Document:

EX-10.10 LICENSE AGREEMENT

 

EXHIBIT 10.10

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

treatment which has been filed separately with the SEC.

License Agreement

between

Vanderbilt University

and

Cumberland Pharmaceuticals Inc.

May 1999

 

 

LICENSE AGREEMENT

between

VANDERBILT UNIVERSITY

and

CUMBERLAND PHARMACEUTICALS INC.

THIS AGREEMENT, by and between VANDERBILT UNIVERSITY, a not-for-profit corporation, organized and
existing under the laws of the state of Tennessee (“VANDERBILT”), and Cumberland Pharmaceuticals
Inc., a Tennessee corporation, having a principal place of business at Nashville, Tennessee (the
“LICENSEE”) is effective as of the 28TH day of  May , 1999 (the
“EFFECTIVE DATE”).

RECITALS

WHEREAS, VANDERBILT represents that it holds title, by assignment, to the data, including patient
records, created by Gordon R. Bernard, M.D., Professor of Medicine (“the Data”) relating to
intravenously administered ibuprofen for treatment of sepsis and that it has all rights to the Data
and VANDERBILT is willing to grant a license to the Data and any intellectual property rights
associated therewith; and

WHEREAS, LICENSEE desires to acquire, and VANDERBILT desires to grant to LICENSEE, an exclusive,
worldwide license to use the Data in connection with the development and production of the
“Product,” as hereinafter defined, for which LICENSEE intends to seek necessary approvals from
regulatory governmental agencies in order to market and sell such products upon the terms and
conditions hereinafter set forth;

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, it is
agreed by the parties as follows:

1. DEFINITIONS

1.1 Product(s) shall mean a pharmaceutical product, consisting, in whole or part, of
intravenously administered ibuprofen manufactured by or for LICENSEE based on the Data and approved
by a regulatory agency for sale or other distribution in the country in which the agency has
regulatory authority.

1.2 Net Sales. The term “Net Sales” shall mean the receipts for Products sold by LICENSEE
or a sublicense during the term of this Agreement, computed quarter by quarter, less allowances
for:

          (a) cash, trade, or quantity discounts and rebates,

          (b) taxes, including sales taxes and duties,

          (c) credits, returns and replacements, and

          (d) shipping and insurance charges.

     Products shall be deemed sold when paid for.

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1.3 The Inventor. The term “Inventor” shall mean Gordon R. Bernard, M.D., Professor of
Medicine.

1.4 Affiliate means, when used with reference to LICENSEE, any entity directly or
indirectly controlling, controlled by or under common control with LICENSEE. For purposes of this
Agreement, “control” means the direct or indirect ownership of over fifty percent (50%) of the
outstanding voting securities of an entity, or the right to receive over fifty percent (50%) of the
profits or earnings of an entity, or the right to control the policy decisions of an entity.

2. GRANT

2.0 Exclusive License. VANDERBILT hereby grants to LICENSEE and LICENSEE hereby accepts
from VANDERBILT, upon the terms and conditions herein specified, an exclusive, royalty bearing,
worldwide license, with the right to sublicense, to use Data for any purpose, including manufacture
and sale of the Product(s) as well as submission to regulatory governmental agencies for approval
to sell Product(s), except as otherwise expressly set forth herein. Upon execution of this
Agreement, VANDERBILT through Gordon Bernard will promptly deliver to LICENSEE all information and
data relating to intravenously administered ibuprofen to which VANDERBILT holds title.

2.1 Federal Government Rights Reserved. Notwithstanding the exclusive license granted
herein, the Federal Government shall receive all the rights, if any, to the Data required by law or
regulation to be reserved to the government. All rights granted in this Agreement are expressly
granted subject to the rights of the Federal Government and such rights are specifically reserved
to the Government by this Agreement.

2.2 Reservation of Right. VANDERBILT reserves the right to make, use and further develop
the Data for its own non-commercial, educational and research purposes.

2.3 Upon receipt of regulatory approval to sell the Product, LICENSEE shall use reasonable efforts
to effect introduction of the Products into the commercial market as soon as practicable,
consistent with sound and reasonable business practices and judgment; thereafter, until the
expiration of this Agreement, LICENSEE shall use commercially reasonable efforts to keep Products
reasonably available to the public.

2.4 Subsidiaries and Distributors. License rights granted hereunder shall enable LICENSEE
to make, use, sell or otherwise distribute Product through any of its subsidiaries and to sell
Product through any of its normal channels including its subsidiaries, distributors, and agents.

