Exhibit 10.11
EMPLOYMENT AGREEMENT
     THIS EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of
February 1, 2010 (the “Effective Date”) by and between CPEX Pharmaceuticals,
Inc., a Delaware corporation (the “Employer” or “CPEX”), and Nils Bergenhem (the
“Employee”).
RECITALS
     The Employer desires to employ the Employee, and the Employee desires to be
employed by the Employer, all upon the terms and provisions and subject to the
conditions set forth in this Agreement.
WITNESSETH
     NOW THEREFORE, in consideration of the foregoing premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree to be legally bound as follows:
1. Employment. The Employer hereby agrees to employ the Employee, and the
Employee hereby accepts such employment, as Chief Scientific Officer and Vice
President of the Employer, upon the terms and subject to the conditions set
forth in this Agreement. The Employee shall perform such functions as are
consistent with these positions under the supervision of the Chief Executive
Officer of the Employer. The Employee shall, without any compensation in
addition to that which is specifically provided in this Agreement, serve in such
further offices or positions with Employer or any subsidiary or affiliate of
Employer (collectively, the “Employer Group”) as shall from time to time be
reasonably requested by the Chief Executive Officer of Employer.
2. Term. Subject to the termination provisions hereinafter contained, the term
of this Agreement shall be for an initial term commencing on the Effective Date
and terminating on December 31, 2010. This Agreement shall thereafter be
automatically renewed for successive one (1) year terms, unless the Employee’s
employment with the Employer has been terminated, as hereinafter provided, or
unless either party shall have given the other party notice at least one year
before the then applicable date of expiration that this Agreement will terminate
as of its then applicable date of expiration. The initial term of this
Agreement, and any extension thereof pursuant to this paragraph, are referred to
as the “Term”.
3. Compensation, Reimbursement, Etc.

  a.   Base Salary. The Employer shall pay to the Employee as compensation for
all services rendered by the Employee a base salary of $18,750.00 per month (the
“Monthly Base Salary”), payable in accordance with the Employer’s regular
payroll practices, plus annual bonuses on a calendar year basis as determined by
the Compensation Committee of the Employer’s Board of Directors (the
“Compensation Committee”), subject to Sections 3(d) and 3(e). If an increase in
Monthly Base Salary is determined for a calendar year after January 1 and

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      before May 31 of that year, the increase shall be retroactive to the
beginning of that year. Annual review of the Employee’s Monthly Base Salary will
be on a calendar year basis, and the results of such review will be provided to
the Employee no later than May of the following year.

  b.   Expense Reimbursement. The Employer shall reimburse the Employee on a
semi-monthly basis for all reasonable expenses incurred by the Employee in the
performance of his duties under this Agreement; provided however, that the
Employee shall have previously furnished to the Employer an itemized account,
satisfactory to the Employer, in substantiation of such expenditures.     c.  
Benefits. The Employee shall be entitled to health and other benefits on the
same terms and conditions as the Employer has made available to other senior
executives of Employer, including without limitation participation in the
Employer’s health plans. If the Employee elects not to participate in the
Employer’s health plans, Employee shall be entitled to reimbursement for the
premiums paid for an alternate plan in amounts not to exceed the premiums that
would have been paid on behalf of the Employee for Employer’s health plan. The
Employer agrees to maintain life insurance and disability coverage on the
Employee in an amount equivalent to 24 times Monthly Base Salary, which
insurance will be payable to the Employee’s estate or beneficiaries (as the
Employee may designate) upon the Employee’s death or to the Employee in the
event of disability as provided in Section 7(b) hereof.     d.   Bonuses. The
Employee shall be eligible for a bonus each year of the Term equal to up to 40%
of twelve (12) times his Monthly Base Salary, prorated for the first year of
employment, payable in cash, common stock and/or other equity awards, and the
amount of any such bonus to be paid for any year shall be determined by the
Compensation Committee in its sole discretion. Such annual bonus will be awarded
for each year as soon as practicable after March 15, but in no event later than
June 30, of the following year.     e.   Equity Awards and Initial Bonus

  i.   Upon the Effective Date, CPEX will grant the Employee initial awards of
17,500 nonstatutory stock options and 5,840 restricted stock units under the
Employer’s Amended and Restated 2008 Equity Incentive Plan (the “Equity Plan”).
These equity awards shall vest one third each year over a three year period from
the initial grant date.     ii.   The Company will provide an initial bonus of
$30,000 in cash, payable to the Employee upon start of his employment.     iii.
  So long as the Employee continues to be employed as an executive officer of
the Employer, the Employee will be eligible for periodic equity awards (“Equity
Awards”) under the Employer’s Equity Plan or another plan as determined by the
Compensation Committee. All Equity Awards shall be

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      subject to substantially the same terms and conditions (and, if more than
one type of award is granted, in the same proportions) as the annual equity
awards made generally to the other executive officers of the Employer, as
determined in good faith by the Compensation Committee, which awards shall be
made on the same date as when annual equity awards are made generally to the
other executive officers of the Employer.

  f.   Annual Review. The Employee shall be reviewed on an annual (calendar
year) basis.

