Ex-10.25 Manufacturing Agreement






EXHIBIT 10.25




Page 1 of 23




* Certain portions of this exhibit have been omitted pursuant to a request for confidential

treatment which has been filed separately with the SEC.




MANUFACTURING AGREEMENT



This Manufacturing Agreement is effective as of February 6, 2008 (“Effective Date”) by and among
Bayer HealthCare, LLC, a Delaware limited liability company with an office at 12707 West Shawnee
Mission Parkway, Shawnee, KS 66216 (hereinafter “Bayer”), and Cumberland Pharmaceuticals Inc., a
Tennessee corporation, organized under the laws of Tennessee, having its principal place of
business at Nashville, TN (hereinafter “Cumberland”) and their products described herein.




WITNESSETH:




     WHEREAS, Cumberland is a manufacturer and developer of healthcare products and is the owner of
all rights to certain proprietary technical information, patents, and patent applications relating
to its products.



     WHEREAS, Bayer is a manufacturer of healthcare products and possesses the requisite expertise,
personnel, and facilities for the manufacture and supply of injectable products and is willing to
manufacture for and supply to Cumberland such products as specified in Exhibit 1 and to perform
such services described in Exhibit 1 (One Time Costs to Cumberland).



     WHEREAS, Cumberland wishes to engage Bayer and Bayer desires to accept such engagement to
perform at Bayer’s facilities certain manufacturing, packaging, labeling, and/or laboratory
services on behalf of and for the benefit of Cumberland with respect to production of its Product
(the “ Manufacturing Services”).



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




	1.	 	DEFINITIONS
	 
	 	 	For the purposes of this Agreement, the following terms shall have the meanings set forth
below:
	 
	1.1	 	Active Pharmaceutical Ingredient” shall mean the pharmacologically active agent for the
manufacture of a Product.
	 
	1.2	 	Affiliate — Any person or business entity which directly or indirectly controls, is
controlled by, or is under common control with a party to this Agreement. In this Agreement,
an Affiliate of Cumberland will include the distributor of Products. A business entity shall
be deemed to “control” another business entity, if it owns directly or indirectly, fifty
percent (50%) or more of the outstanding voting securities, capital stock, or other comparable
equity or ownership interest of such business entity, or exercises equivalent influence over
such entity. If the laws of the jurisdiction in which such entity operates prohibit ownership
by a party of fifty percent (50%) or more, “control” shall be deemed to exist at the maximum
level of ownership allowed by such jurisdiction.
	 
	1.3	 	Components — All materials (including, Active Pharmaceutical Ingredient, packaging and
shipping materials), whether produced by Bayer or procured from Cumberland or a third party
vendor, which are incorporated into the Product by Bayer in the performance of its
Manufacturing Services.
	 
	1.4	 	Cumberland Components means those “Components” which are furnished by Cumberland or by a
third party vendor on behalf of Cumberland.
	 
	1.5	 	Drug Master File shall mean the Drug Master File for manufacturing an Active Latent
Pharmaceutical Ingredient filed with the United States Food & Drug Administration, and the
equivalent filing with the governing health authority of any other country.
	 
	1.6	 	Latent Defect — Any instance where all or portion of batch of a Product fails to
conform to the




 









 











Page 2 of 23




applicable Specifications, Legal Requirements or is otherwise defective or fails to
conform to the warranties given by Bayer herein, and such failure would not be
discoverable upon reasonable physical inspection performed pursuant to Bayer’s standard
operating procedures of such Product. Product containing Latent Defects may be rejected in
accordance with the procedures set forth in Sections 2.5 and 2.6 hereof.




	1.7	 	Legal Requirements — Any present and future national, state, or local law (whether under
statute, rule, regulation, or otherwise), including, without limitation, US Federal Food, Drug
and Cosmetic Act of 1934, and the regulations promulgated there under, as the same may be
amended from time to time (the “Act”); requirements under permits, orders, decrees, judgments,
or directives; and requirements of a Regulatory Agency and any other applicable government
authorities, including without limitation Good Manufacturing Practices as promulgated by the
United States Food and Drug Administration and specified in the U.S. Code of Federal
Regulations Parts 210 and 211, as amended from time to time. The determinations of Cumberland
regarding Legal Requirements shall be dispositive for purposes of this Agreement.






	1.8	 	Process — The practices and procedures to be followed in the manufacturing, labeling,
packaging, storage, and transport of the Product, as agreed to by the parties.






	1.9	 	Product(s) — The final Product(s) that is (are) delivered by Bayer to Cumberland or
Cumberland’s designee after all Manufacturing Services have been completed by Bayer as
specified in Exhibit 1. Additional Products may be added to Exhibit 1 by mutual written
agreement signed by both parties.






	1.10	 	Quality Agreement — The certain Quality Agreement executed by the parties hereto in
connection with this Agreement.






	1.11	 	Regulatory Agency — A regulatory authority having jurisdiction over the manufacture or sale
of a Product.






	1.12	 	Specifications — The specifications set forth in the Quality Agreement, as may be amended by
Cumberland after written notice to Bayer, from time to time.
	 
	2.	 	DESCRIPTION OF SERVICES
	 
	2.1	 	Bayer will perform all Manufacturing Services described in the attached Exhibit 1 in
accordance with the terms and conditions of this Agreement and the Quality Agreement, as well
as in accordance with any manufacturing procedure adopted by written agreement of the parties
hereto after production of pilot batches (a “Master Batch Record”), as applicable, and with
all Legal Requirements. Bayer shall perform the Manufacturing Services on a timely basis so as
to meet the volume requirements of Cumberland as set forth pursuant to Article 3 below.
Without limiting the generality of the foregoing, Cumberland will, at its sole cost and
expense, obtain and maintain all Drug Master Files, licenses, permits, certifications, and
approvals from any and all Regulatory Agencies which are or may become necessary for the
lawful performance of the Manufacturing Services. Bayer shall not make any change whatsoever
in the manufacturing facilities, equipment, processes, testing procedures, validation
procedures, Specifications, materials or Components, Cumberland Components, or documentation
systems used to perform the Manufacturing Services if such change would cause any variation in
the quality or merchantability or affect any Regulatory Agency submission, license, permit,
certification, or approval required for the performance of the Manufacturing Services, either
foreign or domestic, without the prior written consent of Cumberland.
	 
