exv10w3






EXHIBIT 10.3




EMPLOYEE MATTERS AGREEMENT




by and between




BENTLEY PHARMACEUTICALS, INC.




and




CPEX PHARMACEUTICALS, INC.




Dated as of June 13, 2008




 









 








INDEX OF DEFINED TERMS




	 	 	 
	TERM	 	SECTION IN WHICH DEFINED
	Agreement

	 	Preamble
	Bentley

	 	Preamble
	Bentley Welfare Plans

	 	4.1(a) 
	CPEX

	 	Preamble
	CPEX 401(k) Plan

	 	3.1(a) 
	CPEX Ratio

	 	5.1(a)(ii) 
	CPEX Stock Plan

	 	2.4 
	CPEX Welfare Plans

	 	4.1(a) 
	Delaware Courts

	 	9.11 
	Parties

	 	Preamble
	Post-Distribution Bentley Option

	 	5.1(a)(i) 
	Post-Distribution Spanish Employee Option

	 	5.1(b)(i) 
	Post-Distribution Spanish Employee Restricted  

    Stock Unit

	 	
5.2(b)(i) 
	Pre-Distribution Bentley Option Price

	 	5.1(a)(ii) 
	Separation Agreement

	 	Recitals
	Service Crediting Date

	 	2.3(b)(i) 
	Spanish Employee Option

	 	5.1(a) 
	Spanish Employee Restricted Stock Unit

	 	5.2(a) 






EMPLOYEE MATTERS AGREEMENT




     EMPLOYEE MATTERS AGREEMENT (this “Agreement”),
dated as of June 13, 2008, by and
between Bentley Pharmaceuticals, Inc., a Delaware corporation (“Bentley”), and CPEX
Pharmaceuticals, Inc., a Delaware corporation (“CPEX”). Each of Bentley and CPEX is herein
referred to as a “Party” and collectively, as the “Parties”.



RECITALS:




     WHEREAS, Bentley, acting through its direct and indirect Subsidiaries, currently conducts a
number of businesses, including (i) the Bentley Business and (ii) the CPEX Business;



     WHEREAS, the Board of Directors of Bentley has determined that it is appropriate, desirable
and in the best interests of Bentley and its stockholders to separate Bentley into two independent
companies (the “Separation”), one for each of: (i) the Bentley Business, which shall
continue to be owned and conducted, directly or indirectly, by Bentley, and (ii) the CPEX Business,
which shall be owned and conducted, directly or indirectly, by CPEX;



     WHEREAS, to effect the Separation the Parties entered into that certain Separation and
Distribution Agreement dated as of even date hereof (as amended or otherwise modified from time to
time, the “Separation Agreement”); and



 









 





     WHEREAS, pursuant to the Separation Agreement, Bentley and CPEX have agreed to enter into this
Agreement for the purpose of allocating Assets, Liabilities and responsibilities with respect to
certain employee compensation and benefit plans and programs between them.



     NOW, THEREFORE, in consideration of the foregoing premises, the mutual promises and covenants
hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows:



ARTICLE I




DEFINITIONS AND INTERPRETATION




          Section 1.1 Definitions. Capitalized terms used but not defined herein shall have the
meanings assigned to such terms in the Separation Agreement and the following terms shall have the
following meanings:




     “Benefit Plan” shall mean, with respect to an entity, each plan, program, arrangement,
agreement or commitment that is an employment, change in control/severance, consulting,
non-competition or deferred compensation agreement, or an executive compensation, incentive bonus
or other bonus, employee pension, profit-sharing, savings, retirement, supplemental retirement,
stock option, stock purchase, stock appreciation rights, restricted stock, other equity-based
compensation, severance pay, salary continuation, life, health, hospitalization, sick leave,
vacation pay, disability or accident insurance plan, corporate-owned or key-man life insurance or
other employee benefit plan, program, arrangement, agreement or commitment, including any “employee
benefit plan” (as defined in Section 3(3) of ERISA), sponsored or maintained by such entity (or to
which such entity contributes or is required to contribute).



