Document:

EX-4.4 WARRANT TO PURCHASE COMMON STOCK

 

EXHIBIT 4.4

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. SUCH SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT COVERING
SUCH SECURITIES UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
SUCH REGISTRATION IS NOT REQUIRED.

	 	 	 
	Warrant No. W — 3

	 	Number of Shares — 1,979
	Date of Issuance: April 6, 2006

	 	(subject to adjustment)

WARRANT TO PURCHASE

COMMON STOCK OF

CUMBERLAND PHARMACEUTICALS, INC.

(Void after April 6, 2016)

     THIS WARRANT TO PURCHASE COMMON STOCK OF CUMBERLAND PHARMACEUTICALS, INC. (the
“Warrant”) is issued as of this 6th day of April, 2006, by CUMBERLAND PHARMACEUTICALS,
INC., a Tennessee corporation, having a place of business at 2525 West End Avenue, Suite 950,
Nashville, Tennessee 37203 (the “Company”), to BANK OF AMERICA, N.A., a national banking
association (Bank of America, N.A. and any subsequent assignee or transferee hereof are hereinafter
referred to collectively as the “Holder”).

AGREEMENT:

     For and in consideration of the Holder making available to the Company (i) a revolving credit
facility in the maximum principal amount of Four Million and No/100ths Dollars ($4,000,000.00) (the
“Line of Credit”) and (ii) a term loan facility in the original principal amount of Five
Million Five Hundred Thousand and No/100ths Dollars ($5,500,000) (the “Term Loan”
and together with the “Line of Credit”, the “Loans”) pursuant to the terms of (i) a
Fourth Amended and Restated Promissory Note (Revolving) of even date herewith in the maximum
principal amount of Four Million and No/100ths Dollars ($4,000,000) (together with any and all
extensions, modifications, replacements and renewals thereof, the “Line of Credit Note”),
(ii) Secured Term Promissory Note of even date herewith in the original principal amount of Five
Million Five Hundred Thousand and No/100ths Dollars ($5,500,000) (together with any and all
extensions, modifications, replacements and renewals thereof, the “Term Note”; and together
with the Line of Credit Note, the “Notes”) and (iii) a Second Amended and Restated Loan
Agreement of even date herewith (as amended, supplemented or otherwise modified from time to time,
the “Loan Agreement”; any capitalized terms used but not otherwise defined herein shall
have the same meanings as in the Loan Agreement), and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company hereby grants to the Holder
the right to purchase from the Company at a per share price equal to $18.00 (the “Exercise
Price”), 1,979 shares of the Company’s common stock, $0 par value per share (the “Common
Stock”), at any time or from time to time, from April 6, 2006 up to and including 5:00
p.m. (Central time) on April 6, 2016 (the “Expiration Date”), upon surrender to the
Company at its principal office (or at such other location as the Company may advise the Holder in
writing) of this Warrant properly endorsed with the Notice of Exercise attached hereto as
Exhibit A, duly

 

 

completed and signed and, if applicable, upon payment in cash or by check
acceptable to the Company of the aggregate Exercise Price for the number of shares for which this
Warrant is being exercised determined in accordance with the provisions hereof. The Exercise Price
and the number of shares purchasable hereunder are subject to adjustment as provided in Section
3 of this Warrant.

     This Warrant is subject to the following terms and conditions:

     1. Exercise; Issuance of Certificates; Payment for Shares.

          1.1 General. This Warrant is exercisable at the option of the Holder, at any time or from
time to time, from the date of the issuance of this Warrant up to the Expiration Date, for all or
any part of the shares of Common Stock (but not for a fraction of a share) that maybe purchased
hereunder. The Company agrees that the shares of Common Stock purchased under this Warrant shall be
and are deemed to be issued to the Holder as the record owner of such shares as of the close of
business on the date on which this Warrant shall have been surrendered to the Company, properly
endorsed, the completed, executed Form of Subscription shall have been delivered and any required
payment made for such shares. Certificates for the shares of Common Stock so purchased, together
with any other securities or property to which the Holder is entitled upon such exercise, shall be
delivered to the Holder by the Company at the Company’s expense within a reasonable time after the
rights represented by this Warrant have been so exercised. In case of a purchase of less than all
of the shares that may be purchased under this Warrant, the Company shall cancel this Warrant and
execute and deliver a new Warrant or Warrants of like tenor for the balance of the shares
purchasable under the Warrant surrendered upon such purchase to the Holder within a reasonable
time. Each stock certificate so delivered shall be in such denominations of Common Stock as may be
requested by the Holder and shall be registered in the name of such Holder.