	2.2	 	Bayer shall use commercially reasonable efforts to meet Cumberland’s requested delivery
dates, which shall be not more than 90 days after Bayer’s receipt of Cumberland’s purchase
orders. Requested delivery dates may be changed only by mutual written agreement. In the event
that Bayer has reason to believe that it will be unable to meet the agreed upon delivery
dates, Bayer will notify Cumberland promptly and state the reason(s) for the delay.




 









 











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In addition to all other available remedies available, Cumberland may procure products from
an alternate source in order to meet delivery dates that are unattainable by Bayer. Bayer
shall not be responsible for delays caused by carriers selected by Cumberland.




	2.3	 	Bayer warrants that all Products delivered to Cumberland or Cumberland’s designee pursuant to
this Agreement will conform to the Specifications at the time of delivery and will comply with
all Legal Requirements in effect at the time of such delivery and shall not be adulterated or
misbranded within the meaning of the Act. Bayer agrees to promptly notify Cumberland in
writing of any defects in the Products or of any defects as they relate to the manufacture
and/or supply of the Products. Bayer shall notify Cumberland and their designee within three
(3) business days of learning of any failure of any batch of Products to meet the standards
provided by Cumberland pursuant to this Agreement or as otherwise set forth in the Quality
Agreement.
	 
	 	 	EXCEPT AS PROVIDED IN THIS SECTION 2.3, BAYER MAKES NO REPRESENTATION OR WARRANTY OF ANY
KIND, EXPRESS OR IMPLIED, WITH RESPECT TO THE SUPPLY OF THE PRODUCTS, ITS MERCHANTABILITY,
OR ITS FITNESS FOR A PATICULAR PURPOSE. BAYER SHALL NOT BE LIABLE FOR ANY CONSEQUENTIAL
DAMAGES OR LOSS OF ANTICIPATED PROFITS SUSTAINED BY CUMBERLAND.






	2.4	 	If Bayer notifies Cumberland of the non-conformance of Products and Bayer is unable to
provide Products that conform to the Specifications and comply with all applicable Legal
Requirements within ninety (90) days of such notice, contingent on supply of components
including new materials, Cumberland may, without limiting any remedies available to it,
discontinue the purchase of non-conforming Products from Bayer, without any further obligation
to Bayer, and purchase replacement products from an alternate manufacturer until such time as
Bayer is able to resume production of Products with Cumberland’s approval in accordance with
the Specifications and applicable Legal Requirements, subject to depletion of any inventory on
hand that was purchased or is to be delivered pursuant to contractual commitments to purchase
such Product from the alternate source or sources. In the event Cumberland orders Product from
an alternate supplier as provided herein, Bayer shall, at Cumberland’s request, provide all
reasonable assistance requested by Cumberland to qualify an alternate supplier and supply such
alternate supplier with the necessary Active Pharmaceutical Ingredient at Bayer’s actual
manufacturing or acquisition cost. Bayer shall reimburse Cumberland on demand for the
difference between the cost of obtaining such substitute Product (plus any commercially
reasonable charges, expenses or commissions incurred by Cumberland in connection with
effecting cover, and any other reasonable expenses incident to such failure), less the price
which would have been due to Bayer for the like quantity of Product if supplied by Bayer
hereunder.






	2.5	 	Bayer shall obtain and maintain all equipment required to fulfill its obligations under this
Agreement consistent with applicable Good Manufacturing Practices. All Products are subject to
Cumberland’s inspection prior to acceptance. Cumberland shall have fifteen (15) business days
following the receipt of Products to inspect the Products for the purposes of rejecting all or
a portion of such Products if all or a portion of the Products (i) fails to conform to the
Specifications, (ii) shall not have been manufactured in compliance with then applicable Bayer
requirements, or (iii) otherwise fails to conform to the warranties set forth in this
Agreement; provided, however, that in the event there is a Latent Defect in the Products,
Cumberland shall have the right to reject all or a portion of the Products that contain such
Latent Defects following discovery thereof, subject to the requirements of Section 2.6 below.
Upon detection of any defect, Cumberland shall give notice to Bayer specifying the manner in
which all or part of such shipments fails to meet the foregoing requirements and may withhold
payment for that shipment or portion thereof which it has rejected.






	2.6	 	Upon detection of any material defect, including a Latent Defect, Cumberland shall give
notice within three (3) business days to Bayer specifying the manner in which all or part of
such shipment fails to meet the foregoing requirements and may withhold payment for that
shipment or portion thereof which it has rightfully rejected. Bayer shall have fifteen (15)
days within which to cure such defect. In the event that Cumberland rightfully rejects any
products




 









 











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and payment has already been made for such Products, Cumberland shall be entitled to recoup
the payment amount if Bayer is unable to cure such defect within the fifteen (15) day
period. In the event of any dispute between the parties as to whether Cumberland has
rightfully rejected any products, the parties shall submit such dispute to a mutually
agreed to independent laboratory. The determination by such laboratory shall be final and
binding and the costs therefor shall be borne by the non-prevailing party.




	2.7	 	Bayer shall provide all documents and updates with regard to the Product which are required
by any Regulatory Agency, and shall submit to all inquiries and inspections by any such
Regulatory Agency. All documents provided by Bayer to any Regulatory Agency with regard to the
Product shall be provided to Cumberland in advance, if feasible, and in any case within two
(2) business days after such documents are provided to any Regulatory Agency. Bayer shall
promptly notify Cumberland of all scheduled inspections of Bayer’s facilities or records by a
Regulatory Agency concerning the Product, whereupon Cumberland shall have the right to be
present for such inspection. Bayer shall provide any and all written and verbal communications
from any Regulatory Agency pertaining to or affecting the Active Pharmaceutical Ingredient or
the Product no more than two (2) business days after Bayer receives such communications,
including any summary or other record of inspectional observations or findings and all related
communications by Bayer with such Regulatory Authority. Cumberland shall have the right to
audit Bayer’s facilities or records during regular business hours on not less than seven (7)
days prior written notice by the Cumberland. Such audit shall be limited to facilities and
records pertaining to the Product.






	2.8	 	Nothing in this Agreement shall prevent Cumberland or its Affiliates from manufacturing
Product for amounts in excess of the orders for Product placed with Bayer in accordance with
this Agreement. Further, Cumberland or its Affiliates shall not be prevented from qualifying
and using sources of supply other than Bayer and securing Manufacturing Services or Product
from those other sources, as long as such activities do not interfere with the requirements of
this Agreement. In no event, however, shall Bayer disclose to any third party Cumberland
Confidential Information (as defined in Article 7 below) belonging to Cumberland, it being
understood that any information contained in the Master Batch Record does constitute
Confidential Information belonging to Cumberland.
	 
