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

treatment which has been filed separately with the SEC

 

FIRST AMENDMENT TO

EXCLUSIVE DISTRIBUTION AGREEMENT BETWEEN

CUMBERLAND PHARMACEUTICALS, Inc.

AND

CARDINAL HEALTH 105, INC.

This Amendment to the Exclusive Distribution Agreement (“ First Amendment ”) is made as of March 31, 2013 (“ Effective Date ”), by and between Cumberland Pharmaceuticals, Inc., a Tennessee corporation, with an address of 2525 West End Avenue, Suite 950, Nashville, Tennessee 37203 (“ Client ”), and Cardinal Health 105, Inc., an Ohio corporation, with a place of business at 15 Ingram Boulevard, Suite 100, LaVergne, Tennessee, 37086 (“ Cardinal Health ”) each individually a (“ Party ”) and collectively (the “ Parties ”).

RECITALS

WHEREAS Cardinal Health and Client are Parties to an Exclusive Distribution Agreement dated (“ Effective Date ”) as of July 1, 2010 (“ Agreement ”) and the Parties desire to amend the Agreement as provided in this First Amendment; and

WHEREAS Client wishes to engage Cardinal Health to assist with their physician sample orders based on the Prescription Drug Marketing Act of 1987 for samples shipping; and

WHEREAS , the Parties mutually agree to amend the Agreement including (Exhibit A) Opertaing Guidelines and (Exhibit B) Fee Schedule.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this First Amendment, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree that the Agreement is hereby amended as follows:

1. Amendment to Section 5.1 of the Agreement. In Section 5.1 of the Agreement is deleted in its entirety and is replaced with the following language:

5.1 Fees. As compensation for the Services, Client shall pay to Cardinal Health the fees (“ Fees ”) set forth in Exhibit B-2 (“ Fee Schedule ”) attached hereto and incorporated by reference.

2.      Amendment to Section 6.1 of the Agreement. Section 6.1 of the Agreement, is deleted in its entirety and shall be replaced with the following:

6.1      Term . The Initial term of this Agreement shall begin on the Effective Date and shall continue through June 30, 2016 (“ Initial Term ”) unless terminated earlier pursuant to this Agreement. Thereafter, this Agreement shall automatically renew for additional terms of one (1) year each (each, a “ Renewal Term ,” and together with the Initial Term, the “ Term ”), unless written notice of termination is given by either Party at least ninety (90) days prior to the end of the Initial Term or such other term, in which case this Agreement shall terminate at the end of the then current term.

3.      Amendment to Section 1.0 of Exhibit A (Operating Guidelines) related to Warehousing. The following section shall be added to Section 1.0 of the Operating Guidelines:

1.1(a)    With reference to those regulations set forth in 21 CFR Part 203, Cardinal Health will support Client's programs directed to compliance with the Prescription Drug Marketing Act of 1987 (“ PDMA ”) provisions related to acceptance of valid sample requests, validation of practitioner's license status, inventory, storage, distribution, shipment, retrieval of acknowledgement of contents, response to practitioner patterns of non-response, signature verification, document controls and record retention, and other services performed on behalf of the Client to maintain PDMA compliance.  Other aspects of compliance with the PDMA, such as providing Product labeled specifically for sampling, forwarding requests for samples to Cardinal Health and interacting with regulatory authorities, will remain the sole responsibility of the Client.

4.      Amendment to Section 5.0 of Exhibit A (Operating Guidelines) related to Distribution. The following section shall be added to Section 6 of the Operating Guidelines:

5.16     Please Note. Responsibility for verifying and submitting order forms for physician sample orders will remain the sole responsibility of the Client. Additionally, Cardinal Health will contact the Client to resolve discrepancies identified on the order forms that have been submitted for Physician sample orders.

5.      Amendment to Section 23.0 (Records Retention) of Exhibit A (Operating Guidelines) of the Agreement. The Records Retention Schedule in Section 23.0 of Exhibit A is deleted in its entirety and replaced with the following:

6.      Amendment to Exhibit B (Fee Scehdule) of the Agreement. Exhibit B of the Agreement dated January 5, 2010 is deleted in its entirety and replaced with the attached Exhibit-B2 dated April 1, 2013.

7.      No Other Changes. Except as specifically set forth in this First Amendment, the Agreement will continue in full force and effect without change.

8.     Interpretation. To the extent there are any inconsistencies between the provisions of this First Amendment and the provisions of the Agreement, the provisions of this First Amendment will control. Capitalized terms not otherwise defined herein shall have the same meaning given those terms in the Agreement, it being the intent of the Parties that the Agreement and this First Amendment will be applied and construed as a single instrument. The Agreement, as modified by this First Amendment, constitutes the entire agreement between Cardinal Health and Client regarding the subject matter of this First Amendment and supersedes all prior or contemporaneous writings and understandings between the Parties regarding the same.

9.     Counterparts. This Amendment may be executed in one or more counterparts (with facsimile signatures acceptable), each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

10.     Authorized Signatories. All signatories to this First Amendment represent that they are authorized by their respective companies to execute and deliver this Amendment on behalf of their respective companies, and to bind such companies to the terms herein.

IN WITNESS WHEREOF , the Parties hereto have agreed to this First Amendment by having their duly authorized representative execute this Amendment effective as of the 1st day of April, 2013.

< Signature Page to First Amendment >

Note (1): This amended fee schedule is based on distribution services for Cumberland Pharmaceuticals.

Note (2): System access fees includes five user logins to the SmartData reporting system. Additional users will increase the monthly fee by $[***] per user. The system access fee also supports the collection, maintenance and housing of data and IT staff support of the Cardinal Health systems supporting Client's business (i.e. Elite WMS and DMS) * Information Systems / Smart Data fixed fee will increase to $[***] from current $[***] after sample line launches.

Note (3): Should Cumberland Pharmaceuticals require an additional product or service implementation, excluding the product/SKU noted, SPS reserves the right to assess additional Program Implementation Fees. The first payment would be due after the initial implementation meeting. In addition distribution, customer service and financial service monthly fees could be increased accordingly per implementation.

Note (4): Supplies include boxes, tape, labels, bubble pack, etc (approx. $[***] per shipment), pallets ($[***]/pallet), and any other Cumberland Pharmaceuticals requirements.

Note (5): Pallet storage fee is based on a daily average of pallets on hand. Pallet storage greater than two months inventory on hand will be assessed an additional charge of three times the standard fee.

Note (6): The account management fee covers the following services: logistics management, inventory management, regulatory affairs and quality assurance, receiving discrepancy resolution, standard operating procedures, validation management, supply control, process set-ups, and process scheduling.

Note (7): Cardinal SPS will provide business continuity and third party logistics services including product storage and distribution management from its Reno, Nevada facility. All other fees for pick/pack/stage, order, credit

memo, invoice and chargeback processing will be applied accordingly to product that is shipped out of the Reno, Nevada facility.

Note (8): Payment terms will be Net [***].