Document:

CPIX-2012.12.31-Exhibit 10.27 RickGreene-2013

Exhibit 10.27

March 8, 2013

Rick S. Greene
2525 West End Ave, Suite 950
Nashville, TN  37203

Re:    Employment of Rick S. Greene as Vice President, Finance & Accounting and Chief Financial Officer by Cumberland Pharmaceuticals Inc.

Dear Rick,

Effective January 1, 2013, this letter agreement (the “Agreement”) will evidence the terms and conditions under which you will be employed by Cumberland Pharmaceuticals Inc. (the “Company”). In consideration of your appointment as Vice President, Finance & Accounting and Chief Financial Officer of the Company, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1.    Compensation.  The Company agrees to compensate you as follows:

(a)    The Company agrees to pay you on a salary basis for services performed based on an annual rate of two hundred thirty-seven thousand dollars ($237,000.00), payable in arrears in equal monthly installments on the last day of each calendar month of 2013.  For each year, thereafter, you will be paid on a salary basis for services performed based on an annual rate determined by the Company in its sole discretion; provided, however, that any obligation to make payments under this Section 1(a) will cease upon termination of your employment for any reason.  Notwithstanding the foregoing, nothing in this Section 1(a) alters or is intended to alter the at-will nature of your employment as described in Section 3 of this Agreement.  

(b)    You will be eligible to participate in any Company-wide employee benefits as approved by the Board of Directors.  The terms of your eligibility and participation will be governed by the provisions of the employee benefit plans, as such plans may be amended from time to time in the discretion of the Company's Board of Directors.

(c)    You may be eligible for any Company bonus program, based upon performance in meeting your individual objectives and the Company’s overall performance, both as determined and approved by the Board of Directors of the Company.  Any such bonus will be discretionary and will be subject to the terms of the applicable bonus program, the terms of which program may be modified from year to year in the sole discretion of the Company’s Board of Directors.

(d)    You will receive a grant of Cumberland Pharmaceuticals common stock, pursuant to a restricted stock agreement (RSA).  Such shares will be subject to the RSA and the terms set forth in the incentive compensation plan under which they are awarded.  You may, at the Company’s sole discretion, receive additional awards of Company equity, which will be subject to their designated agreements and the incentive compensation plans under which they are awarded.

(e)    Except as set forth in Section 2, the Company shall not be liable to you for any expense incurred by you unless you receive the Company's prior written consent to reimburse you for such expense.

2.Additional Payments.  
(a)During the term hereof, you shall be entitled to receive prompt reimbursement for all reasonable and documented expenses incurred in the performance of Services in accordance with the expense reimbursement policy of the Company.
(b)Assuming you maintain an active license, the Company agrees to pay the following expenses which are professional costs associated with your CPA: Tennessee Department of Revenue Professional Privilege Tax, Continuing Professional Education (the Company will reimburse 32 hours of the 40 hours required per year), Tennessee Society of CPAs Annual Membership (excludes elective fees), and the Tennessee State Board of Accounting License Fee.

3.    Employment at Will.   This Agreement is not intended to and shall not be understood in any manner as affecting or modifying the at-will status of your employment with the Company.  As an at-will employee either you or the Company may terminate the employment relationship at any time with or without cause or notice.  The obligations of Sections 4, 5, 6, 7, 8, 10, 11 and 12 herein shall survive the termination of the employment relationship or of this Agreement.

 4.    Confidentiality.  All knowledge and information, not already available to the public, which you acquire, have acquired, or will acquire in the course of your employment with the Company with respect to the Company’s business, work methods, or pending regulatory matters, or other Company matters that are treated by the Company as confidential, shall be regarded by you as trade secrets, whether or not they are classifiable legally as trade secrets, and shall be treated by you as strictly confidential.  Such knowledge and information shall not either directly or indirectly be used, disclosed, or made accessible to anyone by you for any purpose, except in the ordinary course of the Company’s business under circumstances in which you are authorized to use or disclose such information.  No disclosures of such confidential information shall be made outside of those you are authorized to make in the regular and ordinary course of your duties unless and until you receive prior written permission of the Board of Directors of the Company to make such disclosure.

 5.    Discoveries and Improvements.  During the time that you are employed by the Company, all confidential information, trade secrets, or proprietary information and all other discoveries, inventions, software programs, processes, methods and improvements that are conceived, developed, or otherwise made by you , alone or with others, that relate in any way to the Company’s present or planned business or products (collectively the “Developments”), whether or not patentable 

or subject to copyright protection and whether or not reduced to tangible form or reduced to practice, shall be the sole property of the Company.  You agree to disclose all Developments promptly, fully and in writing to the Company.  You agree to keep and maintain adequate and current dated and witnessed written records of all such Developments, in the form of notes, sketches, drawings, or reports, which records shall  be promptly submitted to the Company and shall be and remain the property of the Company at all times.  You agree to assign, and hereby do assign, to, the Company all your right, title and interest throughout the world in and to all Developments.  You agree that all Developments shall constitute “Works for Hire” (as such are defined under the U.S. Copyright Laws) and hereby assign to the Company all copyrights, patents and other proprietary rights you may have in any Developments without any obligation on the part of the Company to pay royalties or any other consideration to you for such Developments.

 6.    Publication.  All documents and other writings produced by you during the period of your employment, which relate to work you are doing or have done for the Company or to the business of the Company or its affiliates, shall belong to the Company.  You will not publish outside of the Company any such writing without the prior written consent of the Board of Directors of the Company.  You will, without further compensation, execute at any time (whether or not you are still employed by the Company) all documents requested of you relating to the protection of such rights, including the assignment of such rights to the Company.

7.    Litigation.  You shall notify the Company within three business days if no longer employed and immediately if still employed by the Company if you are contacted by any person relating to any claim or litigation against the Company.  You shall not communicate in any manner with any person related to any claim or litigation against the Company without the prior consent of the Board of Directors of the Company unless compelled to do so by law.