          1.2 Net Issue Exercise. Notwithstanding any provisions herein to the contrary, if the Fair
Market Value of one share of the Company’s Common Stock is greater than the Exercise Price (at the
date of calculation as set forth below), in lieu of exercising this Warrant for cash, the Holder
may elect to receive shares equal to the value (as determined below) of this Warrant (or the
portion thereof being canceled) by surrender of this Warrant at the principal office of the Company
together with the properly endorsed Form of Subscription and notice of such election in which event
the Company shall issue to the Holder a number of shares of Common Stock computed using the
following formula:

X=Y(A-B)

        A

     Where X = the number of shares of Common Stock to be issued to the Holder

     Y = the number of shares of Common Stock purchasable under the Warrant or, if only a
portion of the Warrant is being exercised, the portion of the Warrant being canceled (at the
date of such calculation)

     A = the Fair Market Value of one share of the Company’s Common Stock (at the date of
such calculation)

 

 

     B = Exercise Price (as adjusted to the date of such calculation)

     The “Fair Market Value” of a share of Common Stock as of a particular date shall mean: (a) if
there is an active public market for the Company’s Common Stock at the time of such exercise, the
fair market value per share shall be the average of the closing prices of the Common Stock of the
Company over the five (5) trading days ending immediately prior to the applicable date of valuation
if traded on a securities exchange or the Nasdaq National Market; or, if actively traded
over-the-counter, the average of the closing bid prices over the 30-day period ending immediately
prior to the applicable date of valuation, whichever is applicable; or (b) if there is no active
public market for the Company’s Common Stock at the time of such exercise, the Fair Market Value
shall be the value thereof as determined in good faith by the board of directors of the Company
(the “Determination”). The board of directors shall provide to the Holder a written notice
of the Determination which notice shall set forth supporting data in respect of such calculation
(the “Determination Notice”). Holder shall have 10 days following receipt of the
Determination Notice within which to deliver to the Company a written notice of an objection, if
any, to the Determination. The failure by Holder to deliver such notice within such 10-day period
shall constitute the Holder’s acceptance of the Determination as conclusive. In the event of the
timely delivery by Holder of its objection notice, the Company and the Holder shall attempt in good
faith to arrive at an agreement with respect to the Fair Market Value of a share of Common Stock of
the Company, which agreement shall be set forth in writing within 15 days following delivery of
such objection notice by Holder. If the Company and the Holder are unable to reach an agreement
within such 15-day period, the matter shall be promptly referred for determination to a regionally
or nationally recognized investment banking or valuation firm (the “Valuer”) reasonably
acceptable to the Company and the Holder. The Company and the Holder will cooperate with each
other in good faith to select such Valuer. The Valuer may select the Determination or may select
any other number or value. The Valuer’s selection will be furnished to the Company and the Holder
in writing and be conclusive and binding upon the parties and shall not be subject to collateral
attack. The fees and expenses of the Valuer shall be borne by the Company unless the Valuer’s
determination of Fair Market Value per share of the Company’s Common Stock is within 10% of the
Determination, in which case the Valuer’s fees and expenses shall be borne by the Holder.

Notwithstanding the foregoing, in the event the Warrant is exercised in connection with the
Company’s initial public offering of Common Stock, the fair market value per share shall be the per
share offering price to the public of the Company’s initial public offering.