     “Bentley Benefit Plan” shall mean any Benefit Plan sponsored, maintained or
contributed to by any member of the Bentley Group or any ERISA Affiliate thereof immediately
following the Distribution Date.



     “Bentley Employee” shall mean an active employee or an employee on vacation or on
approved leave of absence (including maternity, paternity, family, sick leave, salary continuation,
qualified military service under the Uniformed Services Employment and Reemployment Rights Act of
1994, and leave under the Family Medical Leave Act and other approved leaves) who, on the
Distribution Date, is employed by or will be employed by Bentley or any member of the Bentley
Group.



     “Bentley 401(k) Plan” shall mean the Bentley 401(k) Plan.



     “Bentley Liabilities” shall mean all liabilities of Bentley other than the CPEX
Liabilities.



     “Bentley Option” shall mean an option to purchase shares of Bentley Common Stock
granted pursuant to one of the Bentley Stock Plans.



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     “Bentley Participant” shall mean any individual who, immediately following the
Distribution Date, is a Bentley Employee, a Former Bentley Employee or a beneficiary, dependent or
alternate payee of any of the foregoing.



     “Bentley Restricted Stock Unit” shall mean a unit granted by Bentley or one of its
Affiliates pursuant to one of the Bentley Stock Plans representing a general unsecured promise by
Bentley or one of its Affiliates to deliver a share of Bentley Common Stock or dividend
equivalents, if applicable (or the cash equivalent of either), upon the satisfaction of a vesting
requirement (other than performance based vesting requirements).



     “Bentley Service Plans” shall mean, collectively, the Bentley 401(k) Plan and the
severance and health and welfare benefit plans maintained by a member of the Bentley Group to the
extent eligibility for or level of benefits thereunder is dependent upon length of service,
including the Bentley vacation, health and welfare, sick leave, salary continuation and retiree
medical, dental and life programs, if any.



     “Bentley Stock Plan” shall mean, collectively, the Bentley Pharmaceuticals, Inc. 1991
Stock Option Plan, Bentley Pharmaceuticals, Inc. 2001 Employee Stock Option Plan, Bentley
Pharmaceuticals, Inc. 2001 Directors’ Stock Option Plan, and Bentley Pharmaceuticals, Inc. 2005
Equity and Incentive Plan.



     “COBRA” shall mean the continuation coverage requirements for “group health plans”
under Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and as
codified in Code Section 4980B and Sections 601 through 608 of ERISA, together with all regulations
and proposed regulations promulgated thereunder.



     “CPEX Benefit Plan” shall mean any Benefit Plan sponsored, maintained or contributed
to by any member of the CPEX Group or any ERISA Affiliate thereof immediately following the
Distribution Date, including the CPEX 401(k) Plan and the CPEX Welfare Plans.



     “CPEX Employee” shall mean a person listed on Exhibit A to the Separation Agreement.



     “CPEX Option” shall mean an option to purchase shares of CPEX Common Stock as of the
Distribution Date, which shall be issued pursuant to the CPEX Stock Plan as part of the adjustment
to Bentley Options in connection with the Distribution.



     “CPEX Participant” shall mean any individual who, immediately following the
Distribution Date, is a CPEX Employee, a Former CPEX Employee or a beneficiary, dependent or
alternate payee of any of the foregoing.



     “CPEX Restricted Stock Unit” shall mean a unit issued by CPEX or one of its Affiliates
representing a general unsecured promise by CPEX or one of its Affiliates to deliver a share of
CPEX Common Stock or dividend equivalents, if applicable (or the cash equivalent of either), upon
the satisfaction of a service based vesting requirement, which unit is issued pursuant to the CPEX
Stock Plan as part of the adjustment to Bentley Restricted Stock Units in connection with the
Distribution.



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     “CPEX Service Plans” shall mean, collectively, the CPEX 401(k) Plan and the severance
and health and welfare plans maintained by a member of the CPEX Group to the extent eligibility for
or level of benefits thereunder is dependent upon length of service, including the CPEX vacation,
health and welfare, sick leave, salary continuation and retiree medical, dental and life programs,
if any.