8.    Competition.   For so long as you are employed by the Company or any Affiliate (as defined below) and for a period of one year after you cease to be employed by the Company or any Affiliate, you shall not, directly or indirectly, engage in any work or other activity--whether as owner, stockholder, partner, officer, consultant, or otherwise--involving a trademark, product, or process that, in the opinion of the Company’s President, is  similar to a trademark, product or process on which you worked for the Company (or any Affiliate) or obtained knowledge about while working for the Company at any time during the period of employment, if such work or other activity is then, or reasonably expected to become, competitive with that of the Company (or any Affiliate).  The restriction in the preceding sentence shall not apply if you have disclosed to the Company in writing all the known facts relating to such work or activity and have received a release in writing from the Board of Directors of the Company allowing you to engage in such work or activity. The Company’s President shall have sole discretion to determine whether your work or activity for another employer involves trademarks, products, or processes that are similar to trademarks, products, or processes that you worked on for the Company. Ownership by you of five percent (5%) or less of the outstanding shares of stock of any company either (i) listed on a national securities exchange, or (ii) having at least one hundred (100) stockholders shall not make you a “stockholder” within the meaning of that term as used in this paragraph.  For one year after you cease to work for the Company, you will not engage in any work or activity that will cause you to inevitably disclose to anyone not employed by the Company (or an Affiliate) any trade secret or confidential information 

that belongs to the Company or one of its Affiliates.   Nothing in this paragraph shall limit the rights or remedies of the Company arising, directly or indirectly, from such competitive employment, including, without limitation, claims based upon breach of fiduciary duty, misappropriation, or theft of confidential information.  The term “Affiliate” shall mean the Company and any entity controlling, controlled by, or under common control with the Company.

9.    Conflicting Contracts.  You represent and warrant that you are not now under any obligation resulting from any contract or arrangement, to any person, firm, or corporation, which is inconsistent or in conflict with this Agreement.  Likewise you represent and warrant that you are not now under any obligation resulting from any contract or arrangement to any person, firm, or corporation which would prevent, limit, or impair in any way the performance by you of your obligations to the Company.

10.    Solicitation.  For a period of one year after you cease to be employed by the Company (or a Company affiliate): 

(a)    You agree not to solicit, directly or indirectly, business related to the development or sales of pharmaceutical products from any entity, organization, or person which is contracted with the Company, which has been doing business with the Company or from which the Company was soliciting at the time of your termination, or a firm which you knew or had reason to know that the Company was going to solicit business at the time you ceased to be employed by the Company.  The restriction set forth in the preceding sentence shall not apply if you have disclosed to the Company in writing all the known facts relating to such solicitation and have received a release in writing from the Board of Directors of the Company to engage in such solicitation.  

(b)    You agree not to solicit, recruit, hire, or assist in the hiring of any employee of the Company to work for you or another person, firm, corporation, or business in competition with, or reasonably likely to become in competition with, the Company.

11.    Return of Documents.  Upon termination of your employment for any reason, you shall immediately return to the Company all documents and things belonging to the Company.  This includes, but is not limited to, trade secrets, confidential information, knowledge, data or know-how, and software containing such information, whether or not the documents are marked “Confidential.”

12.    Remedies.  You acknowledge that in the event of breach of this Agreement by you, actual damages to the Company will be impossible to calculate, the Company’s remedies at law will be inadequate, and the Company will suffer irreparable harm.  Therefore, you agree that any of the covenants contained in this Agreement may be specifically enforced through injunctive relief, but such right to injunctive relief shall not preclude the Company from other remedies which may be available to it.  You further agree that should you fail to keep any of the promises made by you in this Agreement, or any way violate this Agreement, the Company shall be entitled to recover all monies the Company is required to spend, including attorneys’ fees, to enforce the provisions of this Agreement.

13.    Best Efforts and Conflicts of Interest:  You are hired with the understanding that Cumberland is your sole employer and you will provide a full-time work effort. You agree to devote your entire professional and business-related time and best efforts to the services required of you by the express and implicit terms of this Agreement, to the reasonable satisfaction of Cumberland in its sole and complete discretion.  Engaging in activities outside of work that create a conflict of interest, or detract from your ability to perform your assigned responsibilities or meet your defined goals and objectives with Cumberland, is a problem and may lead to disciplinary action up to and including termination of employment.  If you believe that you are potentially involved in a situation that could create a conflict of interest and affect your ability to adequately perform your job with Cumberland, you should inform your direct supervisor and Cumberland’s Human Resources Department immediately.

 14.    Debarment.  You represent and warrant that you have not been debarred and will notify the Company immediately if you are debarred, pursuant to subsection 306(a) or 306(b) of the Federal Food, Drug, and Cosmetic Act.

 15.    Notice.  Any notice required or permitted to be given under this Agreement shall be sufficient if in writing and if sent by registered or certified mail to your residence or to the Company’s principal office in the case of the Company.

 16.    Waiver.  The waiver by either party of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach.  

 17.    Entire Agreement.  This Agreement contains the entire agreement of the parties and may not be changed orally, but only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification, extension, or discharge is sought.

 18.    Governance.  This Agreement shall be governed by the laws of the State of Tennessee.  Any dispute arising out of this Agreement shall be resolved, at the Company’s sole option, by courts sitting in Nashville, Tennessee, and you waive any objection to such venue.

 19.    Enforceability.  In the event that any provision of this Agreement shall be held by a court to be unenforceable, such provision will be enforced to the maximum extent permissible, and the remaining portions of this Agreement shall remain in full force and effect.

20.Survival.  Notwithstanding any termination of your employment, this Agreement shall survive and remain in effect in accordance with its terms.

#   #   #   #

This letter agreement may be signed in one or more counterparts, each of which shall be an original and all of which will constitute one and the same instrument.

	
		
	Sincerely yours,
	 

	 
	 

	CUMBERLAND PHARMACEUTICALS INC.

