THE SECURITIES REPRESENTED BY THIS CONVERTIBLE SUBORDINATED NOTE HAVE NOT BEEN

REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE LAWS OF ANY

STATE AND MAY NOT BE TRANSFERRED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION

STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND

APPLICABLE STATE LAWS OR (B) AN OPINION OF COUNSEL FOR THE PAYEE REASONABLY

ACCEPTABLE TO THE MAKE THAT SUCH REGISTRATION IS NOT REQUIRED.



                          CONVERTIBLE SUBORDINATED NOTE



$5,999,998.72                                                  January 29, 2002



FOR VALUE RECEIVED, the undersigned KENDLE INTERNATIONAL INC., an Ohio

corporation (the "Maker") hereby promises to pay to the order of CLINICAL AND

PHARMACOLOGIC RESEARCH, INC., a West Virginia corporation (together with its

permitted transferees and assigns, "CPR" or the "Payee"), the principal sum of

Five Million Nine Hundred Ninety-Nine Thousand Nine Hundred Ninety-Eight and

72/100 Dollars ($5,999,998.72), plus interest at the rate specified below. The

unpaid principal balance outstanding from time to time shall bear interest prior

to the Maturity Date (as defined below) at an annual rate of interest equal to

the yield of a United States Treasury Note with a maturity of three (3) years.

The initial interest rate, which shall be in effect from the date hereof through

January 29, 2005, shall be 3.80% PER ANNUM. In the absence of a conversion of

this Convertible Subordinated Note ("Note") under subsections (a) or (c) below,

interest shall be paid in cash semi-annually in arrears on each June 30 and

December 31 during the term of this Note, with the first interest payment to be

made on June 30, 2002.



         The Maker hereby agrees to pay the entire amount due hereunder,

including the entire principal and all accrued but unpaid interest, on or before

January 29, 2005 ("Maturity Date"). If this Note has not been converted into

shares of common stock, no par value per share, of the Maker on or before

January 29, 2005, the Maker shall have the option to extend the Maturity Date of

this Note for another three (3) years, to January 29, 2008 by providing to Payee

additional documentation as reasonably requested by Payee. The Maturity Date, as

so extended, is hereinafter referred to as the "Final Maturity Date." The

interest rate on this Note will, if the Maturity Date is extended, be reset on

January 29, 2005 at an annual rate of interest equal to the yield of a United

States Treasury Note with a maturity of three (3) years from January 29, 2005.

The Maker shall exercise its option to extend the Maturity Date of this Note not

less than ten (10) business days prior to the Maturity Date.



         Interest hereon shall be calculated on the basis of a 360-day year

based on the actual number of days elapsed until all accrued and unpaid interest

is paid in full. All payments of principal and interest shall be payable in

lawful currency of the United States.



{PAGE}

                                      -2-



         If any required payment of principal and interest is not timely made

and an Event of Default (as defined below) occurs, the interest rate shall

thereafter be increased by three (3%) percent PER ANNUM ("Default Rate"). All

interest due and payable hereunder which is not paid when due for any reason

shall be cumulated and accrue interest at the Default Rate.

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