Manufacturing cost per unit of Drug Product calculated in the manner set forth in Paragraph 2.10(a) hereof exceeds the purchase price per unit of Drug Product set forth in Schedule I, as adjusted pursuant to Paragraphs 2.10(b) and/or (c) hereof.

     (e) No FDA Approval: Immediately upon written notice by BIONICHE to CUMBERLAND if the FDA does not grant CUMBERLAND approval to market and sell the Drug Product on or before the second anniversary of the date of this Agreement.

     (f) By mutual agreement of the parties hereto.

     Except as otherwise specifically set forth in this Paragraph 3.2, termination, expiration, cancellation or abandonment of this Agreement, through any means and for any reason, shall not relieve the parties of any obligation accruing prior thereto and shall be without prejudice to the rights and remedies of either party with respect to any antecedent breach of any of the provisions of this Agreement. Without limiting the generality of the foregoing, termination, expiration, cancellation, or abandonment of this Agreement shall not relieve CUMBERLAND of its obligation to pay the royalty provided for under Schedule I for Drug Product manufactured by BIONICHE hereunder.

     3.3 Minimum Quantities Purchased: If the parties fail to agree on minimum purchase quantities as provided under Paragraph 5.7, or if following such agreement, CUMBERLAND should fail to meet the agreed upon minimum purchase requirements, BIONICHE shall have the right (but not the obligation) to terminate this Agreement in its entirety or with respect to any one or more format of the Drug Product upon ninety (90) days notice; provided, however, that CUMBERLAND shall have the right (but not the obligation) within such ninety (90) day period to pay BIONICHE any short-fall and avoid such termination. Such shortfall shall be calculated by subtracting the purchase price of the amount of each format of Drug Product actually ordered from the amount calculated by multiplying the minimum quantity of such format under Schedule V by the purchase price thereof. It is understood and agreed between the parties that BIONICHE shall not be required to supply Drug Product for such payment. Should BIONICHE exercise its right to terminate under this Paragraph 3.3, CUMBERLAND shall have no liability to BIONICHE for failing to purchase any minimum quantity of Drug Product hereunder.

     3.4 Impact of Termination on Outstanding Purchase Orders: Upon termination of the Agreement for any reason whatsoever (except for termination by either party pursuant to Paragraphs 3.2(a), (b), or (c), or upon expiration of this Agreement), BIONICHE will, at CUMBERLAND’s written request delivered after termination, continue to supply Drug Product to CUMBERLAND in satisfaction of Purchase Orders already submitted to BIONICHE, subject to the same terms and conditions as applied during the term of the Agreement, for a period of sixty (60) days from the date of termination or expiration.

     3.5 Survival: Paragraphs 2.5, 2.8, 3.2, 3.3, and 3.5 and Articles 5, 6, 9, and 10 shall survive the termination or cancellation of the Agreement for any reason.

4. CERTIFICATES OF ANALYSIS AND MANUFACTURING COMPLIANCE

     4.1 Certificates of Analysis: BIONICHE shall perform, or cause to be performed, certain tests requested by CUMBERLAND in writing and as indicated in the Specifications on each batch of the Drug Product manufactured pursuant to this Agreement before delivery to CUMBERLAND. A certificate of analysis for each batch delivered shall be delivered with each batch and shall set forth the items tested, specifications, and test results. BIONICHE shall also indicate on the certificate of analysis that all batch production and control records have been reviewed and approved by the appropriate quality control unit. Subject to Paragraph 2.5, CUMBERLAND shall test, or cause to be tested, prior to final release, each batch of the Drug Product as meeting the Specifications. As required by the FDA (see Paragraph 5.2 below), CUMBERLAND shall assume full responsibility for final release of each lot of the Drug Product.

     4.2 Manufacturing Compliance: BIONICHE shall advise CUMBERLAND immediately if an authorized agent of any regulatory body visits the Facility and makes an inquiry regarding BIONICHE’s method of manufacture of the Drug Product for CUMBERLAND. Upon receipt of any Form 483 Notice of Inspectional Observations issued by the FDA or notice of deficit from any other regulatory inspection after a visit to the Facility, BIONICHE shall immediately send CUMBERLAND a copy thereof; provided that it may redact any language that is subject to a written confidentiality agreement between BIONICHE and a third party.

     4.3 Regulatory Agency Requirements: BIONICHE shall prepare and test the Drug Product in conformity with GMP. Subject to the allocation of responsibility for regulatory compliance as set forth in Paragraph 5.2, each party shall consult with the other party hereto before implementing additional regulatory agency requirements concerning the control of Drug Product components, manufacture of the Drug Product, or storage and handling of the Drug Product. The full text of regulatory agency requests or comments will be provided by the party receiving such requests or comments to the other party hereto. The parties will mutually agree on how to respond to such requests and comments and on the allocation of the costs thereof; provided that BIONICHE shall be entitled to reimbursement from CUMBERLAND for any out-of-pocket expenses or extraordinary costs previously approved in writing by CUMBERLAND and required in connection with implementing such regulatory requirements other than the ordinary costs of compliance with GMP.

     4.4 Regulatory Documents: Each party will advise the other party hereto of its intention to change any Drug Product regulatory documents prior to submission of the document to any regulatory body. If the change affects the rights and obligations of a party hereto under this Agreement, such party may seek to review or alter any part of the document at any time within ten (10) business days after receipt of notification thereof; provided that if no alterations are submitted to the other party within such ten-day period, each party will be deemed to have consented to the documents, as amended.

5. REPRESENTATIONS AND WARRANTIES

     5.1 Conformity with Specifications: BIONICHE represents and warrants that, at the time of Manufacture, the Drug Product is prepared and tested in accordance with cGMP and meets the Specifications. In the event that any production lot of a Drug Product is not Manufactured in accordance with the Specifications or other requirements hereunder, BIONICHE shall, at CUMBERLAND’s request, perform new Manufacturing as necessary to fulfill any then outstanding purchase order of CUMBERLAND. BIONICHE shall be fully responsible for the costs of any Bulk Drug Substance or components required for such new Manufacturing. Because BIONICHE has no control of the conditions under which the Drug Product is used, the diagnosis of the patient before or after treatment with the Drug Product, the method of use or administration of the Drug Product, and handling of the Drug Product after delivery to CUMBERLAND, BIONICHE does not warrant either a good effect, or against an ill effect, following the use of the Drug Product. The foregoing warranty is exclusive and in lieu of all other warranties either written, oral, or implied. No representative of BIONICHE may change any of the foregoing warranties and CUMBERLAND accepts the Drug Product subject to all terms hereof.

     EXCEPT AS SPECIFICALLY PROVIDED FOR IN THIS ARTICLE 5 AND PARAGRAPH 11.4, BIOMCHE MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED (i) OF COMMERCIAL UTILITY; (ii) OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE; OR (iii) THAT THE USE OF THE DRUG PRODUCTS BY CUMBERLAND OR ANY THIRD PARTY WILL NOT INFRINGE ANY PATENT, COPYRIGHT OR TRADEMARK OR OTHER PROPRIETARY OR PROPERTY

RIGHTS OF OTHERS. EXCEPT AS PROVIDED FOR HEREIN, BIONICHE WILL NOT BE LIABLE TO CUMBERLAND, CUMBERLAND’S SUCCESSORS OR ASSIGNS OR ANY THIRD PARTY WITH RESPECT TO ANY CLAIM ARISING FROM CUMBERLAND’S OR ANY THIRD PARTY’S USE OF THE DRUG PRODUCTS.

     CUMBERLAND ACCEPTS ALL RISK AND RESPONSIBILITY FOR DETERMINING THE MANNER IN WHICH CUMBERLAND WILL USE THE DRUG PRODUCTS, AND BIONICHE MAKES NO REPRESENTATIONS OR WARRANTIES CONCERNING, AND ASSUMES NO RESPONSIBILITY FOR, THE PERFORMANCE OF ANY OTHER PRODUCT(S) INTO WHICH THE DRUG PRODUCTS MAY BE INCORPORATED.

     5.2 Compliance: CUMBERLAND represents and warrants that CUMBERLAND assumes responsibility for coordinating all contact with the FDA and other regulatory bodies, pertaining specifically to the Drug Product. During the term of this Agreement, BIONICHE authorizes CUMBERLAND’s representatives to inspect the methods used in and facilities used for manufacturing, processing, packaging, and handling of the Drug Product; provided that each such inspection shall be at CUMBERLAND’S own cost, on reasonable prior notice, and subject to the prior execution of reasonable confidentiality agreement by each inspector who is not an employee of CUMBERLAND but has been selected by CUMBERLAND to represent it; and provided further that CUMBERLAND shall have no such obligation under this Agreement. Except as otherwise required by applicable regulations, CUMBERLAND’s inspections shall be conducted during normal business hours; provided that CUMBERLAND may inspect such facilities immediately after any regulatory inspection thereof.

     5.3 Debarring: BIONICHE represents and warrants that it has not been debarred in the United States within the meaning of 21 U.S.C. § 335a(a) and 335a(b), nor will it use, knowingly after due inquiry, in any capacity the services of any person debarred pursuant to subsections 3.06(a) or 3.06(b) of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. Section 335(a) and (b).

     5.4 FDA Submission: BIONICHE represents and warrants that it has submitted to the FDA information about the Facility and the operating procedures, and personnel at such site in the form required by the FDA. BIONICHE shall keep and maintain the equipment necessary for the Manufacture of any Drug Product in a manufacture-ready state and in good repair. During the term hereof and until the fifth anniversary of termination or expiration, BIONICHE shall maintain written documentation of all use, repair, service, and maintenance of such equipment and shall provide CUMBERLAND copies of such documentation; provided that in the event that a Person acquires substantially all of the assets and business of BIONICHE, BIONICHE may send all such documentation to CUMBERLAND promptly after such acquisition.

     5.5 Reimbursement: BIONICHE shall not incur any costs for which it intends to seek reimbursement from CUMBERLAND unless BIONICHE has the prior written consent of CUMBERLAND. CUMBERLAND shall reimburse BIONICHE at a rate equal to one hundred fifty percent (150%) of all such costs actually incurred and documented and directly related to the production of materials or data for submissions to the FDA (“Pre-Approval Costs”) hereunder, provided that reimbursement of such Pre-Approval Costs shall be paid by means of twelve (12) equal installments thereof to be made on the first day of each of the twelve (12) months following the date on which the FDA issues final approval to CUMBERLAND to market and sell the Drug Product commercially in the United States (the “Approval Date”); and provided further that if the Approval Date has not occurred on or before one year from the date of signing of the Agreement then CUMBERLAND shall immediately reimburse BIONICHE at a rate equal to one hundred percent (100%) of all Pre-Approval Costs incurred prior to such date in complete satisfaction of its obligations to reimburse such Pre-Approval Costs.

     5.6 Exclusivity:

     (a) Neither BIONICHE nor any Affiliate thereof will sell, give away, or deliver to any other person, firm, or corporation any form of the Drug Product in the Territory for indications currently approved as of the date of signing this Agreement (“currently-approved indications”), while this Agreement is effective and for two years after the termination of this Agreement; provided that such restrictions shall not apply in the event of termination by BIONICHE pursuant to Subparagraphs 3.2 (a), (b), (e), or Paragraph 3.3 and shall not apply to the sale by BIONICHE of a product that contains the same active ingredients as the Drug Product for use as a chemoprotectant (“Excluded Products”) or Other Products, as defined below, subject to the rights set out in Subparagraph 5.6 (d).

     (b) If, during the term hereof, BIONICHE wishes to market or distribute Excluded Products in the Territory in association with any third Person, BIONICHE shall give CUMBERLAND written notice thereof, and CUMBERLAND shall have thirty (30) days to notify BIONICHE of its interest in entering into an arrangement with BIONICHE, on terms to be negotiated by the parties in good faith during the period of one hundred twenty (120) days immediately following the receipt by CUMBERLAND of such notice (the “Option Period”). If the parties negotiate in good faith but do not conclude an agreement within the Option Period, BIONICHE agrees not to enter into an agreement covering the Excluded Products in the Territory with any third Person on terms that are more favorable than the terms previously offered to CUMBERLAND without first offering to enter into an agreement with CUMBERLAND, to be negotiated during an additional thirty day period, such offer to be made on terms no less favorable than the terms being offered to the third Person. If CUMBERLAND does not enter into negotiations with BIONICHE within thirty (30) days following receipt of such notice, then BIONICHE shall be free to negotiate with third Persons with no further obligation to CUMBERLAND.

     (c) Notwithstanding the provisions of Subparagraph 5.6 (b) above, BIONICHE shall have no obligation to make any offer to CUMBERLAND with respect to any development, marketing or sale of Excluded Products in the Territory if it chooses to so develop, market or sell directly, rather than in association with any third Person.

     (d) With respect to any product that contains the same active ingredient as the Drug Product for indications other than Excluded Products that BIONICHE may seek to develop (“Other Products”), BIONICHE shall provide notice to CUMBERLAND as set out in Subparagraph 5.6 (b) above, and the same procedures shall apply. Likewise, with respect to any indications other than currently-approved indications for the Drug Product that CUMBERLAND seeks to develop, CUMBERLAND shall provide notice to BIONICHE regarding the possibility of supply of said Drug Product to CUMBERLAND and the procedures described in Subparagraph 5.6 (b) above shall apply.

     (e) If CUMBERLAND does not acquire rights to Excluded Products or to Other Products as described in Subparagraphs 5.6 (c) and (d) above, and CUMBERLAND establishes, through the dispute resolution process set forth in Paragraph 11.7, that sales by BIONICHE of said products have detrimentally impacted sales of the Drug Product then BIONICHE shall pay CUMBERLAND an amount equal to the lost profits so established by CUMBERLAND. CUMBERLAND shall bear the burden of establishing lost sales.

     (f) Except in the event that BIONICHE fails to supply all Drug Product ordered within ninety (90) days of receipt of a Purchase Order in accordance with Paragraph 2.7, or in the event of Force Majeure, CUMBERLAND will order its entire requirement of the Drug Product for the Territory from BIONICHE, If CUMBERLAND notifies BIONICHE that it intends. to distribute the Drug Product in countries other than the United States and its territories, then the parties shall negotiate in good faith, for a period not to exceed one hundred twenty (120) days after CUMBERLAND provides such notice, to amend this agreement to expand the Territory hereunder; provided that if the parties fail to agree upon the terms of supply for an expanded Territory within such 120-day period, CUMBERLAND shall have no obligation to purchase requirements of Drug Products for such other countries from BIONICHE, but its obligations hereunder with respect to the United States and its territories shall remain in full force and effect.

     (g) In the event of breach of this Paragraph 5.6, the parties shall have the right, in addition to other rights hereunder, to seek injunctive relief, notwithstanding any other provision of this Agreement.

     5.7 Minimum Purchase Quantities: CUMBERLAND shall have no minimum purchase requirements for the first year following FDA approval of the Drug Product. The parties shall, no later than three (3) months before the end of the first year following FDA approval, negotiate in good faith to set on the minimum quantities applicable to the second to fifth years of commercial sale, which shall be incorporated into Schedule V and shall form part of this Agreement. The parties shall negotiate in good faith to set additional minimum purchase requirements for any extension of the Term of this Agreement under Paragraph 3.1. CUMBERLAND shall use its best efforts to achieve the minimum purchase requirements set forth in Schedule V of this Agreement for each format of Drug Product being sold in the Territory by CUMBERLAND. In the event CUMBERLAND is required to procure Drug Product from other sources in accordance with Paragraph 2.7, the minimum annual purchase obligation set out in Schedule V shall be decreased by the quantity BIONICHE failed to deliver hereunder.

6. DRUG PRODUCT RECALLS

     6.1 Drug Product Recalls: In the event: (a) any government authority issues a request, directive or order that the Drug Product be recalled, or (b) a court of competent jurisdiction orders such a recall, (c) CUMBERLAND determines that the Drug Product should be recalled, or (d) BIONICHE recommends to CUMBERLAND that a recall be initiated, the parties shall take all appropriate corrective actions; provided that a recall pursuant to Subparagraph 6.1 (c) shall be without prejudice to the parties’ rights under Paragraph 2.5. In the event that BIONICHE recommends a recall of Drug Product by CUMBERLAND, such recommendation must take the form of a notice as per Paragraph 11.1, and CUMBERLAND shall respond promptly indicating to BIONICHE whether the Drug Product will be recalled. In no event, however, shall BIONICHE have responsibility for regulatory compliance in connection with any recall, except to the extent and under the circumstances set forth in the Manual or any other written agreement between the parties hereto or as required by law. All costs and expenses incurred in connection with such recall shall be the responsibility of CUMBERLAND unless caused by the negligence of BIONICHE.

7. FORCE MAJEURE; FAILURE TO SUPPLY

     7.1 Force Majeure Events: Failure of either party to perform under this Agreement (except the obligation to make payments) shall not subject such party to any liability to the other if such failure is caused by acts such as, but not limited to, acts of God, fire, explosion, flood, war, riot, sabotage, embargo, or by any cause beyond the reasonable control of the parties, provided that written notice of such event is promptly given to the other party.

8. MANUFACTURING CHANGES

     BIONICHE may implement commercially reasonable changes in the equipment used for Manufacturing of the Drug Product in the Facility, or the Manufacturing methods, labeling, or packaging of the Drug Product only as expressly provided in the Specifications unless BIONICHE has the prior written consent of CUMBERLAND, which consent shall not be unreasonably withheld or delayed.

9. CONFIDENTIALITY

     9.1 Confidential Information: “Confidential Information” means collectively Confidential Information of CUMBERLAND (as defined herein) and Confidential Information of BIONICHE (as defined herein).

     9.2 Confidential Information of CUMBERLAND: Except as expressly set forth herein, “Confidential Information of CUMBERLAND” means all information obtained or developed by BIONICHE which relates to CUMBERLAND’s business or the Drug Product, regardless of the form in which such information is transmitted. The following shall not be considered Confidential Information of CUMBERLAND for purposes hereof:

     (a) Information that is already in the possession of BIONICHE at the time it is received from CUMBERLAND or developed by BIONICHE on CUMBERLAND’s behalf, if BIONICHE notifies CUMBERLAND of its belief that the information is excepted under the terms of this subsection;

     (b) Information received by BIONICHE from a person which has the right to disclose the same, when BIONICHE notifies CUMBERLAND of its belief that the information is excepted under the terms of this subsection;

     (c) Information that is or becomes published, or is or becomes otherwise publicly available without the fault of BIONICHE;

     (d) An Invention as defined in Paragraph 9.4; or

     (e) Confidential Information of BIONICHE.

     In the event of a dispute regarding the applicability of the above exceptions to the definition of Confidential Information of CUMBERLAND, BIONICHE shall have the burden of producing clear and convincing proof that the information should be excepted from the definition of Confidential Information of CUMBERLAND. BIONICHE shall not use or permit the use of the Confidential Information of CUMBERLAND other than for the limited purposes expressly permitted by or consistent with this Agreement. Recipients of Confidential Information of CUMBERLAND shall be granted access thereto strictly on a “need-to-know” basis. BIONICHE shall take all reasonable steps to ensure that recipients comply with the terms of this Agreement, including all restrictions on use, disclosure and dissemination of Confidential Information of CUMBERLAND. BIONICHE shall notify CUMBERLAND immediately upon becoming aware of any breach hereof and shall take all reasonable steps to prevent any further disclosure or unauthorized use.

     Upon termination or expiration of this Agreement, BIONICHE shall deliver to CUMBERLAND all Confidential Information of CUMBERLAND, all copies thereof, and all documents or data storage media containing such Confidential Information of CUMBERLAND, except that one copy of such information may be retained by BIONICHE as required by regulation or law for future reference. The Confidential Information of CUMBERLAND shall remain confidential and not be disclosed by BIONICHE for a period of ten (10) years following the date of expiration or termination of this Agreement except as expressly set forth herein or in any other written agreement between the parties.

     9.3 Confidential Information of BIONICHE: Except as expressly set forth herein, “Confidential Information of BIONICHE” means all information obtained or developed by CUMBERLAND which relates to the manufacture, sale, and distribution of pharmaceutical products by BIONICHE, regardless of the form in which such information is transmitted. The following shall not be considered Confidential Information of BIONICHE for purposes hereof:

     (a) Information that is already in the possession of CUMBERLAND at the time it is received from BIONICHE or developed by CUMBERLAND on BIONICHE’s behalf, if CUMBERLAND notifies BIONICHE of its belief that the information is excepted under the terms of this subsection;

     (b) Information received by CUMBERLAND from a person which has the right to disclose the same, when CUMBERLAND notifies BIONICHE of its belief that the information is excepted under the terms of this subsection;

     (c) Information that is or becomes published, or is or becomes otherwise publicly available without the fault of CUMBERLAND; or

     (d) Confidential Information of CUMBERLAND.

     In the event of a dispute regarding the applicability of the above exceptions to the definition of Confidential Information of BIONICHE, CUMBERLAND shall have the burden of producing clear and convincing proof that the information should be excepted from the definition of Confidential Information of BIONICHE. CUMBERLAND shall not use or permit the use of the Confidential Information of BIONICHE other than for the limited purposes expressly permitted by or consistent with this Agreement. Recipients of Confidential Information of BIONICHE shall be granted access thereto strictly on a “need-to-know” basis. CUMBERLAND shall take all reasonable steps to ensure that recipients comply with the terms of this Agreement, including all restrictions on use, disclosure and dissemination of Confidential Information of BIONICHE. CUMBERLAND shall notify BIONICHE immediately upon becoming aware of any breach hereof and shall take all reasonable steps to prevent any further disclosure or unauthorized use.

     Upon termination or expiration of this Agreement, CUMBERLAND shall deliver to BIONICHE all Confidential Information of BIONICHE, all copies thereof, and all documents or data storage media containing such Confidential Information of BIONICHE, except that one copy of such information may be retained by CUMBERLAND as required by regulation or law for future reference. The Confidential Information of BIONICHE shall remain confidential and not be disclosed by CUMBERLAND for a period of ten (10) years following the date of expiration or termination of this Agreement except as expressly set forth herein or in any other written agreement between the parties.

     9.4 Invention: As between the parties, CUMBERLAND owns all intellectual property rights in any improvement to the Drug Product and, subject to Paragraph 5.6, any existing or further developments or modifications of the Drug Product in the Territory (“Invention”). Subject to Article 10, BIONICHE shall, at CUMBERLAND’s request and expense, take such actions and execute such documents as necessary or desirable, in CUMBERLAND’s sole judgment, to create, maintain, enforce or defend CUMBERLAND’s rights in any such Invention.

     9.5 Press Release; Other Disclosure: Except pursuant to a press release subject to the prior written approval of both parties hereto, the parties agree that the contents of this Agreement shall not be disclosed to any third party except (i) the controlling companies of the parties, (ii) the companies controlled by the parties, (iii) individuals and entities providing paid services to either of the parties who are bound by confidentiality obligations, and (iv) governmental regulatory agencies, including, but not limited to, environmental protection authorities, without prior written consent of the other party.

     9.6 Production of Records: BIONICHE shall prepare, maintain, and submit all documents or reports required under applicable laws and regulations or as reasonably requested by CUMBERLAND concerning the Manufacture of the Drug Products, including without limitation, batch production records for each Drug Product. Notwithstanding the restrictions set forth in this Agreement, BIONICHE shall retain production records for batches of Drug Product for a period of at least one year after the respective expiration date for each batch. These records will be stored by appropriate means, including without limitation, optical disk or microfilm in a secure manner in compliance with current GMP with duplicate copies submitted to CUMBERLAND promptly after the creation thereof and shall be made available on request of the FDA or any other authorized regulatory body.

10. INDEMNIFICATION

     10.1 Indemnification by CUMBERLAND: Subject to Paragraph 5.1, CUMBERLAND shall indemnify and hold BIONICHE (and any Affiliate and their officers, directors, shareholders, agents, and the employees and insurers of any of them and/or their successors and assigns thereto), free and harmless from any and all claims, demands, liability, actions or causes of actions, and any and all expenses associated therewith (including, without limiting the generality of the foregoing, defense costs and reasonable attorney’s fees), arising out of or in connection with, as a result of, or otherwise related to any third party claims arising from: (i) any negligence or recklessness of CUMBERLAND, its agents, or employees; (ii) the promotion, distribution, use, misuse or sale or effects of the Drug Product except to the extent any alleged Drug Product defects were caused by BIONICHE; (iii) CUMBERLAND’s non-compliance with any applicable FDA or other applicable regulations; or, (iv) any failure of CUMBERLAND to perform, in whole or in part, any of its obligations hereunder in each case, unless caused by the acts or omissions of BIONICHE. Beginning prior to delivery of the first order of Drug Products pursuant to this Agreement and continuing until the third anniversary of termination of this Agreement, CUMBERLAND shall maintain products liability insurance with limits of liability of not less than Five Million U.S. Dollars ($5,000,000) and shall name BIONICHE as additional insured under said policy.

