Document:

EX-10.26

March 23, 2010

Martin E. Cearnal

2525 West End Avenue, Suite 950

Nashville, TN 37203

	 	 	Re: Employment of Martin E. Cearnal as Senior Vice President and Chief Commercial Officer by
Cumberland Pharmaceuticals Inc.

Dear Marty:

Effective January 1, 2010, 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 Senior Vice President and Chief Commercial 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 one hundred sixty thousand dollars ($160,000.00), payable in arrears in equal monthly
installments on the last day of each calendar month of 2010. 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.

(d) 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.

(e) You will receive a grant of options, as set forth in Exhibit A, to purchase Cumberland
common shares pursuant to an option agreement. Such options will be subject to the option
agreement and the terms set forth in the option plan under which they are awarded. You may, at the
Company’s sole discretion, receive additional grants of options, which will be subject to an option
agreement and the option plan under which they are awarded.

(f) 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. 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. Such reimbursement policy shall
require adequate documentation by you of the expenses and payment by the Company of such amounts
shall be made within a reasonable period after the close of the year in which the expenses were
incurred.

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. 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.

14. 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.

15. 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.

16. 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.

17. 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.

18. 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.

19. 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.

	 	 	 	 	 
	
 
	 	By:
	 	/s/ A.J. Kazimi

Chief Executive Officer
	Accepted as to all terms and conditions

as of the 25th of March, 2010:

	 	

	 	

	/s/ Martin E. Cearnal

	 	

	 	

Exhibit A

Option Agreement

The Company’s standard option agreement shall be forthcoming at the appropriate time and shall
incorporate the following several terms:

	1.	 	Subject to the terms therein, the Company will provide a grant of options under its 2007
Long-Term Incentive Compensation Plan to purchase up to ten thousand (10,000) of its shares of
common stock.

	2.	 	As determined and approved by the Board of Directors, up to 2,500 options will vest on each
31st of December over the four-year period from 2010-2013.

	3.	 	The options awarded will have an Exercise Price of Fair Market Value on Date of Grant.

	4.	 	The options awarded will have a term of five years from Date of Grant.

It is important that, after you receive your option agreement and other related documents, you read
and understand the terms and conditions of the option agreement. The Company recommends that you
always seek guidance from your personal accountant or tax advisor prior to initiating any exercise
or action involving your option agreement.exhibit_4-3.htm

 

 

Exhibit 4.3

 

FORM OF SUBSCRIPTION RIGHTS CERTIFICATE

	  	  	  
	  	  	  
	
Rights Certificate No.:  ______________________                                       

	  	
Number of Rights:                                         

 

THE TERMS AND CONDITIONS OF THE RIGHTS OFFERING ARE SET FORTH IN THE GENERAL FINANCE CORPORATION (THE “COMPANY”) PROSPECTUS DATED ___, 2010 (THE “PROSPECTUS”) AND ARE INCORPORATED HEREIN BY REFERENCE. COPIES OF THE PROSPECTUS ARE AVAILABLE UPON REQUEST FROM THE COMPANY.

 

GENERAL FINANCE CORPORATION

 INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE

 

CUSIP NO.: 369822127

 

SUBSCRIPTION RIGHTS CERTIFICATE

 EVIDENCING SUBSCRIPTION RIGHTS TO PURCHASE

                       UNITS

 

SUBSCRIPTION PRICE: $______PER UNIT

 

THE SUBSCRIPTION RIGHTS WILL EXPIRE IF NOT EXERCISED ON OR BEFORE 5:00 P.M., NEW YORK CITY TIME, ON                       ___, 2010, UNLESS EXTENDED OR THE RIGHTS OFFERING IS TERMINATED BY GENERAL FINANCE CORPORATION.

 

REGISTERED OWNER:                                         

 

     THIS CERTIFIES THAT the registered owner whose name is inscribed hereon is the owner of the number of subscription rights (“Rights”) set forth above. Each whole Right entitles the holder thereof, to subscribe for and purchase, at the subscription price of $______ (the “Subscription Price”), one “Unit”, consisting of one share of common stock, par value $0.0001 per share, and a three-year warrant to purchase 0.5 additional shares of common stock, par value $0.0001 per share, of the Company at an exercise price of $4.00 per share, pursuant to a rights offering (the “Rights Offering”), on the terms and subject to the conditions set forth in the Prospectus and the “Instructions for Use of General Finance Corporation Subscription Rights Certificates” accompanying this Subscription Rights Certificate (the “Basic Subscription Right”).