     2. Shares to be Fully Paid; Reservation of Shares. The Company covenants and
agrees that all shares of Common Stock that may be issued upon the exercise of the rights
represented by this Warrant will, upon issuance, be duly authorized, validly issued, fully paid and
nonassessable and free from all preemptive rights of any stockholder and free of all taxes, liens
and charges with respect to the issuance thereof. The Company further covenants and agrees that
during the period within which the rights represented by this Warrant may be exercised, the Company
will at all times have authorized and reserved, for the purpose of issue or transfer upon exercise
of the subscription rights evidenced by this Warrant, a sufficient number of shares of authorized
but unissued Common Stock, or other securities and property, when and as required to provide for
the exercise of the rights represented by this Warrant. The Company will take all such action as
may be necessary to assure that such shares of Common Stock may be

 

 

issued as provided herein without violation of any applicable law or regulation, or of any
requirements of any domestic securities exchange upon which the Common Stock may be listed;
provided, however, that the Company shall not be required to effect a registration under federal or
state securities laws with respect to such exercise. The Company will not take any action which
would result in any adjustment of the Exercise Price (as set forth in Section 3 hereof) if
the total number of shares of Common Stock issuable after such action upon exercise of all
outstanding warrants, together with all shares of Common Stock then outstanding and all shares of
Common Stock then issuable upon exercise of all options and upon the conversion of all convertible
securities then outstanding, would exceed the total number of shares of Common Stock then
authorized by the Company’s charter, as amended.

     3. Adjustment of Exercise Price and Number of Shares. The Exercise Price and
the number of shares purchasable upon the exercise of this Warrant shall be subject to
adjustment from time to time upon the occurrence of certain events described in this Section
3. Upon each adjustment to the Exercise Price, the Holder shall thereafter be entitled to
purchase, at the Exercise Price resulting from such adjustment, the number of shares obtained by
multiplying the Exercise Price in effect immediately prior to such adjustment by the number of
shares purchasable pursuant hereto immediately prior to such adjustment, and dividing the product
thereof by the Exercise Price resulting from such adjustment.

          3.1 Subdivision or Combination of Stock. In case the Company shall at any time subdivide its
outstanding shares of Common Stock into a greater number of shares, the Exercise Price in effect
immediately prior to such subdivision shall be proportionately reduced, and conversely, in case the
outstanding shares of Common Stock of the Company shall be combined into a smaller number of
shares, the Exercise Price in effect immediately prior to such combination shall be proportionately
increased.

          3.2 Dividends in Common Stock, Other Stock, Property, Reclassification. If at any time or from
time to time. the holders of Common Stock shall have received or become entitled to receive,
without further payment therefor,

               (a) Common Stock or any shares of stock or other securities that are at any time directly or
indirectly convertible into or exchangeable for Common Stock, or any rights or options to subscribe
for, purchase or otherwise acquire any of the foregoing by way of dividend or other distribution,

               (b) any cash paid or payable otherwise than as a cash dividend, or

               (c) Common Stock or additional stock or other securities or property
(including cash) by way of spinoff, split-up, reclassification, combination of shares or
similar corporate rearrangement (other than shares of Common Stock issued as a stock split or
adjustments in respect of which shall be covered by the terms of Section 3.1 above), then
and in
each such case, the Holder shall, upon the exercise of this Warrant, be entitled to receive,
in addition to the number of shares of Common Stock receivable thereupon, and without payment of
any additional consideration therefor, the amount of stock and other securities and property
(including cash in the cases referred to in clause (b) above and this clause (c)) that Holder would
hold on the date of such exercise had Holder been the holder of record of such Common Stock as of
the date on which holders of Common Stock received or became entitled to receive such

 

 

shares or all other additional stock and other securities and property.

          3.3 Reorganization, Reclassification, Consolidation, Merger or Sale. If
any recapitalization, reclassification or reorganization of the capital stock of the Company,
or any consolidation or merger of the Company with another company, or the sale of all or
substantially all of its assets or other transaction shall be effected in such a way that holders
of Common Stock shall be entitled to receive stock, securities or other assets or property (an
“Organic Change’’), then, as a condition of such Organic Change, lawful and adequate
provisions shall be made by the Company whereby the Holder thereafter shall have the right to
purchase and receive (in lieu of the shares of the Common Stock of the Company immediately
theretofore purchasable and receivable upon the exercise of the rights represented hereby) such
shares of stock, securities or other assets as may be issued or payable with respect to or in
exchange for a number of outstanding shares of such Common Stock equal to the number of shares of
such stock immediately theretofore purchasable and receivable upon the exercise of the rights
represented hereby. In the event of any Organic Change, appropriate provision shall be made by the
Company with respect to the rights and interests of the Holder to the end that the provisions
hereof (including, without limitation, provisions for adjustments of the Exercise Price and of the
number of shares purchasable and receivable upon the exercise of this Warrant) shall thereafter be
applicable, in relation to any shares of stock, securities or assets thereafter deliverable upon
the exercise hereof. The Company will not effect any such Organic Change unless, prior to the
consummation thereof, the successor company (if other than the Company) resulting from such
consolidation or the company purchasing such assets shall assume by written instrument reasonably
satisfactory in form and substance to the Holder, executed and mailed or delivered to the
registered Holder at the last address of such Holder appearing on the books of the Company,
the obligation to deliver to such Holder such shares of stock, securities or assets as, in
accordance with the foregoing provisions, such Holder may be entitled to purchase.