     10.2 Indemnification by BIONICHE: Subject to Paragraph 5.1, BIONICHE will indemnify and hold CUMBERLAND (and any Affiliate and their officers, directors, shareholders, agents, and the employees and issuers of any of them and/or their successors and assigns thereto), free and harmless from any and all claims, demands, liability, actions or causes of action, and any and all expenses associated therewith (including, without limiting the generality of the foregoing, defense costs and reasonable attorney’s fees), arising out of or in connection with, as a result of, or otherwise related to any third party claims arising from: (i) any negligence or recklessness of BIONICHE, its agents or employees; (ii) personal injury (including death) or property damage arising out of or in connection with BIONICHE’s manufacture or handling of the Drug Product otherwise than in accordance with the Specifications and CUMBERLAND’S written directions; (iii) BIONICHE’s non-compliance with any applicable FDA or other applicable regulations; or (iv) any failure of BIONICHE to perform any of its obligations hereunder, in each case, unless caused by the acts or omissions of CUMBERLAND. Beginning prior to delivery of the first order for Drug Product pursuant to this Agreement and continuing until the third anniversary of termination of this Agreement, BIONICHE shall maintain products liability insurance with limits of liability of not less than U.S. $5,000,000 and shall name CUMBERLAND as additional insured under said policy.

     10.3 Conditions of Indemnification: If either party seeks indemnification from the other under Paragraphs 10.1 or 10.2, it shall promptly give written notice to the other party of any such claim or suit threatened, made or filed against it, which forms the basis for such claim of indemnification and shall cooperate fully with the other party in the defense of all such claims or suits. No settlement or compromise shall be binding on a party hereto without its prior written consent.

     10.4 Limitation: Except as expressly set forth herein, neither party will be liable to the other for any claim for loss of profits, for loss or interruption of business or for indirect, special or consequential damages of any kind under this Agreement.

11. GENERAL PROVISIONS

     11.1 Notices: Any notice permitted or required by this Agreement may be sent by facsimile with the original document being sent by certified (or registered) mail, return receipt requested, or overnight delivery and shall be effective when received (or refused) via facsimile or mail or overnight if faxed and sent and addressed as follows (or to such other facsimile number or address as may be designated by a party in writing):

		If to CUMBERLAND:		CUMBERLAND PHARMACEUTICALS INC.
						209 Tenth Avenue South, Suite 332
						Nashville, Tennessee 37203
						Attn: Chief Executive Officer
						Telephone:          615-255-0068
						Facsimile:            615-255-0094
		If to BIONICHE:		BIONICHE LIFE SCIENCES, INC.
						231 Dundas Street East,
						Belleville, Ontario, Canada K8N 1E2
						Attn: Chief Executive Officer
						Telephone:          800-265-5464
						Facsimile:            613-966-4177
		With a copy to:		BIONICHE PHARMA (CANADA) LIMITED
						151 Dundas Street, Suite 507
						London, Ontario, Canada N6A 5R7
						Attn: President
						Telephone:          519-453-0641
						Facsimile:            519-453-6169
		And to:		BIONICHE LIFE SCIENCES, INC.
						Attn: Vice President, Corporate Counsel
						Telephone:          800-265-5464
						Facsimile:            613-966-4177

     11.2 Master Agreement; Amendment: This Agreement is being entered into pursuant to the Strategic Alliance Agreement dated January 15, 2002, between CUMBERLAND and BIONICHE (the “Master Agreement”), and this Agreement (including any and all exhibits hereto, whether entered into now or hereafter) constitutes an Addendum (as defined in the Master Agreement). In the event of any conflict or inconsistency between the terms of this Agreement and the Master Agreement, the terms of this Agreement shall govern. No modification of any of the terms of this Agreement, or any amendments thereto, shall be deemed to be valid unless in writing and signed by both parties hereto. No course of dealing or usage of trade shall be used to modify the terms and conditions herein.

Without limiting the generality of the foregoing, no provisions of any CUMBERLAND purchase order that are inconsistent with the terms of this Agreement shall apply.

     11.3 Waiver: None of the provisions of the Agreement shall be considered waived by any party hereto unless such waiver is agreed to, in writing, by both parties. The failure of a party to insist upon strict conformance to any of the terms and conditions hereof, or failure or delay to exercise any rights provided herein or by law shall not be deemed a waiver of any rights of any party hereto.

     11.4 Obligations to Third Parties: Each party warrants and represents that this Agreement is not inconsistent with any contractual obligations, expressed or implied, undertaken with any third party.

     11.5 Assignment: This Agreement shall be binding upon and inure to the benefit of the successors or permitted assigns of each of the parties and may not be assigned, transferred, or subcontracted by either party without the prior written consent of’ the other, which consent will not be unreasonably withheld or delayed, except that no consent shall be required in the case of a transfer to an Affiliate of a party hereto or transaction involving the merger, consolidation or sale of substantially all of’ the assets of the party seeking such assignment or transfer and such transaction relates to the business covered by this Agreement and the resulting entity assumes all the obligations of the assigning party under this Agreement.

     11.6 Independent Contractor: BIONICHE shall act as an independent contractor for CUMBERLAND in providing the services required hereunder and shall not be considered an agent of or joint venturer with CUMBERLAND. Unless otherwise provided herein to the contrary, BIONICHE shall furnish all expertise, labor, supervision, machining and equipment necessary for performance hereunder and shall obtain and maintain all building and other permits and licenses required by public authorities.

     11.7 Governing Law and Dispute Resolution: This Agreement is subject to and shall be governed by the laws of the State of New York. Any dispute, controversy, or claim arising out of or relating to this Agreement, any purchase orders between the parties hereto, or the breach, termination, or invalidity thereof shall be settled under the Rules of the American Arbitration Association by one or more arbitrators appointed in accordance with said Rules. The place of arbitration shall be within the State of New York. The parties agree that the award of the arbitrator(s) shall be the sole and exclusive remedy between them regarding any claims, counterclaims, issues or accountings presented or pled to the arbitrator(s); that it shall be made and shall promptly be payable in U.S. dollars free of any tax, deduction, or offset; that any costs and attorney fees incurred by the prevailing party as determined by the arbitrator(s) incident to the arbitration, shall be included as part of the arbitration award; and that any costs. fees, or taxes incident to enforcing the award shall, to the maximum extent permitted by law, be charged against the party resisting such enforcement. The award shall include interest from the date of any damages incurred for breach or other violation of the Agreement, and from the date of the award until paid in full, at a rate to be fixed by the arbitrator(s), but in no event less than the prime interest rate for Bank of America in Nashville, Tennessee, U.S.A.

     11.8 Severability: In the event that any term or provision of this Agreement shall violate any applicable statute, ordinance, or rule of law in any jurisdiction in which it is used, or otherwise be unenforceable, such provision shall be ineffective to the extent of such violation without invalidating any other provision hereof.

     11.9 Headings, Interpretation: The headings used in this Agreement are for convenience only and are not part of this Agreement.

     11.10 Conflict: In the event of conflict between the terms and provisions of this Agreement and the terms and provisions of the Manual, the terms of this Agreement shall control.

     11.11 Limitation: The parties hereto acknowledge and agree that the International Sale of Goods Act and the United Nations Convention on Contracts for the International Sale of Goods have no application to this Agreement.

     IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be executed by their duly authorized representatives effective as of the date first above written.

CUMBERLAND PHARMACEUTICALS INC.						BIONICHE LIFE SCIENCES, INC.
/s/		A. J. Kazimi				/s/		Albert Beraldo
Authorized Signature						Authorized Signature
A.J. Kazimi						Albert Beraldo
Chief Executive Officer						Vice President, Business Development

SCHEDULE I

Shipping and Storage

	1.		Finished Drug Product shall be stored by BIONICHE after completion, at 20 degrees C to 25 degrees C.
	2.		Drug product will be delivered by BIONICHE to CUMBERLAND by air on the basis of FCA (ex works) ex works BIONICHE’s plant in Galway, Ireland with the carrier to be selected by CUMBERLAND.
	3.		The terms “FCA” (“ex works”) and “DDP” and the Parties’ respective obligations shall be determined in accordance with the INCOTERMS adopted by the International Chamber of Commerce, effective July 1, 1990, unless otherwise specifically provided in this Agreement.
	4.		Additional details regarding packaging shall be incorporated herein upon adoption thereof by written agreement of BIONICHE and CUMBERLAND.

Pricing —

The prices to be paid by CUMBERLAND to BIONICHE for the Drug Products arc as follows:

N-acetylcysteine 30 mL                          Canadian      [***]
N-acetylcysteine 10 mL                          Canadian      [***]

Canadian currency conversions will be based upon the then current exchange rate listed in the Wall Street Journal.

The minimum size of any order of the Drug Product shall be one production lot of [***] for the 30 mL Drug Product and [***] for the 10 mL Drug Product.

In addition, CUMBERLAND shall pay to BIONICHE a royalty equal to [***] percent ([***]%) of Net Sales (as defined herein) during each calendar year; provided that CUMBERLAND shall pay BIONICHE such royalty within [***] days after the last day of the applicable calendar year, For purposes hereof, “Net Sales” shall mean the aggregate amount billed for sales of the Drug Product by CUMBERLAND, less returns, hospital buying group chargebacks, hospital buying group/group purchasing organization administration fees, managed care organization rebates, sales/purchasing discounts, federally mandated discounts and rebates, and state medical assistance program rebates and discounts, and determined on an accrual basis by CUMBERLAND.

Within sixty (60) days following the close of each calendar quarter following the first sale of a Drug Product, CUMBERLAND shall furnish to BIONICHE a written report for the calendar quarter showing the Net Sales for each format of the Drug Product during such calendar quarter and the corresponding amount payable to BIONICHE under this Agreement for such calendar quarter. Simultaneously with the submission of the written report, CUMBERLAND shall pay to BIONICHE a sum equal to the aggregate royalty due for such calendar quarter calculated in accordance with this Agreement.

Payments to be made by CUMBERLAND to BIONICHE under this Agreement shall be made by cheque made to the order of BIONICHE or by bank wire transfer in immediately available funds to such bank account designated in writing by BIONICHE from time to time.

For a period of at least five (5) years after the end of each calendar quarter following the first sale of each Drug Product, CUMBERLAND shall keep complete and accurate records in sufficient detail to enable the royalties payable hereunder to be determined. Upon the written request of BIONICHE and not more than once in each calendar year and only with reasonable prior notice to CUMBERLAND, CUMBERLAND shall permit an independent certified public accounting firm of nationally recognized standing selected by BIONICHE and reasonably acceptable to CUMBERLAND to have access during normal business hours to such of the records of CUMBERLAND as may be reasonably necessary to verify the accuracy of the Royalty reports hereunder for any calendar year ending not more than twenty-four (24) months prior to the date of such request.

If such accounting firm concludes in its review that additional royalties were owed during such period, CUMBERLAND shall pay the additional amounts within forty-five (45) days of the date BIONICHE delivers to CUMBERLAND such accounting firm’s written report so concluding. The fees charged by such accounting firm shall be paid by BIONICHE, except CUMBERLAND shall pay such fees in the event that the additional amounts owed by CUMBERLAND vary from amounts paid with respect to the calendar year in question by five percent (5%) or greater.

SCHEDULE II

Technical Agreement

Technical Agreement Rev 1            5^th April 2005
Bioniche/Cumberland

TECHNICAL AGREEMENT

This Agreement is entered into on this 5th day of April, 2005, by and between Cumberland Pharmaceuticals Inc., a company organized and existing under the laws of the United States, with offices located at 2525 West End Avenue, Suite 950 Nashville, Tennessee 37203 USA. (“Cumberland”) and Bioniche Teoranta, a company organized and existing under the laws of the Republic of Ireland, having a principal place of business, Inverin, Co. Galway, Republic of Ireland. (“Bioniche”).

Whereas, Cumberland requested Bioniche to manufacture and supply the Products (as defined in section 1.1 hereof); and

Whereas the parties to this Agreement wish to establish in greater detail, the responsibilities of Cumberland as the Contractor, and Bioniche as Suppliers, for the manufacture of the Products; and

Whereas, a detailed listing of responsibilities of the Contractor and Suppliers, is attached as Exhibit I;

Now therefore, in consideration of the mutual covenants and promises contained herein, the parties agree as follows:

I.

Purpose.

This Technical Agreement is intended to serve as the Manufacturing Project Manual to be attached as Schedule II to the Manufacturing and Supply Agreement, dated January 15, 2002, between Cumberland and Bioniche Life Sciences, Inc. (the “Manufacturing Agreement”), and is not intended to supersede any of the parties’ rights and obligations set forth therein. Only in the event that this Technical Agreement expressly amends and restates specified subsections of the Manufacturing Agreement shall this Technical Agreement serve as an amendment of the parties rights and obligations set forth in the Manufacturing Agreement. Except as specifically amended hereby, the Manufacturing Agreement shall remain in full force and effect, and any conflicting provision hereof shall be null and void. The parties have entered into this Agreement to clearly define the responsibilities of each party and to ensure that the Products are manufactured, packaged, released, stored and shipped in accordance with current European and US GMP’s or other relevant equivalent cGMP’s, agreed by Bioniche and Cumberland.

1.1 Product

     Bioniche will supply Cumberland with Products, as follows:

	1.1.1			Acetadote® — Acetylcysteine Injection
				200mg/mL Bioniche Code Number : 0164AI01

1

Technical Agreement Rev 1            5^th April 2005
Bioniche/Cumberland

All references to Bioniche or Cumberland shall include Affiliates of these companies. “Affiliate” shall be defined as any entity (i) at least fifty percent (50%) of whose outstanding securities or assets are owned or controlled, directly or indirectly, by said party, or (ii) which owns or controls directly or indirectly fifty percent (50%) of the outstanding securities or assets of said party, or (iii) is owned or controlled directly or indirectly, to the extent of fifty percent (50%) or more of the outstanding securities or assets by any of the entities described in (i) and (ii) above. The term “Manufacture” as used in this Agreement shall be understood to include the specification and the purchase of all necessary components of the Product, the manufacturing process, quality control and assurance. The term “Packaging” as used in this Agreement shall be understood to include the specification and purchase of all necessary components of the Product, the packaging and the final quality control and assurance.

II.

General Quality Issues

2.1 Good Manufacturing Practices

Bioniche represents that it shall observe and adhere to the requirements of the current EU Guide to Good Manufacturing Practice for Medicinal Products for Human Use, including supplementary recommendations issued by the Commission of the European Communities (cGMPs) and current US cGMPs. All terms defined in the cGMPs shall have the same meaning when used in this document. Bioniche represents and warrants that all processes and equipment used in the manufacture of the Product shall have been validated or are in the process of being validated in accordance with the cGMPs and current US cGMPs. The reference to other regulatory requirements will be agreed between the two parties.

2.2 Qualified Persons

The Qualified Person (“QP”), as defined in EU Directive 75/319/EEC, for Bioniche is named in Exhibit II, and sample of the signature is affixed.

2.3 Supplier Quality Monitoring and Assessments

It is the responsibility of Bioniche to perform quality monitoring and assessment on suppliers of all materials, involved in the manufacturing of the Product, in accordance with written quality monitoring protocols.

2.4 Traceability

It is the responsibility of Bioniche to properly track each batch number of the Product, for traceability, so as to be able to provide a full manufacturing history. Bioniche shall keep manufacturing records, analytical records and reference samples for each batch of Product. Copies of records and reference samples shall be made available to Cumberland promptly upon request. Reference samples shall be kept for a period of one (1) year after the expiration date for the batch. Manufacturing and quality control records shall be kept for a minimum period of six (6) years from the date of manufacture or a minimum of one (1) year after the expiration date, whichever is longer.

2

Technical Agreement Rev 1             5^th April 2005
Bioniche/Cumberland

2.5 Stability Studies

Bioniche has the responsibility for the performance of 36-month stability studies on the Products in accordance with Bioniche stability SOP ST.001 Stability data are to be reported to Cumberland on request but Cumberland will be alerted concerning any out-of-specification results within 48 hours.

III.

Specifications.

Attached hereto is a complete set of every Specification related to Products, which are referenced in 1.1. Bioniche shall prepare the Master Manufacturing Formula and the Manufacturing and Packaging Batch Instructions for the Product. The Batch Instruction will be approved by Bioniche. Copies of completed Batch Instructions will be provided to Cumberland following the completion of manufacture if requested.

IV.

Manufacture, Controls, Release and Shipment

4.1 Purchases and Management of Materials.

It is the responsibility of Bioniche to source the Active Pharmaceutical Ingredients (APIs), from Bioniche’s designated approved suppliers, for the manufacture of the Products. Bioniche shall supply excipients and materials required for the manufacture of the Product, and/or ancillary operating materials used in the manufacture. Bioniche is responsible for all quality control testing and release of materials used in the manufacturing of the Product

4.2 Product Testing & Release

Bioniche shall test or cause to be tested by an approved, qualified entity each lot of the Product pursuant to the Specifications before release to Cumberland. Each test shall set forth the items tested, the specific release Specifications and test results in a certificate of analysis for each lot delivered and be certified by Bioniche’s QP and sent separately to Cumberland. Cumberland shall be entitled to rely on the certificate of analysis and is not required to perform any further testing,

4.3 Non Conforming Activities

During the course of manufacture:

4.3.1 All deviations and events not affecting the agreed Technical Specifications will be documented by Bioniche. These documents will be retained as part of the batch record. Bioniche shall inform Cumberland of all deviations prior to release of the batch.

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4.4 Manufacturing Batch Records

4.4.1 Bioniche shall also provide as part of the Batch Certificate of Analysis, a manufacturing compliance statement with each lot delivered to Cumberland. This certificate will certify that the lot of Product was manufactured in accordance with the Specifications and applicable cGMP laws or regulations.

4.4.2 The manufacturing lot records shall contain, at a minimum, the following information:

	•		The name and dosage form of the medicinal product.
	•		The batch number or test number of the API and all other raw materials (excluding water).
	•		The date of manufacture and the Product’s batch number.
	•		Details of the amounts of Product manufactured during each operation and the quantity of the Product in the various stages.
	•		Both the expected and actual results of the in-process controls. If expected results are expressed in a quantified manner, actual results shall also be quantified.
	•		Confirmation that the critical steps of the operations proceeded in accordance with the Manufacturing Instructions by the signature of the persons in charge of the various stages.
	•		Special observations made during manufacturing.
	•		Certification that the process operating lines have been cleared, at the beginning of the batch processing.
	•		A list of deviations and their resolution.

4.4.3 Labeling of the product for Clinical Trials will be the responsibility of Cumberland.

4.5 Shipment

Bioniche shall ship the Product in accordance with instructions agreed to by the parties. Bioniche shall only place one lot number on any single pallet. Shipment of Product batches under quarantine shall be made only when specifically authorized in writing by Cumberland, and will be according to the Bioniche procedure.

V.

Changes in Site, Quality Standards, Formula and Manufacturing Procedures

5.1 Changes Control

Bioniche shall inform Cumberland of any proposed intent to change the site of manufacture, the specifications, labeling, the procedures for the manufacturing processes or record keeping of Product.

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VI.

Quality Audit

During normal working hours and upon reasonable notice, Cumberland shall be entitled to inspect such areas of Bioniche’s plant where the Product is manufactured or otherwise stored or handled. Such inspections will include, but not be limited to:

A review of Production facilities and utilities
The taking of physical inventory samples
Reviewing of Quality and Documentation Control systems
Reviewing batch records

A written report of observation shall be issued by Cumberland quality auditors, including a listing of significant items, which must be corrected prior to the supply of further Product to Cumberland.

VII.

Product Complaints/Recall

Bioniche and Cumberland shall each notify the other of any claims related to damage, defective or nonconforming Product. Bioniche shall supply Cumberland with all relevant information for the investigation of complaints related to the Product.

Cumberland shall be responsible for the collection of adverse events reported on the Finished Product. It shall be Cumberland’s responsibility to notify Bioniche of such reports, if such reports relate to Bioniche’s manufacture of the Product, and to keep the appropriate records and to promptly report such adverse reports to the appropriate regulatory authorities. In the event any adverse events are reported to Bioniche, Bioniche shall notify Cumberland in writing within 3 business days.

VIII.

Regulatory Communications

8.1 Maintenance of Licenses

Cumberland is the current Authorization Holder (NDA) for the Finished Product to be manufactured under this Technical Agreement and shall be responsible for the maintenance and renewal of said Marketing Authorizations.

Bioniche shall be responsible for the maintenance and renewal of its manufacturing license.

8.2 Notifications

Cumberland and Bioniche shall promptly inform each other of any material communications to or from governmental authorities or agencies relating to the Product, including but not limited to providing each other promptly with copies of any written communications, and “reports of visits by a governmental authority or agency to any areas within the facilities where the Product is manufactured that could impact upon the continued supply of Product. The parties shall consult with each other regarding any issues raised in such communications and shall attempt in good faith to agree upon any action to be taken or response to be made in connection with such communications.

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IX.

Effective Date and Term, Interpretation

This Technical Agreement shall become effective on the date first written above and shall remain in force until the termination of the Agreement between the parties for the supply of Products.

X.

Modifications

Any modifications or amendments to this Agreement must be in writing and signed by both parties to be effective.

In Witness Whereof, the parties hereto have caused this Agreement to be executed by their respective duly authorized officers, effective as of the first day above written.

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Exhibit I

DETAILED RESPONSIBILITES

X = Responsible
A = Approval/Authority

				BIONICHE		CUMBERLAND
1		SPECIFICATIONS/DOCUMENTATION
1.1		Specification of Active Bulk Ingredient		X		A
1.2		Master Manufacturing Formula		X		A
1.3		Product Lot Identification System		X
1.4		Specification of Inactive Ingredients		X		A
1.5		Test Method for ID of Active Bulk		X
1.6		Test Method for Inactive Ingredients		X
1.7		Test Method for Release of Product		X
1.8		Local Manufacturing and Packaging Instructions		X
1.9		Specification for In-Process Control		X
1.10		Change Control for Active Ingredient		X		A
1.11		Change Control for Manufacturing Formulas		X		A
1.12		Change Control for Inactive ingredients		X		A
1.13		Bulk product package specification, box & labels		X
1.14		Finished Artwork		A		X
1.15		Change Control for Artwork/Finishing Materials		X		A
2		PRODUCTION
2.1		Procurement of Bulk Active ingredient		X
2.2		Purchase Inactive Substances		X
2.3		Store Active/Inactive Substances		X
2.4		Sample/Test/Acceptance of Active & Inactive Substances		X
2.5		Test Method Transfer		N/A
2.6		On-Going Stability Testing of Product		X
2.7		Retention of Certificate of Analysis for Active Substance		X
2.8		Validation of Manufacturing Processes		X
2.9		Bills of Material for Manufacturing Process		X
2.10		In Process Control Instructions and Testing		X
2.11		Batch Record Reconciliation		X
2.12		Batch Record Retention		X
2.13		Retention of Samples of Active Ingredient		X
2.14		Retention of Samples of other Materials (Except water)		X
2.15		Retention of Samples of Product		X
2.16		Maintenance of Pharmaceutical Manufacturing Licenses		X
2.17		Disposal of Waste		X

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				BIONICHE		CUMBERLAND
3.0		TESTING & RELEASE OF FINISHED PRODUCT
3.1		Analysis of Product		X
3.2		Certificate of Analysis for the Product		X
3.3		Internal QP certification of the Product as per approved production and control documents		X
3.4		Final QP Release of the product to Cumberland		X
3.5		Complaint
		- Collection and Logging		X		X
		- Investigation and Report Issue		X
		- Follow Up Corrective Action		X
		- Response to Customer				X
3.6		Product Recall
		- Decision to Initiate Recall		X		X
		- Approval of Notification Wording		X		X
		- Management of Recall		X		X
		- Reconciliation of Returned Product		X		X
3.7		Liaison with Regulatory Authorities for Approval, Maintenance and Updating Marketing Authorisations/Product Authorisations (NDA)				X
3.8		Final Release to Market				X

8

     Technical Agreement Rev 1             5^th April 2005 Bioniche/Cumberland

Exhibit II

Qualified Person
(14^th January 2004)

Qualified Persons of Bioniche Teoranta

9

SCHEDULE III

Territory

The United States of America and all its possessions and territories

SCHEDULE IV

Approved Suppliers

[***]

Schedule V

Minimum Purchase Quantities

[Intentionally omitted. Exhibit 10.3 to Form S-1 filed on May 1, 2007 (File No. 333-142535) incorporated by reference herein.]