	 
	 

	/s/ A.J. Kazimi
	 

	By:      A.J. Kazimi
	 

	Chief Executive Officer
	 

	
		
	Accepted as to all terms and conditions
	 

	as of the 8th of March, 2013:
	 

	 
	 

	/s/ Rick S. Greene
	 

	Rick S. GreeneCPIX Exhibit 10.31-Perrigo-Paddock-SettlementAgreementMarked

EXHIBIT 10.31
*Certain portions of this exhibit have been omitted pursuant to a request for confidential
treatment which has been filed separately with the SEC.

SETTLEMENT AGREEMENT 

This Settlement Agreement (“Agreement”) is entered into this 9th day of November, 2012 (“Effective Date”) by and between Cumberland Pharmaceuticals Inc., a Tennessee corporation having its principal place of business at 2525 West End Ave., Suite 950, Nashville, Tennessee 37023 (“Cumberland”), Paddock Laboratories, LLC, a Delaware limited liability company having its principal place of business at 3940 Quebec Avenue N, Minneapolis, Minnesota 55427 (“Paddock”) and Perrigo Company, a Michigan corporation having its principal place of business at 515 Eastern Avenue, Allergan, Michigan 49010 (“Perrigo”).  Each of Cumberland, Paddock and Perrigo may be referred to herein individually as a “Party” and collectively as the “Parties”, and each of Perrigo and Paddock may be referred to herein as a “Defendant” and together as the “Defendants”.

RECITALS

WHEREAS, Cumberland sells an N-acetylcysteine product in an amount of 6gm/30ml (200mg/ml) and in an intravenous injectable dosage form, free of EDTA (edetate disodium), pursuant to supplemental New Drug Application 21-539 (the “Acetadote® EDTA-Free NDA”) under the trademark Acetadote® (or any replacement trademark) (the “Acetadote® EDTA-Free Product”), and Cumberland previously sold an N-acetylcysteine product in an amount of 6gm/30ml (200mg/ml) and in an intravenous injectable dosage form containing EDTA under the trademark Acetadote® (the “Acetadote® EDTA Product”), which Acetadote® EDTA Product Cumberland has withdrawn from the market due to safety concerns and which Cumberland has delisted from the U.S. Food and Drug Administration’s Orange Book;
WHEREAS, Cumberland owns the following U.S. Patent relating to the Acetadote® products: 8,148,356 (the “’356 Patent”); 

WHEREAS, Paddock filed with the FDA (as defined below) ANDA (as defined below) [***] (the “Paddock ANDA”) requesting approval from the FDA to market a generic product containing N-acetylcysteine as its active ingredient in an amount of 6gm/30ml (200mg/ml) and in an intravenous injectable dosage form and [***] (the “Paddock Generic Product”);

WHEREAS, Perrigo, the parent company of Paddock, filed with the FDA ANDA [***] (the “Perrigo ANDA”) requesting approval from the FDA to market a generic product containing N-acetylcysteine as its active ingredient in an amount of 6gm/30ml (200mg/ml) and in an intravenous injectable dosage form [***] (the “Perrigo Generic Product”);

WHEREAS, Cumberland filed Civil Action No. 12-CV-00619 (LPS) in the United States District Court for the District of Delaware (the “Delaware Court”), in which Cumberland alleges that Defendants, by filing of the Paddock ANDA, infringed the ’356 Patent as specified therein (the “First Action”);

WHEREAS, Cumberland filed Civil Action No. 12-CV-06327 in the United States District Court for the Northern District of Illinois Eastern Division (the “Illinois Court”), in which Cumberland alleges that Perrigo, by filing of the Perrigo ANDA, infringed the ’356 Patent as specified therein (the “Second Action”, and with the First Action, the “Actions”); and 

WHEREAS, each Party desires to resolve, compromise and settle the Actions on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the foregoing premises and the covenants exchanged herein and other good and valuable consideration, the sufficiency and receipt of all of which are hereby acknowledged, Defendants and Cumberland intending to be legally bound hereby agree as follows: 

I.DEFINITIONS
“’356 Patent” has the meaning set forth in the Recitals.
“Acetadote® EDTA-Free NDA” has the meaning set forth in the Recitals.
“Acetadote® EDTA-Free Product” has the meaning set forth in the Recitals.
“Acetadote® EDTA Product” has the meaning set forth in the Recitals.
“Actions” has the meaning set forth in the Recitals.
“Affiliate(s)” shall mean, with respect to any entity, any corporation, association, company, organization or other entity which directly or indirectly controls, is controlled by or under common control with Paddock, Perrigo or Cumberland, as the case may be. For purposes of this definition, “control” means the ability, directly or indirectly, through ownership of securities, by agreement, or by any other method, to direct more than fifty (50%) of the outstanding equity votes of any entity, whether or not represented by securities, or to otherwise control the management decisions of any entity.
“Agreement” has the meaning set forth in the introductory paragraph hereof.
“ANDA” shall mean Abbreviated New Drug Application as defined in 21 CFR § 355(j) et seq., as amended from time to time 
“Commercially Reasonable Efforts” shall mean that degree of effort, expertise and resources which a person of ordinary skill, ability and experience in the matters addressed herein would typically utilize and otherwise apply with respect to fulfilling the obligations assumed hereunder.
“Cumberland” has the meaning set forth in the introductory paragraph hereof.
“Defendant” and “Defendants” have the meaning set forth in the introductory paragraph hereof.