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3. TERMS AND TERMINATION

3.0 Term. Unless previously terminated as herein provided, this Agreement shall become
effective as stated above and shall continue until LICENSEE ceases distribution of Product in all
countries in which it has obtained regulatory approval for manufacture and distribution of such
product based on use of the Data.

3.1 Termination. This Agreement may be terminated by written notice to the other party:

     (a) Other than as stated in Article 3.1(b), in the event that one party commits any
substantial breach of this Agreement, the non-breaching party at its option, may terminate this
Agreement by giving the breaching party written notice pursuant to Article 10.2 of its election to
terminate as of a stated date, not less than forty-five (45) days from the date of the notice.
Such notice shall state the nature of the defaults claimed by the non-breaching party. The
breaching party during said forty-five (45) day period, or such longer period as may be indicated
by the other, may correct any default stated in said notice and if such default is corrected, this
Agreement shall continue in full force and effect as if such notice had not been given. Failure by
LICENSEE to pay earned royalties to VANDERBILT in a timely manner shall be deemed a substantial
breach of the Agreement.

     (b) In the event LICENSEE shall file a petition for voluntary bankruptcy, has a petition for
involuntary bankruptcy filed against it (which petition is not withdrawn within sixty (60) days of
such filing), is adjudicated to be bankrupt, or shall make an assignment for the benefit of
creditors, or shall apply for or consent to the appointment of a receiver or trustee of a
substantial part of its property, to the extent permitted by law, this Agreement shall
automatically terminate effective as of a date ten (10) days prior to LICENSEE’s change of status
hereunder and shall be subject to Article 3.2.

     (c) In the event a LICENSEE provides written notice to VANDERBILT and LICENSEE is terminating
pursuing regulatory approval for the Product.

3.2 Effect of Termination. Upon termination of this Agreement, LICENSEE shall cease all
production and sale of Product except for the production and sale of Product on which production
had begun prior to notice of such termination. LICENSEE may continue to sell such Product for up
to one year after such notice upon payment of royalties accruing thereon, and shall render an
accounting to VANDERBILT of any royalties which may be due. Immediately upon termination all
rights of Licensee, except as expressly stated in this article, shall revert to VANDERBILT.

3.3 Sections 3.2, 3.4, 5.1, Article 6, Article 7, Article 8, Article 9, and Section 10.8 of the
agreement shall survive termination.

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4. CONSULTING AGREEMENTS

4.0 Consulting Agreements. In the event LICENSEE desires to have a Consulting Agreement
with Dr. Bernard, any such Consulting Agreement will be separate and apart from this Agreement, and
in accord with VANDERBILT policy and procedures.

5. ROYALTIES AND [***]

5.0 [***]

5.1 Royalties. Commencing on the effective date of this Agreement, LICENSEE agrees to pay
VANDERBILT at the rate of [***] percent of Net Sales of Products sold to third parties.

5.2 Schedule of Payment. LICENSEE further agrees to pay royalties on a quarterly basis
based on LICENSEE’s fiscal quarter and payments shall be due within forty-five (45) days after the
completion of the fiscal quarter. Each such payment shall be accompanied by a statement for the
period covered by such royalties showing total number or volume of Products sold, and total
royalties due, and identified as Net Sales within U.S. or non-U.S. This statement is to be
certified as accurate by a responsible officer of LICENSEE.

5.3 [***]

5.4 Reports. LICENSEE shall provide written annual reports within [***] after December 31
of each calendar year which shall include but not be limited to: reports of progress on research
and development, regulatory approvals, manufacturing, marketing and sales during the preceding
twelve (12) months as well as plans for the coming year. LICENSEE shall promptly notify VANDERBILT
if any changes in the marketplace or in LICENSEE’s financial condition or business aims suggest
commercialization will not occur within three (3) years from the date hereof.

5.5 Records. LICENSEE shall maintain complete and accurate records sufficient to enable
accurate calculation of royalties due VANDERBILT under this Agreement. LICENSEE shall, at
VANDERBILT’s request and expense, provide certified statements from LICENSEE’s auditors, concerning
royalties due pursuant to this Agreement. Once a calendar year, VANDERBILT shall have the right to
select a certified public accountant to inspect, on reasonable notice and during regular business
hours, the records of LICENSEE to verify LICENSEE’s statements and royalty payments pursuant to
this Agreement. The entire cost for such inspection shall be borne by VANDERBILT, unless there is
a discrepancy greater than 5% in VANDERBILT’s favor, in which case LICENSEE shall bear the entire
cost of the inspection. Records shall be preserved by LICENSEE for three (3) years for inspection
by VANDERBILT.