EXHIBIT 10.3

*Certain portions of this exhibit have been omitted pursuant to a request for confidential
treatment which has been filed separately with the SEC.

FIRST AMENDMENT TO MANUFACTURING AND SUPPLY AGREEMENT
FOR N-ACETYLCYSTEINE

     THIS FIRST AMENDMENT (the “First Amendment”) to that certain Manufacturing and Supply Agreement for N-Acetylcysteine (the ^"Agreement”), dated as of January 15, 2002, as modified by that certain Novation Agreement, dated as of January 27, 2006 (to be attached hereto), is entered into by and between CUMBERLAND PHARMACEUTICALS INC., a corporation organized and existing under the laws of Tennessee, United States (“CUMBERLAND”), and BIONICHE TEORANTA, a corporation organized and existing under the laws of Ireland (“BIONICHE”), and is effective as of November 16, 2006. Capitalized terms used but not defined in this First Amendment shall have the meanings that are set forth in the Agreement.

WITNESSETH:

     WHEREAS, BIONICHE is the assignee under the Agreement of BIONICHE PHARMA GROUP LIMITED, an Affiliate thereof.

     WHEREAS, CUMBERLAND and BIONICHE agree that the exceptions to the exclusivity provisions set forth in Paragraph 5.6 of the Agreement which permit BIONICHE to (i) sell Excluded Products or Other Products or (ii) market or distribute Excluded Products or Other Products in association with any third Person other than CUMBERLAND in certain circumstances shall be deleted from the Agreement.

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

	1.		Paragraph 1.7 is amended and restated in its entirety as follows:
			DRUG PRODUCT shall mean the N-acetylcysteine pharmaceutical product developed by CUMBERLAND and marketed for any current or future approved indications under the trade name ACETADOTE or any other trade name selected by CUMBERLAND.
	2.		Paragraph 1.9 is hereby amended and restated as follows:
			FACILITY shall mean the manufacturing facility and the real property underlying such manufacturing facility operated by BIONICHE, located at Inverin, Co, Galway, Republic of Ireland.
	3.		Paragraph 1.18 defines TERRITORY as having the meaning set forth in Schedule III. Schedule III of the Agreement, and therefore the TERRITORY, is hereby amended and restated as follows:
			The United States of America and all its possessions and territories, and Australia.

	4.		Paragraph 3.1 is amended and restated in its entirety as follows:
			This Agreement shall commence on the date first above written and will continue until January 23, 2011, unless sooner terminated pursuant to Paragraphs 3.2 or 3.3 hereof or extended pursuant to this Paragraph 3.1. CUMBERLAND shall have the option to extend the duration of this Agreement for five (5) years upon prior written notice provided by CUMBERLAND to BIONICHE at least 180 days prior to January 23, 2011; otherwise, the Agreement shall expire on such date in accordance with its terms. If CUMBERLAND exercises such option, then subject to Paragraphs 3.2 and 3.3, the Agreement shall be automatically renewed for successive three-year terms after expiration of the initial extended term, unless either party notifies the other party in writing at least twelve (12) months in advance of the expiration of the then current term that the party is terminating the Agreement.
	5.		Subparagraphs 3.2(d) and (e) are deleted from the Agreement in their entirety and Subparagraph 3.2(f) is re-lettered as 3.2(d).
	6.		Paragraph 3.5 is amended by adding a reference to Paragraph 3.4 thereto (such that Paragraph 3.4 is identified as a “surviving” provision.)
	7.		Subparagraph 5.6(a) is amended and restated in its entirety as follows:
	(a)		Neither BIONICHE nor any Affiliate thereof will sell, give away, or deliver to any other person, firm, or corporation any form of the Drug Product in the Territory for any indications, while this Agreement is effective and for two years after the termination of this Agreement; provided that such restrictions shall not apply in the event of termination by BIONICHE pursuant to Subparagraphs 3.2(a) or (b), or Paragraph 3.3.
	8.		Subparagraphs 5.6(b), (c), (d), and (e) are deleted from the Agreement in their entirety; Subparagraphs 5.6(f) and (g) are re-lettered as 5.6(b) and (c), respectively; and Subparagraph 5.6(f) (re-lettered 5.6(b)) is amended and restated in its entirety as follows:
	(b)		Except in the event that BIONICHE fails to supply all Drug Product ordered within [***] of receipt of a Purchase Order in accordance with Paragraph 2.7, or in the event of Force Majeure, CUMBERLAND will order its entire requirement of the Drug Product for the Territory from BIONICHE. If CUMBERLAND notifies BIONICHE that it intends to distribute the Drug Product in countries not included in the Territory, then the parties shall negotiate in good faith, for a period not to exceed [***] after CUMBERLAND provides such notice, to amend this Agreement to expand the Territory hereunder (and to add additional minimum purchase quantities for such expanded Territory, as contemplated under Paragraph 5.7); provided that, if the parties fail to agree upon the terms of supply for an expanded Territory within such [***], CUMBERLAND shall have no obligation to purchase requirements of such Drug Products for such other countries

from BIONICHE, but its obligations hereunder with respect to the Territory shall remain in full force and effect.

	9.		Paragraph 5.7 is amended and restated in its entirety as follows:
			CUMBERLAND shall use its best efforts to achieve the minimum purchase quantities set forth in Schedule V to this Agreement for each format of Drug Product sold in the Territory by CUMBERLAND. In the event CUMBERLAND is required to procure Drug Product from other sources in accordance with Paragraph 2.7, the minimum annual purchase obligation set out in Schedule V shall be decreased by the quantity BIONICHE failed to deliver hereunder.
			Schedule V of the Agreement is hereby stated as follows:
			CUMBERLAND’s annual minimum purchase requirements shall be ***% of the average actual purchases for the prior three (3) years.

10.

Paragraph 11.1 is amended by replacing the address for notice (and relevant copies) for CUMBERLAND and BIONICHE, as follows:

		If to CUMBERLAND:		CUMBERLAND PHARMACEUTICALS INC.
						2525 West End Avenue, Suite 950
						Nashville, Tennessee 37203
						Attn: Chief Executive Officer
						Telephone:          615-255-0068
						Facsimile:            615-255-0094
		If to BIONICHE:		BIONICHE TEORANTA
						Inverin, Co. Galway,
						Ireland
						Attn: Managing Director
						Telephone:          +353 91 593202
						Facsimile:            +353 91 593228

	11.		Miscellaneous.
			(a) Authorization. Each party to this First Amendment hereby represents and warrants that the execution, delivery and performance of this First Amendment is within the powers of such party and has been duly authorized by the party, is in accordance with all applicable laws and regulations, and this First Amendment constitutes the valid and enforceable obligation of each party in accordance with its terms.
			(b)Effect of First Amendment. Each party acknowledges that this First Amendment constitutes a written instrument as contemplated by Paragraph 11.2 of the Agreement. Except as specifically amended above, the Agreement shall remain in full force and effect, and is hereby ratified and confirmed.

(c) Counterparts. This First Amendment may be executed in any number of counterparts, each of which may be executed by only one of the parties hereto, and each of which shall be enforceable against the party actually executing such counterpart, and all of which shall together constitute one instrument.

(d) Titles and Subtitles. The titles and subtitles used in this First Amendment are used for convenience only and are not to be considered in construing or interpreting this First Amendment.

(e) Governing Law and Dispute Resolution. This First Amendment shall be construed in accordance with the laws of the State of New York without regard to applicable conflicts of laws provisions and any dispute, controversy, or claim arising out of or relating to this First Amendment shall be governed by the provisions of Paragraph 11.7 of the Agreement.

(f) Severability. Should any part of this First Amendment be invalid or unenforceable, such invalidity or unenforceability shall not affect the validity and enforceability of the remaining portion.

     IN WITNESS WHEREOF, each of the undersigned has caused this First Amendment to be executed as of the date first above written.

		CUMBERLAND:
		CUMBERLAND PHARMACEUTICALS INC.
		By:		/s/ A.J. Kazimi
		Title:		Chief Executive Officer
		Date:		December 13, 2006
		BIONICHE:
		BIONICHE TEORANTA
		By:		/s/ John Kavanagh
		Title:		Managing Director
		Date:		November 16, 2006

EXHIBIT 10.4

* Certain portions of this exhibit have been omitted pursuant to a request for confidential
treatment which has been filed separately with the SEC.

Contract Sales and Services Agreement

Between

Cumberland Pharmaceuticals, Inc.

&

Cardinal Health Contract Sales & Services

For

Cumberland Pharmaceuticals Dedicated Sales Force

May 16, 2006

TABLE OF CONTENTS

Article I		Definitions and References to Cardinal Health		Page 3
Article II		Appointment of Cardinal Health; General Scope of Activities		Page 5
Article III		Compensation		Page 8
Article IV		Representations, Warranties and Covenants		Page 9
Article V		Status of Cardinal Health and the Representatives		Page 10
Article VI		Training		Page 11
Article VII		Samples		Page 11
Article VIII		Trademarks and Intellectual Property Rights		Page 12
Article IX		Communications; Monitoring the Program		Page 12
Article X		Insurance		Page 13
Article XI		Adverse Reaction Reporting and Regulatory Matters		Page 14
Article XII		Return/Recall		Page 15
Article XIV		Term and Termination		Page 16
Article XV		Recordkeeping; Audit Rights		Page 18
Article XVI		Indemnification		Page 18
Article XVII		Notice		Page 21
Article XVIII		Miscellaneous		Page 21
Schedule 1.1(k)		List of Products		Page 25
Schedule 1.1(0)		Definition of Territory		Page 26
Schedule 3.1		Service Fees and Payment Schedule		Page 27

AGREEMENT

     This AGREEMENT (“Agreement”) is dated as of May 16, 2006 by and between Cardinal Health PTS, LLC (“Cardinal Health”) with a place of business at 7000 Cardinal Place, Dublin, Ohio, and Cumberland Pharmaceuticals, Inc. (“Cumberland”), having a principal place of business at 2525 West End, Suite 950, Nashville, Tennessee 37203.

Background Information

     Cumberland is a Tennessee-based company which focuses on the acquisition, marketing, and distribution of a portfolio of niche pharmaceutical products. Cardinal Health provides medical representatives who Detail (as hereinafter defined) pharmaceutical products for third parties. Cumberland desires Cardinal Health to provide representatives to Detail certain products as determined and directed by Cumberland in the geographical territory hereinafter specified, pursuant to the terms and conditions of this Agreement, and Cardinal Health desires to provide the Representatives and perform such services pursuant to the terms and conditions set forth in this Agreement.

     The parties hereby agree as follows:

ARTICLE I

     1.1. Definitions. The following terms when used in this Agreement shall, except where the context otherwise requires, have the following meanings:

          (a) “Act” means the Federal Food, Drug and Cosmetic Act, as amended, and the regulations promulgated thereunder from time to time.

          (b) “Affiliate” means any corporate or non-corporate business entity that controls, is controlled by, or is under common control with a party to this Agreement. A corporation or non-corporate business entity shall be regarded as in control of another corporation if it owns or directly or indirectly controls at least forty percent (40%) of the voting stock of the other corporation, or (i) in the absence of the ownership of at least forty percent (40%) of the voting stock of a corporation or (ii) in the case of a non-corporate business entity, if it possesses directly or indirectly, the power to direct or cause the direction of the management and policies of such corporation or non-corporate business entity, as applicable.

          (c) “Agency” means any governmental regulatory authority in the Territory responsible for granting approvals for the sale or maintaining regulatory oversight of the Products, including, without limitation, the FDA.

          (d) “Cardinal Health” means Cardinal Health PTS, LLC and shall be deemed to include the Representatives and Managers.

          (e) “Detail” means an interactive, face-to-face visit by a Representative with a Target Customer or his or her legally empowered designee in the Territory, during which the FDA-approved indicated uses, safety, effectiveness, contraindications, side effects, warnings and other relevant characteristics of one or more of the Products (as defined herein) are described by the Representative in a fair and balanced manner consistent with the requirements of the Act, and using, as necessary or desirable, the Product Labeling (as defined herein) and the Product Promotional Materials (as defined herein). “Product Detail” means Detail of a Product between Target Customer and Representative. When used as a verb, “Detail” or “Detailing” shall mean to engage in a Detail as defined in this Section 1.1(f).

          (f) “FDA” means the United States Food and Drug Administration and any successor agency having substantially the same functions.

          (g) “Manager” means an individual hired by and retained as an employee of Cardinal Health to oversee activities of Representatives under this Agreement, including a project manager.

          (h) “PDMA” means the Prescription Drug Marketing Act of 1987, as amended, and the regulations promulgated thereunder from time to time.

          (i) “Product Labeling” means all labels and other written, printed, or graphic matter provided by Cumberland including (i) any container or wrapper utilized with a Product, or (ii) any written material accompanying a Product, including, without limitation, Product package inserts.

          (j) “Product Promotional Materials” means all written, printed or graphic material provided by Cumberland, including Product Labeling, intended for use by Representatives during a Detail, including visual aids, file cards, premium items, clinical studies, reprints, drug information updates and any other promotional support items that Cumberland deems necessary or appropriate to conduct the Program. Product Promotional Materials shall include FDA approved indicated uses, safety, effectiveness, contraindications, side effects, warnings and other relevant characteristics of each of the Products.

          (k) “Products” means the pharmaceutical products to be detailed by Representatives and marketed by Cumberland as set forth on attached Schedule 1.1(k) and such other products as may be added by Cumberland from time to time to Schedule 1.1(k) attached hereto.

          (l) “Program” means the program of Detailing to be conducted by the Representatives pursuant to this Agreement beginning as of September 5, 2006 and continuing thorugh the remainder of the Term, as defined in Section 14.1.

          (m) “Representative” and “Representatives” mean an individual or individuals hired by and retained as an employee of Cardinal Health to conduct Detailing of Cumberland Products only in connection with the Program.

          (n) “Target” or “Target Customer” means a physician or other specialist identified by Cumberland.

          (o) “Territory” means the geographical area specified in the attached Schedule 1.1(o).

ARTICLE II
APPOINTMENT OF CARDINAL HEALTH; GENERAL SCOPE OF ACTIVITIES

     2.1. Detailing. Cardinal Health shall provide twenty four (24) Representatives to engage in Product Detail activities in the Territory. Cardinal Health shall assign Representatives for such Target Customers, in such numbers, and in such Territories as shall be designated by Cumberland during the term of this Agreement. Each Representative shall make Product Details to his or her assigned Target Customers based on any reasonable general direction given by Cumberland’s designated management team. The duties of such Representatives shall be exclusively to Detail the Products and perform other related activities reasonably agreed upon by Cardinal Health as deemed necessary for the establishment and maintenance of new and existing customers of the Products in the Territories. Cumberland shall at all times retain the right to promote the Products by whomever, wherever, and to whomever it chooses.

     2.2 Furnishing Managers. Cardinal Health shall provide two Managers to oversee the activities of Representatives and to perform this Agreement in such numbers and for such Territories (when relevant) as mutually agreed upon by Cardinal Health and Cumberland.

     2.3. Scope of Activities. The parties shall perform the following activities as applicable to each in connection with the Program:

          (a) Cardinal Health shall have sole and exclusive authority to discipline or terminate the employment of Representatives. Cumberland may reasonably request that a Representative or Manager be terminated or reassigned if such Representative’s or Manager’s activities or conduct are not adequately achieving the performance goals of the Product, or if the Representative or Manager fails to comply with all applicable laws, regulations, and Cumberland requirements for Detailing the Product. Cardinal Health shall use its best efforts to comply with such request; provided that such action complies with applicable laws and is in accordance with Cardinal Health’s policies and procedures, as determined by Cardinal Health’s human resources manager. In the event Cardinal Health determines that its policies and procedures or applicable laws prohibit the termination or reassignment of any Representative so requested by Cumberland, it shall notify Cumberland of such determination and submit a corrective action plan for Cumberland’s approval.

          (b) Cardinal Health shall cause each Representative to attend and successfully complete the Training Program (as defined in Section 6.1) conducted by Cumberland for each of the Products prior to participating in the Program. Any such Representative who shall not successfully complete all such requirements shall be removed and replaced by another Representative who shall comply with such requirements.

          (c) Cumberland shall provide the Representatives without cost with sufficient quantities of the Product Promotional Materials and Product Labeling for the performance of Detailing. Cumberland shall be solely responsible for the preparation, content, and method of distribution of the Product Promotional Materials and the Product Labeling. In connection with the Detailing of the Products, the Representatives shall use only the Product Labeling and the Product Promotional Materials provided by Cumberland; and under no circumstances shall Cardinal Health or the Representatives develop, create, or use any other promotional material or literature for the Detailing of the Products. Cumberland shall advise Cardinal Health immediately of any inaccuracy or incompleteness of the Product Promotional Materials or the Product Labeling, and upon such notice Cardinal Health and the Representatives shall immediately cease the use of any portion or all of the Product Promotional Materials or Product Labeling so identified by Cumberland.

          (d) Cardinal Health shall instruct the Representatives to limit their verbal statements and claims regarding the Products, including efficacy and safety, to those that are consistent with the Product Labeling and the Product Promotional Materials. The Representatives shall not add, delete, or modify claims of efficacy or safety in the Detailing of the Products, nor make any changes (including underlining or otherwise highlighting any language or adding any notes thereto) in the Product Promotional Materials. Representatives shall not make any disparaging, untrue, or misleading statements about Cumberland or its Affiliates, employees, competitors, or competing products. Representatives shall Detail the Products in strict adherence to all applicable laws, regulations, and professional requirements, including, but not limited to, the Act, the Medicare and Medicaid Anti-Kickback Statute, and the American Medical Association Gifts to Physicians from Industry Guidelines.

          (e) The Representatives shall remain under the direct authority and control of Cardinal Health, but shall cooperate with the members of Cumberland and shall receive advice and direction related to Detail activities on the Products from Cumberland and Cardinal Health mutually. Cumberland shall make all decisions with respect to the overall strategy in connection with the Detailing of the Products. Any Cumberland personnel interacting with Cardinal Health Representatives shall not discipline the Representatives or implement terms or conditions of employment or personnel policies and/or practices with respect to the Representatives. Cumberland shall provide Cardinal Health with copies of all reports, memoranda, audits and other data it develops pertaining to (i) the Representatives, Detailing, and the Program within 30 days of the preparation of such documents, and (ii) any negligent or wrongful acts or omissions of Representatives as promptly as practicable.

          (f) In the event Cardinal Health supplies Representatives and Managers with fleet vehicles for their use in performing the Detailing as described in the Schedules of this Agreement, Cumberland shall reimburse Cardinal Health for all of its out-of-pocket costs related to using such vehicles for Detailing, including but not limited to costs related to owning, leasing, maintaining, insuring, and/or operating such vehicles (including fuel costs). Cumberland shall reimburse Cardinal Health for all reasonable out-of-pocket costs and expenses (i.e., airline tickets and other travel expenses, hotel, rent-a-car, business meals, travel meals) of

Representatives and Managers in connection with performing services pursuant to this Agreement. Cumberland and Cardinal Health shall establish a mutually acceptable budget for the costs and expenses referenced in this subparagraph for each Territory.

          (g) Cumberland shall provide Cardinal Health with a list of Target Customers in the Territory and with data on prescriptions and sales in the Territory for Cardinal Health’s use in performing this Agreement. Cumberland shall also provide Cardinal Health with other sales and marketing information concerning the Products that Cumberland obtains or prepares during the term of this Agreement and deems useful to Cardinal Health.

     2.4. Orders for Products. Cumberland shall be solely responsible for establishing the terms and conditions of the sale of the Products, including without limitation, the price at which the Products will be sold, whether sales of the Products will be subject to any discounts, the method of distribution of the Products, and whether any credit will be granted or refused in connection with the sale or return of any Product. Cumberland shall be exclusively responsible for accepting and filling all purchase orders for the Products, billing and returns for the Products, and all other activities in connection with the sale and delivery of the Products, other than Detailing. If Cardinal Health or the Representatives receive an order for the Products, they shall immediately transmit such order to Cumberland for further handling and communications with the submitter of the order, including acceptance or rejection, which shall be in Cumberland’s sole discretion.

     2.5. Representatives’ Activity

     (a) Subject to Cumberland’s obligations and representations and warranties in this Agreement, any negligent or wrongful act or omission on the part of the Representatives (both individually and as a group) that occur during the term of this Agreement and that arise during the course and within the scope of their employment with Cardinal Health pursuant to this Agreement shall be deemed to be negligent or wrongful acts or omissions of Cardinal Health. Notwithstanding the foregoing, any acts or omissions of the Representatives pursuant to the exclusive direction, control or supervision of Cumberland or its employees or agents shall not be deemed to be negligent or wrongful acts or omissions of Cardinal Health.

     (b) Each party shall notify the other in writing as promptly as practicable of any such material alleged negligent or wrongful acts or omissions on the part of the Representatives of which it becomes aware along with a plan to remedy such acts or omissions, and Cumberland shall provide Cardinal Health with a reasonable opportunity to remedy such acts or omissions, and if indicated, to replace the involved Representatives.

     2.6 Vacancies/Turnover. In the event of a Representative vacancy due to resignation, reassignment or termination of a Representative, Cardinal Health shall fill any such vacancy within a six (6) week period. Cumberland shall be responsible for paying the Service Fees (as defined in Section 3.1 below) during such vacancy, unless such vacancy exceeds the six (6) week period, in which event, the associated Service Fees for such vacancy shall be suspended after the six (6) week period and shall resume once the vacancy is filled by Cardinal Health. All recruiting and other related expenses for filling a vacancy shall be borne by Cardinal Health;

provided, however, that Cumberland shall be responsible for all recruiting and other related expenses for filling any vacancy occurring pursuant to Cumberland’s request for reassignment or termination other than a request pursuant to Section 2.5(b) or resulting from the Representative’s failure to comply with any one or more of the provisions of Section 2.3. In addition, if Cumberland desires to interview any candidates, Cumberland shall bear its own cost of attending any final interview conducted by Cardinal Health or the costs of any separate interview arranged for by Cumberland.

     2.7 Management Reports. Cardinal Health or its third party designee shall provide Cumberland with monthly reports in the form agreed between Cumberland and Cardinal Health within fifteen (15) days after the end of each month. At the request of Cumberland, Cardinal Health shall furnish Cumberland at reasonable times such documentation as Cumberland reasonably requests for purposes of verifying the accuracy of any monthly report.

     2.8 Project Manager. Cardinal Health shall appoint a Project Manager to serve as a liaison between Cardinal Health, Representatives and Cumberland regarding the performance by Cardinal Health and Cumberland of their respective obligations under this Agreement.

     2.9 Non-compete. During the term hereof and until the first anniversary of the expiration thereof, the Representatives shall not, directly or indirectly, solicit or influence or attempt to solicit or influence any Target Customer to acquire pharmaceutical products manufactured by a competitor of Cumberland for a laxative product, an oral rehydration solution or other Products added to Schedule 1.1(k) by Cumberland.

ARTICLE III
COMPENSATION

     3.1. Amount and Time of Payment. For services hereunder, Cumberland shall pay to Cardinal Health the fees set forth in Schedule 3.1 attached hereto and incorporated by reference (the “Service Fees”), which shall be payable as set forth in the payment schedule set forth therein.

     3.2 Cumberland’s Hiring of Representatives. Cumberland shall not solicit, directly or indirectly, any Representative or other employee of Cardinal Health to terminate their employment with Cardinal Health and/or hire any such Representative or employee during the Term of this Agreement without the prior written consent of Cardinal Health, which consent shall not be unreasonably withheld or delayed. At the expiration or termination of this Agreement, Cumberland shall have the right to hire as its own employee or as an independent contractor or agent any one or more of the Representatives or Managers (collectively, the “Targeted Employees”). Cumberland shall have the right to negotiate with any Targeted Employee concerning the terms on which Cumberland might hire that Targeted Employee prior to the end of the Term only upon the prior written consent of Cardinal Health, which shall not be unreasonably withheld or delayed. Cardinal agrees not to interfere with or restrict in any manner Cumberland’s solicitation and hiring of the Targeted Employees and Cardinal Health will assist Cumberland in the transition of Targeted Employees from Cardinal Health to Cumberland.

     3.3. Reimbursement of Expenses. All expenses of Cardinal Health for which Cumberland is obligated to reimburse Cardinal Health as expressly provided in this Agreement, including but not limited to travel expenses and vehicle expenses under Section 2.3(e), shall be paid by Cumberland within [***] days after Cardinal Health has submitted a statement itemizing such expenses. Cardinal Health shall submit such expense statements to Cumberland monthly.