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“Defendants’ Releasees” has the meaning set forth in Section 4.1.
“Delaware Court” has the meaning set forth in the Recitals.
“Dismissal Effective Date” has the meaning set forth in Section 2.1.
“Effective Date” has the meaning set forth in the introductory paragraph hereof.
“FDA” shall mean the Food and Drug Administration of the United States of America.
“Illinois Court” has the meaning set forth in the Recitals.
“Law” shall mean any local, state or federal rule, regulation, statute or law.
“License and Supply Agreement” has the meaning set forth in Section 2.1.
“Licensed Patents” shall mean the ‘356 Patent, and all continuations, divisionals and extensions thereof, and all reexaminations and reissues thereof..
“Losses” has the meaning set forth in Section 4.1.
“NDA” means a New Drug Application (as more fully described in 21 C.F.R. 314.50 et seq. or its successor regulation) and all amendments and supplements thereto submitted to the FDA.
“Other Acetadote® Patent Litigations” has the meaning set forth in Section 6.3.
“Paddock” has the meaning set forth in the introductory paragraph hereof.
“Paddock ANDA” has the meaning set forth in the Recitals.
“Paddock Generic Product” has the meaning set forth in the Recitals.
“Parties” shall have the meaning set forth in the introductory paragraph hereof.
“Perrigo” has the meaning set forth in the introductory paragraph hereof.
“Perrigo ANDA” has the meaning set forth in the Recitals.
“Perrigo Generic Product” has the meaning set forth in the Recitals.
“Plaintiff’s Releasees” has the meaning set forth in Section 4.1.
“Stipulations of Dismissal” has the meaning set forth in Section 2.1.
“Term” has the meaning set forth in Section 8.1.

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“Territory” shall mean the United States of America, its territories, commonwealths and possessions.
“Third Party” shall mean any person, entity or other organization (other than the Parties and their respective Affiliates).
Any other capitalized terms used but not defined in this Article I shall have the meanings assigned to such terms in the body of this Agreement.
II.    DISMISSAL OF LITIGATION
2.1.    On the Effective Date, the Parties shall execute and deliver to each other the License and Supply Agreement attached as Exhibit 2 hereto (the “License and Supply Agreement”).  Within three (3) business days of the Effective Date, the respective Parties will execute and file with the Delaware Court and Illinois Court, all necessary papers, including the Stipulations of Dismissal attached as Exhibit 1, required to dismiss without prejudice all claims and counterclaims, motions, and petitions asserted in the Actions (the “Stipulations of Dismissal”).  The date upon which the Actions are dismissed against all Parties pursuant to the Stipulations of Dismissal shall be referred to herein as the “Dismissal Effective Date”.   If for any reason the courts in the Actions do not approve the Stipulations of Dismissal and enter them as orders of the courts, the Parties agree to confer promptly in good faith in an effort to modify the Stipulations of Dismissal and this Agreement or take such other action as is required to overcome the objections of the courts.  
2.2.    Nothing herein or in the License and Supply Agreement shall be deemed to be Cumberland’s consent to or approval of any ANDA in the United States or any similar application or filing in any foreign jurisdiction by Defendants or any of their Affiliates, or to permit Defendants or any of their Affiliates the right to reference or cross-reference any New Drug Application, regulatory filing or other proprietary materials or information.
III.    WITHDRAWAL OF ANDA; PATENT MATTERS
3.1.    Paddock acknowledges, agrees and admits, on behalf of itself and its Affiliates, that (a) the Paddock Generic Products infringe the ‘356 Patent, (b) the ‘356 Patent is valid and (c) the ‘356 Patent is enforceable.  Perrigo acknowledges, agrees and admits, on behalf of itself and its Affiliates, that (i) the Perrigo Generic Products infringe the ‘356 Patent, (ii) the ‘356 Patent is valid and (iii) the ‘356 Patent is enforceable.
3.2.    No later than three (3) business days after the Effective Date, Paddock shall take all steps necessary to withdraw and cancel the Paddock ANDA filed with the FDA.  During the term of the License and Supply Agreement, Paddock agrees that neither it nor any of its Affiliates shall refile the Paddock ANDA with the FDA or file any ANDA that references the Acetadote® EDTA Product or Acetadote® EDTA-Free Product, provided that the foregoing shall not preclude Perrigo from seeking the approval of or maintaining the Perrigo ANDA with the FDA.

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3.3.    From and after the Effective Date and continuing for the terms of this Agreement and the License and Supply Agreement (whichever is longer), each Defendant agrees, on behalf of itself and its Affiliates and its and their respective successors and assigns, not to challenge the validity, enforceability, ownership or patentability of any of the Licensed Patents, or the infringement of any of the Licensed Patents by the manufacture, use and sale of the Perrigo Generic Product and the Paddock Generic Product, including by suing, directly or indirectly, Cumberland or any of its Affiliates in any action in any forum seeking an order or decision that any of the Licensed Patents is invalid or unenforceable, is not exclusively owned by Cumberland and/or its Affiliates, or that the manufacture, use or sale of the Perrigo Generic Product or Paddock Generic Product does not infringe any of the Licensed Patents.  Further, each Defendant agrees, on behalf of itself and its Affiliates and its and their respective successors and assigns, not to seek reexamination of any of the Licensed Patents in any court or administrative agency having jurisdiction to consider the issue.  Further, Defendants will not, and will cause their Affiliates to not, directly or indirectly participate in, support or assist any such challenges by any person.    
3.4.    From and after the Effective Date and continuing for the terms of this Agreement and the License and Supply Agreement (whichever is longer), neither of the Defendants nor any of their respective Affiliates, nor any of their respective officers, or employees, will assist, encourage, or provide any information or support to, any entity attacking the validity or enforceability or defending against the alleged infringement of any of the Licensed Patents, except as compelled by Law.  Neither of the Defendants nor any of their respective Affiliates, nor any of their respective officers, or employees, will encourage any expert witnesses who are under their control to assist, encourage, or provide any information or support to any entity attacking the validity or enforceability or defending against the alleged infringement of the any of the Licensed Patents or consent to any of the foregoing, except as compelled by Law.
3.5.    In return for the rights, releases, and other consideration set forth in this Agreement and the License and Supply Agreement, except as permitted under the License and Supply Agreement, the Defendants agree that neither the Defendants nor any of their Affiliates will market, offer for sale, sell or distribute any Perrigo ANDA Product or Paddock ANDA Product or any other generic N-acetylcysteine product that references a product covered by any Cumberland NDA as the reference listed drug, or encourage, assist or participate in the profits from the marketing, offer for sale, for sale or distribution of a generic N-acetylcysteine that references a product covered by any Cumberland NDA as the reference listed drug, other than pursuant to the License and Supply Agreement.
3.6.    Notwithstanding this Article III, nothing herein shall prevent Perrigo from maintaining the paragraph IV certification under Section 505(j)(2)(A)(vii)(IV) of the FFDCA (21 U.S.C. § 355(j)(2)(A)(vii)(IV)) that is contained in the Perrigo ANDA.
IV.    RELEASE OF CLAIMS    
4.1.    Effective on the Dismissal Effective Date, Defendants, their Affiliates and each of their respective predecessors, successors, assigns, officers, directors, managers, employees and trustees (collectively, the “Defendants’ Releasees”) fully, finally and forever release, relinquish, 