5.6 If this Agreement is not terminated in accordance with other provisions hereof, LICENSEE’s
obligation to pay royalties hereunder shall continue as long as Product is being distributed by
LICENSEE.

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5.7 The royalty on sales in currencies other than U.S. Dollars shall be calculated using the
appropriate exchange rate for such transactions quoted by CITICORP BANK (NEW YORK) foreign exchange
desk on the last banking day of each calendar quarter. Royalty payments to VANDERBILT shall be in
U.S. Dollars.

5.8 In the event that LICENSEE is acquired by a third party or enters into a joint venture with a
third party, or in any other way transfers all of its assets, including this License to a third
party, all obligations of this License, including the foregoing royalty terms, shall be binding
upon the party acquiring this License.

6. CONFIDENTIALITY

6.0 It may be necessary for one party to disclose to the other party certain confidential or
proprietary information, including business plans and marketing strategies. In such event, the
receiving party agrees to preserve such identified information as confidential. The obligation of
confidentiality shall not apply to information which:

     (a) is now in the public domain or which becomes generally available to the public through no
fault of the receiving party; or

     (b) is already known to, or in the possession of, the receiving party prior to disclosure by
the disclosing party as can be demonstrated by documentary evidence; or

     (c) is disclosed on a non-confidential basis from a third party having the right to make such
a disclosure; or

     (d) is independently developed by the receiving party as can be demonstrated by documentary
evidence.

6.1 Term. The confidentiality obligations of this Article shall continue for a period of
five (5) years beyond the termination of this Agreement.

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7. INFRINGEMENT

7.0 Products Infringing Third Parties. Each party shall promptly notify the other if any
legal proceedings are commenced or threatened against either party or any purchaser of a Product
sold by LICENSEE on the ground that the manufacture, use, sale or possession of the Product is an
infringement of a third party’s patent or other intellectual property rights. LICENSEE shall, at
its own expense, conduct all suits brought against it as a result of the exercise of the rights
granted hereunder, and VANDERBILT shall, at the request and expense of LICENSEE, give LICENSEE all
reasonable assistance in any such proceedings. Payment of any amounts which may be recovered by
such third party by way of judgment, award, decree, or settlement that resulted from infringement
of third party patent rights or other rights by a Product, including attorneys’ fees and other
costs shall be the sole responsibility of LICENSEE. LICENSEE agrees not to settle or compromise any
action, suit or proceeding without the consent of VANDERBILT.

8. WARRANTIES AND INDEMNITIES

8.0 Nothing in this Agreement shall be constructed as:

     (a) a warranty or representation by VANDERBILT that anything made, used, sold, or otherwise
disposed of through the license granted herein is or will be free from infringement of patents
rights of third parties;

     (b) an obligation by VANDERBILT to bring or prosecute actions or suits against third parties
for infringement;

     (c) Granting by implication, estoppel, or otherwise any licenses under patents of VANDERBILT.

8.1 To the best of its knowledge and belief, VANDERBILT hereby represents and warrants that it is
the sole owner of the Data and has the right to grant the license to the Data provided herein and
that to the best of its knowledge and belief after due inquiry, no rights of patients or other
persons are or will be infringed by the license granted to LICENSEE. VANDERBILT further represents
and warrants that the Data is both accurate and complete and includes all information and data
relating to intravenously administered ibuprofen to which VANDERBILT holds title. VANDERBILT also
represents and warrants that it has full right, title, and authority to enter into this Agreement
and that VANDERBILT is not under any obligation resulting from any contract or arrangement, to any
person, firm, or corporation, which is inconsistent or in conflict with this Agreement.

8.2 (a) LICENSEE shall indemnify, defend and hold harmless VANDERBILT and its trustees, officers,
faculty, staff, employees, students, agents and representatives, and their respective successors,
heirs and assigns (the “Indemnities”), against any liability, damage, loss or expenses (including
reasonable attorneys’ fees and expense of litigation) incurred by or imposed upon the Indemnities
or any one of them in connection with any claims, suits, actions, demands, or judgments arising out
of any theory of law (including, but not limited

6

 

to, actions in the form of tort, warranty, or strict liability) arising from LICENSEE’s use of the
Data pursuant to any right or license granted under this Agreement. Such indemnity obligation
shall include claims and expenses related to infringement of a third party’s rights by the Product.