     3.4 Past Due Amounts. All amounts owing by Cumberland to Cardinal Health pursuant to this Agreement that are not timely paid by Cumberland will bear interest at the rate of twelve (12%) per annum from the due date. An invoice will be considered late and begin to accrue interest if unpaid 30 days past its due date.

ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS

     4.1. By Cardinal Health. Cardinal Health represents, warrants, and covenants to Cumberland, as of execution of this Agreement and during the term of this Agreement, as follows:

          (a) that Cardinal Health and the Representatives shall perform the Detailing in a professional and timely manner;

          (b) that Cardinal Health and the Representatives shall comply with all laws, rules and regulations that apply to the performance of services under this Agreement, including but not limited to the PDMA, the Medicare and Medicaid Anti-Kickback Act (42 U.S.C. § 1320a-7b(a)), the Civil False Claims Act (31 U.S.C. § 3729(a)), Sections 1128A, 1128B, and 1877 of the Social Security Act (42 U.S.C. §§ 1320a-7a, -7b, and 1395nn), the Health Care Fraud Act (18 U.S.C. § 1347), and the Criminal False Claims Act (18 U.S.C. § 287), as amended from time to time, as well as similar applicable state laws; and

          (c) that Cardinal Health is under no obligation to any third party that would prevent the execution of this Agreement or interfere with its performance under this Agreement.

     4.2. By Cumberland. Cumberland represents, warrants, and covenants to Cardinal Health, as of execution of this Agreement and during the term of this Agreement, as follows:

          (a) that Cumberland is under no obligation to any third party that would prevent the execution of this Agreement or interfere with its performance under this Agreement;

          (b) that Cumberland shall comply with all laws, rules and regulations that apply to the Products and their sale, the Program, and this Agreement, including but not limited to the Act, the PDMA, the Medicare and Medicaid Anti-Kickback Act (42 U.S.C. § 1320a-7b(a)), the Civil False Claims Act (31 U.S.C. § 3729(a)), Sections 1128A, 1128B, and 1877 of the Social Security Act (42 U.S.C. §§ 1320a-7a, -7b, and 1395nn), the Health Care Fraud Act (18

U.S.C. § 1347), and the Criminal False Claims Act (18 U.S.C. § 287), as amended from time to time, as well as similar applicable state laws;

          (c) that the Product Labeling and Product Promotional Materials are accurate, complete, and in compliance with the Act and all applicable rules and regulations of the FDA; and

          (d) that to the best knowledge of Cumberland, the manufacture, sale, and distribution of the products do not and will not during the term of this Agreement, infringe any patent or other proprietary rights of third parties, and the Products have all necessary governmental approvals and may be lawfully Detailed and sold by Cumberland and the Representatives.

ARTICLE V
STATUS OF CARDINAL HEALTH AND THE REPRESENTATIVES

     5.1. Cardinal Health Independent Contractor. Cardinal Health is being retained and shall perform hereunder strictly as an independent contractor. Representatives and Managers of Cardinal Health performing services hereunder shall not be, and shall not be considered to be, employees of Cumberland for any purpose, and shall at all times remain employees of Cardinal Health, subject to Section 3.3. Neither party shall have any responsibility for the hiring, termination, compensation, benefits or other conditions of employment of the other party’s employees, except as otherwise provided in this Agreement.

     5.2. No Cumberland Benefits. While employees of Cardinal Health, the Managers and Representatives are not eligible to participate in any benefits programs or sales bonuses offered by Cumberland to its employees, or in any pension plans, profit sharing plans, insurance plans or any other employee benefit plans offered from time to time by Cumberland to its employees, provided that the Representatives shall be eligible to participate in Cumberland sales contests and bonus plans if so requested by Cumberland and approved by Cardinal Health. Cardinal Health acknowledges and agrees that Cumberland does not, and will not, maintain or procure any worker’s compensation or unemployment compensation insurance for or on behalf of the Managers or Representatives while they are employees of Cardinal Health. Cardinal Health acknowledges and agrees that it shall be solely responsible for paying all salaries, wages, benefits and other compensation which its employees (including Representatives and Managers) may be entitled to receive in connection with the performance of the services hereunder.

     5.3 Sales, Use and Excise Taxes. If any state or local government or other taxing authority determines that sales, use or excise Taxes (“Taxes”) are applicable to Cardinal Health’s services performed hereunder, Cardinal Health shall promptly accrue and Cumberland shall pay such Taxes on behalf of Cardinal Health to the appropriate taxing authorities. In addition, Cumberland shall be responsible for the payment of any applicable Taxes related to Cumberland’s supply to Cardinal Health of Product Promotional Materials and Product Samples.

     5.4. No Joint Venture. Nothing contained in this Agreement shall be construed as creating a joint venture or, except as otherwise provided herein, as granting to either party the

authority to bind or contract any obligations in the name of or on the account of the other party or to make any guarantees or warranties on behalf of the other party.

ARTICLE VI
TRAINING

     6.1. Training Programs.

          (a) Cumberland shall conduct a training program for new Representatives and Managers prior to participating in the Program, which shall include such medical and technical information about the Products and such sales training as Cumberland, along with Cardinal Health, deems necessary and appropriate (the “Training Program”). The Training Program shall also include instruction on compliance with applicable laws, Company policies and procedures, and computer training. Cardinal Health shall assist Cumberland with the Training Program only to the extent requested by Cumberland.

          (b) In order to qualify for assignment in a Territory, a Representative must demonstrate thorough knowledge of the Products by passing Cumberland approved Product tests at a level of proficiency agreed upon by Cumberland and Cardinal Health.

     6.2. Training Materials. Cumberland shall prepare written training materials for the Training Program and an up-to-date programmed learning unit for the Products, to be sent to each Representative for “at home” study a minimum of five (5) days prior to the commencement of the Training Program.

     6.3. Cumberland Assistance. During the term of this Agreement, Cumberland shall make available to Cardinal Health, free of charge, a reasonable number of, and for a reasonable amount of time, at locations reasonably agreed by Cumberland and Cardinal Health, Cumberland’s sales training and marketing personnel to assist Cardinal Health’s Representatives and Managers with respect to the Training Program and additional orientation and ongoing training for the Representatives.

ARTICLE VII
SAMPLES

     7.1. Provision of Samples. Cumberland shall provide samples of the Products to the Representatives at Cumberland’s option and at its expense. Cumberland shall determine the quantity and types of samples to be provided to the Representatives and the method of distribution of the samples. In the event Cumberland elects to have Cardinal Health manage the storage and distribution of samples, Cardinal Health shall pass on to Cumberland the actual invoice costs for storage, distribution and other related costs and use prudent business sense in costs incurred. All samples shall be stored and handled by Cumberland and Cardinal Health in compliance with the PDMA and applicable law.

     7.2 Sample Accountability. Cardinal Health shall prepare and provide to Cumberland for approval a sample accountability program applicable to the samples provided by

Cumberland. After the parties agree in writing to adopt a sample accountability program Cardinal Health shall comply with such program.

     7.3. Return of Samples. Within 30 days following the termination or expiration of this Agreement or within 30 days from the termination or removal from the Program of a Representative (unless such Representative has been hired or retained by Cumberland), Cardinal Health shall cause the Representatives to return to Cumberland all unused Product samples provided to Cardinal Health or the Representatives by Cumberland. Cumberland shall pay or reimburse Cardinal Health for all out-of-pocket costs and expenses in connection with the storage and shipment of returned samples.

ARTICLE VIII
TRADEMARKS AND INTELLECTUAL PROPERTY RIGHTS

     The Products shall be Detailed by Cardinal Health’s Representatives under trademarks owned or licensed by Cumberland or an Affiliate of Cumberland. This Agreement does not constitute a grant to Cardinal Health of any property right or interest in the Products or any trademarks which Cumberland or an Affiliate of Cumberland uses with respect to the Products or to the name or business style of Cumberland. Cardinal Health and the Representatives shall use the Product Promotional Materials only for the purposes of this Agreement, and all copyright and other intellectual property rights in the Product Promotional Materials shall remain with Cumberland.

ARTICLE IX
COMMUNICATIONS; MONITORING THE PROGRAM

     9.1. Communications from Third Parties. Cardinal Health and its Representatives shall advise Cumberland promptly of all comments, statements, requests and inquiries of the medical profession or any other third parties relating to the Products that are not addressed by either Product Labeling or the Product Promotional Materials, of which Cardinal Health becomes aware. All responses to such communications to the medical profession or such other third parties shall be handled solely by Cumberland. Cardinal Health shall provide reasonable assistance to Cumberland to the extent requested by Cumberland, and at Cumberland’s cost and expense, to fully respond to such communications.

     9.2. Government Agencies. All communications with government agencies, including the FDA, concerning the Products shall be the sole responsibility of Cumberland. Cardinal Health shall assist Cumberland with respect to such communications with government agencies to the extent requested by Cumberland, and at Cumberland’s cost and expense. Cardinal Health shall provide Cumberland with any documents or information reasonably requested by Cumberland for purposes of responding to any communications with government agencies within 72 hours of Cumberland’s request.

     9.3. Cumberland Communications. In addition to Detailing, Cardinal Health shall assist Cumberland with respect to customer communications (as reasonably requested by Cumberland and at Cumberland’s cost and expense) within the Territory and shall regularly

advise Cumberland of market, economic, regulatory and other developments of which Cardinal Health may become aware which may affect the sale of the Products in the Territory.

     9.4. Review of Results. The parties shall meet periodically, but at least once per calendar quarter, to review and discuss the actual results compared to the marketing plans for Detailing of the Products. Cumberland shall regularly and promptly share with Cardinal Health all reports, audits and other data it develops relative to the Program.

ARTICLE X
INSURANCE

     10.1 Cardinal Health Insurance.

(a)

During the Term of this Agreement, Cardinal Health shall obtain and maintain the following insurance with limits not less than those specified below:

	i.		Commercial General Liability Insurance with a limit of One Million Dollars ($1,000,000) per occurrence.
	ii.		Worker’s Compensation and Employers Liability Insurance with statutory limits for Workers’ Compensation and Employers’ Liability limits of One Million Dollars ($1,000,000) per accident.
	iii.		Automobile Liability Insurance with a combined single limit of $1,000,000.
	iv.		Products Liability Insurance with a limit of Five Million Dollars ($5,000,000) per occurrence.

(b) Cardinal Health may self-insure any or a portion of the required insurance. In the event that any of the required policies of insurance are written on a claims made basis, then such policies shall be maintained during the entire term of this Agreement and for a period of not less than five (5) years following the termination or expiration of this Agreement.

(c) Cardinal Health shall waive subrogation rights against Cumberland for workers’ compensation benefits and shall obtain a waiver from any insurance carriers with which Cardinal Health carries workers’ compensation insurance releasing their subrogation rights against Cumberland.

(d) Each insurance policy which is required under this Section shall be obtained from an insurance carrier with an A.M. Best rating of at least A- VII.

     10.2 Cumberland Insurance.

(a)

During the Term of this Agreement, Cumberland shall obtain and maintain the following insurance with limits not less than those specified below.

	i.		Commercial General Liability Insurance with a limit of One Million Dollars ($1,000,000) per occurrence.
	ii.		Products Liability Insurance with a limit of Five Million Dollars ($5,000,000) per occurrence.
	iii.		Worker’s Compensation and Employers Liability Insurance with statutory limits for Workers’ Compensation and Employers’ Liability limits of One Million Dollars ($1,000,000) per accident.

(b) Cumberland may self-insure any or a portion of the required insurance. In the event that any of the required policies of insurance are written on a claims made basis, then such policy(ies) shall be maintained during the entire period of this Agreement and for a period of not less than five (5) years following the termination or expiration of this Agreement.

(c) Cumberland shall waive subrogation rights against Cardinal Health for workers’ compensation benefits and shall obtain a waiver from any insurance carriers with which Cumberland carries workers’ compensation insurance releasing their subrogation rights against Cardinal Health.

(d) Each insurance policy which is required under this Section shall be obtained from an insurance carrier with an A.M. Best rating of at least A- VII.

ARTICLE XI

     11.1. Immediate Notification. Cardinal Health and Cumberland agree to notify the other party as soon as reasonably practicable of any information that each may obtain or learn concerning any Product or package complaint or any serious unexpected side effect, injury, toxicity, or sensitivity reaction or any unexpected incidence of severity thereof associated with the clinical uses, studies, investigations, tests and marketing of the Products, whether or not determined to be attributable to the Products. “Serious” as used in this Section 11.1 refers to an experience which results in death, permanent or substantial disability, in-patient hospitalization, prolongation of existing in-patient hospitalization, a congenital anomaly or cancer, or a result of an overdose or life threatening condition. “Unexpected” as used in this Section 11.1 refers to (i) conditions or developments not previously submitted to governmental Agencies or encountered during clinical studies of the Products and not reflected in the Product Promotional Materials or the Product Labeling, or (ii) conditions or developments occurring with greater frequency, severity, or specificity than shown by information previously submitted to governmental Agencies or encountered during clinical studies of the Products and not reflected in the Product Promotional Materials or the Product Labeling. Each party shall also notify the other in a timely manner of any other adverse experience, i.e., any unfavorable and unintended change in the

structure (signs), function (symptoms) or chemistry (laboratory data) of the body temporally associated with the use of the Products, whether or not considered related thereto.

     11.2. Threatened Agency Action. Cardinal Health and Cumberland shall each immediately notify the other party of any information that each may obtain or learn regarding any threatened or pending action by an Agency which may affect the Products. Cardinal Health shall, at the request of Cumberland and at the cost and expense of Cumberland, cooperate with Cumberland in formulating a procedure for taking appropriate action in response to such information. Unless compelled by law, Cardinal Health shall not respond to an Agency without the prior written consent of Cumberland.

     11.3. Training. Cardinal Health and Cumberland shall develop appropriate instructions in the Training Program for Representatives as to handling of information received or obtained subject to Sections 11.1 and 11.2.

ARTICLE XII

     12.1. Returned Products.

          (a) Cumberland shall be responsible for handling all returned Products, including shipment and compensation or credit for the returned Products. Any Products inadvertently returned to Cardinal Health shall be shipped to Cumberland or at its direction, in compliance with Cumberland’s returned goods policy, and Cardinal Health shall advise the customer who made the return that the Products have been returned to Cumberland. Cumberland shall reimburse Cardinal Health’s out-of-pocket shipping costs arising from its handling of such returned Products within 30 days of delivery to Cumberland of Cardinal Health’s statement for such costs. Upon request Cardinal Health shall provide Cumberland with documentation relating to such costs.

          (b) At Cumberland’s request, Cardinal Health shall assist Cumberland in obtaining and receiving any Products that have been recalled, and any costs incurred by Cardinal Health, agreed upon in advance by Cumberland, with respect to participating in any such recall shall be reimbursed by Cumberland within 30 days of delivery to Cumberland of Cardinal Health’s statement for such costs.

ARTICLE XIII

13.1 Mutual Obligation. Cardinal Health and Cumberland agree that they will not disclose the other party’s Confidential Information (defined below) to any third party without the prior written consent of the other party except as required by law, regulation or court or administrative order; provided, however, that prior to making any such legally required disclosure, the party making such disclosure shall give the other party as much prior notice of the requirement for and contents of such disclosure as is practicable under the circumstances. Notwithstanding the foregoing, each party may disclose the other party’s Confidential Information to any of its Affiliates that (A) need to know such

Confidential Information for the purpose of performing under this Agreement, (B) are advised of the contents of this Article, and (C) agree to be bound by the terms of this Article.

13.2 Definition. As used in this Agreement, the term “Confidential Information” includes all such information furnished by Cardinal Health or Cumberland, or any of their respective representatives or Affiliates, to the other or its representatives or Affiliates, whether furnished before, on or after the date of this Agreement and furnished in any form, including but not limited to written, verbal, visual, electronic or in any other media or manner. Confidential Information includes all proprietary technologies, know-how, trade secrets, discoveries, inventions and any other Intellectual Property (whether or not patented), analyses, compilations, business or technical information and other materials prepared by either party, or any of their respective representatives, containing or based in whole or in part on any such information furnished by the other party or its representatives. Confidential Information also includes the existence of this Agreement and its terms.

13.3 Exclusions. Notwithstanding Section 13.2, Confidential Information does not include information that (A) is or becomes generally available to the public or within the industry to which such information relates other than as a result of a breach of this Agreement, or (B) is already known by the receiving party at the time of disclosure as evidenced by the receiving party’s written records, or (C) becomes available to the receiving party on a non-confidential basis from a source that is entitled to disclose it on a non-confidential basis, or (D) was or is independently developed by or for the receiving party without reference to the Confidential Information, as evidenced by the receiving party’s written records.

13.4 No Implied License. The receiving party will obtain no right of any kind or license under any patent application or patent by reason of this Agreement. All Confidential Information will remain the sole property of the party disclosing such information or data.

13.5 Return of Confidential Information. Upon written request or termination of this Agreement, the receiving party shall promptly return within thirty (30) days all such information, including any copies thereof, and cease its use or, at the request of the disclosing party, shall promptly destroy the same and certify such destruction to the disclosing party; except for a single copy thereof, which may be retained for the sole purpose of determining the scope of the obligations incurred under this Agreement.

13.6 Survival. The obligations of this Article 13 will terminate five (5) years from the expiration of this Agreement.

ARTICLE XIV

     14.1. Term. This Agreement shall take effect as of September 5, 2006 and shall continue in effect until August 30, 2008 (the “Initial Term”), unless terminated earlier as set forth herein. Notwithstanding the foregoing, Cumberland may, at its option upon written notice to Cardinal Health at least ninety (90) days prior to the expiration of the Initial Term, and with the written consent of Cardinal Health, extend the Initial Term for one additional year (the “Renewal Term”). If Cumberland desires to exercise the Renewal Term, parties shall negotiate in good faith provisions of Section 3.1 regarding Service Fees. References in this Agreement to the term of this Agreement include both the Initial Term and the Renewal Term, if applicable.

     14.2. Bankruptcy: Insolvency. Either party may terminate this Agreement upon notice to the other upon the occurrence of: (a) the entry of a decree or order for relief by a court of proper jurisdiction in an involuntary case of the other party under the Federal Bankruptcy Code, as now constituted or hereafter amended, or any other applicable federal or state insolvency or other similar laws, and the continuance of any such decree or order in effect for a period of sixty (60) consecutive days; or (b) the filing by the other party of a petition for relief under the Federal Bankruptcy Code, as now constituted or hereafter amended, or any other applicable federal or state insolvency or similar laws.

     14.3 Termination For Breach. Subject to Section 3.2 and other continuing obligations, either party may terminate this Agreement (i) in the event of a material breach of the other party’s obligations under this Agreement, provided that such breach has not been cured within thirty (30) days after written notice thereof from the non-breaching party.

     14.4 Termination Due To Regulatory And Other Problems. If the Product is not being marketed due to regulatory problems, court or administrative proceedings, product liability claims, recalls, raw materials shortages, or similar factors beyond the control of Cumberland, then, subject to Section 3.2, either party may terminate this Agreement upon thirty (30) days written notice to the other.

     14.5 Termination Due To Assignment or Change in Control. In the event of a Change of Control (defined herein), the party that has had a Change In Control (the “Affected Party”) shall give written notice to the other party (the “Non-Affected Party”) within thirty (30) days of the occurrence of such Change In Control. If the Change In Control involves a material and direct competitor of the Non-Affected Party, the Non-Affected Party may terminate this Agreement by written notice to the Affected Party within 60 days after receipt of the Notice of a Change In Control . If the Change In Control does not involve a material and direct competitor of the Non-Affected Party, this Agreement may not be terminated by the Non-Affected Party. For purposes of this Section, “Change In Control” includes a purchase, assignment or transfer of a controlling interest in the Affected Party or substantially all of its business and assets and any merger or consolidation involving the Affected Party or any Affiliate of the Affected Party that requires a vote of the stockholders of the Ultimate Parent of the Affected Party. “Ultimate Parent” for Cardinal Health is Cardinal Health, Inc. and the Ultimate Parent for Cumberland is its stockholders.

     14.6. Termination: Phase Out. In the event that this Agreement is terminated pursuant to Sections 14.2 through 14.5, and at Cumberland’s request, the parties shall discuss in good faith an appropriate phase-out of Cardinal Health’s Detailing activities.

     14.7 Termination: Written Notice. Cumberland may terminate the Agreement, with or without cause, upon 60 days prior written notice.

     14.8. Termination: Continuing Rights. The termination or expiration of this Agreement shall not affect Cumberland’s obligation to reimburse or pay Cardinal Health any amount then due and owing under this Agreement. Further, the termination or expiration of this Agreement

shall not affect any rights or obligations of any party under this Agreement which are intended by the parties to survive such termination. The Service Fee paid by Cumberland for the month in which this Agreement is terminated shall be prorated based on the number of days in that month, and Cardinal Health shall refund any overpayment to Cumberland.

     14.9 Termination: Return of Materials. Within sixty (60) days following the termination or expiration of this Agreement, Cardinal Health shall return to Cumberland all Confidential Information, Product Promotional Materials, marketing plans, forms, territory lists, reports and any and all other tangible items provided to Cardinal Health by Cumberland.

ARTICLE XV
RECORDKEEPING; AUDIT RIGHTS

     15.1. Cardinal Health Record Keeping: Inspection by Cumberland. Cardinal Health shall keep accurate records in sufficient detail as to costs and expenses for which Cumberland must reimburse Cardinal Health under this Agreement. Upon Cumberland’s reasonable request made during or within one (1) year after the term of this Agreement, and at Cumberland’s expense, Cardinal Health shall permit Cumberland’s designated employees or agents to have access during ordinary business hours to records of such costs and expenses in order to verify the accuracy of amounts reimbursed by Cumberland to Cardinal Health. Cumberland and its designated employees or agents shall maintain in confidence all such cost and expense records of Cardinal Health.

ARTICLE XVI
INDEMNIFICATION

     16.1 Definitions. As used in this Article 16 and this Agreement, “Damages” shall mean all liabilities, damages, assessments, levies, losses, fines, penalties, costs, and expenses, including, without limitation, reasonable attorneys’, accountants’, investigators’, and experts’ fees and expenses, sustained or incurred as a result of any claims, suits, liabilities, or actions by any third party.

     16.2. Indemnification by Cardinal Health. Except to the extent that any of the following Damages arises from the negligence or willful misconduct of Cumberland or breach of this Agreement by Cumberland, Cardinal Health shall indemnify and hold Cumberland, its Affiliates, directors, officers, employees and agents harmless from and against any and all Damages arising directly or indirectly from:

     (a) Cardinal Health’s breach of or failure to comply with any of its obligations under this Agreement;

     (b) any inaccuracy in or breach or failure of any representation, warranty, or covenant made by Cardinal Health in this Agreement;

     (c) any negligent or wrongful act or omission on the part of Cardinal Health or its employees or agents;

     (d) Cardinal Health’s violation of or failure to comply with all applicable laws relating to the promotion, distribution and sale of the Products, including but not limited to the Act, the PDMA, the Medicare and Medicaid Anti-Kickback Act (42 U.S.C. § 1320a-7b(a)), the Civil False Claims Act (31 U.S.C. § 3729(a)), Sections 1128A, 1128B, and 1877 of the Social Security Act (42 U.S.C. §§ 1320a-7a, -7b, and 1395nn), the Health Care Fraud Act (18 U.S.C. § 1347), and the Criminal False Claims Act (18 U.S.C. § 287), as amended from time to time, as well as similar applicable state laws;

     (e) Detailing of the Products, except to the extent such Damages arise from a negligent or wrongful act or omission of Cumberland;

     (f) any federal or state claim or assessment for nonpayment or late payment by Cardinal Health of any tax or contribution based on the status of any Representatives as employees of Cardinal Health:; or

     (g) except as limited by Section 2.3(a) or by Cumberland’s indemnification obligations, any employment actions and/or employment related claims alleging violation of any state or federal employment laws arising out of any action taken or omission made independently by Cardinal Health.