4. Duties. The Employee will be engaged as Chief Scientific Officer and Vice
President of the Employer. In addition, the Employee shall have such other
duties and hold such offices as may from time to time be reasonably assigned to
him by the Chief Executive Officer of the Employer.
5. Extent of Services. During the Term, the Employee shall devote his full time,
energy and attention to the benefit and business of the Employer and its
affiliates and shall not be employed by another entity, either directly or as a
consultant to or in any other capacity, except as approved in advance by the
Employer’s Board of Directors; provided, however, that no such approval shall be
required to serve as a director, officer or trustee of any trade association or
of any civic or charitable organization so long as such service does not
significantly interfere with the Employee’s performance of his duties at the
Employer.
6. Vacation. The Employee may take a maximum of four weeks of paid vacation each
calendar year, at times to be determined in a manner most convenient to the
business of the Employer, as approved by the Chief Executive Officer. A maximum
of one week of unused vacation may be carried over from one calendar year to the
next.
7. Termination Following Death or Incapacity.

  a.   Death. All rights of the Employee under this Agreement shall terminate
upon death (other than rights accrued prior thereto). All Equity Awards shall be
exercisable for a period of twelve (12) months from death, in accordance with
the Plan. The Employer shall pay to the estate of the Employee any unpaid salary
and other benefits due, as well as reimbursable expenses accrued and owing to
the Employee at the time of his death and any term-life insurance benefit
provided in accordance with Section 3(c) above.     b.   Disability.

  i.   During any period of disability, illness or incapacity during the Term
which renders the Employee at least temporarily unable to perform the services
required under this Agreement, the Employee shall receive his salary payable
under Section 3 of this Agreement, less any benefits received by him under any
insurance carried by or provided by the Employer; provided however, all rights
of the Employee under this

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      Agreement (other than rights already accrued) shall terminate as provided
below upon the Employee’s permanent disability (as defined below).

  ii.   The term “permanent disability” as used in this Agreement shall mean the
inability of the Employee, as determined by the Board of Directors of the
Employer, by reason of physical or mental disability to perform the duties
required of him under this Agreement after a period of: (a) 120 consecutive days
of such disability; or (b) disability for at least six months during any twelve
month period. Upon such determination, the Board of Directors may terminate the
Employee’s employment under this Agreement upon ten (10) days prior written
notice. In the event of permanent disability all Equity Awards shall vest, and
be exercisable for a period of time, in accordance with their respective terms
and the terms of the Plan.     iii.   If any determination of the Board of
Directors with respect to permanent disability is disputed by the Employee, the
parties hereto agree to abide by the decision of a panel of three physicians.
The Employee and Employer shall each appoint one member, and the third member of
the panel shall be appointed by the other two physicians. If the physicians
appointed by the parties have not agreed upon the third physician within fifteen
(15) days, either party may petition the New Hampshire Medical Society to
appoint a third physician. The Employee agrees to make himself available for and
to submit to reasonable examinations by such physicians as may be directed by
the Employer. Failure to submit to any such exam shall constitute a material
breach of this Agreement. In the event such a panel is convened, the party whose
position is not sustained will bear all the associated costs.

8. Other Terminations.

  a.   Without Cause.

  i.   Either the Employee or the Employer may terminate the Employee’s
employment hereunder at any time upon written notice.     ii.   If the Employee
gives written notice pursuant to paragraph (i) above, the Employer shall have
the right to either (a) relieve the Employee, in whole or in part, of his duties
under this Agreement or (b) to accelerate the date of termination of employment
to coincide with the date on which the written notice is received.     iii.  
Notwithstanding any provisions hereof to the contrary, the Employer may
terminate Employee’s employment hereunder without cause at any time. If the
Employer terminates the Employee’s Employment pursuant to the provisions of this
Section 8(a), it shall pay to the Employee as a severance

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      benefit, in cash, an amount equal to (a) twelve months of the Employee’s
Monthly Base Salary plus (b) the higher of the bonus target for the current year
or the bonus paid for the prior year, which amount shall be due and payable in a
lump sum within not more than ten (10) days after such termination or such later
date on which the revocation period for the separation agreement contemplated by
Section 18 expires provided, however, that this obligation shall terminate if
the separation agreement has not been delivered and the revocation period has
not expired within sixty 60 days after such termination. Additionally, the
vesting of Equity Awards shall be accelerated on a pro rata basis determined by
the number of completed months of service during the then current annual vesting
period, the vested portions of such Equity Awards shall be exercisable for the
period of time indicated in the terms of the Equity Award, and all other vesting
of Equity Awards shall cease unless otherwise determined by the Compensation
Committee.

  b.   For Cause.