          3.4 Certain Events. If any change in the outstanding Common Stock of the
Company or any other event occurs as to which the other provisions of this Section 3
are not strictly applicable or if strictly applicable would not fairly protect the purchase rights
of the Holder of the Warrant in accordance with such provisions, then the Board of Directors of
this Company shall make an adjustment in the number and class of shares available under the
Warrant, the Exercise Price or the application of such provisions, so as to protect such purchase
rights as aforesaid. The adjustment shall be such as will give the Holder, upon exercise for the
same aggregate Exercise Price, the total number, class and kind of shares as the Holder would have
owned had the Warrant been exercised prior to the event and had the Holder continued to hold such
Common Stock until after the event requiring adjustment.

     4. Issue Tax. The issuance of certificates for shares of Common Stock upon the exercise of
the Warrant shall be made without charge to the Holder for any issue tax (other than any applicable
income taxes) in respect thereof; provided, however, that the Company shall not be required to pay
any tax that may be payable in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than that of the then Holder of the Warrant being exercised.

     5. Closing of Books. The Company will at no time close its transfer books against the
transfer of any warrant or of any shares of Common Stock issued or issuable upon the exercise of
any warrant in any manner which interferes with the timely exercise of this Warrant.

 

 

     6. No Voting or Dividend Rights; Limitation of Liability. Nothing contained in this Warrant
shall be construed as conferring upon the Holder the right to vote or to consent or to receive
notice as a stockholder of the Company or any other matters or any rights whatsoever as a
stockholder of the Company. Except as set forth in Section 3.2 hereof, no dividends or
interest shall be payable or accrued in respect of this Warrant or the interest represented hereby
or the shares purchasable hereunder until, and only to the extent that, this Warrant shall have
been exercised. No provisions hereof, in the absence of affirmative action by the Holder to
purchase shares of Common Stock, and no mere enumeration herein of the rights or privileges of the
Holder, shall give rise to any liability of such Holder for the Exercise Price or as a stockholder
of the Company, whether such liability is asserted by the Company or by its creditors.

     7. Rights and Obligations Survive Exercise of Warrant. The rights and obligations of the
Company, of the Holder and of the holder of shares of Common Stock (or other shares of stock,
securities or assets) issued upon exercise of this Warrant shall survive the exercise of this
Warrant.

     8. Amendments.

     9. Notices.

               (a) Whenever the Exercise Price or number of shares purchasable hereunder shall be adjusted
pursuant to Section 3 hereof, the Company shall issue a certificate signed by its Chief
Financial Officer setting forth, in reasonable detail, the event requiring the adjustment, the
amount of the adjustment, the method by which such adjustment was calculated and the Exercise Price
and number of shares purchasable hereunder after giving effect to such adjustment, and shall cause
a copy of such certificate to be mailed (by first-class mail, postage prepaid) to the Holder.

               (b) In case:

     (i) the Company shall take a record of the holders of its Common Stock
(or other stock or securities at the time receivable upon the exercise of
this Warrant) for the purpose of entitling them to receive any dividend or
other distribution, or any right to subscribe for or purchase any shares of
stock of any class or any other securities, or to receive any other right,
or

     (ii) of any capital reorganization of the Company, any reclassification
of the capital stock of the Company, any consolidation or

 

 

merger of the Company with or into another company, or any conveyance of all
or substantially all of the assets of the Company to another company, or