     16.3. Indemnification by Cumberland. Except to the extent that any of the following Damages arise from the negligence or willful misconduct of Cardinal Health or breach of this Agreement by Cardinal Health, Cumberland shall indemnify and hold Cardinal Health and its Affiliates, directors, officers, employees and agents harmless from and against any and all Damages arising directly or indirectly from:

     (a) Cumberland’s breach of or failure to comply with any of its obligations under this Agreement;

     (b) any inaccuracy in or breach or failure of any representation, warranty, or covenant made by Cumberland in this Agreement;

     (c) any negligent or wrongful act or omission on the part of Cumberland or its employees or agents;

     (d) Cumberland’s violation of or failure to comply with all applicable laws relating to the manufacture, sale, distribution, possession and use of the Product, the Program and this Agreement, including but not limited to the Act, the PDMA, the Medicare and Medicaid Anti-Kickback Act (42 U.S.C. § 1320a-7b(a)), the Civil.False Claims Act (31 U.S.C. § 3729(a)), Sections 1128A, 1128B, and 1877 of the Social Security Act (42 U.S.C. §§ 1320a-7a, -7b, and 1395nn), the Health Care Fraud Act (18 U.S.C. § 1347), and the Criminal False Claims Act (18 U.S.C. § 287), as amended from time to time, as well as similar applicable state laws;

     (e) Detailing of the Products, except to the extent such Damages arise from a negligent or wrongful act or omission of Cardinal Health;

     (f) the accuracy or completeness of the Product Labels, Product Promotional Materials, or the Training Program;

     (g) any claims or liabilities for injury to or death of persons, regardless of when such claim or liability is asserted or incurred, resulting from or arising out of the manufacture, use, sale, distribution, possession of the Products, or a manufacturing design or defect of the Products, or any failure to warn or inadequacy of warning regarding the Products;

     (h) Cumberland’s failure to pay when due or to reimburse Cardinal Health for any Taxes (as defined in Section 5.3);

     (i) any negligent or wrongful acts or omissions on the part of Cumberland with respect to Cardinal Health’s employees or Representatives or those individuals who have made application to be Representatives of Cardinal Health;

     (j) any federal or state claim or assessment for nonpayment or late payment by Cumberland of any tax or contribution based on the status of any former Representatives as employees or agents of Cumberland; or

     (k) the use by Cardinal Health, in the performance of its duties hereunder and as specified or directed by Cumberland, of any trademark, trade name, copyright, patent or other rights which use actually or allegedly infringes on the rights of any third party.

     16.4. Indemnification Procedures. A party (the “Indemnitee”) which intends to claim indemnification under this Article 16 shall promptly notify the other party (the “lndemnitor”) in writing of any action, claim or liability in respect of which the lndemnitee or any of its employees or agents are entitled to indemnification. The Indemnitee shall permit, and shall cause its employees and agents to permit, the Indemnitor at its discretion, to settle any such action, claim or liability and agrees to the complete control of such defense or settlement by the Indemnitor; provided, however, that such settlement or defense does not adversely affect the lndemnitee’s rights hereunder or impose any obligations on the Indemnitee in addition to those set forth in this Agreement. The Indemnitee, its employees, and agents, shall cooperate fully with the Indemnitor and its legal representatives in the investigation and defense of any action, claim or liability subject to indemnification. The Indemnitee shall have the right, but not the obligation, to be represented by counsel of its own selection and at its own expense: in connection with any indemnified claim.

     16.5. Limitation on Cardinal Health Liability. In no event shall Cardinal Health’s total liability under this Agreement exceed an amount equal to the total fees paid to Cardinal Health under this Agreement.

     16.6 No Consequential Damages. Notwithstanding any provision of this Agreement to the contrary, and except with regard to claims by third parties, neither party shall be liable to the other for any special, indirect, incidental or consequential damages (other than liability for personal injury as provided in this Article 16), including lost profits.

ARTICLE 17

All notices and other communications hereunder shall be in writing and shall be deemed given: (A) when delivered personally; (B) when delivered by facsimile transmission (receipt verified); (C) when received or refused, if mailed by registered or certified mail (return receipt requested), postage prepaid; or (D) when delivered if sent by express courier service,

to the parties at the following addresses (or at such other address for a party as shall be specified by like notice; provided, that notices of a change of address shall be effective only upon receipt thereof):

		To Cumberland:		A.J. Kazimi, CEO
				Cumberland Pharmaceuticals Inc.
				2525 West End Avenue, Suite 950
				Nashville, Tennessee 37203
				Facsimile (615) 255-0094
		With a copy to:		Adams and Reese / Stokes Bartholomew LLP
				424 Church Street, Suite 2800
				Nashville, Tennessee 37219
				Attn. Martin S. Brown, Jr.
				Facsimile (615) 259-1470
		To Cardinal Health:		Cardinal Health PTS, LLC
				7000 Cardinal Place
				Dublin, Ohio 43017
				Attn: Thomas Dimke, SVP/GM
				Cardinal Health Contract Sales and Services
				Facsimile: (614) 757-6117
		With a copy to:		Cardinal Health, Inc.
				7000 Cardinal Place
				Dublin, Ohio 43017
				Attn: Associate General Counsel,
				Pharmaceutical Technologies and Services
				Facsimile: (614) 757-5051

ARTICLE 18
MISCELLANEOUS

     18.1 Entire Agreement; Amendments. This Agreement, the attachments, and any amendments thereto constitute the entire understanding between the parties and supersede any

contracts, agreements or understanding (oral or written) of the parties with respect to the subject matter hereof. No term of this Agreement may be amended except upon written agreement of both parties, unless otherwise provided in this Agreement.

     18.2 Captions. The captions in this Agreement are for convenience only and are not to be interpreted or construed as a substantive part of this Agreement.

     18.3 Further Assurances. The parties agree to execute, acknowledge and deliver such further instruments and to take all such other incidental acts as may be reasonably necessary or appropriate to carry out the purpose and intent of this Agreement.

     18.4 No Waiver. Failure by either party to insist upon strict compliance with any term of this Agreement in any one or more instances will not be deemed to be a waiver of its rights to insist upon such strict compliance with respect to any subsequent failure.

     18.5 Severability. If any term of this Agreement is declared invalid or unenforceable by a court or other body of competent jurisdiction, the remaining terms of this Agreement will continue in full force and effect.

     18.6 Independent Contractors. The relationship of the parties is that of independent contractors, and neither party will incur any debts or make any commitments for the other party except to the extent expressly provided in this Agreement. Nothing in this Agreement is intended to create or will be construed as creating between the parties the relationship of joint ventures, co-partners, employer/employee or principal and agent.

     18.7 Successors and Assigns. This Agreement will be binding upon and inure to the benefit of the parties, their successors and permitted assigns. Neither party may assign this Agreement, in whole or in part, without the prior written consent of the other party, except that either party may, without the other party’s consent, assign this Agreement to an Affiliate or to a successor to substantially all of the business or assets of the assigning company.

     18.8 Governing Law. This Agreement shall be governed by and construed under the laws of the State of Tennessee, excluding its conflicts of law provisions. The United Nations Convention on Contracts for the International Sale of Goods shall not apply to this Agreement.

     18.9 Alternative Dispute Resolution. If any Dispute arises between the parties, such Dispute shall be presented to the respective presidents or senior executives of Cardinal Health and Cumberland for their consideration and resolution. If such parties cannot reach a resolution of the Dispute, then such Dispute shall be resolved by binding alternative dispute resolution in accordance with the then existing commercial arbitration rules of CPR Institute for Dispute Resolution, 366 Madison Avenue, New York, NY 10017. Arbitration shall be conducted in the jurisdiction of the defendant party.

     18.10 Prevailing Party. In any dispute resolution proceeding between the parties in connection with this Agreement, the prevailing party will be entitled to its reasonable attorney’s fees and costs in such proceeding.

     18.11 Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed an original but all of which together will constitute one and the same

instrument. Any photocopy, facsimile or electronic reproduction of the executed Agreement shall constitute an original.

     18.12 Publicity. Neither party will make any press release or other public disclosure regarding this Agreement or the transactions contemplated hereby without the other party’s express prior written consent, except as required under applicable law or by any governmental agency, in which case the party required to make the press release or public disclosure shall use commercially reasonable efforts to obtain the approval of the other party as to the form, nature and extent of the press release or public disclosure prior to issuing the press release or making the public disclosure.

     18.13 Setoff. Without limiting Cardinal Health’s rights under law or in equity, Cardinal Health and its Affiliates, parent or related entities, collectively or individually, may exercise a right of set-off against any and all amounts due to Cardinal Health from Cumberland. For purposes of this Article, Cardinal Health, its Affiliates, parent or related entities shall be deemed to be a single creditor.

     18.14 Survival. The rights and obligations of the parties shall continue under Articles 6 (Confidentiality), 7 (Intellectual Property), 9 (Indemnification), 10 (Limitations of Liability), 11 (Insurance), to the extent expressly stated therein, 13 (Notice), 14 (Miscellaneous) and Section 12.3 (Effect of Termination), notwithstanding expiration or termination of this Agreement.

     18.15 Force Majeure. Except as to payments required under this Agreement, neither party shall be liable in damages for, nor shall this Agreement be terminable or cancelable by reason of, any delay or default in such party’s performance hereunder if such default or delay is caused by events beyond such party’s reasonable control including, but not limited to, acts of God, regulation or law or other action or failure to act of any government or agency thereof, war or insurrection, civil commotion, destruction of production facilities or materials by earthquake, fire, flood or storm, labor disturbances, epidemic, or failure of suppliers, public utilities or common carriers; provided however, that the party seeking relief hereunder shall immediately notify the other party of such cause(s) beyond such party’s reasonable control. The party that may invoke this section shall use all reasonable endeavors to reinstate its ongoing obligations to the other. If the cause(s) shall continue unabated for one hundred eighty (180) days, then both parties shall meet to discuss and negotiate in good faith what modifications to this Agreement should result from this force majeure.

     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized officers.

CARDINAL HEALTH PTS, LLC						CUMBERLAND PHARMACEUTICALS INC.
By:		/s/ Thomas G. Dimke				By:		/s/ AJ Kazimi
Name:		Thomas G. Dimke				Name:		AJ Kazimi
Title:		SVP/GM HCSS				Title:		C.E.O.
Date:		5-18-06				Date:		5-17-06

Schedule 1.1(k)

List of Products

CeraLyte^®
Kristalose^®

Schedule 1.1(o)

Definition of Territory

The mutually agreed upon headquarter locations for the twenty four representatives are as follows:

Atlanta, GA

Birmingham, AL

Boston, MA

Charlotte, NC

Chicago, IL

Dallas, TX

Dayton, OH

Detroit, MI

Hartford, CT

Houston, TX

Knoxville, TN

Lafayette, LA

Long Island, NY

Manhattan, NY

Miami, FL

Mobile, AL

Newark, NJ

Philadelphia N, PA

Philadelphia S, PA

Cleveland, OH

San Antonio, TX

Tampa, FL

Washington, DC

Yonkers, NY

Each Territory shall include the Target Customers identified by Cumberland and Cardinal Health.

     Schedule 3.1

Service Fees and Payment Schedule

With respect to the Program defined herein, the following fees shall apply:

A. As compensation for the satisfactory performance by Cardinal Health of its obligations under the Agreement, Cumberland agrees to pay Cardinal Health Service Fees at the annual rate of three million one hundred one thousand seven hundred eighty four dollars ($3,101,784.00). The Service Fees shall be billed in monthly installments on the last day of each month during the term hereof. Each such installment shall be in the amount of two hundred fifty-eight thousand four hundred eighty-two dollars ($258,482.00) or pro rata portion thereof in the event of early termination. The payment schedule for the term is as follows:

Invoice Date		Payment
September 30, 2006		$258,482.00
October 31, 2006		$258,482.00
November 30, 2006		$258,482.00
December 31, 2006		$258,482.00
January 31, 2006		$258,482.00
February 28, 2006		$258,482.00
March 31, 2006		$258,482.00
April 30, 2007		$258,482.00
May 31, 2007		$258,482.00
June 30, 2007		$258,482.00
July 31, 2007		$258,482.00
August 31, 2007		$258,482.00
September 30, 2007		$258,482.00
October 31, 2007		$258,482.00
November 30, 2007		$258,482.00
December 31, 2007		$258,482.00
January 31, 2008		$258,482.00
February 28, 2008		$258,482.00
March 31, 2008		$258,482.00
April 30, 2008		$258,482.00
May 31, 2008		$258,482.00
June 30, 2008		$258,482.00
July 31, 2008		$258,482.00
August 31, 2008		$258,482.00

     B. In addition to the Service Fees, Cardinal Health will invoice Cumberland for the following pass through costs:

	(i)		bonuses to Representatives in amounts as agreed in writing by Cardinal Health and Cumberland before payment and based upon well-defined performance criteria (typically [***] of salaries); and
	(ii)		actual expenses associated with regular territory business travel for Detailing, training meetings, and plan of action meetings including airfare, hotels, meals, meeting rooms, A/V equipment, materials, parking and tolls, each of which is subject to the Territory Budget as set forth in the Agreement

     C. The expiration or termination of this Agreement shall not release Cumberland from any obligation to pay Cardinal Health any amounts accrued under this Agreement in connection with activities completed, expenses accrued prior to the effective date of such expiration or termination; provided that the Service Fee paid by Cumberland for the month in which this Agreement is terminated shall be prorated based on the number of days in that month, and Cardinal Health shall refund any overpayment to Cumberland.

     D. Performance Incentive. Cardinal Health shall be eligible to receive a Performance Incentive based upon Cardinal Health’s performance resulting in Kristalose sales during the term hereof in excess of a mutually agreed upon threshold which is based on sales to targeted physicians, over which Cardinal Health will be paid a maximum of [***] in Performance Incentives according to the scale below:

     [***]

EXHIBIT 10.5

* Certain portions of this exhibit have been omitted pursuant to a request for
confidential treatment which has been filed separately with the SEC.

FIRST AMENDMENT TO

     This First Amendment to Contract Sales and Services Agreement (the “Amendment”), between Cardinal Health PTS, LLC (“Cardinal Health”) and Cumberland Pharmaceuticals, Inc. (“Cumberland”) is entered into by and between Cardinal Health and Cumberland to modify the terms of the Contract Sales and Services Agreement between the parties dated May 16, 2006 (“Agreement”). All capitalized terms used in this Amendment shall have the meaning ascribed to them in the Agreement.

1.

Amendments.

	A.		Section 2.1 of the agreement is hereby amended to the add the following to the end of Section 2.1:
			In addition to the twenty-four Representatives dedicated to Detailing Products for Cumberland under this Section, Cardinal Health shall also provide Cumberland with access to a syndicated sales force which will provide Details for Cumberland products as well as products of other Cardinal Health customers (“Syndicated Sales Force”). Upon agreement of the parties, the Syndicated Sales Force shall provide Details in accordance with terms set forth in amendments to Schedule 3.1 of this Agreement. Such amendment shall set forth the details of the Details, priority of Details, Products, services and fees to be provided by Cardinal Health through the Syndicated Sales Force. The provisions of Sections 2.3(a) and 3.2 shall not apply with respect to the Syndicated Sales Force. Cumberland agrees that it will not recruit, solicit or hire any Representative which is a member of the Syndicated Sales Force during the Term of this Agreement and for one year thereafter.
	B.		Section 2.2 of the Agreement is hereby amended to add the following to the end of Section 2.2:
			The two Managers shall be responsible for oversight of the dedicated sales force and not the Syndicated Sales Force. The Syndicated Sales Force shall continue to be managed by individuals appointed by Cardinal Health to manage the Syndicated Sales Force.
	C.		Schedule 3.1 is hereby amended to add the following at the end:
			SYNDICATED SALES FORCE
			Cardinal Health’s Syndicated Sales Force will make Calls on Target Customers identified by Cumberland within the territory currently served by the Syndicated Sales Force. The Syndicated Sales Force will Detail up to 3 Cumberland products during calls that are dedicated exclusively to Cumberland. For purposes of this Agreement, a “Call” means a visit by a Representative or Manager to a Target Customer in which multiple Products shall be Detailed to the Target Customer, with the understanding that a small number (less than 10%) of Calls may not involve the

			Detailing of all required Products (i.e., where Target Customers will not listen to all Details).
			The Call schedule shall begin on July 1, 2006 and end on June 30, 2007. Cardinal will deliver [***] during this period. The service fee schedule will be as follows:

Month		Invoice Amount
July, 2006		37,500
August		37,500
September		37,500
October		37,500
November		37,500
December		37,500
January, 2007		37,000
February		37,500
March		37,500
April		37,500
May		37,500
June, 2007		37,500
	$450,000

			Cardinal Health will invoice Cumberland the amount set forth in the above table on the last day of each month for service fees.
			Cardinal Health will also have the ability to earn up to [***] in performance incentive for mutually agreed upon sales achievement levels on the target audience.

		The following expenses shall be direct pass-through to Cumberland for the syndicated program:
		Actual travel expenses for all required participation in any subsequent POA meetings.
		Actual promotional expenses and percentage of representative sample storage cost. The parties will agree upon and manage to a budget based upon marketing programs and storage requirements.
2.		Effective Date. This Amendment shall be effective upon full execution hereof (“Effective Date”). Except as otherwise amended herein, the terms and conditions of the Addendum shall remain in full force and effect.

		CUMBERLAND PHARMACEUTICALS, INC.						CARDINAL HEALTH PTS, LLC.
		By:		/s/ James D. Aderhold, Jr				By:		/s/ Thomas G. Dimke
		Name:		James D. Aderhold, Jr				Name:		Thomas G. Dimke
		Title:		V-P				Title:		SVP/GM
		Date:		7/13/06				Date:		7/19/06

EXHIBIT 10.6

SECOND AMENDMENT TO
CONTRACT SALES AND SERVICE AGREEMENT

     This Second Amendment to Contract Sales and Service Agreement (the “Second Amendment”) is entered into this 1st day of June, 2007 by and between Inventiv Commercial Services, LLC (“Inventiv”) and Cumberland Pharmaceuticals Inc. (“Cumberland”).

     WHEREAS, Cardinal Health PTS, LLC (“Cardinal Health”) entered into that certain Contract Sales and Service Agreement (the “Agreement”) with Cumberland on May 16, 2006; and

     WHEREAS, Cardinal Health and Cumberland previously executed a First Amendment to Contract Sales and Service Agreement wherein the parties amended the Agreement and the schedules to the Agreement; and

     WHEREAS, Cardinal Health sold its Healthcare Marketing Services division and Cumberland previously consented to an assignment of all of Cardinal Health’s rights, title, interest and obligations under the Agreement, as amended by the First Amendment, to PG Holding Corporation; and

     WHEREAS, Inventiv, as successor in interest to PG Holding Corporation, desires to assume all of PG Holding Corporation’s rights, title interest and obligations under the Agreement, as amended by the First Amendment, and Cumberland desires to consent to such assignment.

     NOW, THEREFORE, for and in consideration of the premises and other good and valuable consideration, the parties hereto agree as follows:

     1. Inventiv shall assume all rights, title, interest and obligations under the Agreement of Cardinal Health, as amended by that certain First Amendment and herein, arising from and after June 1, 2007.

     2. Capitalized terms not defined in this Second Amendment shall have the meaning set forth in the Agreement. It is mutually agreed that all covenants, conditions and agreements set forth in the Agreement (as amended hereby) shall remain binding upon the parties and inure to the benefit of the parties hereto and their respective successors and assigns.

Signature page follows.

     IN WITNESS WHEREOF, the parties have executed this Second Amendment to Contract Sales and Services Agreement as of the day and year first written above.

EXHIBIT 10.7

* Certain portions of this exhibit have been omitted pursuant to a request for confidential
treatment which has been filed separately with the SEC.

DISTRIBUTION SERVICES AGREEMENT

     This agreement is made as of August 3, 2000, between Cumberland Pharmaceuticals Inc., a Tennessee corporation (“Cumberland”), and CORD Logistics, Inc., an Ohio corporation (“CORD”).

Background Information

     A. Cumberland is a Tennessee-based company formed primarily to acquire and market a portfolio of niche pharmaceutical products to specific physician segments in the United States, the District of Columbia and Puerto Rico (the “Territory”).

     B. CORD is in the business of distributing pharmaceutical products to wholesalers, specialty distributors, physicians, clinics, hospitals, retail pharmacies, and other health care providers in the Territory, and of providing Information Systems and other services that support its customers’ use of its distribution capabilities (collectively, the “Services”).

     C. Cumberland desires to engage CORD as its exclusive distribution agent (described below) for the pharmaceutical products described on the exhibits attached hereto (each, a “Product”) and, with respect to each Product, to perform certain other services described in this agreement, all upon the terms and conditions set forth in this agreement. This agreement is being entered into pursuant to a letter of intent from CORD dated April 5, 2000, which was accepted and executed by Cumberland as of April 10, 2000.

Statement of Agreement

     Cumberland and CORD (the “Parties”) hereby acknowledge the accuracy of the above Background Information and agree as follows:

     §1. Appointment. Upon the terms and conditions described in this agreement, Cumberland hereby appoints CORD as its exclusive distribution agent in and for the Territory for distribution of each Product (including samples) to Cumberland’s direct customers (“Customers”).

     The Services for each Product or group of Products identified on the same Product-specific exhibit to this agreement shall be implemented pursuant to the Implementation Schedule included in such exhibit (each, an “Implementation Schedule”), with distribution of each Product to begin on the date specified in the Implementation Schedule for such Product (the “Commencement Date”). In performing the Services, CORD will provide, at its discretion, the services of either the Vice President and General Manager, Director of Sales or other such representative as mutually agreed to by Cumberland and CORD. CORD’s designated representative will be the primary liaison with Cumberland, unless otherwise agreed to by the parties.

     §2. Product Supply. Warehousing and Storage. Cumberland shall ship each Product to CORD at CORD’s distribution facility currently located at 15 Ingram Boulevard, Suite 100, La Vergne, TN 37086 or to such other distribution facility as may be designated by CORD (individually or collectively, the “CORD Facility”) and agreed by Cumberland, in sufficient quantities to meet Cumberland’s anticipated Customer orders. CORD shall visually inspect each shipment of each Product for external damage or loss in transit and, in the event of any such damage or loss, shall, within a commercially reasonable period of time following discovery of such damage or loss by CORD, notify Cumberland that such damage or loss has occurred.

     With respect to each Product or group of Products identified on the same Product-specific exhibit to this agreement: (a) Cumberland shall, during the Product Term set forth on such exhibit, provide CORD with applicable regulatory storage and handling requirements and projections of such Product’s volume requirements not less often than quarterly, at least 30 days in advance of the quarter and written instructions setting forth the storage and handling requirements applicable to such Product; and (b) CORD shall store such Product in the CORD Facility and comply with applicable regulatory storage and handling requirements and the storage and handling requirements applicable to such Product, as such requirements may be supplemented or amended from time to time in writing by Cumberland with reasonable prior notice to CORD and its prior approval, which approval shall not be unreasonably withheld or delayed. If CORD notifies Cumberland in good faith that any such supplement or amendment will require any material modification to the CORD Facility or CORD’s procedures or requirements which are unique and specific to the Product or the Services resulting in a material increase to CORD’s anticipated costs and expenses, then Cumberland and CORD shall consult regarding such reasonable costs and expenses (hereinafter, simply “unique costs”) and Cumberland shall pay such unique costs resulting from that modification.

     Cumberland shall pay all costs and expenses of delivering each Product to the CORD Facility. CORD will never take title to any Product, even when such Product is located at the CORD Facility.

     §3. Standard Product Distribution. With respect to each Product or group of Products identified on the same Product-specific exhibit to this agreement, and during the Product Term set forth on such exhibit, all Customer orders shall be taken by CORD as described in the Operating Guidelines (defined in §6, below). CORD shall confirm the receipt of and process each order and, so long as the ordered Product is then in stock at the CORD Facility and the orders are received no later than 2:00 p.m. local time at the CORD Facility, routinely have that order available for shipment within 24 hours of CORD’s receipt of the order (exclusive of holidays and weekends) or such longer period as may be designated or permitted by Cumberland.

     Customer orders will be delivered by a courier mutually chosen by Cumberland and CORD. CORD will invoice Cumberland for such handling services and freight cost on a monthly basis. CORD will use best efforts to manage any claims by Cumberland against the courier, provided, however, that Cumberland shall be responsible for all lost or damaged shipments.

     In addition, Cumberland shall reimburse CORD for all documented costs and expenses of packaging material used for shipping the Product and all business forms unique to Cumberland (e.g., packing slips, invoices, etc.); provided that the use of such packaging material and business forms is authorized in advance by Cumberland.

     Each Product shall be shipped on a “first expiration date, first out” basis or as otherwise directed by Cumberland. In addition, CORD shall establish (and Cumberland shall approve) procedures for the processing and shipment of emergency orders on weekends and holidays, provided that Cumberland shall separately pay all increased costs resulting from such orders.