  i.   The Employer may terminate the Employee’s employment hereunder without
notice (a) upon the Employee’s breach of any material provision of this
Agreement, or (b) for other “good cause” (as defined below).     ii.   The term
“good cause” as used in this Agreement shall mean: (a) any breach by Employee of
any of Employee’s fiduciary duties to Employer or material obligations under
this Agreement (other than as a result of incapacity due to physical or mental
illness), in each case if such breach is not cured within ten (10) days after
written notice thereof to Employee by Employer, (b) conviction of a felony or a
crime involving moral turpitude or other commission of any act or omission of
Employee involving, fraud, embezzlement, theft, substance abuse or sexual
misconduct with respect to the Employer or any of its subsidiaries or any of
their employees, vendors, suppliers or customers, (c) Employee’s substantial
neglect of duties provided that such act of neglect is not cured within ten
(10) days after written notice thereof to Employee by Employer, (d) the
Employee’s willful, knowing or deliberate misappropriation of funds or assets of
Employer or one of its subsidiaries for personal use, or (e) the Employee’s
willful, knowing or deliberate misconduct in the performance of Employee’s
duties.     iii.   If the Employee’s employment is terminated pursuant to
Section 8(b), the Employer shall pay to the Employee any unpaid salary and other
benefits and reimbursable expenses accrued and owing to the Employee in
accordance with law, but in any event within not more than ten (10) days after
such termination. Such payment shall be in full and complete discharge of any
and all liabilities or obligations of the Employer to the employee hereunder.
The Employee shall be entitled to no further benefits

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      under this Agreement other than extension of health benefits as required
by law, at the Employee’s expense. All Equity Awards shall cease vesting in
accordance with the terms thereof and the Plan.

  c.   Whenever the Employee’s employment is terminated under this Agreement,
the Employee shall immediately resign, in a signed writing in such form as the
Employer may reasonably request, from all offices and any other positions he
shall hold with the Employer or any parent corporation and any subsidiaries or
divisions of the Employer or any such parent corporation. If Employee fails to
deliver any such resignation immediately, Employee may be removed from any such
office or position without further cause.

9. Termination of Employment Upon Change in Control.

  a.   For purposes hereof, a “Change in Control” shall be deemed to have
occurred if:

  i.   there has occurred a “change in control” as such term is used in Item
6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange
Act of 1934, as in effect as of the date hereof (hereinafter referred to as the
“1934 Act”);     ii.   if there has occurred a change in “control” as the term
“control” is defined in Rule 12b-2 promulgated under the 1934 Act;     iii.  
when any person (as such term is defined in Section 3(a)(9) and 13(d)(3) of the
1934 Act, a “Person”), during the Term, becomes a beneficial owner, directly or
indirectly, of securities of the Employer representing 20% or more of the
Employer’s then outstanding securities having the right to vote on the election
of directors if such person did not have 20% or more of the Employer’s then
outstanding securities at the commencement of the Term; or if a Person having
more than 20% of the Employer’s then outstanding securities increases his or its
holdings by more than 15% of the Employer’s then outstanding securities during
the Term;     iv.   if the stockholders of the Employer approve a plan of
complete liquidation or dissolution of the Employer, or a merger or
consolidation (a) in which the voting securities of the Employer outstanding
immediately prior thereto do not represent (either by remaining outstanding or
by being converted into voting securities of the surviving entity) at least
50.1% of the combined voting securities of the Employer or such surviving entity
outstanding immediately after such merger or consolidation or (b) in which no
Person acquires 30% or more of the combined voting power of the Employer’s then
outstanding securities; or

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  v.   if during any period of twenty-four (24) consecutive months (not
including any period prior to the date of this Agreement), individuals who at
the beginning of such period constitute the Board and any new director (other
than a director designated by a person who has entered into an agreement with
the Employer to effect a transaction described in paragraphs i, ii or iii of
this section 9(a)) whose election by the Board or nomination for election by the
stockholders of the Employer was approved by a vote of at least two-thirds (2/3)
of the directors then still in office who either were directors at the beginning
of such period or whose election or nomination for election was previously so
approved by the stockholders, cease for any reason to constitute a majority
thereof; provided, however, in no event shall any mere action (other than sales
or purchases of the Employer’s outstanding securities) by Michael McGovern and
the Employer be deemed to be a Change in Control.

  b.   The Employee may terminate his employment at any time within 12 months
after a Change in Control if during such 12-month period any of the following
events has occurred:

  i.   A material diminution of the Employee’s authority, duties, or
responsibilities;     ii.   a material breach of Employer’s obligations pursuant
to this Agreement;     iii.   the Employer requires Employee to move Employee’s
primary place of employment to a location more than 30 miles from Employer’s
primary place of business before the Change in Control (other than temporary
relocation or business travel in the ordinary course); or     iv.   a material
diminution in the Employee’s Monthly Base Salary without the prior written
consent of the Employee;

    provided that in the case of clause i. through iv. such event or condition
continues uncured for 30 days after Employee gives Employer notice of such event
or condition within 90 days of its initial existence.