     “CPEX Stock Plan” shall mean the CPEX 2008 Equity and Incentive Plan.



     “ERISA Affiliate” shall mean with respect to any Person, each business or entity which
is a member of a “controlled group of corporations,” under “common control” or a member of an
“affiliated service group” with such Person within the meaning of Sections 414(b), (c) or (m) of
the Code, or required to be aggregated with such Person under Section 414(o) of the Code, or under
“common control” with such Person within the meaning of Section 4001(a)(14) of ERISA.



     “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.



     “Former Bentley Employee” shall mean, as of the Distribution Date, any individual who,
before the Distribution Date, terminated employment with Bentley or its predecessors or any member
of the Bentley Group and is not listed on Exhibit A to the Separation Agreement, other than any
Former CPEX Employee.



     “Former CPEX Employee” shall mean, as of the Distribution Date, any individual who,
before the Distribution Date, terminated employment with Bentley or its predecessors or any member
of the Bentley Group and whose principal services to the Bentley Group related to the CPEX
Business.



     “HIPAA” shall mean the Health Insurance Portability and Accountability Act of 1996, as
amended.



     “Initial CPEX Stock Price” shall mean, unless otherwise determined by the Compensation
Committee of the Bentley Board of Directors in its sole discretion in order to effect an equitable
adjustment of a Bentley Option in connection with the Distribution, the closing per share trading
price of CPEX Common Stock on a when issued basis on the Distribution Date or, if none, the opening
per share trading price of CPEX Common Stock on the first date following the Distribution Date on
which there is trading.



     “Participating Company” shall mean Bentley or any Person (other than an individual)
participating in a Bentley Benefit Plan.



     “Pre-Distribution Bentley Stock Price” shall mean the closing per share trading price
of Bentley Common Stock on the day immediately preceding the Distribution Date.



     “Post-Distribution Bentley Stock Price” shall mean, unless otherwise determined by the
Compensation Committee of the Bentley Board of Directors in its sole discretion in order to effect
an equitable adjustment of a Bentley Option in connection with the Distribution, the closing per
share trading price of Bentley Common Stock on an ex-distribution basis on the Distribution Date
or, if none, the closing per share trading price of Bentley Common Stock on the Distribution Date



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(or, if there is no trading on the Distribution Date, on the first following date on which
there is trading).




     “Spanish Employee” shall mean an active employee or an employee on vacation or on
approved leave of absence (including maternity, paternity, family, sick leave, salary continuation,
qualified military service under the Uniformed Services Employment and Reemployment Rights Act of
1994, and leave under the Family Medical Leave Act and other approved leaves) who, on the
Distribution Date, is employed by or will be employed by Laboratorios Belmac, S.A., Laboratorios
Rimafor, S.L., Laboratorios Davur, S.L. or Bentley A.P.I., S.L. or any former employee who
immediately prior to his or her termination of employment was employed by such entities.



          Section 1.2 References; Interpretation. References in this Agreement to any gender include
references to all genders, and references to the singular include references to the plural and vice
versa. Unless the context otherwise requires, the words “include”, “includes” and “including” when
used in this Agreement shall be deemed to be followed by the phrase “without limitation”. Unless
the context otherwise requires, references in this Agreement to Articles, Sections, Exhibits and
Schedules shall be deemed references to Articles and Sections of, and Exhibits and Schedules to,
this Agreement. Unless the context otherwise requires, the words “hereof”, “hereby” and “herein”
and words of similar meaning when used in this Agreement refer to this Agreement in its entirety
and not to any particular Article, Section or provision of this Agreement.




ARTICLE II




GENERAL PRINCIPLES




          Section 2.1 Assumption and Retention of Liabilities; Related Assets.