	3.	 	SUPPLY OF PRODUCT






	3.1	 	Bayer and Cumberland shall cooperate in estimating and scheduling the performance of the
Manufacturing Services and the delivery of Product to Cumberland.






	3.2	 	Within [***] days after execution of this Agreement and thereafter monthly within [***] days
of that respective month, Cumberland shall provide non-binding forecasts for Product to Bayer
by month for the immediately succeeding twelve (12) month period.






	3.3	 	Cumberland shall issue purchase orders setting forth the quantities and delivery dates at
least [***] days in advance of the requested delivery date. Bayer shall be obligated to
formulate and supply Product in accordance with quantities and delivery dates requested in the
firm orders placed by Cumberland, Bayer will procure sufficient bulk quantities to produce
product prior to or at the time a purchase order is issued.






	3.4	 	Bayer agrees to give timely notice to Cumberland of any maintenance, plant modifications, or
other event that may affect Bayer’s capacity or otherwise affect its ability to meet
forecasted quantities with sufficient advance notice to permit Cumberland to order additional
Product to meet its requirements for such periods. Bayer shall use commercially reasonable
efforts to assure that adequate capacity is available to fulfill future requirements of
Cumberland.






	3.5	 	Bayer shall use Cumberland designated carriers. In the event that a Cumberland designated
carrier is not available, Bayer may use a qualified carrier of its choice, with prior written
approval from Cumberland. Products shall be packed and shipped in accordance with Cumberland’s
instructions, good commercial practices and in compliance with all Legal
Requirements. Each shipment of Product shall be clearly marked as per Cumberland’s




 









 











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requirements. Shipment will be FOB Shawnee, Kansas. Number of shipments are limited to no
more than three (3) locations per batch quantity.




	3.6	 	Neither Bayer nor any Affiliate thereof will sell, give away, or deleiver to any other
person, firm, or corporation any form of Product for indications currently approved as of
the Effective Date while this Agreement is effective and for two years after the termination
of this Agreement.
	 
	4.	 	FEES






	4.1	 	In consideration for the services to be performed by Bayer, Cumberland will pay Bayer a
fee per unit of Product delivered to and accepted by Cumberland. The quantity and fee per
unit to be paid by Cumberland shall be as specified in the attached Exhibit 2. The quantity
and one-time costs to be paid by Cumberland shall be as spedified in the attached Exhibit
1. Regarding definition of Cumberland as described on page 1, responsibility of payment
solely resides with Cumberland.






	4.2	 	Except as otherwise provided in Exhibit 2, beginning on the [***] anniversary of the
Effective Date and on each anniversary thereafter, either Bayer or Cumberland may propose an adjustment
to the prices ser forth in Exhibit 2. Either party hereto shall notify the other party hereto
in writing of any proposed fee adjustment at least [***] days prior to implementation of any
price adjustment. Such notice shall include a cost matirx and reasonable and reasonable
justification for such fee adjustment. Fee adjustments shall be based solely on significant
changes in cost of goods or manufacturing and may not exceed the actual increases in costs
incurred by Bayer in the manufacture of the Product. In the event the fees specified by Bayer
in a notice to Cumberland pursuant to this Paragraph 4.2 represent an increase of more than
[***] over the then current fees, the parties agree to negotiate in good faith the new contract
fee based upon actual increases in Bayer’s underlying cost of providing the Manufacturing
Services. If the parties cannot agree as to the new contract fee, either party, at its
election, may terminate this Agreement, subject to the provisions of Paragraph 8.6 below, as of
a date specified which is not less than [***] months after written notice of any such
termination. Notwithstanding the foregoing, the percentage change in the then current fees
shall not exceed the appropriately adjusted reflecting the cost of living on [***] of the year
in which the fee adjustment is to become effective over and above such costs as of [***] of the
index for urban wage earners and clerical workers published by the Bureau of Labor Statistics
of the United States Department of Labor or a successor or substitute index appropriately
adjusted.








	4.3	 	In the event of any change in the Specifications requested by Cumberland, Cumberland shall
reimburse Bayer for costs actually incurred by Bayer in connection with such change,
including without limitation, one-time development costs specifically related to such
change, costs of obsolescence of raw materials, goods-in-process, packaging material
components and supplies (bulk containers and labels), and finished goods, which shall be
valued at the cost incurred by Bayer, except that finished goods inventory will be valued
at the Price pursuant to Exhibit 2 of this Agreement.






	4.4	 	All fees shall be determined on the basis of Product being delivered F.O.B. Cumberland’s
third party packager [plant location] and may be subject to change by mutual agreement of
the parties hereto after the third anniversary of the Effective Date.






	4.5	 	Fees payable by Cumberland to Bayer under this Agreement shall be due and
payable [***] days after the receipt of Bayer’s invoice and all required
accompanying documentation to be supplied by Bayer and acceptance of the
delivered Product by Cumberland. If Cumberland does not timely issue a
notice of non-conformity of the delivered Product to Bayer pursuant
to the Quality Agreement, such delivered Product shall be
considered accepted by Cumberland. Bayer will issue its invoice
only at such time as Product




 









 











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has been released pursuant to the terms and conditions of the Quality Agreement, and
only at such time as the documents specified in the Quality Agreement have been
delivered by Bayer to Cumberland. Past due invoices are subject to a late charge at
the maximum rate of 18% per annum or a minimum charge of $2.00, whichever is greater.
A 15-day grace period will apply.




	5.	 	ADVERSE EVENTS/RECALLS/WITHDRAWALS
	 
	5.1	 	Bayer shall inform Cumberland immediately of any important information relating to the
activity, side effects, toxicity, and/or safety of the Product that becomes known to Bayer
during the term of this Agreement. Furthermore, Bayer shall inform Cumberland immediately of
any defects in the manufacturing processes for the Product that becomes known to Bayer during
the term of this Agreement. Bayer agrees to carry out its obligations with respect to the
reporting of adverse drug reactions as described in the attached Exhibit 3.






	5.2	 	Cumberland shall inform Bayer immediately of any important information relating to the
activity, side effects, toxicity, and/or safety of the Product that becomes known to
Cumberland during the term of this Agreement and that is relevant to the performance of the
Manufacturing Services by Bayer. Cumberland agrees to carry out its obligation with respect to
the reporting of adverse drug reactions as described in the attached Exhibit 3.