    An election by the Employee to terminate his employment following a Change
in Control for any of the reasons set forth above shall not be deemed a
voluntary termination of employment by the Employee for the purpose of
interpreting the provisions of this Agreement or any of the Employer’s employee
benefit plans and arrangements. The Employee’s continued employment with the
Employer for any period of time during the Term of this Agreement after a Change
in Control shall not be considered a waiver of any right he may have to
terminate his employment to the extent permitted under this Section 9(b).      
If the Employer terminates the Employee without cause pursuant to Section 8(a)
hereof within twelve (12) months after a Change in Control has

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  occurred, such termination shall be deemed an election by the Employee to
terminate his employment pursuant to this Section 9(b) and Employee shall have
the right to the compensation set forth in Section 9(c) instead of the
compensation set forth in Section 8(a). In addition, in the event of such
termination, the Employee shall continue to have the obligations provided for in
Sections 11 and 12 hereof.

  c.   If the Employee’s employment with the Employer is terminated under
Section 9(b) hereof,

  i.   the Employee shall be paid in a lump sum, in cash, within thirty
(30) days after termination of employment or such later date on which the
revocation period for the separation agreement contemplated by Section 18
expires, severance pay in an amount equal to two (2) times (A) the average of
his aggregate annual compensation paid by his current Employer during the two
prior calendar years (including base salary and bonuses, if any) or (B) if he
has not been so employed for two full prior calendar years, twelve (12) times
his Monthly Base Salary immediately before the Change in Control plus the
greater of (X) his most recent bonus, if any, paid by his current Employer
before the Change in Control and (Y) his target bonus most recently determined
by his current Employer before the Change in Control; provided, however, that
the obligation under this clause (i) shall terminate if such separation
agreement has not been delivered within sixty (60) days after such termination;.
    ii.   all stock options and other Equity Awards under the Plan held by the
Employee immediately prior to the effective date of the Change in Control shall
immediately vest and become fully exercisable for the period of time indicated
in the terms of the option or other Equity Award;     iii.   health benefits as
provided in Section 3(c) shall continue for up to two years from the date of
termination, including reimbursement of COBRA payments, or New Hampshire State
Continuation of Benefits payments, as applicable, to the extent no longer
covered under the Employer’s plans; provided, however, that any such
reimbursements under this clause (iv) shall be made within 10 business days of
payment by the Employee and such benefits will be subject to mitigation to the
extent of comparable benefits at a new job; and     iv.   life insurance
benefits may be continued for up to two years from the date of termination at
the option of the Employee and at the Employer’s expense;

    The lump sum severance payment described in clause (i) of this Section 9(c)
is hereinafter referred to as the “Termination Compensation.” The amount of the
Termination Compensation shall be determined, at the expense of the Employer,

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    by its regular outside certified public accountants. Upon payment of the
Termination Compensation and any other accrued compensation, this Agreement
shall terminate (except for the Employee’s obligations pursuant to Sections 10,
11, 12, 13 and 14 hereof and the continuing obligations to provide the benefits
set forth in clauses (ii) — (iv) of this Section 9(c) in accordance with the
terms thereof) and be of no further force or effect.

  d.   After a Change in Control has occurred, the Employer shall honor the
Employee’s exercise of the Employee’s outstanding stock options and any other
Equity Awards in accordance with the terms thereof and this Employment
Agreement. After a Change in Control has occurred and the Employee’s employment
is terminated as a result thereof, the Employee (or his designated beneficiary
or personal representative(s) shall also receive, except to the extent already
paid pursuant to Section 9(c)(i) hereof or otherwise, the sums the Employee
would otherwise have received (whether under this Agreement, by law or
otherwise) by reason of termination of employment as if a Change in Control had
not occurred.     e.   The Employee shall not be required to mitigate the
payment of the Termination Compensation or other benefits or payments by seeking
other employment. To the extent that the Employee shall, after the Term of this
Agreement, receive compensation from any other employment, the payment of
Termination Compensation or other benefits or payments shall not be adjusted
(except as set forth in Section 9(c)(iii)).     f.   Notwithstanding any
provision in this Agreement to the contrary, if the payment of any compensation
or benefit hereunder (including, without limitation, any severance benefit)
would be subject to additional taxes and interest under Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”) because the timing of
such payment is not delayed as provided in Section 409A(a)(2)(B) of the Code,
then any such payment or benefit that the Employee would otherwise be entitled
to during the first six months following the date of the Employee’s termination
of employment shall be accumulated and paid or provided, as applicable, on the
date that is six months and one day after the date of the Employee’s termination
of employment (or if such date does not fall on a business day of the Employer,
the next following business day of the Employer), or such earlier date upon
which such amount can be paid or provided under Section 409A of the Code without
being subject to such additional taxes and interest. The preceding sentence
shall apply only to the extent required to avoid the Employee’s incurrence of
any additional tax or interest under Section 409A of the Code or the regulations
or Treasury guidance promulgated thereunder.