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acquit and discharge Cumberland, its Affiliates and each of their respective predecessors, successors, assigns, officers, directors, managers, employees and trustees (collectively, the “Plaintiff’s Releasees”) of and from, and covenant not to sue, not to assign to any other entity or person a right to sue and not to authorize any other entity or person to sue any Plaintiff’s Releasee for any and all claims, counterclaims, actions, causes of action, suits, defenses, judgments, debts, offsets, accounts, torts, damages, demands and liabilities whatsoever, including costs, expenses, and attorneys’ fees (collectively, “Losses”) of every name and nature, both at law and in equity, for acts, transactions, facts, matters or omissions whether known or unknown, foreseen or unforeseen, accrued as of the Dismissal Date, relating to (i) any and all claims, liabilities, defenses or counterclaims in the Actions with respect to any cause of action asserted therein arising out of or relating to the Perrigo ANDA or the Paddock ANDA or their filing or the Perrigo Generic Product or Paddock Generic Product; (ii) any and all claims, liabilities, defenses or counterclaims relating to the issues in the Actions and arising out of or relating to the Perrigo ANDA or the Paddock ANDA or their filing or the Perrigo Generic Product or Paddock Generic Product that could have been asserted in the Actions; (iii) any claim or liability that has arisen between Cumberland and Defendants relating to the issues in the Actions and arising out of or relating to the Perrigo ANDA or the Paddock ANDA or their filing or the Perrigo Generic Product or Paddock Generic Product, including but not limited to any antitrust or unfair competition claims relating to the ‘356 Patent or the Actions; and (iv) any damages or other remedies flowing from (i)–(iii) above.  Notwithstanding this release, nothing herein shall preclude Defendants’ Releasees from asserting Losses arising from any activities occurring after the Dismissal Effective Date, including breach of this Agreement or the License and Supply Agreement, and all such claims are reserved.
4.2.    Effective on the Dismissal Effective Date, Cumberland and each of the other Plaintiff’s Releasees fully, finally and forever release, relinquish, acquit and discharge Defendants and each of the other Defendants’ Releasees of and from, and covenant not to sue, not to assign to any other entity or person a right to sue and not to authorize any other entity or person to sue any Defendants’ Releasees for any and all Losses of every name and nature, both at law and in equity, for acts, transactions, facts, matters or omissions whether known or unknown, foreseen or unforeseen, accrued as of the Dismissal Date, relating to (i) any and all claims, liabilities, defenses or counterclaims in the Actions with respect to any cause of action asserted therein arising out of or relating to the Perrigo ANDA or the Paddock ANDA or their filing or the Perrigo Generic Product or Paddock Generic Product; (ii) any and all claims, liabilities, defenses or counterclaims relating to the issues in the Actions and arising out of or relating to the Perrigo ANDA or the Paddock ANDA or their filing or the Perrigo Generic Product or Paddock Generic Product that could have been asserted in the Actions; (iii) any claim or liability that has arisen between Cumberland and Defendants relating to the issues in the Actions and arising out of or relating to the Perrigo ANDA or the Paddock ANDA or their filing or the Perrigo Generic Product or Paddock Generic Product; and (iv) any damages or other remedies flowing from (i)–(iii) above.  Notwithstanding this release, nothing herein shall preclude Plaintiff’s Releasees from asserting Losses arising from any activities occurring after the Dismissal Effective Date, including breach of this Agreement or the License and Supply Agreement, and all such claims are reserved.