     §4. Product Prices. With respect to each Product or group of Products identified in the same Product-specific exhibit to this agreement, Cumberland shall, upon execution of such exhibit, deliver to CORD a price list for Customers who purchase such Product or Products (the “Customer Price List”). Cumberland shall notify CORD of any change in the Customer Price List not less than 10 business days prior to the effective date of any such change. The Parties hereby acknowledge that Cumberland, and not CORD, is the seller of each Product to Customers.

     §5. Financial Support Services.

     (a) Subject to Section 5(b), during each Product Term set forth on the Product-specific exhibits to this agreement, CORD shall perform the customer credit research, billing, cash application, collections, and reporting services described in the Operating Guidelines in accordance with the policies and procedures set forth in such Operating Guidelines, as such policies and procedures may be supplemented or amended from time to time by Cumberland with reasonable prior notice to CORD and with its prior approval (the “Financial Support Services”); provided that if CORD notifies Cumberland in good faith that any such supplement or amendment will require any material modification to CORD’s procedures or requirements for providing the Services, then Cumberland shall pay all unique costs resulting from that modification.

     (b) CORD shall have no obligation to pay for any Product or to reimburse Cumberland for any losses incurred in connection with the failure of any Customer to pay Cumberland any amount due.

     (c) Customers shall be directed to make payments for the Products in accordance with the Operating Guidelines.

     §6. Operating Guidelines. As soon as practicable after the date of this agreement, CORD and Cumberland shall develop operating guidelines relating to the Products and the Services, which guidelines (the “Operating Guidelines”) will be in writing, in a form satisfactory to CORD and Cumberland, and will define and document the responsibilities of CORD and Cumberland in support of the relationship described in this agreement. All Operating Guidelines shall be developed and implemented in good faith and in a commercially reasonable manner, subject to the qualifications set forth therein; provided that in the event of any inconsistency between the Operating Guidelines and the other provisions of this agreement (including each Product-specific exhibit to this agreement), the other provisions of this agreement shall control. The Operating Guidelines may be amended from time to time upon the mutual agreement of CORD and Cumberland.

     §7. Returns and Recalls. Pursuant to this agreement and any applicable Operating Guidelines, CORD shall assist in the processing of Product returns (excluding recall returns, which will be dealt with as described below) in coordination with the third party returns company chosen by Cumberland to facilitate return of Product. No such assistance will involve handling by CORD of the Product being returned. The fees to be paid to CORD for these return services are described in Section 8.

     CORD shall process Customer Product return authorizations and credits as set forth in the Operating Guidelines. The fee for such Services by CORD will be included as a part of the Customer Service Fees described in Section 8.

     If Cumberland is required to recall, or on its own initiative recalls, any Product, CORD will assist Cumberland with that recall as reasonably requested by Cumberland; provided that Cumberland shall pay to CORD an amount equal to all costs incurred by CORD in connection with any such recall.

     §8. Fees. As compensation for services being provided by CORD in connection with the development and implementation of the infrastructure for the relationship contemplated by this agreement, including CORD’s information system development (separate from the Information System Access Fees described below) and implementation for Cumberland’s use, Cumberland shall pay CORD a one-time implementation fee of [***] (the “Implementation Fee”), one-half of which shall be payable on the first anniversary of the date of this agreement and one-half of which shall be payable on the second anniversary of the date of this agreement. Cumberland’s obligation to pay the Implementation

Fee is not contingent upon the acquisition by Cumberland of any Product marketing and distribution rights and shall survive the termination of this agreement. However, the Implementation Fee shall not be due and payable if this Agreement is terminated early for any reason other than breach by Cumberland.

     In addition, with respect to each Product or group of Products identified on the same Product-specific exhibit to this agreement, Cumberland shall pay CORD, as compensation for the Services related to such Product or Products, the fees described in such exhibit (the “Fees”). CORD will use commercially reasonable efforts to keep total fees in line with industry standards. The Fees shall include:

     (a) Storage/Distribution Fees. The Storage and Distribution Fees shall be in the amounts set forth in each applicable Product Exhibit. This component of the Fees shall cover storage of Product and distribution services, which fees (the “Storage and Distribution Fees”), with respect to each Product or group of Products identified on the same Product-specific exhibit to this agreement, shall be in the amount specified in such exhibit.

The Storage Fees shall be based upon the average weekly number of pallets in storage. The Distribution Fees, for each calendar month during the Term of this Agreement, shall be based upon the aggregate number of units (or cases) shipped by CORD from the warehouse. Cumberland shall be charged an initial price per unit or case (collectively referred to as “pick”) on the first pick of each order placed by Cumberland each month, and then a recurring amount per pick for each incremental pick shipped from the same order thereafter. For example, for the distribution of Reglan and Donnatal, on a monthly basis, Cumberland shall be charged the sum of [***] per pick of each order of product shipped that month and the sum of [***] per pick for each incremental pick from the same order.

     (b) Information System Access Fees. This component of the Fees shall cover Cumberland’s access to CORD’s or an affiliate of CORD’s standard Information Systems, consisting of the computer hardware and software and other components described in the attached Schedule 8(c)-1 (the “System”), and other services relating to Cumberland’s access to the System as described in Schedule 8(c)-1, which fees (the “System Access Fees”), with respect to each Product or group of Products identified on the same Product-specific exhibit to this agreement, shall be in the amount specified in such exhibit. Access to the System shall be provided pursuant to a System Access Agreement in the form of the attached Schedule 8(c)-2, which agreement (the “System Access Agreement”) shall be executed by the Parties concurrently with this agreement. Access to the System shall be made available to Cumberland’s facility for each Product at the prices set forth in the exhibit for such Product, so long as Cumberland first has in place a local area network sufficient to support all Cumberland terminals and personal computers which will have access to the System and a centralized server sufficient for data storage related to Cumberland’s access to the System. All costs and expenses associated with establishing initial hook-up of all communication and electronic information lines necessary for interface of the System with Cumberland’s information systems located at Cumberland’s address set forth at the end of this agreement are included in the Implementation Fee and are separate from the services and costs and expenses covered by the System Access Fees. Cumberland shall have sole responsibility for payment of all costs and expenses of maintaining all such communication and electronic information lines. CORD and Cumberland shall each assign knowledgeable and qualified employees to facilitate the access to the System as contemplated by this agreement.

     (c) Financial Support Services Fees. This component of the Fees shall be payment for cash application, collections and chargeback processing services (including chargeback system access) described in the Operating Guidelines, which fees (the “Financial Support Services Fees”), with respect to each Product or group of Products identified on the same Product-specific exhibit to this agreement, shall be in the amount specified in such exhibit.

     (d) Customer Service Fees. This component of the Fees shall be payment for the customer services performed by CORD pursuant to the Operating Guidelines, which fees (the “Customer Support Fees”), with respect to each Product or group of Products identified in the same Product-specific exhibit to this agreement, shall be in the amount specified in such exhibit.

     (e) EDI Set-up, Maintenance, Access Fees. This component of the Fees shall be payment for services related to the set-up and maintenance of Electronic Data Interchange (“EDI”) transaction capabilities between Cumberland and its Customers and access and use of a mutually agreed upon EDI provider. These fees are included in the System Access Fees described in §8(b) above.

     With respect to each Product or group of Products identified on the same Product-specific exhibit to this agreement, following the end of each calendar month with respect to Product Term set forth on such exhibit, CORD shall issue an invoice to Cumberland for the Fees payable with respect to CORD’s performance of the Services for the prior month. The Fees or other amounts owed to CORD by Cumberland under this agreement shall be payable within 30 days of the date of CORD’s invoice for such Fees or other amounts.

     The Fees shall be held firm for the first contract year. Thereafter, CORD shall adjust the price not more often than once per contract year by not more than the increase in the Producer Price Index — All Commodities published by the United States Department of Labor, Bureau of Statistics, as amended from time to time.

     Notwithstanding the above Price Increase, if CORD can demonstrate that the costs for providing the Services have materially increased, or are likely to materially increase in the coming year due to the adoption of any applicable law or regulation, or any material change in the interpretation or administration thereof, then upon notice from CORD, the Parties agree to meet in good faith and negotiate a mutually acceptable adjustment to the Fees, which compensates CORD for the change.

     §9. Term and Termination.

     (a) The initial term of this agreement shall begin upon the day Cumberland signs a letter of intent to acquire its first Product and shall continue for a period of three (3) years (the “Initial Term”), unless terminated earlier pursuant to this agreement. Thereafter, this agreement shall automatically renew for additional terms of one (1) year each, unless written notice of termination is given by either Party at least 90 days prior to the end of the Initial Term, or such other term, in which case this agreement shall terminate at the end of the relevant term. Any reference in this agreement to the “term of this agreement” shall include the Initial Term and any such renewal terms. Upon termination of this agreement or upon the written request of Client, all Product shall be expeditiously returned to the Client or a designee of the Client.

     (b) Either Party shall have the right to terminate this agreement or any Product-specific exhibit to this agreement upon the breach by the other Party of a material provision of this agreement or such exhibit and that Party’s failure to cure such breach within 60 days following written notice thereof from the non-breaching Party or, in the event such failure is not capable of being cured within such 60-day period, the non-breaching Party’s failure to continue to diligently prosecute such cure thereafter; provided, that, with respect to any failure to make any payment when due under this agreement or any Product-specific exhibit to this agreement, such period in which to cure shall be reduced to 30 days.

     (c) Either Party shall have the right to terminate this agreement or any Product-specific exhibit to this agreement immediately upon notice to the other Party following the commencement of any bankruptcy or insolvency proceeding (whether voluntary or involuntary) with respect to such other Party or its assets, the general assignment for the benefit of creditors by such other Party, or the appointment of a receiver, trustee or liquidator by or for such other Party.

     (d) Sections 8 and Sections 14 through 17, inclusive, of this agreement shall survive the termination or expiration of this agreement and each Product-specific exhibit to this agreement, and except as set forth herein, no termination of this agreement or any Product-specific exhibit to this agreement shall affect any liabilities arising, or based upon acts or omissions occurring, prior to the date of such termination.

     § 10. Audits. In connection with any services being provided pursuant to this Agreement, CORD agrees to maintain written records and data during and after the term of this Agreement in compliance with all applicable legal and regulatory requirements, including without limitation applicable requirements of the United States Food and Drug Administration. Further, CORD shall furnish Cumberland within thirty (30) days following each March 31, June 30, September 30, and December 31 of each calendar year a complete and accurate statement for the immediately preceding calendar quarterly period of (a) the number of units of Products sold; (b) information as to returns actually credited; (c) current inventory levels for Products; and (d) such other information as Cumberland may reasonably request. In order to verify compliance, CORD shall provide Cumberland with such records and agrees to permit representatives of Cumberland to visit facilities of CORD at which Services are being performed during normal business hours (i.e., 8:00 a.m. to 5:00 p.m. local time), upon 15 business days prior notice, to: (a) review and audit CORD’s records relating directly to Product received at and shipped from the CORD Facility; and (b) conduct, together with representatives of CORD, an inventory of the Product at the CORD Facility.

     §11. Compliance With Laws. Each Party shall conduct its activities in connection with this agreement in substantial compliance with all applicable laws, rules, regulations, and orders of governmental entities.

     § 12. Representations and Warranties.

     (a) Mutual Representations and Warranties. Each Party represents and warrants to the other that: (i) it has full power and authority to enter into this agreement and perform and observe all obligations and conditions to be performed or observed by it under this agreement without any restriction by any other agreement or otherwise; (ii) the execution, delivery and performance of this agreement have been duly authorized by all necessary corporate action of that Party; and (iii) this agreement constitutes the legal, valid and binding obligation of that Party.

     (b) Cumberland Representations and Warranties. Cumberland further represents and warrants to CORD that (i) each Product is and shall be manufactured in conformity with the Food, Drug, and Cosmetic Act, as amended, and all other applicable laws, rules, regulations and orders of governmental entities, and (ii) as of the effective date of any Product-specific exhibit hereto, Cumberland will have (and will have provided CORD with written documentation in form reasonably satisfactory to CORD that Cumberland has, as of such effective date) title to such Product or Products and the right to market and distribute such Product or Products as contemplated hereby.

     (c) CORD Representations and Warranties. CORD hereby represents and warrants that it has the experience, capability and resources, including without limitation, sufficient personnel and supervisors, to perform the Services offered hereunder in a commercially reasonable manner in conformity with applicable regulations of any governmental authority, including the United States Food and Drug Administration. CORD further represent that it will at all times devote the necessary personnel and supervisors to perform the Services in such a manner.

     CORD shall not make any representations, warranties, or guarantees to Customers with respect to the Products that are inconsistent with information provided by Cumberland to CORD, including without limitation, representations, warranties, and guarantees concerning specifications, features, efficacy, prices, or availability of the Products.

     §13. Taxes. Cumberland shall pay when due all sales, use, gross receipts, excise, personal property taxes associated with each Product (excluding any personal property tax associated with CORD’s equipment used in connection with the Services), and other taxes or similar charges now or hereafter imposed as a result of the transactions contemplated by this agreement, none of which have been included in the fees payable to CORD under this agreement; provided that the amounts payable by Cumberland under this section shall not include taxes based on the net income of CORD.

     § 14. Trademarks and Proprietary Rights.

     14.1 Neither party hereto shall have the right to use the trademarks, service marks, logos, or other similar marks of the party hereto, or any of its affiliates, in any manner except with the prior written approval of the party that has rights to such intellectual property.

     14.2 All materials, documents, information, inventions, improvements, data, programs and suggestions of every kind and description, whether or not patentable, and all copyrightable works supplied to CORD by Cumberland pursuant to this Agreement shall be the property of Cumberland solely and exclusively (the “Cumberland Property”); provided that any and all information, processes, documents, computer software or other proprietary information used, owned, licensed or developed by CORD shall be the property of CORD.

     §15. Master Agreement. This agreement is being entered into pursuant to the Strategic Alliance Agreement dated June 6, 2000, between Cardinal Health (as defined below) and Cumberland (the “Master Agreement”), and this agreement (including any and all exhibits hereto, whether entered into now or hereafter) constitutes an Addendum, as defined in the Master Agreement. In the event of any conflict or inconsistency between the terms of this agreement (including any and all exhibits hereto) and the terms of the Master Agreement, the terms of this agreement shall govern. For purposes of this agreement, “Cardinal Health” means the following affiliated operating companies: Cardinal MarketForce, a division of RedKey, Inc., an Ohio corporation (Dublin, OH); CORD Logistics, Inc., an Ohio corporation (Dublin, OH); and any other subsidiary of Cardinal Health, Inc., an Ohio corporation (“CHI”), as may be designated by CHI and agreed by client in writing.

     § 16. Indemnification. Each Party shall indemnify and hold harmless the other and its parent and affiliates, and each of their respective directors, officers, employees, agents, and representatives from and against all claims, liabilities, losses, damages, costs, and expenses (including without limitation reasonable attorneys’ fees) arising directly or indirectly out of any failure of that Party to perform and observe fully all obligations and conditions to be performed or observed by that Party pursuant to this agreement or any breach of any warranty made by that Party in this agreement. Cumberland further agrees to indemnify and hold harmless CORD and its parent and affiliates and each of their respective directors, officers, employees, agents and representatives from and against all claims, liability, losses, damages, costs, and expenses (including without limitation reasonable attorney’s fees) arising directly or

indirectly out of injury or death to person or property alleged to have been caused by any defect in any Product. NOTWITHSTANDING THE FOREGOING, OR ANY OTHER PROVISION OF THIS AGREEMENT TO THE CONTRARY, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT, SPECIAL, OR OTHER SIMILAR DAMAGES ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, AND IN NO EVENT SHALL CORD’S LIABILITY HEREUNDER EXCEED CORD’S INSURANCE LIMITS SET FORTH BELOW IN SECTION 17(b)(i).

§17. Insurance.

          (a) Promptly after Cumberland acquires rights to distribute its first Product and for as long thereafter as necessary to cover claims resulting from this agreement, Cumberland shall obtain and maintain: (i) product liability and commercial general liability insurance having a limit of not less than $10 million; and (ii) property damage insurance at replacement value for each Product located at the CORD Facility or in transit to or from the CORD Facility, pursuant to one or more insurance policies with reputable insurance carriers. Cardinal Health, Inc. and its subsidiaries shall be designated as “additional insureds” under the product liability and commercial general liability insurance policy(ies), and as “loss payees” under the property damage insurance policy(ies). Prior to CORD’s receipt of Product, Cumberland shall deliver to CORD certificates evidencing such insurance. Cumberland shall not cause or permit such insurance to be canceled or modified to materially reduce its scope or limits of coverage during the term of this agreement or thereafter as provided above. Except for any losses resulting from the negligence or intentional misconduct of CORD, Cumberland shall bear all risk of loss or damage with respect to each Product, whether located at the CORD Facility or otherwise.

          (b) Promptly after Cumberland acquires rights to distribute its first Product and for as long thereafter as necessary to cover claims resulting from this agreement, CORD shall obtain and maintain: (i) product liability and commercial general liability insurance having a limit of not less than $1 million; and (ii) property damage insurance at replacement value for each Product located at the CORD Facility or in transit to or from the CORD Facility, pursuant to one or more insurance policies with reputable insurance carriers. Cumberland shall be designated as “additional insureds” under the product liability and commercial general liability insurance policy(ies), and as “loss payees” under the property damage insurance policy(ies). Prior to CORD’S receipt of Product, CORD shall deliver to Cumberland certificates evidencing such insurance. CORD shall not cause or permit such insurance to be canceled or modified to materially reduce its scope or limits of coverage during the term of this agreement or thereafter as provided above.

     §18. Relationship of the Parties. The relationship among the Parties is and shall be that of independent contractors. This agreement does not establish or create a partnership or joint venture among the Parties.

     §19. Notices. Any notice or other communication required or desired to be given to any Party under this agreement shall be delivered in writing to the address or facsimile number set forth beneath the authorized signatures on this agreement and shall be deemed given: (a) three business days after such notice is deposited in the United States mail, first-class postage prepaid, and addressed to that Party at the address for such Party set forth at the end of this agreement; (b) one business day after delivered to Federal Express, Airborne, or any other similar express delivery service for delivery to that Party at that address; or (c) when sent by facsimile transmission, with electronic confirmation, to that Party at its facsimile number set forth at the end of this agreement. Any notice delivered by facsimile transmission will be deemed delivered upon electronic confirmation provided the notice is also deposited in the U.S. mail, first-class postage prepaid. Any Party may change its address or facsimile number for notices under this agreement by giving the other Parties notice of such change.

     §20. Alternative Dispute Resolution.

The Parties agree to use good faith efforts to resolve all disputes within ninety (60) days of written notice that such a dispute exists. If dispute under this Agreement cannot be resolved by the Parties within such sixty (60) day period, the Parties agree to refer the matter to one executive from each Party not directly involved in the dispute for review and resolution. A copy of the terms of this Agreement, agreed upon facts and areas of disagreement, and a concise summary of the basis for each side’s contentions will be provided to both executives who shall review the same, confer, and attempt to reach a mutual resolution of the issue within forty-five (45) days after receipt of the materials referenced above. If the matter has not been resolved within such forty-five (45) day period, either or both Parties may pursue resolution of the matter through litigation or other process available under law or equity.

     §21. Remedies. Each Party acknowledges that in the event of any violation by that Party of any of the provisions of Section 14 of this agreement or Article III., Sections D or E of the Master Agreement, the other Party would suffer irreparable harm and its remedies at law would be inadequate. Accordingly, in the event of any violation or attempted violation of any such provisions by either Party, the other Party shall be entitled to a temporary restraining order, temporary and permanent injunctions, specific performance, and other equitable relief, without any showing of irreparable harm or damage or the posting of any bond. The rights and remedies of each Party under this agreement shall be cumulative and in addition to any other rights or remedies available to such Party, whether under any other agreement, at law, or in equity.

     §22. Governing Law. All questions concerning the validity or meaning of this agreement or relating to the rights and obligations of the Parties with respect to performance under this agreement shall be construed and resolved under the laws of the State of Tennessee , without regard to principles of conflicts of laws. The parties agree that any claims asserted in any legal proceeding by one party against the other shall be commenced and maintained in any state or federal court in Nashville, Tennessee or Columbus, Ohio and the parties submit to the jurisdiction of these courts.

     §23. Severability. The intention of the Parties is to comply fully with all laws and public policies, and this agreement shall be construed consistently with all laws and public policies to the extent possible. If and to the extent that any court of competent jurisdiction determines that it is impossible to construe any provision of this agreement consistently with any law or public policy and consequently holds that provision to be invalid, such holding shall in no way affect the validity of the other provisions of this agreement, which shall remain in full force and effect.

     §24. Non-waiver. No failure by either Party to insist upon strict compliance with any term of this agreement, to exercise any option, to enforce any right, or to seek any remedy upon any default of the other Party shall affect, or constitute a waiver of, the first Party’s right to insist upon strict compliance, to exercise that option, to enforce that right, or to seek that remedy with respect to that default or any prior, contemporaneous, or subsequent default. No custom or practice of the Parties at variance with any provision of this agreement shall affect, or constitute a waiver of, that Party’s right to demand strict compliance with all provisions of this agreement.

     §25. Force Majeure. If the performance of any part of this agreement by either Party shall be affected for any length of time by fire or other casualty, government restrictions, war, riots, strikes or labor disputes, lock out, transportation delays, acts of God, or any other causes which are beyond the control of the Parties, such Party shall not be responsible for delay or failure of performance of this agreement for such length of time, provided, however, that the obligation of one Party to pay amounts due to any other Party shall not be subject to the provisions of this section

     §26. Genders and Numbers. Where permitted by the context, each pronoun in this agreement includes the same pronoun in the other genders or numbers and each noun used in this agreement includes the same noun in other genders.

     §27. Complete Agreement. This agreement (together with the Master Agreement, the Product-specific exhibits hereto, and the other documents referred to herein, all of which are hereby incorporated herein by reference) contains the entire agreement between the Parties and supersedes all prior or contemporaneous discussions, negotiations, representations, warranties, or agreements relating to the subject matter of this agreement. CORD and Cumberland agree to comply with the obligations of confidentiality set forth in Article III, Section E of the Master Agreement. No changes to this agreement shall be made or be binding on either Party unless made in writing and signed by both Parties.

     §28. Successors. This Agreement may not be assigned or transferred by a party without the prior written consent of the other party hereto, provided, however, that either party may assign this Agreement to any subsidiary, affiliate or an entity which acquires substantially all of it’s assets and business that is not in direct competition with CORD. Any such assignment shall not materially or adversely affect the rights or obligations of either party to this Agreement.

CUMBERLAND PHARMACEUTICALS, INC.		CORD LOGISTICS, INC.
/s/ A.J. Kazimi		/s/ Frank C. Wegerson
A.J. Kazimi		Frank C. Wegerson
Chief Executive Officer		Vice President and General Manager
Initials: /s/ AJK		Initials: /s/ FCW
209 10th Avenue South		15 Ingram Blvd, #100
Nashville, TN 37203		LaVergne, TN 37086
Facsimile No. (615) 255-0094		Facsimile No. (615) 793-4783

          Schedule 8 (c) -1

OPERATING SYSTEM BASE PACKAGE

A. System Access

Includes access to CORD’s processor and operating system Monday through Friday, excluding holidays, 12 hours per day (5:30 am to 5:30 p.m., Pacific local time).

B. Software Access and Maintenance

Includes access to CORD’s or an affiliate of CORD’s standard software. CORD or an affiliate of CORD shall perform at it’s own expense any necessary modification to bring the systems in compliance with the standard functionality described below.

•

Customer service

•

Reports necessary to perform Medicaid rebate calculations

•

Billing (Customization of invoicing/packing slips)

•

Inventory tracking and reporting

•

Lot tracking

•

Order entry

•

Warehousing

•

Returns processing

•

Ability to download system data to Cumberland’s processors for reporting writing

•

All standard reports

•

Contracts/Pricing maintenance and chargeback processing

Systems Development/Additional Services:

Cumberland bears financial responsibility for customization beyond the standard systems functionality described above. Such customization performed by CORD or its representatives (exclusive of the base package) in connection with this agreement shall be billed to Cumberland as follows:

•

Systems and software development—$120 per hour per person, plus travel.

•

On-site training—$120 per hour per person, plus travel.

•

Supplies, equipment and other, to be agreed upon by both parties.