	5.3	 	In the event that a recall or market withdrawal of a Product is required by a governmental
agency or authority of competent jurisdiction, or if a recall or market withdrawal of Product
is deemed advisable by Cumberland in its sole discretion, such recall shall be implemented and
administered in a manner which is appropriate and reasonable under the circumstances and in
conformity with any requests or orders of local Regulatory Agencies, as well as accepted trade
practices. The costs and expenses associated with the recalling or withdrawing a Product shall
be paid by Cumberland, provided, however, that if the recall or withdrawal is related to a
failure of Bayer to follow the Specifications or to any act or omission of Bayer in its
performance of the Manufacturing Services, the costs of the recall solely related to Bayer’s
failure in performance shall be borne by Bayer. In the event that a Product is recalled or
that Cumberland is required to disseminate information relating to a Product covered by this
Agreement, Cumberland shall so notify Bayer within a reasonable time so as to enable Bayer to
provide Cumberland with such assistance in connection with such recall as may reasonably be
requested by Cumberland. Bayer will comply with all such reasonable requests from Cumberland.
Cumberland shall handle exclusively the organization and implementation of all recalls of the
Product.
	 
	6.	 	INDEMNIFICATION
	 
	6.1	 	Bayer shall indemnify, defend and hold Cumberland, its Affiliates, and their respective
principals, directors, officers, employees, representatives and agents harmless from and
against any and all losses, damages, liabilities, costs and expenses (including reasonable
attorneys’ and consultants’ fees and amounts paid in settlement with the consent of Bayer,
which consent shall not be unreasonably withheld or delayed) arising from any claim, lawsuit,
or other action made, brought, or threatened against Cumberland as a result of (i) a breach or
default of this Agreement or the Quality Agreement by Bayer, or (ii) any act or omission by
Bayer in the performance of the Manufacturing Services, except to the extent such claim,
lawsuit, or other action results from any act or omission by Cumberland relating to its
performance of this Agreement. Cumberland shall inform Bayer of any such claim, lawsuit, or
other action to which this Paragraph 6.1 applies within a reasonable time after receiving
notice thereof. Cumberland shall have the right to retain, at its own expense, its own legal
counsel to defend it with respect to such claim, lawsuit, or other action and to participate
in the defense thereof, provided, however, that to the extent Bayer is obligated to indemnify
Cumberland, Bayer shall have control of the defense of the action.






	6.2	 	Cumberland shall indemnify, defend and hold Bayer, its Affiliates, and their respective
principals, directors, officers, employees, representatives and agents harmless from
and against any and all losses, damages, liabilities, costs and expenses (including reasonable




 









 











Page 7 of 23




attorneys’ and consultants’ fees and amounts paid in settlement with the consent of
Cumberland, which consent shall not be unreasonably withheld or delayed) arising from any
claim, lawsuit, or other action made, brought, or threatened against Bayer as a result of
(i) a breach or default of this Agreement or the Quality Agreement by Cumberland, or (ii)
the sale, use, or distribution of the Product by Cumberland, except to the extent such
claim, lawsuit, or other action results from any act or omission by Bayer in the performance
of the Manufacturing Services specified herein. Bayer shall inform Cumberland of any such
claim, lawsuit, or other action to which this Paragraph 6.2 applies within a reasonable time
after receiving notice thereof. Bayer shall have the right to retain, at its own expense,
its own legal counsel to defend it with respect to such claim, lawsuit, or other action and
to participate in defense thereof; provided, however, that to the extent Cumberland is
obligated to indemnify Bayer, Cumberland shall have control of the defense of such action.




	6.3	 	Bayer or Cumberland, as the case may be, will respond to all reasonable requests from the
other to assist in the disposition of any claim, lawsuit, or other action to which Paragraphs
6.1 and/or 6.2 apply.






	6.4	 	Title and risk of loss to the the in-process and released Product shall remain with Bayer
while such Product is in the possession of Bayer.
	 
	7.	 	CONFIDENTIALITY






	7.1	 	Each party may from time to time provide to the other party information (hereinafter
“Confidential Information”). For purposes of this Agreement, Confidential Information shall
not include:






	 	a.	 	information which was known to the receiving party prior to receipt from the
disclosing party, as evidenced by written records;
	 
	 	b.	 	information which was in the public domain or generally known to the trade at
the time of receipt from the disclosing party;
	 
	 	c.	 	information which enters the public domain or becomes generally known to the
trade through no fault of the receiving party;
	 
	 	d.	 	information which is disclosed to the receiving party by a third party who is
not under an obligation of confidentiality to the disclosing party;
	 
	 	e.	 	information which is independently developed by the receiving party without use
of the disclosing party’s Confidential Information, as evidenced by written records; or
	 
	 	f.	 	information which is required to be disclosed by law, regulatory,
administrative or judicial order, provide that the receiving party has provided the
disclosing party with sufficient advance notice or such disclosure to enable the
disclosing party to seek to restrict the public disclosure of such Confidential
Information.






	7.2	 	Each party’s Confidential Information shall be kept confidential by the other party and shall
not be disclosed by such other party for a period that is five (5) years from the expiration
or termination of this Agreement. Such Confidential Information shall not be disclosed by such
other party other than to its officers, employees, and agents who are engaged in its
operations relating to the Product and who have the need to know such Confidential Information
for purposes of meeting its obligations under this Agreement and the Quality Agreement. The
receiving party will only use Confidential Information of the disclosing party in the
furtherance of the purposes of this Agreement. Either party may use a discloser’s Confidential
Information for the purpose of obtaining and maintaining approvals of a Regulatory Agency or
to otherwise meet Legal Requirements with respect to Product. Notwithstanding the foregoing,
Confidential Information may be disclosed if it is required to be disclosed in
compliance withapplicable laws or regulations, subpoena, court order, or order of such
other governmental or regulatory agency having competent jurisdiction; or
either party reasonably believes that it is necessary to disclose Confidential Information
in connection with any action, suit, or proceeding before any court or any governmental or
other




 









 











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regulatory agency or body, or any arbitral panel; or any audit or investigation brought by
any governmental or other regulatory agency or body; or the assertion of any claim against
any insurer or other third party; provided, however, that reasonable measures shall be taken
to assure confidential treatment of such information. Each party recognizes that any
violation of this confidentiality provision would cause the other irreparable harm and
agrees that the other party shall be entitled, in addition to any other right or remedy it
may have, at law or in equity, to an injunction without the posting of any bond or other
security, enjoining the disclosing party, its affiliates and their respective officers,
directors, employees, and agents from any violation or potential violation of this Article
7.