     (iii) of any voluntary dissolution, liquidation or winding-up of the
Company,

then, and in each such case, the Company will mail or cause to be mailed to the Holder or Holders a
notice specifying, as the case maybe, (A) the date on which a record is to be taken for the purpose
of such dividend, distribution or right, and stating the amount and character of such dividend,
distribution or right, or (B) the date on which such reorganization, reclassification,
consolidation, merger, conveyance, dissolution, liquidation or winding-up is to take place, and the
time, if any is to be fixed, as of which the holders of record of Common Stock (or such stock or
securities at the time receivable upon the exercise of this Warrant) shall be entitled to exchange
their shares of Common Stock (or such other stock or securities) for securities or other property
deliverable upon such reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding-up. Such notice shall be mailed at least 15 days prior to the
date therein specified.

               (c) Any notice, request or other document required or permitted to be
given or delivered to the Holder or the Company shall be delivered or shall be sent by
certified mail, postage prepaid, to the Holder at its address as shown on the books of the Company
or to the Company at the address indicated therefor in the first paragraph of this Warrant or such
other address as either may from time to time provide to the other. Any notice, request or other
document required or permitted to be given or delivered pursuant to this Warrant shall be deemed
effectively given: (i) upon personal delivery to the party to be notified; (iii) five days after
having been sent by registered or certified mail, return receipt requested, postage prepaid;
or (iv) one day after deposit with a nationally recognized overnight courier, specifying next
day delivery, with written verification of receipt.

     11. Binding Effect on Successors. This Warrant shall be binding upon any company succeeding
the Company by merger, consolidation or acquisition of all or substantially all of the Company’s
assets. All of the obligations of the Company relating to the Common Stock issuable upon the
exercise of this Warrant shall survive the exercise and termination of this Warrant. This Warrant
and all rights hereunder may be transferred or assigned, in whole or in part, to any person or
business entity upon surrender of this Warrant at the principal office of the Company, accompanied
by an Assignment Form attached hereto as Exhibit B, duly completed and signed. Upon
surrender of this Warrant and receipt of the Assignment Form, the Company, at its expense, shall
issue to or on the order of the new Holder a new warrant or warrants of like tenor in accordance
with the Assignment Form.

     12. Descriptive Headings. The description headings of the several sections and paragraphs of
this Warrant are inserted for convenience only and do not constitute a part of this Warrant.

     13. Governing Law. This Warrant shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the laws of the State of Tennessee.

 

 

     14. Replacement Warrants. The Company represents and warrants to the Holder that upon receipt
of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of any such loss, theft or destruction, upon receipt of an indemnity
reasonably satisfactory to the Company, or in the case of any such mutilation, upon surrender and
cancellation of such Warrant, the Company, at its expense, will execute and deliver a new Warrant,
of like tenor, in lieu of the lost, stolen, destroyed or mutilated Warrant.

     15. Fractional Shares. No fractional shares shall be issued upon exercise of this Warrant.
The Company shall, in lieu of issuing any fractional share, pay the Holder entitled to such
fraction a sum in cash equal to such fraction multiplied by the Fair Market Value of a share of
Common Stock.

     16. Equity Participation. This Warrant and the rights of the Holder hereunder are intended to
constitute an “equity participation” for purposes of Title 47, Chapter 24, Tennessee Code
Annotated, and the consideration or value received by the Holder in respect of this Warrant shall
not be deemed to be interest, loan charges, commitment fees or brokerage commissions for purposes
of Title 47,.Chapter 14, Tennessee Code Annotated.

     17. No Novation. This Warrant does not constitute a discharge or novation of any warrant
existing prior to this Warrant, including, without limitation, that certain Warrant to Purchase
Common Stock of Cumberland Pharmaceuticals, Inc. (W-1) dated as of October 21, 2003, and such
documents shall continue in full force and effect, shall be fully binding upon the Company, and all
rights hereunder shall be cumulative in effect with such documents.

     In Witness Whereof, the Company has caused this Warrant to be duly executed by its
officers, thereunto duly authorized this 6th day of April, 2006.

	 	 	 	 	 
	 	CUMBERLAND PHARMACEUTICALS, INC.