               (a) As of the Distribution Date, except as otherwise expressly provided in this Agreement,
Bentley shall, or shall cause one or more members of the Bentley Group to, assume or retain, as
applicable, and pay, perform, fulfill and discharge, in due course in full (i) all Liabilities
under all Bentley Benefit Plans, (ii) all Liabilities (excluding Liabilities incurred under a
Benefit Plan except as otherwise provided in this Agreement) with respect to the employment,
service, termination of employment or termination of service of all Bentley Employees, Former
Bentley Employees and their dependents and beneficiaries (and any alternate payees in respect
thereof) and other service providers (including any individual who is, or was, an independent
contractor, temporary employee, temporary service worker, consultant, freelancer, agency employee,
leased employee, on-call worker, incidental worker, or non-payroll worker or in any other
employment, non-employment, or retainer arrangement, or relationship with any member of the Bentley
Group), in each case to the extent arising in connection with or as a result of employment with or
the performance of services for any member of the Bentley Group, and (iii) any other Liabilities or
obligations expressly assigned to Bentley or any of its Affiliates (other than any member of the
CPEX Group) under this Agreement. For purposes of clarification, the Liabilities assumed or
retained by the Bentley Group as provided for in this Section 2.1(a) or elsewhere in this Agreement
are intended to be Bentley Liabilities.



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               (b) As of the Distribution Date, except as otherwise expressly provided in this Agreement,
CPEX shall, or shall cause one or more members of the CPEX Group to, assume or retain, as
applicable, and pay, perform, fulfill and discharge, in due course in full (i) all Liabilities
under all CPEX Benefit Plans, (ii) all Liabilities (excluding Liabilities incurred under a Benefit
Plan except as otherwise provided in this Agreement) with respect to the employment, service,
termination of employment or termination of service of all CPEX Employees, Former CPEX Employees
and their dependents and beneficiaries (and any alternate payees in respect thereof) and other
service providers (including any individual who is, or was, an independent contractor, temporary
employee, temporary service worker, consultant, freelancer, agency employee, leased employee,
on-call worker, incidental worker, or non-payroll worker or in any other employment,
non-employment, or retainer arrangement, or relationship with any member of the Bentley Group or
CPEX Group), in each case to the extent arising in connection with or as a result of employment
with or the performance of services for any member of the CPEX Group, or in the case of Former CPEX
Employees, the Bentley Group and (iii) any other Liabilities or obligations expressly assigned to
CPEX or any of its Affiliates (other than any member of the Bentley Group) under this Agreement.
For purposes of clarification, the Liabilities assumed or retained by the CPEX Group as provided
for in this Section 2.1(b) or elsewhere in this Agreement are intended to be CPEX Liabilities as
such term is defined in the Separation Agreement.



               (c) From time to time after the Distribution Date, the Parties shall promptly reimburse one
another, upon reasonable request of the Party requesting reimbursement and the presentation by such
Party of such substantiating documentation as the other Party shall reasonably request, for the
cost of any obligations or Liabilities satisfied or assumed by the Party requesting reimbursement
or its Affiliates that are, or that have been made pursuant to this Agreement, the responsibility
of the other Party or any of its Affiliates. Any such request for reimbursement must be made not
later than the first anniversary of the Distribution Date.



               (d) Bentley shall retain responsibility for all employee-related regulatory filings for
reporting periods ending at or prior to the Distribution Date except for Equal Employment
Opportunity Commission EEO-1 reports and affirmative action program (AAP) reports and responses to
Office of Federal Contract Compliance Programs (OFCCP) submissions, for which Bentley will provide
data and information (to the extent permitted by applicable Laws and consistent with Section 8.1)
to CPEX, who will be responsible for making such filings in respect of CPEX Employees.