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4.3.    Each Party hereby expressly waives any and all provisions, rights and benefits conferred by §1542 of the California Civil Code, or by any law of the United States or principle of common law that is similar, comparable or equivalent to §1542 of the California Civil Code, with respect to the matters released in Sections 4.1 and 4.2.  Each Party represents, warrants and covenants that it has not heretofore assigned or transferred, and will not assign or otherwise transfer, to any person or entity any matters released by such Party in Sections 4.1 and 4.2, as the case may be, and such Party agrees to indemnify and hold harmless the other Parties from and against all such released matters arising from any such alleged or actual assignment or transfer.
4.4.    Nothing in this Agreement shall preclude by release, contract, claim or issue preclusion or otherwise, Cumberland from raising any infringement assertion or Defendants from raising a non-infringement defense of any of the Licensed Patents or their foreign equivalents in connection with any product that was not the subject of the Actions.  
4.5.    Nothing in this Agreement releases or shall be deemed to release any Party from any violation of any provision of this Agreement or the License and Supply Agreement, and each Party is entitled to enforce the obligations hereunder and thereunder.
V.    REGULATORY MATTERS
5.1.    Within ten (10) business days following the execution of this Agreement, the Parties shall submit this Agreement and the License and Supply Agreement to the Federal Trade Commission of the United States (“FTC”) and the Department of Justice of the United States (“DOJ” and, together with FTC, the “Agencies”) for review pursuant to Section 1112 of the Medicare Prescription Drug Improvement and Modernization Act of 2003.  The Parties shall promptly in good faith coordinate the foregoing filings and respond promptly in good faith to any requests for additional information made by either of such Agencies.  Each Party reserves the right to communicate with the FTC and/or DOJ regarding such filings as it believes appropriate.  Each Party will keep the other Parties informed of such responses and communications and shall not disclose any confidential information of the other Parties without such other Party’s consent, which will not be unreasonably withheld or delayed.  In the event that the FTC or DOJ threatens to institute a judicial or administrative proceeding raising material objections against any Party related to this Agreement or the License and Supply Agreement, or any subpart thereof, the Parties shall use Commercially Reasonable efforts to modify this Agreement and/or the License and Supply Agreement to address the objections raised by the FTC or DOJ while maintaining the material terms of the transaction.
5.2.    If at any time this Agreement is rendered null and void with respect to the Territory, or any portion thereof by the actions of a Third Party or government entity, or if the Parties cannot fulfill their respective obligations with respect to this Agreement, it is the intent of the Parties that no Party will be in any way prejudiced with respect to its claims, causes of action, defenses and counterclaims in the Actions, and no consent judgment, order or dismissal entered by a Party pursuant to this Agreement in the Territory or portion thereof, as applicable, will be deemed an admission on the part of such Party, and the Parties would be free to assert any and all claims and defenses with respect to the reinstated portion of the Actions in any future litigation.  In particular, if this Agreement is terminated for any reason: (a) Cumberland will have the right 

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to recommence or refile the First Action before the Delaware Court and the Second Action before the Illinois Court; (b) each Party consents, with respect to any such refiled Action or declaratory judgment action, to (i) the jurisdiction of the Delaware Court with respect to the subject matter of the First Action and the jurisdiction of the Illinois Court with respect to the subject matter of the Second Action, and irrevocably and unconditionally waives any objection to the laying of venue in such courts or that the Actions or declaratory judgment action have been brought in an inconvenient forum, (ii) waive any statute of limitations defenses in connection with such recommenced or refiled Actions or declaratory judgment action, (iii) the License and Supply Agreement will immediately terminate; (iv) Perrigo and Paddock will have the right to defend themselves on any basis, including challenging the infringement, validity and enforceability of the Licensed Patents; and (v) the Agreement will not be available as evidence in any proceeding.  Termination of this Agreement shall not release any Party from liability (in an action at law or otherwise) for any obligations, liabilities or damages incurred prior to such termination and arising out of a breach of any of its representations, warranties, covenants or agreements set forth in this Agreement.  In addition, Article VI shall survive any termination of this Agreement.
VI.    CONFIDENTIALITY
6.1.    The Parties hereby agree that, except to enforce this Agreement or unless otherwise agreed to by the Parties in writing or required by law, including as required by a court, government or other regulatory agency, that the Parties, their Affiliates and their respective employees, officers, directors and other representatives shall not publish or otherwise disclose the contents of this Agreement and/or any exhibits attached hereto. The Parties may state publicly that the Actions have been settled on terms that are confidential, but no public announcement concerning the terms or subject matter of this Agreement shall be made, either directly or indirectly, by any Party, except as set forth in Section 6.2.  
6.2.    If either Party determines that a release of information concerning this Agreement is required by applicable Law, legal process (including without limitation any subpoena or discovery ordered  by any court of competent jurisdiction) or by stock exchange rules, it shall notify the other in writing at least ten (10) days (or such shorter period where legally required) before the time of the proposed release; it being understood and agreed that each such Party that proposes to make any such release of information shall use its Commercially Reasonable Efforts to ensure that any such release shall not include more information regarding the existence or terms of this Agreement than is required by Law, legal process or by stock exchange rule and shall seek the highest level of confidentiality then available for such information proposed to be released. Such notice shall include the exact text of the proposed release and the time and manner of the release. At the other Party’s request, and before the release, the Party desiring to release further information shall consult with the other Party on the necessity for the disclosure and the text of the proposed further disclosure. Perrigo and Cumberland recognize that in addition to the other exceptions set forth herein, disclosure of this Agreement to IRS and other tax authorities may be required, and Perrigo and Cumberland each waives the requirements of this subsection with respect to disclosure to such entities.    

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6.3.    Defendants acknowledge that Cumberland is currently engaged in ANDA-related patent litigations with Third Parties concerning infringement of the ‘356 Patent on the basis of marketing and selling of generic versions of Cumberland’s Acetadote® product in the United States, and may become engaged in future patent litigations concerning infringement of the ‘356 Patent on the basis of marketing and selling of generic versions of Cumberland’s Acetadote® product in the United States (collectively, “Other Acetadote® Patent Litigations”).  Defendants recognize that parties to the Other Acetadote® Patent Litigations may request a copy of this Agreement and the License and Supply Agreement in connection with discovery and that Cumberland may be compelled to provide such copies.  Defendants further acknowledge that Cumberland may be required to provide a copy of this Agreement and the License and Supply Agreement under the terms of other settlement agreements.  In either instance, Cumberland agrees to use Commercially Reasonable Efforts to notify Defendants at least two (2) weeks in advance of any proposed production of the terms of this Agreement to parties in any such litigation.  Cumberland may disclose such terms to a third party litigant with whom Cumberland is engaged in an Other Acetadote® Patent Litigations to the extent reasonably necessary to settle, or to comply with settlement of, any such Other Acetadote® Patent Litigations, subject to any such third party litigant agreeing to keep any terms so disclosed confidential.  Defendants hereby consent to Cumberland’s disclosure of the terms of this Agreement and the License and Supply Agreement to any such third party litigant subject to appropriate confidentiality limitations no less stringent than those set forth herein.  
VII.    REPRESENTATIONS AND WARRANTIES
7.1.    Mutual Representations and Warranties.  Cumberland represents and warrants to Defendants, as of the date of this Agreement, and each of the Defendants represents and warrants to Cumberland, as of the date of this Agreement, that:
7.1.1.    Such Party is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has full corporate power and authority to enter into this Agreement and to carry out the provisions hereof;
7.1.2.    Such Party has taken all corporate action necessary to authorize the execution and delivery of this Agreement and the performance of its obligations under this Agreement;
7.1.3.    This Agreement has been duly executed by such Party and constitutes a valid and legally binding obligation of such Party, enforceable in accordance with its terms;
7.1.4.    The execution, delivery and performance of this Agreement by such Party does not conflict with any agreement, instrument or understanding, oral or written, to which it is a party or by which it may be bound, nor violate any material law or regulation of any court, governmental body or administrative or other agency having jurisdiction over it;
7.1.5.    Such Party has been advised by its counsel of its rights and obligations under this Agreement and enters into this Agreement freely, voluntarily, and without duress; and 