10. Disclosure, Proprietary Rights. The Employee agrees that during the Term of
his employment by the Employer, he will disclose only to the Employer all ideas,
methods, plans, formulas, processes, trade secrets, developments, or
improvements known by him which relate directly or indirectly to the business of
the Employer, including any lines of business, acquired

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by the Employee during his employment by the Employer; provided, that nothing in
this Section 10 shall be construed as requiring any such communication where the
idea, plan, method or development is lawfully protected from disclosure,
including but not limited to trade secrets of third parties. For purposes of the
Agreement, the term “the business of the Employer” shall include, without
limitation, the following: the design, development, obtaining regulatory
approval, production, manufacturing, marketing, and licensing of prescription
and non-prescription drugs, medical devices, and methods for the diagnosis,
evaluation, treatment or correction of any disease, injury, illness or other
medical or health condition and such other lines of business as the Employer
shall engage in during the Term hereof. The parties further agree that any
inventions, formulas, trade secrets, ideas, or secret processes which shall
arise from any disclosure made by the Employee pursuant to this paragraph,
whether or not patentable, shall be and remain the sole property of the
Employer.
11. Confidentiality. As a condition to Employee’s employment by the Employer,
Employee shall execute and deliver to the Employer the Employer’s
Confidentiality Agreement in the form attached hereto as Exhibit A (the
“Employee Agreement”), which sets forth, among other things, Employee’s
obligations with respect to the Employer’s confidential and proprietary
information.
12. Non-Competition. During the Employee’s employment with the Company, and for
a period of one year following the termination or cessation of the Employee’s
employment for any reason, the Employee covenants that he will not engage,
directly or indirectly, alone or in conjunction with others, as an agent,
employee, investor, director, shareholder or partner in any business which
provides products, information and/or services to the public which are
competitive with those provided by the Employer Group; provided, however, that
the ownership by the Employee of 5% or less of the issued and outstanding shares
of any class of securities which is traded on a national securities exchange or,
in the over the counter market shall not constitute a breach of the provisions
of this section. During the Employee’s employment with the Company and for a
period of one year following the termination or cessation of the Employee’s
employment for any reason, the Employee will not on his own behalf or on behalf
of any other business enterprise, directly or indirectly, solicit or induce any
creditor, customer, client, supplier, officer, employee or agent of the Employer
Group to sever his/her or its relationship with or leave the employ of the
Employer Group.
13. Conflict of Interest and Other Policies. The Employee shall devote his full
time, energy and attention to the benefit and business of the employer and its
affiliates and shall not be employed by another entity, except as permitted in
Section 5. It is understood by and between the parties hereto that the foregoing
restrictive covenants set forth in Sections 10, 11, 12, 13 and 14 are essential
elements of this Agreement, and that but for the agreement of the Employee to
comply with such covenants, the Employer would not have entered into this
Agreement. Notwithstanding anything to the contrary in this Agreement, the terms
and provisions of Sections 11, 12, 13 and 14 of this Agreement, together with
any definitions used in such terms and provisions, shall survive the termination
or expiration of this Agreement. The existence of any claim or cause of action
of the Employee against the Employer, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by the Employer of
such covenants. The Employee shall be subject to the Employer’s policies
applicable to its executives generally.

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14. Specific Performance. The Employee agrees that damages at law will be
insufficient remedy to the Employer if the employee violates the terms of
Sections 10, 11, 12 or 13 of this Agreement and that the Employer shall be
entitled, upon application to a court of competent jurisdiction, to obtain
injunctive relief to enforce the provisions of such Sections, which injunctive
or other equitable relief shall be in addition to any other rights or remedies
available to the Employer, and the Employee agrees that he will not raise and
hereby waives any objection or defense that there is an adequate remedy at law.
15. Compliance with Other Agreements. The Employee represents and warrants that
the execution of this Agreement by him and his performance of his obligation
hereunder will not conflict with, result in the breach of any provision of,
terminate, or constitute a default under any agreement to which the Employee is
or may be bound.
16. Waiver of Breach. The waiver by the Employer of a breach of any of the
provisions of this Agreement by the Employee shall not be construed as a waiver
of any subsequent breach by the Employee.
17. D&O Insurance; Indemnification. The Employer hereby agrees to maintain in
full force and effect for the duration of this Agreement, Director’s and
Officer’s Liability Insurance of at least $5,000,000 and to indemnify and hold
harmless the Employee to the full extent permitted by law, for acts performed by
him in carrying out his duties and responsibilities in accordance with this
Agreement.
18. Release. In the event of the termination of the Employee’s employment with
the Employer, the Employee shall execute a release that is substantially in the
form attached hereto as Exhibit B (the “Release”) or that is the standard form
of release that the Employer is using for these purposes at the time of such
termination. If the Employee declines or refuses to execute the Release at such
time, the Employer shall have no obligation to make any future payments to the
Employee which would otherwise be owed to the Employee under the terms of this
Agreement, and the Employer may delay any such future payment until after
expiration of the period during which the Employee may revoke the Release in
accordance with its terms.
19. Binding Effect, Assignment. The rights and obligations of the Employer under
this Agreement shall inure to the benefit of and shall be binding upon the
successors and assigns of the Employer. This Agreement is a personal employment
contract and the rights, obligations and interests of the Employee hereunder may
not be sold or assigned or hypothecated. Whenever in this Agreement reference is
made to any party, such reference shall be deemed to include the successors,
assigns, heirs, and legal representatives of such party, and without limiting
the generality of the foregoing, all representations, warranties, covenants and
other agreements made by or on behalf of the Employee in this Agreement shall
inure to the benefit of the successors and assigns of the Employer; provided,
however, that nothing herein shall be deemed to authorize or permit the Employee
to assign any of his rights or obligations under this Agreement to any other
person (whether or not a family member or other affiliate of the Employee, other
than as specifically provided in this Agreement), and the Employee covenants and
agrees that he shall not make any such assignments.