	7.3	 	All new techniques, discoveries, inventions, processes, and know-how (each a “New
Development”) relating to the Product which are developed by Bayer during the performance of
this Agreement and which result from access to Cumberland or its Affiliates Confidential
Information shall be the property of Cumberland or its Affiliates. Cumberland or its
Affiliates shall grant to Bayer a nontransferable, nonexclusive, royalty-free, worldwide,
perpetual license to make, use, sell, and offer to sell such New Development(s). This
licensing shall expire upon termination of this agreement. Notwithstanding the grant of such
license, Bayer shall not use such New Development(s) of Cumberland or its Affiliates
Confidential Information to compete, or assist third parties in competing, directly or
indirectly, with Cumberland or its Affiliates in the use or sale of the Product Bayer agrees
to cooperate in the filing and prosecution of all New Development(s) patent applications filed
by Cumberland or its Affiliates, but Cumberland or its Affiliates shall bear all associated
expenses. As to New Development(s) which may be developed by Bayer during the performance of
this Agreement which relate to the Product but which do not result from access to Confidential
Information of Cumberland or its Affiliates, Bayer grants to Cumberland or its Affiliates a
nontransferable, royalty-free, irrevocable, worldwide, nonexclusive license to make, have
made, sell, or offer to sell the New Development(s) in connection with the Product.






	7.4	 	Neither party shall use the other’s name or refer to it directly or indirectly in an
advertisement, news release, or release to any professional or trade publication without
written approval from such party. The parties expressly consent to such disclosure in filings
with the Securities and Exchange Commission and the Food and Drug Administration and
analogous agencies in other countries. Cumberland or its Affiliates and Bayer agree that the
existence and contents of this Agreement shall be maintained in confidence and not disclosed
or used for any purpose without the prior written consent of each party, except as otherwise
provided herein or required by law.
	 
	7.5	 	The provisions of this Article 7 shall survive termination of this Agreement for any reason.
	 
	8.	 	TERM
	 
	8.1	 	This Agreement shall become effective on the Effective Date and, except as otherwise provided
herein, shall be in effect for an initial term of five (5) years. Thereafter, so long as this
Agreement is in force, it shall be automatically renewed for additional terms of one (1) year,
unless one party elects to terminate this Agreement by notice thereof to the other party in
writing at least six (6) months prior to expiration of the then existing term.






	8.2	 	Either party may terminate this Agreement for a material breach by the other party by giving
the breaching party written notice, specifying the breach relied on, and giving the breaching
party thirty (30) days to cure such breach. If the breaching party has not cured the default
at the end of the thirty (30) day period, then, upon notice thereof to the breaching party by
the other, this Agreement shall terminate. Termination for breach will have no effect on
obligations that have accrued up to the effective date of such termination or any obligations
that, by their terms, survive the termination of this Agreement.






	8.3	 	Cumberland shall have the right to terminate this Agreement upon thirty (30) days notice in
the event of a change of the site of manufacture of any Products to any site that has
not been approved by Cumberland. Such approval shall not be unreasonably withheld.
	 
	8.4	 	Cumberland may terminate this Agreement in the event of a change in control of Bayer. A




 









 











Page 9 of 23




change in control shall mean the occurrence of either of the following events: (i) any
“person” or “group” (as such terms are defined in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)), which is a competitor to Cumberland,
is or becomes the “beneficial owner” (as such term is used in Rule 13d-3 under the Exchange
Act) of more than fifty percent (50%) of the total voting power of Bayer (whether by
acquisition of stock, merger, or otherwise) or (ii) Bayer sells all or substantially all of
the assets utilized in connection with this Agreement. Any termination pursuant to this
Paragraph 8.4 shall be effective on the thirtieth (30th) day following the date
on which such written notice is given.




	8.5	 	In the event of any proceedings, voluntary or involuntary, in bankruptcy or insolvency, by or
against Cumberland or Bayer, or the appointment with or without the party’s consent of a
receiver for either party, or the other party makes or seeks to make a general assignment for
the benefit of its creditors or applies for or consents to the appointment of a trustee or
custodian for it or a substantial part of its property, and such situation is not cured within
thirty (30) days from its occurrence, the other party shall be entitled to terminate this
Agreement upon giving written notice.






	8.6	 	In the event of termination pursuant to this Section 8, the parties will cooperate in the
orderly transition of supply so as not to cause inconvenience to either party. Should
termination in accordance with this section 8 be initiated by Bayer, Bayer shall notify
Cumberland in writing of its desire to so terminate; provided, however, that termination by
Bayer shall not be effective until Cumberland has located and arranged for continuation of any
ongoing Manufacturing Services with another product manufacturer, so long as such termination
procedure shall not extend beyond eighteen (18) months from Bayer’s written notice of
termination to Cumberland. In the event Bayer terminates this Agreement as provided
hereunder, Bayer shall, at Cumberland’s request, provide commercially reasonable assistance
requested by Cumberland to qualify an alternate supplier. The parties will cooperate during
such period to continue the Manufacturing Services on the basis set forth in this Agreement.
In the event of notice of such early termination by Cumberland, Bayer shall perform such
functions reasonably necessary or required in connection with the orderly wind-down of the
Manufacturing Services as required by the terms of this Agreement and/or any Legal
Requirements, including any applicable Regulatory Agency regulations, and Cumberland shall pay
Bayer for the Manufacturing Services performed, under the terms and conditions of this
Agreement.






	8.7	 	Cumberland shall also have the right to terminate this Agreement upon thirty (30) days
written notice to Bayer in the event a Regulatory Agency does not approve the Product for
marketing; or a Regulatory Agency withdraws marketing approval; or Cumberland otherwise
terminates the commercial sale of Product. If Cumberland terminates pursuant to this provision
or a Regulatory Agency does not approve the Product for marketing or withdraws marketing
approval, Cumberland shall reimburse Bayer for any purchases of Components used in the
performance of the Manufacturing Services which cannot be cancelled, as well as associated
documented out-of-pocket costs incurred by Bayer in performances of Manufacturing Services.
The reimbursement shall be made within thirty (30) days following receipt by Cumberland of an
invoice itemizing the costs of such Components and Manufacturing Services. Bayer agrees to
transfer to Cumberland any Components paid for by Cumberland under this provision. Termination
under this provision shall have no effect on payment obligations that otherwise may have
accrued up to the effective date of termination.
	 