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7.1.6.    Such Party is not relying on any promises, inducements, or representations other than those provided herein.
7.2.    Cumberland Representations and Warranties.  Cumberland represents and warrants to Defendants that, as of the date of this Agreement, Cumberland is the owner of the ‘356 Patent.
7.3.    No Other Warranties.  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN SECTIONS 7.1 AND 7.2 OF THIS AGREEMENT, NO PARTY MAKES ANY REPRESENTATION OR EXTENDS ANY WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED. 
VIII.    MISCELLANEOUS
8.1.    Waiver.  A waiver by any Party of any of the terms and conditions of this Agreement in any instance shall not be deemed or construed to be a waiver of such term or condition for the future, or of any subsequent breach hereof. All rights, remedies, undertakings, obligations and agreements contained in this Agreement shall be cumulative and none of them shall be in limitation of any other remedy, right, undertaking, obligation or agreement of any Party.
8.2.    No Admission of Liability.  Except as provided in Article III, nothing in this Agreement shall be construed as or deemed to be an admission by the Parties hereto, or any of them, of any unlawful, improper, or actionable conduct or omission by any of them, and each Party hereto expressly denies liability of any kind whatsoever.
8.3.    Choice of Law and Remedies.  This Agreement shall be governed and interpreted in accordance with the laws of the State of Delaware without regard to conflicts of law principles. The Delaware Court (and any appropriate appellate court) shall have exclusive jurisdiction in all matters arising under this Agreement, and the Parties hereto expressly consent and submit to the personal and subject matter jurisdiction of such courts. This Agreement does not limit or restrict the remedies available to any Party for the breach by another Party, and the Parties expressly reserve any and all remedies available to them, at law or in equity, for breach of this Agreement, including claims for patent infringement.
8.4.    Assignment.  This Agreement shall be binding upon and inure to the benefit of the Parties and their successors and assigns. This Agreement and the rights granted herein may not be assigned or transferred (whether by contract, operation of law or otherwise) by Perrigo or Paddock without the prior written consent of Cumberland, provided that each of Perrigo and Paddock may assign or transfer its rights and obligations hereunder to any Affiliate or to a successor or assignee of all or substantially all of its relevant prescription pharmaceutical business or assets, without Cumberland’s prior consent, but only if such Affiliate, successor or assignee is not at such time involved in a litigation or other legal proceeding with Cumberland.  Cumberland may assign or transfer its rights and obligations hereunder to any Affiliate or to a successor or assignee of all or substantially all of its relevant prescription pharmaceutical business or assets, without Perrigo’s or Paddock’s prior consent.

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8.5.    Costs.  Each Party shall each bear its own costs and legal fees associated with the Actions and the negotiation and preparation of, and completion of tasks contemplated under, this Agreement and the License and Supply Agreement.
8.6.    Severability.  If any of the terms or provisions of this Agreement are in or come into conflict with any applicable Law within the Territory then such term or provision shall be deemed inoperative to the extent it may conflict therewith and shall be deemed to be modified to conform with such Law unless such modification would render the affected provision inconsistent with or contrary to the intent of the Parties. However, in the event the terms and conditions of this Agreement are materially altered as a result of this subsection, the Parties shall in good faith attempt to renegotiate said terms and conditions to resolve any disputes related thereto.
8.7.    Integration.  This Agreement, the Stipulations of Dismissal and the License and Supply Agreement shall constitute the entire agreement among the Parties with respect to the subject matter hereof and supersede all prior agreements and understandings, both oral and written, among the Parties with respect to such subject matter.
8.8.    Territory.  The Parties acknowledge and agree that this Agreement and the License and Supply Agreement, and the fact that the Parties have entered into this Agreement and the License and Supply Agreement and consummated the transactions contemplated hereby, shall not have any effect outside the United States and its territories and possessions.  The Parties hereby agree that neither this Agreement nor the License and Supply Agreement nor those facts may be proffered, or be referred to in any testimonial or other evidence, by any Party or any of their Affiliates at any trial, action or other proceeding regarding any foreign equivalents of the Perrigo Generic Product, Paddock Generic Product or foreign counterparts of the ‘356 Patent or any other Licensed Patent.  Nothing herein shall be construed as an admission or waiver as to any factual or legal matter by any Party or their Affiliates with respect to any jurisdiction outside of the United States.
8.9.    Amendments.  No amendment, modification or supplement of any provisions of this Agreement shall be valid or effective unless made in writing and signed by a duly authorized officer of each Party. 
8.10.    Descriptive Headings.  The captions and descriptive headings of this Agreement are for convenience only, and shall be of no force or effect in construing or interpreting any of the provisions of this Agreement.
8.11.    Third Party Benefit.  Except as otherwise expressly set forth herein, none of the provisions of this Agreement shall be for the benefit of or enforceable by any Third Party.
8.12.    Notice.  Any notices or reports required or permitted under this Agreement shall be in writing and shall be deemed to have been given for all purposes if mailed by first class certified or registered mail or transmitted electronically be facsimile with mailed confirmation copy to the following address of each Party:

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	For Perrigo:
	Perrigo Company

	 
	515 Eastern Avenue

	 
	Allegan, MI 49010

	 
	Attn: General Counsel

	
		
	For Paddock:
	Paddock Laboratories, LLC

	 
	c/o Perrigo Company

	 
	515 Eastern Avenue

	 
	Allegan, MI 49010

	 
	Attn: General Counsel

	
		
	For Cumberland:
	Cumberland Pharmaceuticals Inc.