     (b) LICENSEE agrees, at its own expense, to provide attorneys reasonably acceptable to
VANDERBILT to defend against any actions brought or filed against any party indemnified hereunder
with respect to the subject of indemnity contained herein, whether or not such actions are
rightfully brought.

     (c) VANDERBILT shall indemnify, defend and hold harmless LICENSEE and its officers, directors,
employees, agents, and shareholders, notwithstanding termination of this Agreement, against any
liability, damage, loss, or expenses (including reasonable attorney’s fees) incurred by or imposed
in connection with any claims, suits, actions, demands or judgments arising out of any theory of
law (including, but not limited to, actions in the form of tort, warranty, or strict liability)
arising from default under any provision of this Agreement by VANDERBILT.

8.3 VANDERBILT MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND EXPRESS OR IMPLIED,
OTHER THAN AS EXPRESSLY STATED HEREIN. THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR THAT USE OF A PRODUCT WILL NOT INFRINGE ANY
PATENT, COPYRIGHT, TRADEMARK, OR OTHER INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.

8.4 Regarding the indemnity and hold harmless provisions, under Paragraph 8.2, VANDERBILT shall
give prompt written notice to LICENSEE of the commencement of any action, suit, or proceeding for
which indemnification may be sought, and LICENSEE, through counsel reasonably satisfactory to
VANDERBILT shall assume the defense thereof; provided, however, that VANDERBILT shall be entitled
to participate in any such action, suit, or proceeding with counsel of its own choice, but at its
own expense. If LICENSEE fails to assume the defense within ninety (90) days of receipt of written
notice of the action, suit, or proceeding, VANDERBILT may assume such defense and the reasonable
fees and expenses of its attorneys will be covered by the indemnity provided for in Paragraph 8.2.
No such action, suit, or proceeding shall be compromised or settled in any manner which might
adversely affect the interests of VANDERBILT without the prior written consent of VANDERBILT.
Notwithstanding anything in this Paragraph to the contrary, LICENSEE shall not, without the written
consent of VANDERBILT, which consent shall not be unreasonably withheld:

     (a) Settle or compromise any action, suit, or proceeding or consent to the entry of any
judgment which does not include as an unconditional term thereof the delivery by the claimant or
plaintiff to VANDERBILT of a written release from all liability in respect of such action, suit, or
proceeding; or

     (b) Settle or compromise any action, suit, or proceeding in any manner which may adversely
affect VANDERBILT.

7

 

8.5 Insurance. (a) Beginning at the time as any Product is being commercially distributed
or sold by LICENSEE or agent of LICENSEE, LICENSEE or such other, shall make commercially
reasonable efforts to procure and maintain comprehensive general product liability and tort
liability insurance in amounts not less than $5,000,000 per incident and $5,000,000 annual
aggregate and name the Indemnities as additional insureds. Such comprehensive general liability
insurance shall provide (i) product liability coverage and (ii) broad form contractual liability
coverage for LICENSEE’s indemnification under this Agreement. If LICENSEE elects to self-insure or
otherwise finds it necessary to self-insure all or part of the limits described above, such
self-insurance program must be reasonably acceptable to VANDERBILT. LICENSEE agrees that no amount
greater than the sum of $250,000 shall be deductible under LICENSEE’s primary coverage for
VANDERBILT and LICENSEE against any claims or suits arising from alleged defects in Products. The
minimum amounts of insurance coverage required shall not be construed to create or limit LICENSEE’s
liability with respect to its indemnification under this Agreement.

     (b) LICENSEE represents and warrants that it will make commercially reasonable efforts to
acquire its product liability and general tort liability is of the occurrence-based rather than
claims-made type. Within thirty (30) day after the date of the first commercial sale of a Product
hereunder, LICENSEE shall provide VANDERBILT with a certificate or certificates of insurance
evidencing that VANDERBILT has been named as an additional insured party and evidencing the
insurer(s) is required to notify VANDERBILT in writing at least thirty (30) days in advance of any
termination of the policy or certificate, or any modification that would cause LICENSEE no longer
to be in compliance with the provisions of this Article, or would cause the representation and
warranties set forth above in this Article no longer to be true, such written notification to
specify the reason for such termination, the nature of the proposed modification, as the case may
be. It is expressly agreed by the parties that the provisions of this Article regarding insurance
shall in no way limit LICENSEE’s indemnity obligations, except to the extent that LICENSEE’s
insurer(s) actually pays VANDERBILT amounts for which VANDERBILT is entitled to be indemnified
under this Agreement, nor shall VANDERBILT have any obligation to pursue any insurer as a
precondition to its rights to be indemnified by LICENSEE. As used in this Article, the term
“VANDERBILT” shall include VANDERBILT, and its officers, directors, agents and employees. If
LICENSEE does not make commercially reasonable efforts to obtain replacement insurance within such
thirty (30) day period specified above, VANDERBILT shall have the right to terminate this Agreement
effective at the end of such thirty (30) day period without notice or any additional waiting
periods.