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20. Modification, Amendment, Etc. Each and every modification and amendment of
this Agreement shall be in writing and signed by all of the parties hereto, and
each and every waiver of, or consent to any departure from, any representation,
warranty, covenant or other term or provision of this Agreement shall be in
writing and signed by each affected party hereto.
21. Notice. Any notice required or permitted to be given under this Agreement
shall be sufficient if in writing and if sent by certified or registered mail,
first class, return receipt requested, to the Employer, at its executive offices
as set forth in its filings with the Securities and Exchange Commission and, to
the Employee, at his address as set forth on the current employment records of
the Employer.
22. Severability. It is agreed by the Employer and Employee that if any portion
of the provisions set forth in this Agreement are held to be unreasonable,
arbitrary or against public policy, then that portion of such covenants shall be
considered divisible both as to time and geographical area. The Employer and
Employee agree that if any court of competent jurisdiction determines the
specific time period or the specified geographical area applicable to this
Agreement to be unreasonable, arbitrary or against public policy, then a lesser
time period or geographical area which is determined to be reasonable,
non-arbitrary and not against public policy may be enforced against the
Employee. The Employer and Employee agree that the foregoing covenants are
appropriate and reasonable when considered in light of the nature and extent of
the business conducted by the Employer.
23. Entire Agreement. This Agreement contains the entire agreement between the
Employer and the Employee and supersedes all prior agreements and
understandings, oral or written, with respect to the subject matter hereof.
24. Headings. The headings contained in this agreement are for reference
purposes only and shall not affect the meaning or interpretation of the
Agreement.
25. Governing Law; Forum. This Agreement shall be construed and enforced in
accordance with the laws of the State of New Hampshire. Any action brought
pursuant to this Agreement or in relation to its breach may be heard by any
court of competent jurisdiction having jurisdiction thereof. The parties hereby
expressly consent to the personal jurisdiction of the state and federal courts
located in New Hampshire for any lawsuit filed arising from or relating to this
Agreement and expressly waive any and all objections to venue, including,
without limitation, the inconvenience of such forum.
26. Counterparts. This Agreement may be executed in two counterpart copies of
the entire document or of signature pages to the document, each of which may be
executed by one or more of the parties hereto, but all of which when taken
together, shall constitute a single agreement binding upon all of the parties
hereto.

12

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the day and year first written above.

         
Employer:
CPEX PHARMACEUTICALS, INC.
    Employee:

     
/s/ John A. Sedor
      /s/ Nils Bergenhem
 
       
By: John A. Sedor
      Nils Bergenhem, individually
Title: Chief Executive Officer
       

13

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Exhibit A
Employee Name (printed): Nils Bergenhem
CPEX PHARMACEUTICALS, INC.
EMPLOYEE CONFIDENTIALITY AGREEMENT
     Effective as of February 1, 2010, the undersigned having an address at 90
Brainerd Road, Boston, MA 02134 enters into this Agreement with CPEX
Pharmaceuticals, Inc., (“CPEX”), a Delaware corporation with principal offices
and facilities in Exeter, New Hampshire.
     Since CPEX is engaged in a highly competitive and rapidly evolving business
of developing and marketing pharmaceuticals, and owns or controls technological
and marketing information in various fields, which information is of commercial
value throughout the world; and,
     Since CPEX has expended and intends to continue to expend significant time,
effort and financial resources to develop the business practices, technology and
products which are necessary to the continued success of CPEX’s business, and
the information relative to this development is considered by CPEX and
acknowledged by the undersigned, to be confidential and trade secret information
which is proprietary to CPEX; and,
     Since I will be employed by CPEX, I will have access to CPEX’s confidential
and trade secret information, the unauthorized disclosure of which to a
competitor of CPEX could cause serious and irreparable financial and business
damage to CPEX.
     THEREFORE, in consideration of my employment with CPEX, I hereby agree with
CPEX as follows:
     1. Property of CPEX. All ideas, discoveries and inventions, whether
patentable or not, which I make or conceive during my employment by CPEX which
relate to the business of CPEX, or to work or investigations done for CPEX,
shall be the sole and exclusive property of CPEX and I will promptly and fully
disclose such to CPEX.
     2. Records. In order that CPEX may protect such property, I will make
adequate written records of such ideas, discoveries and inventions, which
records shall be CPEX’s property; and both during and after termination of my
employment by CPEX, I will sign all papers and render any other proper
assistance necessary for CPEX to obtain, maintain and enforce patents thereon
throughout the world.
     3. Nondisclosure. During my employment with CPEX and thereafter, I will
not, and I will not cause, suffer or permit any family member or other of my
affiliates to, directly or indirectly, under any circumstances, (i) use,
disclose to others or publish any “confidential information”, as defined below
unless CPEX specifically instructs or authorizes me in writing to do so;
(ii) act or fail to act so as to reveal any confidential information or
otherwise impair the