	9.	 	COMPLIANCE WITH APPLICABLE LAW






	9.1	 	During the term of this Agreement, Bayer and all its subcontractors, employees, agents,
representatives, and invitees shall comply with all applicable laws, governmental regulations,
rules, requirements, ordinances, and other requirements of federal, state, and local
authorities. Bayer is not authorized to take any action in the name of or otherwise on behalf
of Cumberland which would violate any of the foregoing.






	9.2	 	Bayer represents and warrants that at the time of submission of its proposal for the
performance of the Services, it was and remains properly licensed and qualified to do business
in all jurisdictions in which the Services are to be performed, and agrees that it will
maintain such licenses and qualifications and acquire any additional licenses and




 









 











Page 10 of 23




qualifications as may be thereafter required by law or otherwise. If any licenses required
by law are revoked or altered, Bayer shall immediately notify Cumberland.




	9.3	 	Bayer represents and warrants that it has not and has never been, nor has any of its
employees, agents, or subcontractors who may provide services under this Agreement ever been
debarred or, to the best of its knowledge, (i) convicted of a crime for which a person or
entity can be debarred, under Section 306(a) or 306(b) of the United States Generic Drug
Enforcement Act of 1992 or under 42 USC Section 1320a-7, or (ii) sanctioned by, suspended,
excluded, or otherwise ineligible to participate in any federal health care program, including
Medicare and Medicaid, or in any federal procurement or non-procurement programs.
	 
	9.4	 	Bayer agrees:






	 	a.	 	to comply with the equal employment opportunity and affirmative action
provision of: (1) Executive Order 11246, as amended and U.S. Dept. of Labor
regulations issued pursuant thereto (41 CFR 60); (2) Section 503 of the Rehabilitation
Act of 1973 (29 U.S.C. 793), as amended; and U.S. Dept. of Labor regulation issued
pursuant thereto (41 CFR 60-741), in contracts for $2500 or more; and (3) Section 402
of the Vietnam Era Veterans Readjustment Assistance Act of 1974 (38 U.S.C. 2012), and
U.S. Dept. of Labor regulations pursuant thereto (41 CFR 60-250), in
contracts for $10,000 or more; Title VII of Civil Rights of 1964, 78 Stat. 253, as
amended, and regulations issued pursuant thereto.






	10.	 	INSURANCE






	 	a.	 	Each Party shall obtain and maintain insurance coverage against such
liability in limits provided in Exhibit 4. Each Party stipulates that it will use
its best efforts such that the insurance will not be cancelled while this Agreement is
in effect without thirty (30) days prior written notice to the other Party. Each Party
shall maintain such insurance during the Term and thereafter for so long as it
customarily maintains insurance for itself for similar products and activities. Each
Party shall use its best efforts so that the other Party is named as an additional
insured under the Product Liability policy and shall provide the other Party proof of
such insurance upon request. Each party shall use its best efforts to provide
reasonable notice to the Party listed as additional insured on its Product Liability
Policy of any cancellation, termination, or change in such insurance, such prior
written notice to be no less than thirty (30) days of any such change. Each Party
shall obtain and maintain product liability insurance coverage against such liability
in limits provided in Exhibit 4. Each Party stipulates that the insurance will not
be cancelled while this Agreement is in effect without thirty (30) days prior written
notice to the other Party.






	11.	 	MISCELLANEOUS
	 
	11.1	 	Except as provided in Paragraph 7.3, nothing in this Agreement will be deemed or construed as
providing either party any right, title, interest, or license in or under any intellectual
property right owned or controlled by the other party.
	 
	11.2	 	Modifications and amendments to this Agreement and its Exhibits require the written consent
of both parties.
	 
	11.3	 	No waiver of any requirement of this Agreement, whether by conduct or otherwise, will be
effective unless in writing. The waiver in any one or more instances will not be deemed or
construed to be a further or continuing waiver of any such requirement or of any other
requirement of this Agreement.
	 
	11.4	 	The provisions of this Agreement shall be deemed separate. Accordingly, the invalidity,
illegality, or unenforceability of any particular provision of this Agreement shall not in any
way affect or impair the other provisions, and this Agreement shall be construed in all
respects as if such invalid, illegal, or unenforceable provision were omitted, except in cases
where such unenforceable provision is a basic requirement of any party or both parties to




 









 











Page 11 of 23




enter into this Agreement.




	11.5	 	Any notice required or permitted to be given hereunder will be deemed sufficient if delivered
by hand or sent by overnight courier to the parties at the addresses set forth below, or such
other addresses as either party may designate. Notice will be deemed given when received.




If to Bayer, to:



Dr. Detlef Mathes

VP of Operations

12707 West Shawnee Mission Parkway

Shawnee, KS 66216



with a courtesy copy, which shall not constitute notice hereunder, sent to:



Cynthia Hughes-Coons

Assistant General Counsel

12707 West Shawnee Mission Parkway

Shawnee, KS 66216



If to Cumberland, to:



Cumberland Pharmaceuticals Inc.

2525 West End Avenue

Suite 950

Nashville, TN 37203

Attn A.J. Kazimi



with a courtesy copy, which shall not constitute notice hereunder, sent to:



Adams and Reese LLP

424 Church Street

Suite 2800

Nashville, TN 37219

Attn. Martin S. Brown, Jr.





	11.6	 	Neither party will assign this Agreement, or subcontract any of its obligations hereunder, to
any other person or entity other than to one or more Affiliates, without the prior written
consent of the other party, which consent will not be unreasonably withheld; however, in the
event of any assignment or subcontract, the party effecting such assignment or subcontract
shall guarantee the performance of the assignee or subcontractor in a form satisfactory to the
other party. Notwithstanding the foregoing, either party may, without such written consent,
assign this Agreement, and its rights and objections hereunder, in connection with the
transfer or sale of all or substantially all of its business or part of its business to which
this Agreement pertains, or in the event of its merger or consolidation or change in control
or similar transaction, provided the permitted assignee shall have assumed all obligations of
the assignor under this Agreement.






	11.7	 	This Agreement will be binding upon and inure to the benefit of the permitted successors or
permitted assigns of Bayer and Cumberland.
	 