     (c) LICENSEE shall maintain such comprehensive general product liability and tort liability
insurance or self-insurance beyond the expiration or termination of this Agreement during (i) the
period that any product relating to, or developed pursuant to, this Agreement is being commercially
distributed or sold by LICENSEE or agent of LICENSEE and (ii) a period not less than the statute of
limitations for product liability claims in the state in which the product is being used.

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9. USE OF VANDERBILT’S NAME

9.0 LICENSEE agrees not to identify VANDERBILT or to use the name of VANDERBILT, its faculty,
employees, or students, or any trademark, service mark, trade name, or symbol of VANDERBILT, or
that is associated with any of them, in promotional advertising or other similar materials without
VANDERBILT’s written consent, except as required by governmental authority. LICENSEE may, without
prior consent, refer to VANDERBILT as LICENSOR of the Data submitted in support of marketing
approval for Product in a business plan, fund raising material or the like. All other uses of
VANDERBILT’s name shall be made only after prior approval.

9.1 VANDERBILT agrees not to identify LICENSEE or to use the name of LICENSEE’s officers,
employees, or any trademark, service mark, trade name or symbol of LICENSEE without the written
consent of LICENSEE, except as may be required by governmental authority or as necessary in the
normal course of VANDERBILT’S business operations.

10. TERMS AND CONDITIONS

10. Manner of Payment. All payments hereunder shall be made by check to VANDERBILT. Where
required to do so by applicable law or treaty, LICENSEE shall withhold taxes required to be paid
to a taxing authority on account of such income to VANDERBILT, and LICENSEE shall furnish
VANDERBILT with satisfactory evidence of such withholding and payment in order to permit
VANDERBILT to obtain a tax credit or other relief as may be available under the applicable law or
treaty.

10.1 Provisions Contrary to Law. In performing this Agreement, the parties shall comply
with all applicable laws and regulations. In particular, it is understood and acknowledged that
the transfer of certain commodities and technical data is subject to United States laws and
regulations controlling the export of such commodities and technical data, including all Export
Administration Regulations of the United States Department of Commerce. These laws and regulations
among other things, prohibit or require a license for the export of certain types of technical
data to certain specified countries. LICENSEE hereby agrees and gives written assurance that it
will comply with all United States laws and regulations controlling the export of commodities and
technical data, that it will be solely responsible for any violation of such by LICENSEE or its
Affiliates, and that it will defend and hold VANDERBILT harmless in the event of any legal action
of any nature occasioned by such violation.

Nothing in this Agreement shall be construed so as to require the violation of any law, and
wherever there is any conflict between any provision of this Agreement and any law the law shall
prevail, but in such event the affected provision of this Agreement shall be affected only to the
extent necessary to bring it within the applicable law.

10.2 Notices. Any notice may be initially given by facsimile with confirmation required or
permitted to be given by this License by postpaid, first class, registered or certified mail
addressed as set forth below unless changed by notice so given:

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	For LICENSEE:

	 	For VANDERBILT:
	 
	 	 
	Cumberland Pharmaceuticals Inc.

	 	Office of Technology Transfer
	209 10th Ave. South, Suite 332

	 	VANDERBILT University
	Nashville, Tennessee 37203

	 	1207 17th Avenue, S., Suite 210
	Fax: 615-259-9085

	 	Nashville, TN 37212
	 

	 	Fax: 615-343-4419
	 
	 	 
	With a copy to:
	 	 
	 
	 	 
	Stokes & Bartholomew, P.A.
	 	 
	424 Church Street, 28th Floor
	 	 
	Nashville, Tennessee 37214
	 	 
	Attn: Martin S. Brown, Esq.
	 	 
	Fax: 615-259-1470
	 	 

Such notice shall be effective upon receipt by the party to whom notice is sent.

10.3 Dispute Resolution. The parties acknowledge and agree that they have entered into this
agreement with the expectation of a long-term, mutually beneficial relationship. However, should
disagreement arise regarding obligations imposed on the parties be this Agreement, it is agreed
that the parties will, in good faith, promptly attempt to reach an amicable resolution of such
disagreement.