Schedule 8 (c) -2

SYSTEM ACCESS AGREEMENT

This agreement is made as of July ___, 2000, between CORD Logistics, Inc., an Ohio corporation (“Licensor”), and Cumberland Pharmaceuticals Inc., a Tennessee corporation (“Licensee”), who hereby agree as follows:

     1. System Access; Maintenance Obligations. On the terms and subject to the conditions described in this agreement and the Distribution Services Agreement having the same date as this agreement between Licensor and Licensee (the “Distribution Agreement”), Licensor hereby grants to Licensee a nonexclusive license (the “License”) to utilize Licensor’s Order Entry System, consisting of the computer hardware, software and other components described in Schedule 8(c)-1 to the Distribution Agreement (collectively, the “System”), for the information processing needs of Licensee in connection with the Services to be provided by Licensor under the Distribution Agreement. Licensee shall maintain during the term of this agreement the network and local area network (including without limitation centralized server) requirements for the System described in the Distribution Agreement.

     During the term of this agreement, Licensee shall employ reasonable security measures and policies designed to safeguard the integrity, accessibility, and confidentiality of all of Licensee’s data resident on the System and establish reasonable disaster and emergency recovery plans designed to minimize disruption from System operation interruptions. Licensee shall have the right to review the operation of the System from time to time upon reasonable prior notice from Licensee to Licensor; provided that such reviews shall be conducted in a manner to avoid disruption of Licensor’s business operations to the extent possible.

     2. Proprietary Rights. Licensee shall have the right to use the System during the term of this agreement as expressly provided in paragraph 1 of this agreement, but not otherwise. Licensee shall not assign or otherwise transfer, disclose, copy, modify, or decompile the System or any part thereof without prior written consent of the Licensor. The System and all parts thereof, in all of their tangible and intangible manifestations, all existing or new enhancements, developments, derivative works, and other adaptations or modifications to the System (or any part thereof), and all related proprietary rights, are and shall remain the exclusive property of Licensor. Except for the License, Licensee shall have no right, title, or interest in or to the System or any part thereof. Upon termination of this agreement, Licensee shall promptly return to Licensor all portions of the System then in Licensee’s possession or under its control.

     3. Warranties. Licensee acknowledges that it has had adequate opportunity to review the System and its features and operation and Licensee accepts the System “AS IS” for its use as contemplated in the Distribution Agreement. EXCEPT AS EXPRESSLY SET FORTH HEREIN OR IN THE DISTRIBUTION AGREEMENT, LICENSOR MAKES NO REPRESENTATIONS OR WARRANTIES, AND HEREBY EXPRESSLY DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED RELATING DIRECTLY OR INDIRECTLY TO THE SYSTEM OR ANY PART THEREOF, INCLUDING WITHOUT LIMITATION ANY WARRANTIES OF QUALITY, PERFORMANCE, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE.

     4. Limitation On Liability. LICENSOR SHALL NOT BE LIABLE FOR ANY CONSEQUENTIAL, INDIRECT, SPECIAL, OR OTHER SIMILAR DAMAGES ARISING DIRECTLY OR INDIRECTLY OUT OF THE USE OR INABILITY TO USE THE SYSTEM OR ANY PART THEREOF, EVEN IF INFORMED OF THE POSSIBILITY OF SUCH DAMAGES, WHETHER CLAIMED UNDER CONTRACT, TORT, OR ANY OTHER LEGAL THEORY.

     IF ANY OF THE LIMITATIONS ON THE LIABILITY OF LICENSOR CONTAINED IN THIS AGREEMENT ARE FOUND TO BE INVALID OR UNENFORCEABLE FOR ANY REASON THEN LICENSOR AND LICENSEE EXPRESSLY AGREE THAT THE MAXIMUM AGGREGATE LIABILITY OF LICENSOR FOR ALL CLAIMS RELATING TO THE SYSTEM SHALL NOT EXCEED 100% OF THE AGGREGATE BASE PACKAGE FEES PAID BY LICENSEE TO LICENSOR FOR LICENSEE’S USE OF THE SYSTEM UNDER THE DISTRIBUTION AGREEMENT.

     5. Taxes. Licensee shall pay when due all sales, use, gross receipts, excise, property, and other taxes or similar charges (other than taxes based upon Licensor’s net income) now or hereafter imposed as a result of the transactions contemplated by this agreement.

     6. Term. The term of this agreement shall begin upon Licensee’s initial use of the System as evidenced by the first entry of inventory into the System (which may be a date earlier than the Commencement Date specified for the Distribution Agreement) and shall end: (a) automatically upon the termination of the Distribution Agreement (for any reason), or (b) on any earlier date specified by Licensee in notice to Licensor given not less than 180 days prior to

the specified termination date; provided that: (i) paragraph 2 through 5 inclusive, and paragraph 8 of this agreement shall survive the termination of this agreement, and (ii) no termination of this agreement shall affect any liabilities arising, or based upon acts or omissions occurring, prior to such termination.

     Licensee shall continue to have access to the System for a reasonable period of time (not be exceed 60 days) following termination of this agreement solely for purposes of retrieving and transferring to a separate system Licensee’s data relating to its pre-termination operations, and Licensor shall reasonably cooperate with Licensee to preserve the integrity and accessibility of Licensee’s data during such period; provided that, during such period, Licensee shall continue to pay the full Base Package and other fees payable by Licensee under the Distribution Agreement and comply with all other requirements imposed upon Licensee under this agreement.

     7. Notices. Any notice or other communication required or desired to be given to either party under this agreement shall be in writing and shall be deemed given: (a) three days after mailing, if deposited in the United States mail, first-class postage prepaid, and^-addressed to that party at its address set forth at the end of this agreement; (b) when received if delivered to Federal Express or any other similar overnight_, delivery service for delivery to that party at that address; or (c) when sent by facsimile transmission, with electronic confirmation, to that party at its facsimile number set forth at the end of this agreement. Either party may change its address or facsimile number for notices under this agreement by giving the other party notice of such change.

     8. Remedies. Licensee shall indemnify Licensor and its affiliates, directors, officers, employees, agents, and representatives against all claims, liabilities, losses, damages, costs and expenses (including without limitation reasonable attorneys’ fees) arising directly or indirectly out of any failure of Licensee to perform and observe fully all obligations and conditions to be performed or observed by Licensee pursuant to this agreement. Licensee acknowledges that in the event of any violation by it of any of the provisions of paragraph 2 of this agreement, Licensor would suffer irreparable harm and its remedies at law would be inadequate. Accordingly, in the event of any violation or attempted violation of any such provisions by Licensee, Licensor shall be entitled to a temporary restraining order, temporary and permanent injunctions, specific performance, and other equitable relief, without any showing of irreparable harm or damage or the posting of any bond, in addition to any other rights or remedies which may be available to Licensor.

     9. Force Majeure. Notwithstanding any other provisions of this agreement or the Distribution Agreement to the contrary, each party’s obligations under this agreement (exclusive of payment obligations) shall be excused if and to the extent that any delay or failure to perform such obligations is due to fire or other casualty, material shortages, strikes or labor disputes, acts of God, or other causes beyond the reasonable control of that party.

     10. Successors. Licensee shall not assign or otherwise transfer this agreement or any of its rights or obligations under this agreement without the prior written consent of Licensor, which consent shall not be unreasonably withheld. Subject to the preceding sentence, this agreement shall be binding upon, inure to the benefit of, and be enforceable by and against the respective successors and assigns of each party.

     11. Interpretation. This agreement shall be governed by and construed in accordance with the laws of the State of Tennessee. If and to the extent that any court of competent jurisdiction determines that it is impossible to construe any provision of this agreement consistently with any law or public policy and consequently holds that provision to be invalid, such holding shall in no way affect the validity or the other provisions of this agreement, which shall remain in full force and effect.

     12. Complete Agreement. This agreement (together with the Distribution Agreement, which is hereby incorporated herein by reference) constitutes the entire agreement between the parties with respect to the subject matter of this agreement and supersedes all prior or contemporaneous discussions, negotiations, representations, warranties, or agreements relating to the subject matter of this agreement. This agreement may not be amended or otherwise modified except by a written instrument signed by each party.

CUMBERLAND PHARMACEUTICALS, INC.						CORD LOGISTICS, INC.
By:		/s/ A.J. Kazimi				By:		/s/ Frank C. Wegerson
		A.J. Kazimi						Frank C. Wegerson
		Chief Executive Officer						Vice President and General Manager
		Initials: /s/ AJK						Initials: /s/ FCW
209 10th Avenue South, Suite 332						15 Ingram Blvd., #100
Nashville, TN 37203						LaVergne, TN 37086
Facsimile No. (615) 255-0094						Facsimile No. (615) 793-4783

Exhibit A

CUMBERLAND PHARMACEUTICALS

PROPOSED FEE SCHEDULE

Program Implementation
One Time Start-up Fee		$	*	**
Distribution Services
Monthly per pallet ambient storage		$	*	**
Per bottle ambient product pick/pack/stage — first bottle (1)		$	*	**
Per bottle ambient product pick/pack/stage — each add’l bottle (1)		$	*	**
Per case ambient product pick/pack/stage — first case (1)		$	*	**
Per case ambient product pick/pack/stage — each add’l case (1)		$	*	**
Per unit return goods processing		$	*	**
Monthly distribution system access and use (2)		$	*	**
Monthly account management fee		$	*	**
Packing/Shipping Supplies		Cost plus ***% handling fee
(includes ordering, receiving, storage)
Shipping Charges (3)		List minus ***%
Customer Service
Monthly fixed fee		$	*	**
Per order fee		$	*	**
Preprinted Forms		Cost plus ***% handling fee
Financial Services
Monthly fixed fee Accounts Receivable Management		$	*	**
Per order fee Accounts Receivable Management		$	*	**
Monthly fixed fee Chargeback Management		$	*	**
Per submission Chargeback Processing & Government Reporting		$	*	**
Preprinted Forms		Cost plus ***% handling fee

Note (1):		This proposal is based on the distribution of Reglan and Donnatal only, any additional products requiring distribution services will be quoted separately. The pricing will be based on the buying patterns of the wholesalers.
Note (2):		System access fee includes licenses for two concurrent users. Any additional licenses required by Cumberland Pharmaceuticals will Increase the monthly fee by $*** per concurrent user.
Note (3):		List minus ***% is incorporated to UPS and FedEx rates only, all other freight carriers will be billed back at cost plus ***%.
Note (4):		The implementation fee will be paid in two equal installments at the beginning of contract year two and three. The monthly fixed fees will be assessed at a ***% discount in year one and a ***% increase in year three.

EXHIBIT 10.8

*Certain portions of this exhibit have been omitted pursuant to a request for confidential
treatment which has been filed separately with the SEC.

STRATEGIC ALLIANCE AGREEMENT

THIS AGREEMENT is made and entered into as of the 21st day of July, 2000.

BY AND BETWEEN:

CUMBERLAND PHARMACEUTICALS INC., a corporation organized and existing under the laws of Tennessee, with its principal offices located at 209 Tenth Avenue South, Suite 332, Nashville, Tennessee, 37203 (hereinafter referred to as “CUMBERLAND”)

AND:

F.H. FAULDING & CO. LIMITED (ABN 88 007 870 984), a corporation organized under the laws of South Australia, with its principal place of business located at 115 Sheriff Street, Underdale, South Australia 5032 (hereinafter referred to as “FAULDING”);

WHEREAS, CUMBERLAND is the owner of intellectual property rights, formulations and know- how related to intravenous formulations of a certain pharmaceutical product set forth in Schedule I;

WHEREAS, FAULDING has the expertise and the manufacturing facility suitable for the pharmaceutical preparation and production of the Drug Product;

WHEREAS, CUMBERLAND wishes to have FAULDING manufacture the Drug Product and FAULDING wishes to supply the Drug Product to CUMBERLAND;

WHEREAS, CUMBERLAND will appoint FAULDING as its preferred manufacturer for CUMBERLAND’s products;

WHEREAS, FAULDING and CUMBERLAND will explore opportunities to collaborate on the manufacture and distribution of other pharmaceutical products of CUMBERLAND;

NOW, THEREFORE, in consideration of the premises and the undertakings, terms, conditions and covenants set forth below, the parties hereto agree as follows:

1. DEFINITIONS

     1.1 BUFFER SOLUTION shall mean the buffer solution selected by CUMBERLAND for the manufacture of the Drug Product.

     1.2 BULK DRUG SUBSTANCE shall mean the active ingredients in the Drug Product.

     1.3 cGMP or GMP shall have the meaning set forth in Schedule I.

     1.4 CONFIDENTIAL INFORMATION shall have the meaning set forth in Paragraph 9.

     1.5 DEVELOPMENT shall mean all work necessary to develop a process to manufacture the Drug Product in full accord with cGMP and to supply the Drug Product conforming to the Specifications. Development activities shall include, but not be limited to, pilot batches, scale- up batches, validation of the manufacturing process, and successful completion of the Drug Product manufacture and delivery as defined in Schedule I attached hereto.

     1.6 DRUG PRODUCT shall mean the Ibuprofen for injection pharmaceutical product developed by Cumberland and marketed under the trade name AMELIOR™.

     1.7 EXCIPIENT shall mean any inert substance selected by CUMBERLAND and used to give the Drug Product proper consistency.

     1.8 FDA shall mean the United States Food and Drug Administration (FDA).

     1.9 IN-PROCESS SOLUTION shall mean all Buffer Solutions and Excipients needed to produce Drug Product in the finished dosage form set forth in Schedule I.

     1.10 INVENTION shall have the meaning set forth in Paragraph 9.4.

     1.11 LABELING shall mean all labels and other written, printed, or graphic matter upon: (i) the Drug Product or any container or wrapper utilized with the Drug Product or (ii) any written material accompanying the Drug Product, including without limitation, package inserts.

     1.12 MANUAL shall mean the Manufacturing Project Manual attached as Schedule II to this Agreement and reviewed and accepted by CUMBERLAND and FAULDING, the terms and provisions of which are incorporated by reference as though fully set forth herein.

     1.13 SPECIFICATIONS shall mean those specifications set forth in Attachment I to the Manual.

2. DEVELOPMENT AND MANUFACTURING

     2.1 Initiation: Upon request by CUMBERLAND, FAULDING shall proceed with the schedule for completing Development of the Drug Product. Upon request by CUMBERLAND, FAULDING shall manufacture the Drug Product in the batch size set forth in Schedule I in accordance with the terms hereof, the Specifications, and all applicable laws and regulations. Prior to distributing and selling the Drug Product, CUMBERLAND shall prepare and file submissions to the FDA in order to obtain and maintain during the term hereof regulatory approval of the Drug Product. FAULDING shall prepare and test the Drug Product in accordance with cGMP.

     2.2 Processing and Manufacturing: FAULDING shall manufacture and package the Drug Product in accordance with Schedules I and II hereto.

     2.3 Documentation: Subject to CUMBERLAND’s prior consent pursuant to Paragraph 5.5 hereof to reimburse FAULDING for all out-of-pocket expenses and reasonable internal costs, FAULDING shall provide CUMBERLAND with required supporting documentation for the Development of the Drug Product in a form suitable for CUMBERLAND’s submission to the FDA or applicable governmental authorities for any country into which the Drug Product will be distributed with the prior written consent of FAULDING, which consent shall not be unreasonably withheld or delayed.

     2.4 Bulk Drug Substance Supply: FAULDING shall be responsible for the supply of all Bulk Drug Substance in accordance with Schedules I and II hereto; provided that the supply of Bulk Drug Substance shall be exclusively from such suppliers and in such grades as have been approved in writing by CUMBERLAND as reflected on an approved list to be attached hereto as Schedule III, and provided further that such suppliers and grades may not be changed without CUMBERLAND’s prior written consent.

     2.5 Supply of Components: FAULDING shall be responsible for the supply of all components in accordance with Schedules I and II hereto; provided that the supply of components shall be exclusively from such suppliers and in such grades as have been approved in writing by CUMBERLAND as reflected on an approved list to be attached hereto as Schedule III, and provided further that such suppliers and grades may not be changed without CUMBERLAND’s prior written consent.

     2.6 Delivery Terms: All deliveries of Drug Product under this Agreement shall be made by FAULDING to CUMBERLAND in the manner set forth in Schedule I. CUMBERLAND shall, within twenty (20) working days after its receipt of any shipment, notify FAULDING in writing, of any claim relating to a Drug Product not conforming to the Specifications, and, failing such notification, notwithstanding Paragraph 5.1 of this Agreement, CUMBERLAND shall be deemed to have accepted the Drug Product. If FAULDING disputes CUMBERLAND’s claim that the Drug Product is non-conforming, then such dispute shall be resolved by an independent testing organization of recognized repute within the pharmaceutical industry mutually agreed upon by FAULDING and CUMBERLAND, the appointment of which shall not be unreasonably withheld by either party. In such event, CUMBERLAND shall ship the testing organization representative samples of the Drug Product from the disputed production lot, and the fees and costs of such testing organization and related shipping and supply costs shall be borne by the party whose position is not sustained by the testing organization. CUMBERLAND’s sole remedy for non-conforming product (other than indemnification under Paragraph 10.2) is to be provided with replacement Drug Product free of charge, including compensation for all CUMBERLAND inputs and all freight charges.

     2.7 Payment for the Drug Product: At the time of each shipment, FAULDING shall invoice CUMBERLAND for FAULDING’s manufacturing services at the cost per batch as set forth in Schedule I. Payment shall be made in Australian dollars of the latter of the invoice date or

CUMBERLAND’s acceptance of shipment of conforming Product at its designated receiving facility.

     2.8 Price Variations:

     (i) Prices are as set on Schedule I for the term hereof unless changed pursuant to Paragraph 2.8(ii).

     (ii) A party may request not less than two months prior to the second anniversary of the effective date of this Agreement and each anniversary thereof thereafter to renegotiate the price per batch having regard to varying costs of manufacture. The requesting party shall provide the other party with evidence of varying costs of manufacture if an increase or decrease in price is sought. Any increase in price shall not exceed the twelve (12) month percent increase in the Consumer Price Index as published by the Australian government and shall be further subject to a maximum of [***] percent ([***]%) unless (a) CUMBERLAND consents in writing to an increase in excess of such Consumer Price Index and (b) FAULDING provides CUMBERLAND with evidence that the proposed increase in price per batch is equivalent to FAULDING’s increased cost of manufacturing per batch (excluding non-manufacturing overhead) as calculated in accordance with generally accepted accounting principles consistently applied. If CUMBERLAND does not consent in writing to an increase in excess of such Consumer Price Index within thirty (30) days of written notification thereof, then FAULDING may withdraw the proposed amount of the increase in excess of the Consumer Price Index or may terminate this Agreement upon at least ninety (90) days prior written notice.

3. TERM AND TERMINATION

     3.1 Term: This Agreement shall commence on the date first above written and will continue until the fifth anniversary of the date on which the FDA grants approval to market and sell the Drug Product, unless sooner terminated pursuant to Paragraph 3.2 herein. The Agreement shall be automatically renewed for successive three-year terms unless either party notifies the other party in writing at least twelve (12) months in advance of the expiration of the then current term that the party is terminating the Agreement.

     3.2 Termination: This Agreement may be terminated at any time upon the occurrence of any of the following events:

     (a) Default: Forty-five (45) days following written notice, by either party to the other party, in the event that the other party breaches any provision of this Agreement, and such party fails to remedy the breach prior to the expiration of the forty-five (45) day period.

     (b) Insolvency: Written notice by either party to the other upon insolvency or bankruptcy of the other party, and the failure of any such insolvency or bankruptcy to be dismissed within sixty (60) days.

     (c) If, as a result of causes described in Paragraph 7.1, either party is unable to fully perform its obligations hereunder for a period of one hundred eighty (180) consecutive days, the other party shall have the right to terminate this Agreement upon at least thirty (30) days prior written notice; provided that if the required performance is met during that thirty-day period, this Agreement shall continue in full force and effect as if the notice had not been given.

     Termination, expiration, cancellation or abandonment of this Agreement, through any means and for any reason, shall not relieve the parties of any obligation accruing prior thereto and shall be without the prejudice to the rights and remedies of either party with respect to any antecedent breach of any of the provisions of this Agreement or CUMBERLAND’s purchase order issued hereunder.

     3.3 Survival: Paragraphs 5, 6, 9, and 10 shall survive the termination or cancellation of the Agreement for any reason.

4. CERTIFICATES OF ANALYSIS AND MANUFACTURING COMPLIANCE

     4.1 Certificates of Analysis: FAULDING shall perform, or cause to be performed, certain tests requested by CUMBERLAND as indicated in the Specifications on each batch of the Drug Product manufactured pursuant to this Agreement before delivery to CUMBERLAND.

A certificate of analysis for each batch delivered shall be delivered with each batch and shall set forth the items tested, specifications, and test results. FAULDING shall also indicate on the certificate of analysis that all batch production and control records have been reviewed and approved by the appropriate quality control unit. FAULDING shall send, or cause to be sent, such certificates to CUMBERLAND prior to the shipment of the Drug Product. CUMBERLAND shall test, or cause to be tested, prior to final release, each batch of the Drug Product as meeting the Specifications. As required by the FDA (see Paragraph 5.2 below), CUMBERLAND shall assume full responsibility for final release of each lot of the Drug Product.

     4.2 Manufacturing Compliance: FAULDING shall advise CUMBERLAND immediately if an authorized agent of any regulatory body visits FAULDING’s manufacturing facility and makes an inquiry regarding FAULDING’s method of manufacture of the Drug Product for CUMBERLAND. Upon receipt of any Form 483 Notice of Inspectional Observations issued by the FDA or notice of deficit from any other regulatory inspection after a visit to FAULDING’s manufacturing facility, FAULDING shall immediately send CUMBERLAND a copy thereof; provided that it may redact any language that is subject to a legally enforceable confidentiality agreement between FAULDING and a third party.

     4.3 Regulatory Agency Requirements: FAULDING shall prepare and test the Drug Product in conformity with GMP. Subject to the allocation of responsibility for regulatory compliance as set forth in Paragraph 5.2, each party shall consult with the other party hereto before implementing additional regulatory agency requirements concerning the control of Drug Product components, manufacture of the Drug Product, or storage and handling of the Drug Product. The full text of regulatory agency requests or comments will be provided by the party receiving such requests or comments to the other party hereto. The parties will mutually agree on how to respond to such requests and comments and on the allocation of the costs thereof; provided that FAULDING shall be liable only for its reasonable internal costs and not for any out-of-pocket expenses or extraordinary costs required in connection with implementing such regulatory requirements other than the ordinary costs of compliance with GMP.

     4.4 Regulatory Documents: Each party will advise the other party hereto of its intention to change any Drug Product regulatory documents prior to submission of the document to any regulatory body. If the change affects the rights and obligations of a party hereto under this Agreement, such party may seek to review or alter any part of the document at any time within ten (10) business days after receipt of notification thereof; provided that if no alterations are submitted to the other party within such ten-day period, each party will be deemed to have consented to the alteration. CUMBERLAND shall reimburse FAULDING for all out-of-pocket expenses and reasonable internal costs of changes to Drug Product regulatory documents, subject to CUMBERLAND’s prior consent pursuant to Paragraph 5.5.

5. REPRESENTATIONS AND WARRANTIES

     5.1 Conformity with Specifications: FAULDING warrants that, at the time of manufacture, the Drug Product is prepared and tested in accordance with cGMP and meets the Specifications. Because FAULDING has no control of the conditions under which the Drug Product is used, the diagnosis of the patient before or after treatment with the Drug Product, the

method of use or administration of the Drug Product, and handling of the Drug Product after delivery to CUMBERLAND, FAULDING does not warrant either a good effect, or against an ill effect, following the use of the Drug Product. The foregoing warranty is exclusive and in lieu of all other warranties either written, oral, or implied. THERE ARE NO WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. No representative of FAULDING may change any of the foregoing warranties and CUMBERLAND accepts the Drug Product subject to all terms hereof.

     5.2 Compliance: CUMBERLAND assumes responsibility for coordinating all contact with the FDA and other regulatory bodies, pertaining specifically to Drug Product. FAULDING authorizes CUMBERLAND’s representatives to supervise and inspect the methods used in and facilities used for manufacturing, processing, packaging, and handling of the Drug Product, but CUMBERLAND shall have no such obligation under this Agreement. Except as otherwise required by applicable regulations, CUMBERLAND’s inspections shall be limited to two per year, each to occur upon seven days notice and to be conducted during normal business hours; provided that CUMBERLAND may also inspect such facilities promptly after any regulatory inspection thereof.

     5.3 Debarring: FAULDING represents and warrants that it has not been debarred in the United States within the meaning of 21 U.S.C. § 335a(a) and 335a(b), nor will it use in any capacity the services of any person debarred pursuant to subsections 3.06(a) or 3.06(b) of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. Section 335(a) and (b).