	 
	2525 West End Ave., Suite 950, 

	 
	Nashville, Tennessee 37023

	 
	Attn: Chief Executive Officer

or to such other addresses as shall have been subsequently furnished by written notice to the other Parties.                                                
8.13.    Waiver of Rule of Construction.  Each Party has had the opportunity to consult with counsel in connection with the review, drafting and negotiation of this Agreement. Accordingly, any rule of construction that any ambiguity in this Agreement shall be construed against the drafting Party shall not apply.
8.14.    Counterparts.  This Agreement may be executed in any number of signature page counterparts transmitted via facsimile, any one of which need not contain the signature of more than one Party but all such counterparts taken together shall constitute one and the same Agreement.
8.15.    Interpretation.  
8.15.1.    The singular form of any noun or pronoun shall include the plural when the context in which such a word is used is such that it is apparent the singular is intended to include the plural or vice versa.  Neutral pronouns and any variations thereof shall be deemed to include the feminine and masculine and all terms used in the singular shall be deemed to include the plural, and vice versa, as the context may require.  The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.  The word “will” shall be construed to have the same meaning and effect as the word “shall”.  The word “any” shall mean “any and all” unless otherwise clearly indicated by context.  “$” as used in this Agreement means the lawful currency of the United States of America.  Where a Party’s consent is required hereunder, except as otherwise specified herein, such Party’s consent may be granted 

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or withheld in such Party’s sole discretion.  Derivative forms of any capitalized term defined herein shall have meanings correlative to the meaning specified herein.  
8.15.2.    Unless the context requires otherwise: (i) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or therein), (ii) any reference to any laws herein shall be construed as referring to such laws as from time to time enacted, repealed or amended, (iii) any reference herein to any Person shall be construed to include the Person’s successors and permitted assigns, (iv) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, and (v) all references herein to Articles, Sections, Appendices or Exhibits, unless otherwise specifically provided, shall be construed to refer to Articles, Sections, Appendices or Exhibits of this Agreement.

SIGNATURES FOLLOW ON NEXT PAGE

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed in duplicate by their duly authorized representatives in the places provided below. 

	
					
	Perrigo Company
	 
	Cumberland Pharmaceuticals Inc.

	By
	/s/ Andrew Solomon
	 
	By
	/s/ A.J. Kazimi

	Title
	Assistant Secretary
	 
	Title
	Chief Executive Officer

	Date
	November 10, 2012
	 
	Date
	November 12, 2012

 

	
		
	Paddock Laboratories, LLC

	By
	/s/ Andrew Solomon

	Title
	Assistant Secretary

	Date
	November 10, 2012

 
            

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EXHIBIT 1:  STIPULATIONS OF DISMISSAL 
        

- 15 -

 UNITED STATES DISTRICT COURT  
DISTRICT OF DELAWARE
	
			
	CUMBERLAND PHARMACEUTICALS INC.
	)
	 

	 
	)
	 

	Plaintiff,
	)
	No.  12-CV-00619 

	 
	)
	 

	v.
	)
	 

	 
	)
	 

	PERRIGO COMPANY
	)
	Hon. [____]

	PADDOCK LABORATORIES, LLC        )
	 
	 

	Defendants
	)
	 

	 
	)
	 

	 
	)
	 

JOINT STIPULATION OF DISMISSAL

Pursuant to Federal Rule of Civil Procedure 41(a)(1), Plaintiff Cumberland Pharmaceuticals Inc. and Defendants Perrigo Company and Paddock Laboratories, LLC hereby stipulate and agree that the above action, including all claims, counterclaims, and affirmative defenses, is hereby dismissed without prejudice, and without costs, disbursements or attorneys’ fees to any party.

- 16 -

	
		
	Dated:              

[_________]

                  

[________]

Attorneys for Plaintiff Cumberland Pharmaceuticals Inc.

	Dated:              

[________]

                  

[________]

Attorneys for Defendants Perrigo Company and Paddock Laboratories, LLC

SO ORDERED this ____ day of __________________, 2012.

                            
United States District Judge

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IN THE UNITED STATES DISTRICT COURT FOR THE 
NORTHERN DISTRICT OF ILLINOIS, EASTERN DIVISION
	
			
	CUMBERLAND PHARMACEUTICALS INC.
	)
	 

	 
	)
	 

	Plaintiff,
	)
	No.  12-CV-06327 

	 
	)
	 

	v.
	)
	 

	 
	)
	 

	PERRIGO COMPANY
	)
	Hon. [____]

	

	)
	 

	Defendants
	)
	 

	 
	)
	 

	 
	)
	 

JOINT STIPULATION OF DISMISSAL

Pursuant to Federal Rule of Civil Procedure 41(a)(1), Plaintiff Cumberland Pharmaceuticals Inc. and Defendant Perrigo Company hereby stipulate and agree that the above action, including all claims, counterclaims, and affirmative defenses, is hereby dismissed without prejudice, and without costs, disbursements or attorneys’ fees to any party.

- 18 -

	
		
	Dated:              

[_________]

                  

[________]

Attorneys for Plaintiff Cumberland Pharmaceuticals Inc.

	Dated:              

[________]

                  

[________]

Attorneys for Defendant Perrigo Company

SO ORDERED this ____ day of __________________, 2012.

                            
United States District Judge

- 19 -

EXHIBIT 2:  LICENSE AND SUPPLY AGREEMENT 

(To come)

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