	11.8	 	This Agreement shall be construed, interpreted, and applied in accordance with the laws of
the State of New York ,without reference to it conflict of laws provisions.









	11.9	 	Product labeling (primary, secondary, and insert) and filings with a Regulatory Agency may
indicate that the Product has been manufactured for Cumberland by Bayer. Except when Legal
Requirements mandate or when necessary to seek the approval of any Regulatory Agency,




 









 











Page 12 of 23




neither party shall make any other use of the other party’s name without the other party’s
prior written approval.




	11.10	 	If either of Bayer or Cumberland is impeded in fulfilling its undertakings in accordance
with this Agreement due to any cause beyond the reasonable control of Bayer or Cumberland, as
the case may be, such as, but not limited to fires, flood, earthquakes, lightening strike,
acts of God, catastrophic accident, terrorism, war, mobilization or unforeseen military
call-up of a large magnitude, requisition, confiscation, commandeering, public decrees, acts,
restraints, regulations or directions of governmental authorities, riots, insurrections,
general shortage of transport, goods, or energy and faults or delays in deliveries from
subcontractor or supplier caused by any circumstances referred to in this Paragraph 11.10, the
impediment shall be considered a Force Majeure, and the party shall be exempted from liability
for delays due to such reasons, provided always that it notified the other party thereof
without undue delay after such a circumstance has occurred. Upon such notification, Bayer and
Cumberland shall agree upon a reasonable extension of the delivery time, not to exceed two (2)
months. If, after two (2) months following notification of the Force Majeure condition, such
condition persists, Cumberland may cancel the purchase orders affected by the Force Majeure
condition. Notwithstanding any of the foregoing, if any extension of the delivery time causes
hardship to Cumberland in the maintenance of its business, Cumberland may purchase its
Products requirements during such extension period from a third party as provided above.






	11.11	 	Neither party shall have the right to control the activities of the other in the performance
of this Agreement, and each shall perform as an independent contractor, and nothing herein
shall be construed to be inconsistent with that relationship or status. Under no circumstances
shall the employees or agents of one party be considered employees or agents of the other.
This Agreement shall not constitute, create, or in any way be interpreted as a joint venture,
partnership, or formal business organization of any kind.






	11.12	 	This Agreement, together with its attached Exhibits and the Quality Agreement and the
Services Agreement dated February 6, 2008, constitutes the entire agreement between Bayer and
Cumberland with respect to the Manufacturing Services to be performed by Bayer. The
requirements of this Agreement supersede all prior understandings and agreements, whether oral
or written, all terms and conditions contained within any purchase order, acknowledgement,
invoice, or other agreement between Bayer and Cumberland with respect to the Manufacturing
Services. Other terms and conditions not inconsistent with the terms and conditions of this
Agreement covering Products to be supplied under this Agreement will be provided in purchase
orders and releases issued by Cumberland and in order acknowledgements and invoices issued by
Bayer. In the event of a conflict between the terms and conditions of any of these documents,
including the Quality Agreement, Bayer and Cumberland agree to negotiate in good faith to
resolve such differences, unless such terms conflict with the terms of this Agreement, in
which case the terms of this Agreement shall control.






	11.13	 	Bayer and Cumberland covenant and agree that subsequent to the execution and delivery of
this Agreement and without any additional consideration, each of Bayer and Cumberland shall
execute and deliver any further legal instruments and perform such acts which are or may
become necessary to effectuate the purposes of this Agreement.






	11.14	 	Bayer and Cumberland agree to use their best efforts to resolve any and all disputes arising
out of or relating to this Agreement. If after thirty (30) days following receipt of notice by
one party from the other of a dispute under this Agreement, the parties are unable to resolve
the dispute, then the matter shall be fully and finally resolved in a court of law.






	11.15	 	The heading of the Articles and Paragraphs used in this Agreement are included for
convenience only and are not to be used in construing or interpreting this Agreement.






	11.16	 	This Agreement may be executed in any number of counterparts, each of which will be deemed
an original, but all of which together will constitute one and the same instrument. Bayer and
Cumberland may rely upon facsimile signatures as binding execution of this Agreement and the
instruments contemplated hereby. Each of Bayer and Cumberland shall promptly send originally
executed versions of any documents or instruments bearing facsimile signatures to the other
party




 









 











Page 13 of 23




for record keeping purposes.



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



BAYER HEALTHCARE, LLC




Signature: /s/ Dr. Detlef Mathes




Name: Dr. Detlef Mathes




Title: Vice President of Operations




Cumberland




Signature: /s/ A.J. Kazimi




Name: A.J. Kazimi




Title: Chief Executive Officer




 









 





Page 14 of 23




Exhibits




Exhibit 1       Description of Manufacturing Services and One Time Costs




Exhibit 2       Quantities and Prices per Unit of Product




Exhibit 3       Procedures for the Reporting of Adverse Drug Reactions




Exhibit 4       Minimum Insurance Requirements




 









 





Page 15 of 23




EXHIBIT 1

DESCRIPTION OF MANUFACTURING SERVICES AND ONE TIME COSTS



In the event that improved technology relating to Manufacturing Services production or costs
(hereinafter “Improvements”) becomes known and available to Cumberland, then Cumberland may request
Bayer to investigate the feasibility of incorporating such Improvements into the Bayer’s
production. Improvements are defined as quantifiable advantages in economic, functional, or quality
traits, and may include, but are not limited to, measurable improvements in Product integrity or
quality, efficiencies in production, consumer satisfaction, or reduced costs. Bayer and Cumberland
shall use their best efforts to implement cost, quality, and cycle time improvements. Cumberland
shall bear the costs of such investigation and incorporation of improvements in to Bayer’s
production.



Project Scope Document



Cumberland.



Annual Quantities: See Exhibit 2



Bayer and Cumberland are to perform the following services related to product development/product
transfer activities:





	 	•	 	Bayer to perform necessary scale up/engineering batch, demonstration batching to move
product to commercial manufacturing.
	 
	 	•	 	Bayer to source all materials required to perform scale up/product transfer and begin
to qualify all excipient materials.
	 
	 	•	 	Cumberland to provide and Bayer to transfer lab methods required to support scale up
and engineering batch production and cleaning validation.
	 
	 	•	 	Bayer to produce Cumberland recommended and mutually agreed upon amount and scale of
validation batches and prepare specified number of stability samples (if required).
	 
	 	•	 	Bayer to develop validation documents and circulate for Cumberland approval and execute
protocols.
	 