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confidentiality of any confidential information; (iii) use any know-how,
customer list or other confidential information other than at the direction and
for the benefit of CPEX; or (iv) offer or agree to, or cause or assist in the
inception or continuation of, any such disclosure, impairment or use.
“Confidential information” of CPEX shall, for purposes of this Agreement,
include but not be limited to such ideas, discoveries and inventions, and any
other information and data, of CPEX, or used by CPEX in its business, as are
(i) not readily available to the public without any publication directly or
indirectly in violation of this Agreement or any similar obligation of
confidentiality and (ii) and:

  (a)   are of a technical nature such as, but not limited to, methods,
know-how, formula, drawings, operations, procedures, reports, systems
inventions, processes, discoveries, computer programs, software, software
documentation, technologies and similar items;     (b)   are of a business
nature such as, but not limited to, information about sales or lists of
customers, prices, costs, purchasing, profits, markets, product capabilities
assets, business, creditors, employees, financial condition or affairs and
suppliers; or     (c)   pertain to future developments such as, but not limited
to, research and development, new or improved products, business ventures, and
marketing and merchandising plans and ideas.

     4. Removal of Materials. I will not remove or cause to be removed from
CPEX’s premises, for purposes other than the work or investigations I do for
CPEX, any material whatsoever belonging to CPEX, including material created,
discovered or developed by me and belonging to CPEX, unless CPEX in writing
specifically instructs or authorizes me to do so.
     5. Disclosure of Other Information. I understand that CPEX will not require
nor expect me to disclose to CPEX, or to use at or for CPEX, any secret or
confidential information that I obtained from any of my former employers which
is not then publicly available, and I agree not to use at or for CPEX any such
secret or confidential information.
     6. Warranty. I warrant that I have not previously assumed any obligations
inconsistent with those of this Agreement.
     7. Duties Upon Termination. Upon termination of my employment with CPEX, I
agree to turn over to CPEX all copies of data, information and knowledge,
including without limitation all drawings, photographs, graphs, tables, charts,
documents, correspondence, specifications, notebooks, reports, sketches,
formula, computer programs, software, software documentation, sales data,
business manuals, price lists, customer lists, samples, and all other materials
and copies therefore including product and other embodiments relating in any way
to the business of CPEX, made fully or in part, or obtained by me during the
course of my employment, whether confidential information or not, which are in
my possession or control.

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     8. Exclusions. Notwithstanding anything contained herein, my obligations
hereunder shall not apply to any information which I can demonstrate by
documentary evidence:

  (a)   was rightfully known to me prior to disclosure to me by CPEX or its
predecessor in interest to such information.     (b)   is or becomes generally
available to the public other than as a result of disclosure by me, members of
my family or other of my affiliates,     (c)   becomes available to me on a
nonconfidential basis from a source other than CPEX, which has a right to
disclose such information.

     9. Disclosure by Law. In the event that I become legally compelled to
disclose any confidential information, I will provide CPEX with prompt notice so
that CPEX may seek a protective order or other appropriate remedy or waive
compliance with the provisions of the Agreement. In the event that such
protective order or other remedy is not obtained, or that CPEX waives compliance
with the provisions of this Agreement, I shall furnish only that portion of such
confidential information that is legally required to be disclosed.
     10. No License or Right to Use. Except as is expressly set forth in this
Agreement, I shall have no right to examine, hold, use, access or disclose the
confidential information in any manner. Nothing herein shall be deemed to create
a license of such confidential information to me.
     11. Remedies. I agree that any breach or threatened breach of any of the
provisions of this paragraph cannot be remedied solely by the recovery of
damages and CPEX shall be entitled to any other remedies available at law or in
equity for any such breach or threatened breach, including injunctive relief,
specific performance or such other relief as CPEX may request to enjoin or
otherwise restrain any act prohibited hereby, as well as the recovery of all
costs and expenses, including attorney’s fees, incurred. I will not raise and
hereby waive any objection or defense that there is an adequate remedy at law.
     12. Severability. If any condition herein or the application of such
condition shall be invalid and unenforceable, the remainder of this Agreement
shall not be affected and each remaining condition hereof shall be valid and
enforced to the fullest extent permitted by law.
     13. Parties. This Agreement shall be binding on and for the benefit of
CPEX, its successors and assigns. This Agreement may not be assigned by me and
any purported assignment shall be void. No term or provision of this Agreement
may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against which the enforcement of the
change, waiver, discharge or termination is sought.
     14. Law. Any claim or action arising out of this Agreement shall be decided
in Rockingham County, New Hampshire. This Agreement shall be construed under the
laws of the State of New Hampshire, without regard to the conflict of law
provisions thereof.