 

     If any of the Units available for purchase in the Rights Offering are not purchased by other holders of Rights pursuant to the exercise of their Basic Subscription Right (the “Excess Units”), any Rights holder that exercises its Basic Subscription Right in full may subscribe for Excess Units pursuant to the terms and conditions of the Rights Offering, subject to proration, as described in the Prospectus (the “Over-Subscription Privilege”). The Rights represented by this Subscription Rights Certificate may be exercised by completing Form 1 and any other appropriate forms on the reverse side hereof and by returning the full payment of the Subscription Price for each Right subscribed for pursuant to the Over-Subscription Privilege, in addition to the payment due for Units purchased through your Basic Subscription Right, in accordance with the “Instructions for Use of General Finance Corporation Subscription Rights Certificates” that accompany this Subscription Rights Certificate.

 

     Rights evidenced by this Subscription Rights Certificate may be transferred or sold after the Rights have been listed for trading on any stock exchange or on the NASDAQ Global Market.

 

     IN WITNESS WHEREOF, the Company has caused this Subscription Rights Certificate to be duly executed under their corporate seals.

 

Dated: April ___, 2010

	  	  	  	  	  
	  	
GENERAL FINANCE CORPORATION

  

	  
	  	
By:  

	  	  
	  	  	
Charles E. Barrantes 

	  
	  	  	
Executive Vice President and Chief Financial Officer 

	  

 

  

  

  

 

	  	  	  	  	  

 

DELIVERY OPTIONS FOR SUBSCRIPTION RIGHTS CERTIFICATE

 

FOR DELIVERY BY HAND DELIVERY, FIRST CLASS MAIL OR COURIER SERVICE:

 

Continental Stock Transfer & Trust Company

 Attn: Reorganization Department

 17 Battery Place, 8 th  Floor

 New York, New York 10004

 (212) 509-4000

 

DELIVERY OTHER THAN IN THE MANNER OR TO THE ADDRESSES LISTED

 ABOVE WILL NOT CONSTITUTE VALID DELIVERY

 

PLEASE PRINT ALL INFORMATION CLEARLY AND LEGIBLY

 

  

  

  

 

 

FORM 1 — EXERCISE OF SUBSCRIPTION RIGHTS

 

     To subscribe for Units pursuant to your Basic Subscription Right, please complete lines (a) and (c) and sign under Form 3 below. To subscribe for Units pursuant to your Over-Subscription Privilege, please also complete line (b) and sign under Form 3 below.

	  	  	  	 	 	 	  
	  	  	  	 	 	 	  
	
(a)

	
I apply for

	
                     Units

	 	 	x 	 	
= $                     

	  	  	
(No. of new Units)

	 	
(Subscription Price)

	 	
(Payment)

 

If you have exercised your Basic Subscription Right in full and wish to subscribe for additional Units pursuant to your Over-Subscription Right:

	  	  	  	 	 	 	  
	  	  	  	 	 	 	  
	
(b)

	
I apply for

	
                     Units

	 	 	x 	 	
= $                     

	  	  	
(No. of new Units)

	 	
(Subscription Price)

	 	
(Payment)

	  	  	  	 	 	 	 	  
	
(c)

	
Total Amount of Payment Enclosed = $

	 	  

 

METHOD OF PAYMENT (CHECK ONE):

 

	
  

	
o   Check or bank draft drawn on a U.S. bank, or postal, telegraphic or express money order payable to “Continental Stock Transfer & Trust Co. as agent for General Finance Corporation.” Funds paid by an uncertified check may take at least five business days to clear.

 

	
  

	
o   Wire transfer of immediately available funds directly to the account maintained by Continental Stock Transfer for purposes of accepting subscriptions in this Rights Offering (the “Subscription Account”):

 

JP Morgan Chase

 ABA # 021000021

 Continental Stock Transfer & Trust as agent for General Finance Corporation

 Acct # 475-507754

 

  

  

  

 

 

FORM 2 — DELIVERY TO DIFFERENT ADDRESS

 

     If you wish for the shares of our common stock, as well as the warrants, underlying your subscription rights to be delivered to an address different from that shown on the face of this Subscription Rights Certificate, please enter the alternate address below, sign under Form 3 and have your signature guaranteed under Form 4.

 

  

  

  

 

 

FORM 3 — SIGNATURE

 

     I acknowledge that I have received the Prospectus for this Rights Offering and I hereby irrevocably subscribe for the number of Units indicated above on the terms and conditions specified in the Prospectus.

	  	  	  
	  	  	  
	
Signature(s)

	  	  

 

IMPORTANT: The signature(s) must correspond with the name(s) as printed on the reverse of this Subscription Rights Certificate in every particular, without alteration or enlargement, or any other change whatsoever.

 

  

  

  

 

 

FORM 4 — SIGNATURE GUARANTEE

 

This form must be completed if you have completed Form 2.

 

Signature Guaranteed:                                                                                                   

 

(Name of Bank or Firm)

 

By:                                                                                                   

 

(Signature of Officer)

 

IMPORTANT: The signature(s) should be guaranteed by an eligible guarantor institution (bank, stock broker, savings & loan association or credit union) with membership in an approved signature guarantee medallion program pursuant to Securities and Exchange Commission Rule 17Ad-15.

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