 	 
	 	By:  	/s/  A.J. Kazimi
 	 
	 	Name: 	A.J. Kazimi 	 
	 	Title: 	Chief Executive Officer 	 
	 

 

 

EXHIBIT A

NOTICE OF EXERCISE

To: Cumberland Pharmaceuticals, Inc.

     o The undersigned hereby elects to exercise the attached Warrant and to purchase
thereunder
                     shares of Common Stock at a purchase price of                      Dollars
($                    ) per Share or an aggregate purchase price of                      Dollars ($                    ).
Pursuant to the terms of the Warrant, the undersigned has delivered the purchase price herewith
in full.

     o The undersigned hereby elects to convert                      percent (                     %) of the value
of the Warrant pursuant to the provisions of Section 1.2, of the Warrant.

     Please issue a certificate or certificates representing said shares of Common Stock in the
name of the undersigned or in such other name as is specified below:

	 	 	 	 	 
	 

	 	 

(Name)
	 	 
	 
	 	 	 	 
	 

	 	 

(Name)
	 	 

     Please issue a new Warrant for the unexercised portion of the attached Warrant, if applicable,
in the name of the undersigned or in such other name as is specified below:

	 	 	 	 	 	 	 
	 

	 	 	 	 

(Name)
	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

(Name)
	 	 
	 
	 	 	 	 	 	 
	 

(Date)

	 	 	 	 

(Signature)
	 	 

 

 

EXHIBIT B

ASSIGNMENT FORM

     FOR VALUE RECEIVED, the undersigned registered owner of the attached Warrant hereby sells,
assigns and transfers all of the rights of the undersigned under the attached Warrant with respect
to the number of shares of the security covered thereby set forth below, unto:

	 	 	 	 	 
	Name of Assignee
	 	Address
	 	No. of Shares

	 	 	 	 	 	 	 
	 

(Date)

	 	 	 	 

(Signature)EX-4.5 FORM OF OPTION AGREEMENT

 

EXHIBIT 4.5

CUMBERLAND PHARMACEUTICALS INC.

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 1999 Stock Option Plan (the “Plan”); 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 fully vested and
exercisable after , in whole or in part, by written notice in the manner set forth in Section 7 hereof, accompanied by payment of the purchase price in accordance with the terms of
the Plan for the Shares which the Participant elects to purchase. 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. Termination of Option. 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.

     5. Provisions of Plan. This Option is subject to the Plan. 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 any term or provision contained herein and a term or provision of the
Plan, the applicable terms and provisions of the Plan will govern and prevail.

1

 

     6. Representations and Warranties of Participant. Recognizing that the Company will be relying
on the information and on the representations and warranties set forth herein, the Participant
hereby acknowledges, represents, and warrants to the Company that the Participant has been advised
that neither this Option nor the Shares will be registered under the Securities Act of 1933, as
amended (the “Securities Act”), or under the securities law of any state, unless the Company in its
sole discretion determines that registration under an applicable state securities law would not
subject it to unreasonable expense, and that the Shares will only be offered and sold in reliance
upon an exemption from the registration requirements of the Securities Act. The Participant further
understands and agrees that the Option and any exercise thereof must comply with all applicable
securities laws, including, but not limited to, the Securities Act and the securities laws of the
several states, as such laws exist on the date of this Agreement and on such future dates that the
Option may be exercised. By executing this Option, the Participant represents that this Option, and
the Shares issuable upon exercise of this Option, is being and will be purchased solely for the
Participant’s own account as an investment, and not with a view to the resale or distribution, in
whole or in part, thereof. The Participant has such knowledge and experience in financial and
business matters that the Participant is capable of evaluating the merits and risks of the
acquisition of this Option and the Shares issuable upon the exercise of this Option. Further, the
Participant understands and agrees that all certificates representing Shares issued pursuant to an
exercise of this Option shall be inscribed with a legend in substantially the following form:

     THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAW AND MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED.

     7. 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.

     8. 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.

2

 

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

	 	 	 	 	 
	CUMBERLAND PHARMACEUTICALS INC.:	 	 
	 
	 	 	 	 
	By:
	 	 

	 	 
	 
	Name:

	 	 

	 	 
	 
	Title:

	 	 

	 	 
	 
	 
	 	 	 	 
	PARTICIPANT:	 	 
	 
	 	 	 	 
	 	 	 
	 
	Address:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 

3

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