10.4 Force Majeure. Neither party to this License Agreement shall be liable for delay or
failure in the performance of any of its obligations hereunder if such delay or failure is due to
causes beyond its reasonable control, including, without limitation, acts of God, fires,
earthquakes, strikes, and labor disputes, acts of was, civil unrest, or intervention of any
governmental authority, but any such delay or failure shall be remedied by such party as soon as is
reasonably possible. Failure to make timely royalty payments shall not be excused by Force
Majeure.

10.5 Assignments. Except in connection with the sale of all or substantially all of the
assets of either party, this Agreement may not be assigned by either party without the prior
written consent of the other party, which consent shall not be unreasonably withheld. The parties
hereto agree that each is acting as an independent contractor and not as an agent of the other or
as joint ventures.

10.6 Waivers and Modifications. The failure of any party to insist on the performance of
any obligation hereunder shall not act as a waiver of such obligation. No waiver, modification,
release, or amendment of any obligation under this Agreement shall be valid or effective unless in
writing and signed by both parties hereto.

10.7 Successors in Interest. This Agreement shall inure to the benefit of and be binding on
the parties’ permitted assigns, successors in interest, and subsidiaries.

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10.8 Choice of Law and Jurisdiction. This Agreement is subject to and shall be construed
and enforced in accordance with the laws of the U.S.A., and Tennessee. Any action on any dispute
arising out of this Agreement shall be tried in Davidson County, and the parties consent to the
jurisdiction of the state and federal courts there.

10.9 Entire Agreement. This Agreement constitutes the entire agreement between the parties
as to the subject matter hereof, and all prior negotiations, representations, agreements and
understandings are merged into, extinguished by and completely expressed by this Agreement.

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IN WITNESS WHEREOF, the parties have duly executed this Agreement on the date(s) written below.

	 	 	 	 	 	 	 	 	 	 	 
	LICENSEE	 	 	 	VANDERBILT UNIVERSITY	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ A.J. Kazimi
	 	 	 	By:
	 	/s/ Larry R. Steranka
	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	A.J. Kazimi
	 	 	 	 	 	Larry R. Steranka, Ph.D.	 	 
	Title:

	 	President
	 	 	 	Title:
	 	Director, Office of Technology Transfer	 	 
	Date:

	 	May 28, 1999
	 	 	 	Date:
	 	June 4, 1999	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	ACKNOWLEDGED AND AGREED	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Gordon R. Bernard, M.D.	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	A.J. Kazimi	 	 	 	 	 	 	 	 
	Title:

	 	Professor of Medicine	 	 	 	 	 	 	 	 
	Date:

	 	6/2/99	 	 	 	 	 	 	 	 

12EX-10.11 EMPLOYMENT AGREEMENT

 

EXHIBIT 10.11

January 31, 2007

Mr. A.J. Kazimi

712 Overton Park

Nashville, Tennessee 37215

Re: Employment of A.J. Kazimi as Chief Executive Officer by Cumberland Pharmaceuticals Inc.

Dear A.J.:

Effective January 1st, 2007, 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 Chief Executive 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 three hundred three thousand three hundred ninety dollars ($303,390.00), payable in arrears in
equal monthly installments on the last day of each calendar month during the term of this
Agreement.

(b) You will be eligible to participate in any Company-wide employee benefits as approved by the
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 have elected not to receive this year, as part of your 2007 compensation, an option
award to purchase Cumberland common shares.

(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.

CUMBERLAND PHARMACEUTICALS INC.

2525 West End Avenue, Suite 950 • Nashville, Tennessee 37203 • Telephone: (615) 255-0068 • Facsimile: (615) 255-0094

www.cumberlandpharma.com

 

 

January 31, 2007

A.J. Kazimi

Page 2.

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.

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 terminated 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

 

 

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A.J. Kazimi

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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.

 

 

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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.

 

 

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A.J. Kazimi

Page 5.

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.	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ Jean W. Marstiller	 	 
	 	 	 	 	 
	 

	 	By:
	 	Jean W. Marstiller	 	 
	 

	 	 	 	Corporate Secretary	 	 
	 
	 	 	 	 	 	 
	Accepted as to all terms
and conditions as
	 	 	 	 	 	 
	of
the 7th of
February, 2007:
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	/s/ A.J. Kazimi
	 	 	 	 	 	 
	 

A.J. Kazimi

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