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Witness:
      Employee:
 
       
 
       
Signature
      Signature
 
       
 
      Nils Bergenhem
 
       
Witness Name Printed
      Employee Name Printed
 
       
 
       
Date
      Date

                  Agreed and accepted:         CPEX PHARMACEUTICALS, INC.      
 
 
       
By: 
               
 
             
Name: 
             
 
               
Title:
             
 
             

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Exhibit B
GENERAL RELEASE
     Except with respect to any rights, obligations or duties arising out of the
Employment Agreement dated as of February 1, 2010, and in consideration of
certain payments and other provisions for the benefit of the undersigned set
forth in such agreement, and other valuable consideration, the sufficiency of
which the undersigned hereby acknowledges, the undersigned, on behalf of
himself, his executors, heirs, administrators, agents, attorneys, beneficiaries
and assigns (hereinafter referred to collectively as “Employee”) hereby releases
and discharges CPEX Pharmaceuticals, Inc., on behalf of itself, its
predecessors, successors, parents, subsidiaries, related and affiliated
companies (hereinafter referred to collectively as the “Company”) and its
officers, directors, partners, stockholders, trustees, attorneys, insurers,
representatives, agents and employees (hereinafter referred to collectively, the
“Releasees”), of and from any and all complaints, charges, lawsuits or claims
for relief of any kind by Employee that he now has or ever had against the
Releasees, or any one of them, whether known or unknown, arising out of any
matter or thing that has happened before the signing of this General Release,
including but not limited to claims arising under common law, claims for breach
of contract and in tort, and claims arising under federal and state labor law
and employment laws and laws prohibiting discrimination on the basis of age,
sex, race, national origin, disability or other protected characteristic, and
specifically including any claims under the Age Discrimination in Employment Act
of 1967, as amended. The laws referred to in the preceding sentence include but
are not limited to Title VII of the Civil Rights Act of 1964, the Equal Pay Act
of 1963, the Age Discrimination in Employment Act of 1967 (“ADEA”), the Fair
Labor Standards Act of 1938, the Americans with Disabilities Act of 1990, the
Rehabilitation Act of 1973, the Family and Medical Leave Act of 1993, and the
New Hampshire Law Against Discrimination, all as amended to the date of this
General Release. It is further expressly agreed and understood by Employee that
the release contained herein is a GENERAL RELEASE. Nothing in this General
Release shall be construed to preclude Employee from participating or
cooperating in any investigation or proceeding conducted by a state or federal
Fair Employment Practices Agency. However, in the event that a charge or
complaint is filed against the Releasees, or any one of them, with any
administrative agency or in the event of an authorized investigation, charge or
lawsuit filed against the Releasees by any administrative agency, Employee
expressly waives and shall not accept any award or damages therefrom.
     Time to Consider Agreement. Employee acknowledges that he has been advised
to consult with an attorney and has had ample time to consult with an attorney
of his choice, and has been given a period of at least twenty-one days within
which to consider whether to sign this General Release. Employee may sign this
General Release prior to the end of this twenty-one day period, provided that
Employee does this knowingly and voluntarily.
     Revocation. It is agreed that for a period of seven days following the
execution of this General Release, which period shall end at 5:00 p.m. on the
seventh day following the date of execution by Employee, Employee may revoke
this General Release. This General Release will not become effective until this
revocation period has expired. This seven-day revocation period cannot be
shortened by agreement of the parties or by any other means.

 

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EMPLOYEE ACKNOWLEDGES AND RECITES THAT:

(a)   Employee has executed this General Release knowingly and voluntarily;  
(b)   Employee has read and understands this General Release in its entirety;  
(c)   Employee has been advised and directed orally and in writing (and this
subsection (c) constitutes such written direction) to seek legal counsel and any
other advice the Employee wishes with respect to the terms of this General
Release before executing it; and   (d)   Employee’s execution of this General
Release has not been forced by any employee or agent of the Company and Employee
has had an opportunity to negotiate about the terms of this General Release.

     PLEASE READ THIS GENERAL RELEASE CAREFULLY. IT CONTAINS A RELEASE OF ALL
KNOWN AND UNKNOWN CLAIMS.

             
 
           
Date:
          Nils Bergenhem