     5.4 FDA Submission: FAULDING represents and warrants that it has submitted to the FDA information about the manufacturing site to be used for the Drug Product and the facilities, operating procedures, and personnel at such site.

     5.5 Reimbursement: FAULDING shall not incur any development costs for which it intends to seek reimbursement from CUMBERLAND for the manufacturing facility, equipment, or manufacturing method unless FAULDING has the prior written consent of CUMBERLAND.

     5.6 Exclusivity: FAULDING will not sell, give away, or deliver to any other person, firm, or corporation any Drug Product without CUMBERLAND’s prior written consent while this Agreement is effective and for two years after the termination of this Agreement. In the event of breach, CUMBERLAND shall have the right, in addition to other rights, to seek injunctive relief.

6. DRUG PRODUCT RECALLS

     6.1 Drug Product Recalls: In the event: (a) any government authority issues a request, directive or order that the Drug Product be recalled, or (b) a court of competent jurisdiction orders such a recall, (c) CUMBERLAND determines that the Drug Product should be recalled because the Drug Product does not conform to Specifications, or (d) FAULDING recommends to CUMBERLAND that a recall be initiated, the parties shall take all appropriate corrective actions. In the event that FAULDING recommends a recall of Drug Product by CUMBERLAND, such recommendation must take the form of a notice as per Paragraph 14.1, and CUMBERLAND shall respond promptly indicating to FAULDING whether the Drug

Product will be recalled. In no event, however, shall FAULDING have responsibility for regulatory compliance in connection with any recall, except to the extent and under the circumstances set forth in the Manual or any other written agreement between the parties hereto or as required by law. All costs and expenses incurred in connection with such recall shall be the responsibility of CUMBERLAND unless caused by the negligence of FAULDING.

7. FORCE MAJEURE; FAILURE TO SUPPLY

     7.1 Force Majeure Events: Failure of either party to perform under this Agreement (except the obligation to make payments) shall not subject such party to any liability to the other if such failure is caused by acts such as, but not limited to, acts of God, fire, explosion, flood, drought, war, riot, sabotage, embargo, strikes or other labor trouble, compliance with any order or regulation of any government entity, or by any cause beyond the reasonable control of the parties, provided that written notice of such event is promptly given to the other party.

     7.2 Failure to Supply; Delivery Dates; Forecasts: FAULDING shall supply all of the Drug Product ordered by CUMBERLAND within sixty (60) days of receipt of a written order from CUMBERLAND. On the date that CUMBERLAND makes its first order, CUMBERLAND will supply FAULDING with a non-binding forecast of its future orders of Drug Product for each of the eleven calendar months following the month in which the initial order is made. CUMBERLAND will update the forecasts on the first day of the calendar month and on a monthly basis thereafter throughout the term of this Agreement. The quantity of any Drug Product ordered pursuant to this Agreement shall not be less than seventy percent (70%) nor more than one hundred thirty percent (130%) of the quantity indicated in the most recent monthly forecast provided hereunder for the month in which the order is placed. If CUMBERLAND fails to provide orders, or forecasts by agreed dates, FAULDING shall not be required to deliver the quantity ordered by CUMBERLAND within sixty (60) days. The provisions of this Paragraph 7.2 shall be without prejudice to CUMBERLAND’s rights under Paragraph 3.2 and remedies provided for thereunder.

8. IMPROVEMENTS

     8.1 Changes by CUMBERLAND:

     When CUMBERLAND seeks to change the Drug Product Specifications, such change shall be incorporated within the Specifications only with the prior written consent of FAULDING, such consent not to be unreasonably withheld or delayed. The price of the Drug Product may be adjusted for such change, and CUMBERLAND shall pay FAULDING the agreed costs associated with such change, including any development work, if necessary, based upon FAULDING’s then-prevailing development rates. Such prices and costs shall be set forth in a written amendment to this Agreement. It is the responsibility of CUMBERLAND to ensure that proper regulatory agencies approve the suggested changes. CUMBERLAND will notify FAULDING if it intends to change the process or test specifications related to the preparation of the Bulk Drug Substance.

     8.2 Changes by FAULDING:

     FAULDING shall inform CUMBERLAND in writing of all proposed changes in the manufacturing facility, equipment, or manufacturing methods and labeling of the Drug Product, each as approved by applicable regulatory authorities, including the FDA, in advance of the time such changes are intended to be made to allow CUMBERLAND sufficient time to provide any notice required by FDA regulations. FAULDING shall not implement any such changes without prior written authorization by the FDA or other applicable regulatory authorities and the prior written consent of CUMBERLAND, which consent shall not be unreasonably withheld or delayed. FAULDING shall be liable only for its reasonable internal costs and not for extraordinary costs in connection with such manufacturing changes.

9. CONFIDENTIALITY

     9.1 Confidential Information: “Confidential Information” means collectively Confidential Information of CUMBERLAND (as defined herein) and Confidential Information of FAULDING (as defined herein).

     9.2 Confidential Information of CUMBERLAND: “Confidential Information of CUMBERLAND” means all information obtained or developed by FAULDING or any third party which related to CUMBERLAND’s business or the Drug Product, regardless of the form in which such information is transmitted. The following shall not be considered Confidential Information of CUMBERLAND for purposes hereof:

     (a) Information that is already in the possession of FAULDING at the time it is received from CUMBERLAND or developed on CUMBERLAND’s behalf, if FAULDING notifies CUMBERLAND of its belief that the information is excepted under the terms of this subsection;

     (b) Information received by FAULDING from a person which has the right to disclose the same, when FAULDING notifies CUMBERLAND of its belief that the information is excepted under the terms of this subsection;

     (c) Information that is or becomes published, or is or becomes otherwise publicly available without the fault of FAULDING; or

     (d) An Invention as defined in Paragraph 9.4.

     In the event of a dispute regarding the applicability of the above exceptions to the definition of Confidential Information of CUMBERLAND, FAULDING shall have the burden of producing clear and convincing proof that the information should be excepted from the definition of Confidential Information of CUMBERLAND. FAULDING shall not use or permit the use of the Confidential Information of CUMBERLAND other than for the limited purposes expressly permitted by or consistent with this Agreement. Recipients of Confidential Information of CUMBERLAND shall be granted access thereto strictly on a “need-to-know” basis. FAULDING shall take all reasonable steps to ensure that recipients comply with the terms of this Agreement, including all restrictions on use, disclosure and dissemination of Confidential

Information of CUMBERLAND. FAULDING shall notify CUMBERLAND immediately upon becoming aware of any breach hereof and shall take all reasonable steps to prevent any further disclosure or unauthorized use.

     Upon termination or expiration of this Agreement, FAULDING shall deliver to CUMBERLAND all Confidential Information of CUMBERLAND, all copies thereof, and all documents or data storage media containing such Confidential Information of CUMBERLAND, except as expressly set forth herein or in any other written agreement between the parties.

     9.3 Confidential Information of FAULDING: “Confidential Information of FAULDING” means all information obtained by CUMBERLAND which relates to FAULDING’s business, regardless of the form in which such information is transmitted. The following shall not be considered Confidential Information of FAULDING for purposes hereof:

     (a) Information that is already in the possession of CUMBERLAND at the time it is received from FAULDING, if CUMBERLAND notifies FAULDING of its belief that the information is excepted under the terms of this subsection; or

     (b) Information received by CUMBERLAND from a person which has the right to disclose the same, when CUMBERLAND notifies FAULDING of its belief that the information is excepted under the terms of this subsection; or

     (c) Information that is or becomes published, or is or becomes otherwise publicly available without the fault of CUMBERLAND.

     In the event of a dispute regarding the applicability of the above exceptions to the definition of Confidential Information of FAULDING, CUMBERLAND shall have the burden of producing clear and convincing proof that the information should be excepted from the definition of Confidential Information of FAULDING. CUMBERLAND shall not use or permit the use of the Confidential Information of FAULDING other than for the limited purposes expressly permitted by or consistent with this Agreement. Recipients of Confidential Information of FAULDING shall be granted access thereto strictly on a “need-to-know” basis. CUMBERLAND shall take all reasonable steps to ensure that recipients comply with the terms of this Agreement, including all restrictions on use, disclosure and dissemination of Confidential Information of FAULDING. CUMBERLAND shall notify FAULDING immediately upon becoming aware of any breach hereof and shall take all reasonable steps to prevent any further disclosure or unauthorized use.

     Upon termination or expiration of this Agreement, CUMBERLAND shall deliver to FAULDING all Confidential Information of FAULDING, all copies thereof, and all documents or data storage media containing such Confidential Information of FAULDING, except as expressly set forth herein or in any other written agreement between the parties.

     9.4 Invention: CUMBERLAND owns all intellectual property rights in any improvement to or derived from the Drug Product and any existing or further developments or modifications of the Drug Products (“Invention”), except to the extent that a manufacturing

process used therewith is developed exclusively by FAULDING, in which case the intellectual property rights for such process shall be retained by FAULDING.

     9.5 Disclosure: The parties agree that the existence of this Agreement may be disclosed to third parties but that the contents of this Agreement shall not be disclosed to any third party except (i) the controlling companies of the parties, (ii) the companies controlled by the parties, (iii) individuals and entities providing paid services to either of the parties, and (iv) governmental regulatory agencies, including, but not limited to, environmental protection authorities, without prior written consent of the other party.

     9.6 Retention of Records: Notwithstanding the restrictions set forth in this Agreement, FAULDING shall retain production records (a) for batches of Drug Products manufactured prior to establishment by CUMBERLAND of an expiry date (CTM and validation batches) for three (3) years after (i) issuance of regulatory approval of the Drug Product necessary for distribution thereof or (ii) withdrawal of the IND (Notice of Claimed Investigational Exemption for a New Drug) and (b) for batches of Drug Product manufactured after establishment by CUMBERLAND of an expiry date for a period of at least one year after the respective expiry date for each batch. These records will be stored by appropriate means, including without limitation, optical disk or microfilm in a secure manner in compliance with current GMP with duplicate copies submitted to CUMBERLAND promptly after the creation thereof and shall be made available on request of the FDA or any other authorized regulatory body.

     9.7 Confidential Information Upon Termination: Upon termination of this Agreement for whatever reason, FAULDING shall return to CUMBERLAND originals, copies, and derivative forms of disclosed or developed information relating to the purpose of this Agreement; except that one copy of such information may be retained as required by regulation or law for future reference. The Confidential Information shall remain confidential and not be disclosed by either party for a period of ten (10) years following the date of expiration or termination of this Agreement.

10. INDEMNIFICATION

     10.1 Indemnification by CUMBERLAND: CUMBERLAND shall indemnify and hold FAULDING (and any parent, subsidiary, or affiliate company or corporation, and their officers, directors, shareholders, agents, and the employees and insurers of any of them and/or their successors and assigns thereto), free and harmless from any and all claims, demands, liability, actions or causes of actions, and any and all expenses associated therewith (including, without limiting the generality of the foregoing, attorney’s fees), arising out of or in connection with, as a result of, or otherwise related to any third party claims arising from: (i) any negligence or recklessness of CUMBERLAND, its agents, or employees; (ii) the promotion, distribution, use, misuse or sale or effects of the Drug Product except to the extent the alleged Drug Product defects were caused by FAULDING; (iii) CUMBERLAND’s non-compliance with any applicable FDA or other applicable regulations; or, (iv) any failure of CUMBERLAND to perform, in whole or in part, any of its obligations hereunder in each case, unless caused by the acts or omissions of FAULDING. Beginning prior to use of the Drug Product in humans and

continuing until the third anniversary of termination of this Agreement, CUMBERLAND shall maintain products liability insurance with limits of liability of not less than [***] and shall name FAULDING as additional insured under said policy.

     10.2 Indemnification by FAULDING: FAULDING will indemnify and hold CUMBERLAND (and any parent, subsidiary, or affiliate company or corporation, and their officers, directors, shareholders, agents, and the employees and issuers of any of them and/or their successors and assigns thereto), free and harmless against any and all claims, demands, actions or causes of action, and any and all expenses associated therewith (including, without limiting the generality of the foregoing, defense costs and attorney’s fees), arising out of or in connection with, as a result of, or otherwise related to any third party claims arising from (i) any negligence or recklessness of FAULDING, its agents or employees; (ii) personal injury (including death) or property damage arising out of or in connection with FAULDING’s manufacture or handling of the Drug Product otherwise than in accordance with the Specifications and CUMBERLAND’S written directions; (iii) FAULDING’s non-compliance with any applicable FDA or other applicable regulations; provided that CUMBERLAND perform its obligations under Paragraph 2.1, or (iv) any failure of FAULDING to perform any of its obligations hereunder, unless caused by the acts or omissions of CUMBERLAND. Beginning prior to delivery of the first order for Drug Product pursuant to this Agreement and continuing until the third anniversary of termination of this Agreement, FAULDING shall maintain products liability insurance with limits of liability of not less than [***] and shall name CUMBERLAND as additional insured under said policy.

     10.3 Patent Indemnity: Subject to Paragraph 5.1, CUMBERLAND further warrants that importation, manufacture (excluding manufacturing not specific to the manufacture of the Drug Product to be performed by FAULDING for CUMBERLAND), use, supply, and sale of the Drug Product and Bulk Drug Substance will not infringe any patent rights or any other third-party intellectual property rights and that CUMBERLAND will indemnify, defend, and hold FAULDING free and harmless from any damage, judgment, liability, loss, cost or expense, including legal expenses, arising from claims that the Drug Product and Bulk Drug Substance infringe patent rights of a third party or any third-party intellectual property rights.

     10.4 Conditions of Indemnification: If either party seeks indemnification from the other under Paragraphs 10.1, 10.2, or 10.3, it shall promptly give written notice to the other party of any such claim or suit threatened, made or filed against it, which forms the basis for such claim of indemnification and shall cooperate fully with the other party in the defense of all such claims or suits. No settlement or compromise shall be binding on a party hereto without its prior written consent.

     10.5 Disclaimer of Warranties; Limited Liability: Under no circumstances shall either party be liable to the other on account of any claim (whether based upon principles of contract, warranty, negligence, or other tort, breach of any statutory duty, principles of indemnity, the failure of any expressly limited remedy to achieve its essential purpose) for any special, consequential, incidental or exemplary damages, or including but not limited to lost profits.

11. APPOINTMENT AS PREFERRED MANUFACTURER

     Until the expiration or earlier termination of this Agreement, CUMBERLAND agrees to provide FAULDING with the first opportunity to negotiate to manufacture each CUMBERLAND pharmaceutical product to be sold anywhere in the world in addition to the Drug Product; provided that the foregoing shall not apply to pharmaceutical products in respect of which CUMBERLAND is unable to enter into a manufacturing arrangement with FAULDING, due to contractual obligations applicable to CUMBERLAND or where to enter into such an arrangement with FAULDING would adversely affect any existing regulatory approval or application for regulatory approval for the product, in either case as reasonably determined by CUMBERLAND having regard to documented evidence which CUMBERLAND shall provide to FAULDING or FAULDING’s advisers for review at FAULDING’s request. Except as set forth to the contrary in the preceding sentence, CUMBERLAND agrees not to manufacture, or to have manufactured, such a product anywhere in the world unless CUMBERLAND first notifies FAULDING of the opportunity hereunder and unless CUMBERLAND negotiates in good faith with FAULDING for sixty (60) days after providing such notice in an attempt to enter into a written agreement on substantially the same terms as this Agreement with respect to such additional product.

12. LICENSING AND DISTRIBUTION OF CUMBERLAND PRODUCTS

     Until the expiration or earlier termination of this Agreement, CUMBERLAND agrees to provide FAULDING with the first opportunity to negotiate to license and distribute each pharmaceutical product of CUMBERLAND in Australia, New Zealand, Canada, and mutually agreed Southeast Asian and Latin American countries; provided that the foregoing shall not apply to pharmaceutical products in respect of which CUMBERLAND is unable to enter into a license and distribution arrangement with FAULDING, due to contractual obligations applicable to CUMBERLAND as reasonably determined by CUMBERLAND having regard to documented evidence which CUMBERLAND shall provide to FAULDING or FAULDING’s advisers for review at FAULDING’s request, and further provided that CUMBERLAND shall use good faith efforts to initiate such negotiations with FAULDING as soon as such a product is reasonably available for license and distribution in such territory. Except as set forth to the contrary in the preceding sentence, CUMBERLAND agrees not to license or distribute such a product in such territory unless CUMBERLAND first notifies FAULDING of the opportunity hereunder and unless CUMBERLAND negotiates in good faith with FAULDING for sixty (60) days after providing such notice in an attempt to enter into a written agreement with respect to the services that are being negotiated.

13. REGULATORY SUPPORT

     If requested by CUMBERLAND, and at CUMBERLAND’S cost at reasonable fees to be agreed by the parties, FAULDING shall provide CUMBERLAND with reasonable assistance in relation to the Development of, and applications for regulatory approval for, pharmaceutical products other than the Drug Product which are identified by CUMBERLAND, including but not limited to the preparation of development reports, stability reports, manufacturing documentation and

instructions for use necessary to support applications for regulatory approval.

14. GENERAL PROVISIONS

     14.1 Notices: Any notice permitted or required by this Agreement may be sent by facsimile with the original document being sent by certified (or registered) mail, return receipt requested, or overnight delivery and shall be effective when received (or refused) via facsimile or mail or overnight if faxed and sent and addressed as follows (or to such other facsimile number or address as may be designated by a party in writing):

		If to CUMBERLAND:		Cumberland Pharmaceuticals Inc.
				209 Tenth Avenue South, Suite 332
				Nashville, Tennessee 37203
				Attn: Chief Executive Officer
				Telephone:		615-255-0068
				Facsimile:		615-255-0094
		If to FAULDING:		F.H. Faulding & Co. Limited
				115 Sherriff Street
				Underdale, South Australia 5032
				Attn: Company Secretary
				Telephone:		61-8-8205-6500
				Facsimile:		61-8-8234-8380

     14.2 Entire Agreement: Amendment: The parties hereto acknowledge that this Agreement sets forth the entire agreement and understanding of the parties and supersedes all prior written or oral agreements or understandings with respect to the subject matter hereof; provided that the Confidentiality Agreement dated August 1, 1999, between FAULDING and CUMBERLAND shall remain in effect and that the terms thereof shall supersede any conflicting term of Paragraph 9 hereof. No modification of any of the terms of this Agreement, or any amendments thereto, shall be deemed to be valid unless in writing and signed by both parties hereto. No course of dealing or usage of trade shall be used to modify the terms and conditions herein.

     14.3 Waiver: None of the provisions of the Agreement shall be considered waived by any party hereto unless such waiver is agreed to, in writing, by both parties. The failure of a party to insist upon strict conformance to any of the terms and conditions hereof, or failure or delay to exercise any rights provided herein or by law shall not be deemed a waiver of any rights of any party hereto.

     14.4 Obligations to Third Parties: Each party warrants and represents that this Agreement is not inconsistent with any contractual obligations, expressed or implied, undertaken with any third party.

     14.5 Assignment: This Agreement shall be binding upon and inure to the benefit of the successors or permitted assigns of each of the parties and may not be assigned, transferred, or

subcontracted by either party without the prior written consent of the other, which consent will not be unreasonably withheld or delayed, except that no consent shall be required in the case of a transfer to a wholly-owned subsidiary or transaction involving the merger, consolidation or sale of substantially all of the assets of the party seeking such assignment or transfer and such transaction relates to the business covered by this Agreement and the resulting entity assumes all the obligations under this Agreement.

     14.6 Independent Contractor: FAULDING shall act as an independent contractor for CUMBERLAND in providing the services required hereunder and shall not be considered an agent of or joint venturer with CUMBERLAND. Unless otherwise provided herein to the contrary, FAULDING shall furnish all expertise, labor, supervision, machining and equipment necessary for performance hereunder and shall obtain and maintain all building and other permits and licenses required by public authorities.

     14.7 Governing Law: This Agreement is subject to and shall be governed by the laws of the State of Tennessee. The parties hereby submit to the jurisdiction of the courts of the State of Tennessee in respect to all disputes arising out of or in connection with this Agreement and waive any and all objections to such venue.

     14.8 Severability: In the event that any term or provision of this Agreement shall violate any applicable statute, ordinance, or rule of law in any jurisdiction in which it is used, or otherwise be unenforceable, such provision shall be ineffective to the extent of such violation without invalidating any other provision hereof.

     14.9 Headings, Interpretation: The headings used in this Agreement are for convenience only and are not part of this Agreement.

     14.10 Conflict: In the event of conflict between the terms and provisions of this Agreement and the terms and provisions of the Manual, the terms of this Agreement shall control.

     IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be executed by their duly authorized representatives effective as of the date first above written.

CUMBERLAND PHARMACEUTICALS INC.				F.H. FAULDING & CO. LIMITED
/s/ A.J. Kazimi				/s/ Alex Bell
Authorized Signature				Authorized Signature
Printed Name				Printed Name
A.J. Kazimi				Alex Bell
Printed Name				Printed Name
				Title
CEO				V.P. Tech Ops.
Title

SCHEDULE I

DEVELOPMENT ACTIVITIES AND PRICING

Development of the Drug Product for use in Clinical Studies and for sale will consist of the following:

Product -		Amelior™. Ibuprofen for intravenous injection.
Timing -		CUMBERLAND shall provide FAULDING with non-binding forecasts of its requirements in the manner set forth in Paragraph 7.2 of this Agreement. FAULDING shall manufacture the number of batches of Drug Product corresponding to each purchase order therefor within 60 days of receipt of any such order.
Special Issues -		All product contact components must be dedicated or disposed of after use. CUMBERLAND may be present for manufacturing. The initial batches are for an FDA submission, and may subsequently be used in clinical studies or sold. FAULDING shall provide process validation (scale-up and three validation batches) in accordance with this Agreement and the Schedules thereto.
cGMP or GMP -		GMP or cGMP shall mean the current good manufacturing practices as defined from time in regulations promulgated under the Federal Food, Drug and Cosmetic Act of the United States or any successor laws or regulations governing the manufacture of the Drug Product.
Storage -

1.

FAULDING shall store and handle Bulk Drug Substance and finished Drug Product at 20E to 25E C.

Composition, Process & Container

[***]

Preparation -		Additional details regarding preparation shall be incorporated herein upon adoption thereof by written agreement of FAULDING and CUMBERLAND.
[***]
Disposal -		Method of disposal is incineration. Any disposal costs incurred by FAULDING will be charged back to CUMBERLAND; provided that CUMBERLAND shall not be required to reimburse FAULDING for such costs if the Drug Product is disposed of because of FAULDING’s negligence or breach of this Agreement. FAULDING shall prepare and provide CUMBERLAND with complete documentation of disposal throughout the chain of custody.

Documentation by FAULDING –

1.		Master batch record for review and approval by FAULDING and CUMBERLAND.
2.		Product specific validation summaries.
3.		Executed batch records.
4.		Analytical records.
5.		Inventory records.
6.		Disposal records.

Compensation -		The price to be paid by CUMBERLAND to FAULDING for the satisfactory performance of its obligations under this Agreement are as follows:
[***]

Reimbursement of Development Costs -		CUMBERLAND shall reimburse FAULDING for development costs incurred and approved as agreed by the parties.
Reimbursement of Regulatory Costs -		CUMBERLAND shall reimburse FAULDING for regulatory costs incurred and approved as agreed by the parties.
Reimbursement of Inspection and Audit Costs -		CUMBERLAND shall reimburse FAULDING for inspection and audit costs incurred and approved as agreed by the parties.

SCHEDULE II

MANUFACTURING PROJECT MANUAL

(To be expanded by mutual written consent of F.H. Faulding & Co., Limited (“FHF”) and
Cumberland Pharmaceuticals, Inc. (“CPI”))

				Responsibility
Documentation/Activity		FHF		CPI		Comments
GMP certificate and other permits		/
Active Pharmaceutical Ingredient (“API”)
Supply of API		/				CPI to identify source
Provide specifications				/
Approval of API specifications		/		/
Provide sampling and testing methods				/
Approval of sampling and testing methods		/		/
Sampling and testing		/
Release		/
Storage of samples		/
Storage of documents		/		/
Starting Materials (except API)
Supply of starting materials		/				CPI to identify arginine source
Provide specifications of starting materials				/
Approval of starting materials specifications		/		/
Providing sampling and testing methods		/
Approval of sampling and testing materials		/		/
Sampling and testing		/
Release		/
Storage of samples		/
Storage of documentation		/		/
Manufacturing Formula
Development of manufacturing formula		/		/
Approval of manufacturing formula		/		/
Processing Instructions
Development of processing instructions		/
Approval of processing instructions		/		/