	 	•	 	Bayer to develop stability program protocols (if required), circulate for Cumberland
approval and execute protocols.
	 
	 	•	 	Bayer to prepare final reports for validation and stability activities and provide to
Cumberland for inclusion in the regulatory submission, as appropriate.
	 
	 	•	 	Cumberland will advise if any tight container testing is required. Bayer may develop
the protocols, for a fee, and perform that testing.
	 
	 	•	 	Cumberland will decide and perform any leechable or extractable testing required for
in-process or finish product containers.




Bayer to perform the following services related to commercial batch production:





	 	•	 	Based on issuance of a purchase order by Company, manufacture commercial batch
quantities of Product.
	 
	 	•	 	Develop material specifications for all materials, identify suppliers of materials,
procure materials and manage material inventory levels (based on forecasts).
	 
	 	•	 	Using transferred laboratory methods for product engineering batch production/scale up
activities perform incoming material testing, in-process testing and final release
testing. Based on this testing a certificate of analysis will be issued, along with copy
of batch records, to Cumberland on a per batch basis.
	 
	 	•	 	Per batch, retained samples will be maintained and held by Bayer.
	 
	 	•	 	Develop ongoing sampling protocols for stability program and maintain samples (if
required)
	 
	 	•	 	Maintain waste material and Health and Environmental Saftey (“HES”) reporting for
ongoing production requirements.




 









 











Page 16 of 23





	 	•	 	Provide Cumberland audit access to manufacturing area and documents related to the
production of their product(s).
	 
	 	•	 	Ship lot quantities of finished and released vials to Cumberland, single point
location. Shipment will be FOB Shawnee, KS using the carrier/method of choice from
Cumberland.




Bayer will not provide the following support activities:





	 	•	 	Assistance in the recommendation for the components or facilitate the actual submission
of regulatory documents.
	 
	 	•	 	Assume the commercial viability of this formulation and/or packaging configuration of
this product in the marketplace, except as otherwise set forth in the Manufacturing
Agreement.
	 
	 	•	 	Performance/assurance of the product regarding scalability. Cumberland is requested to
be present, support and approve all follow up Bayer scale up activities and share in
accepted performance (and costs) of the product during those scale up activities.
	 
	 	•	 	Assure the accuracy/reliability of original laboratory methods.
	 
	 	•	 	Support or make claims about the placement of this product in the marketplace.





One Time Costs:



See Attachment I for Ibuprofen Inj One-Time Costs

See Attachment II for Acetadote Inj One-Time Costs



Both One-Time Costs have been readjusted to account for the reduced Acetylcysteine unit price.
Both contain the manufacturing/ filling cost for one engineering feasibility study. A second
engineering/ feasibility study for either product would cost:



Ibuprofen Inj: [***]

Acetadote Inj: [***]





 









 








Page 17 of 23




ATTACHMENT I




	 	 	 
	Cumberland Pharmaceuticals, Inc.
	 	 
	 
	 	 
	One Time Costs — Ibuprofen Inj

	 	9/7/2007
	 
	 	 
	[***]
	 	 






 









 






Page 18 of 23



[***]





 









 








Page 19 of 23




ATTACHMENT II




	 	 	 
	Cumberland Pharmaceuticals, Inc.
	 	 
	 
	 	 
	One Time Costs — Acetadote Inj.

	 	9/7/2007
	 
	 	 
	[***]
	 	 






 









 






Page 20 of 23



[***]




 









 








Page 21 of 23




EXHIBIT 2

QUANTITIES AND PRICES PER UNIT OF PRODUCT







	 	 	 	 	 	 	 
	Ibuprofen Inj.

	 	[***]
	 	Total Cost Per Vial
	 	[***]
	 

	 	[***]
	 	Total Cost Per Vial
	 	[***]
	Acetadote Inj.

	 	[***]
	 	Total Cost Per Bottle
	 	[***]
	 

	 	[***]
	 	Total Cost Per Bottle
	 	[***]





Minimum Commercial Volumes:



The pricing listed above for Acetadote is based on Cumberland’s
purchase of a minimum of [***] batches of Acetadote on an [***] basis. The pricing listed
above for Ibuprofen Inj. is based on Cumberland’s purchase of a minimum of [***] batches of [***]
mL vials and [***] batches of [***] mL vials on an annual basis.



In the event Cumberland does not meet the minimum annual commercial Volume requirments, Bayer shall
provide Cumberland an invoice within [***] days of year end that shall include a fee adjustments on
the pricing listed above. This fee adjustment shall be based the actual increases in costs
incurred by Bayer in the manufacture of the Product. If Cumberland fails to meet the minimum
commercial volumes for [***] Bayer at its election, may terminate this Agreement
subject to the provisions of Paragraph 8.6.






 









 








Page 22 of 23




EXHIBIT 3




PROCEDURES FOR REPORTING OF ADVERSE DRUG REACTIONS




(See Quality Agreement)





 









 








EXHIBIT 4




MINIMUM INSURANCE REQUIREMENTS





	1.0	 	Commercial General Liability Insurance:





Bayer and Cumberland shall each maintain a policy or policies of commercial general liability
insurance with the premiums thereon paid on or before the due dates, issued by and binding upon a
solvent insurance company authorized to transact business in the state where the insured party
resides. Such insurance shall be written on an occurrence basis and shall afford minimum
protection (which may be affected by primary and/or excess coverage) of not less than $2 million
per occurrence for bodily injury and property damage.




	2.0	 	Workers’ Compensation





Bayer and Cumberland shall maintain Statutory Coverage for Workers’ Compensation.




	3.0	 	Product Liability





Bayer and Cumberland shall maintain Product Liability Insurance [***] Each Occurrence and in the
Aggregate



     4. Basis of Insurance:




	4.1	 	All policies, other than for Product Liability, shall be issued on an “occurrence” basis
unless such coverage is not available on commercially reasonable terms. Where insurance is on
a “Claims Made” basis, each Party shall maintain the coverage until the later of the
expiration of three years after the manufacture of the final batch of Product by Bayer or of
all applicable statutes of limitations. Each Party shall list the other Party as an
additional insured.






	4.2	 	The Product Liability policy shall be issued on a ”Claims Made” basis. Each Party shall
maintain the Product Liability coverage until the later of the expiration of three years after
the manufacture of the final batch of Product by Bayer or the applicable statute of
limitations.






	4.3	 	Bayer reserves the right to self-insure for any and all coverages.