          Section 2.2 Participation in Bentley Benefit Plans. Except as otherwise expressly provided
for in this Agreement or as otherwise expressly agreed to in writing between or among the affected
Parties, (i) effective as of the Distribution Date, CPEX and each member of the CPEX Group shall
cease to be a Participating Company in any Bentley Benefit Plan, and (ii) each CPEX Participant and
any other service providers (including any individual who is, or was, an independent contractor,
temporary employee, temporary service worker, consultant, freelancer, agency employee, leased
employee, on-call worker, incidental worker, or nonpayroll worker of any member of the CPEX Group
or in any other employment, non-employment, or retainer arrangement, or relationship with any
member of the CPEX Group), effective as of the Distribution Date, shall cease to participate in, be
covered by, accrue benefits under, be eligible to contribute to or have any rights under any
Bentley Benefit Plan (except to the extent of obligations




6









 







that accrued before the Distribution Date, including benefits that are not otherwise addressed
herein), and CPEX and Bentley shall take all necessary action to effectuate each such cessation.




          Section 2.3 Service Recognition. CPEX shall give each CPEX Participant full credit for
purposes of eligibility, vesting, determination of level of benefits, and, to the extent
applicable, benefit accruals under any CPEX Benefit Plan, respectively, for such CPEX Participant’s
service with any member of the Bentley Group prior to the Distribution Date to the same extent such
service was recognized by the applicable Bentley Benefit Plans immediately prior to the
Distribution Date; provided, that, such service shall not be recognized to the
extent that such recognition would result in the duplication of benefits.




          Section 2.4 Approval by Bentley As Sole Stockholder. Effective as of the Distribution
Date, CPEX shall have adopted the CPEX Pharmaceuticals, Inc. 2008 Equity and Incentive Plan (the
“CPEX Stock Plan”), which shall permit the issuance of long-term incentive awards that have
material terms and conditions substantially similar to those long-term incentive awards issued
under the relevant Bentley Stock Plans in respect of which CPEX long-term incentive awards will be
issued in connection with the Distribution. The CPEX Stock Plan shall be approved prior to the
Distribution Date by Bentley as the sole stockholder of CPEX.




ARTICLE III




QUALIFIED DEFINED CONTRIBUTION PLAN




          Section 3.1 CPEX 401(k) Plan.




               (a) Establishment of the CPEX 401(k) Plan. Effective as of the Distribution Date, CPEX
shall, or shall have caused one of its Affiliates to, establish a defined contribution plan and
trust for the benefit of CPEX Participants (the “CPEX 401(k) Plan”). CPEX shall be
responsible for taking all necessary, reasonable and appropriate action to establish, maintain and
administer the CPEX 401(k) Plan so that it is qualified under Section 401(a) of the Code and that
the related trust thereunder is exempt from Federal income tax under Section 501(a) of the Code.
CPEX (acting directly or through its Affiliates) shall be responsible for any and all Liabilities
and other obligations with respect to the CPEX 401(k) Plan.



               (b) Transfer of Savings Plan Assets. Not later than ninety (90) days following the
Distribution Date (or such later time as mutually agreed by Bentley and CPEX), Bentley shall cause
the accounts (including any outstanding loan balances) in the Bentley 401(k) Plan attributable to
CPEX Participants and all of the Assets in the Bentley 401(k) Plan related thereto, to be
transferred to the CPEX 401(k) Plan and CPEX shall cause the CPEX 401(k) Plan to accept such
transfer of accounts and underlying Assets and, effective as of the date of such transfer, to
assume and to fully perform, pay and discharge, all obligations of the Bentley 401(k) Plan relating
to the accounts of CPEX Participants (to the extent the Assets related to those accounts are
actually transferred from the Bentley 401(k) Plan to the CPEX 401(k) Plan). Any transfer of Assets
pursuant to this Section 3.1(b) shall be conducted in accordance with Section 414(l) of the Code,
Treasury
Regulation Section 1.414(1)-1, and Section 208 of ERISA.



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               (c) Continuation of Elections. As of the Distribution Date, CPEX (acting directly or
through its Affiliates) shall cause the CPEX 401(k) Plan to recognize and maintain all Bentley
401(k) Plan and CPEX 401(k) Plan elections, including, but not limited to, deferral, investment,
and payment form elections, dividend elections, beneficiary designations, and the rights of
alternate payees under qualified domestic relations orders with respect to CPEX Participants, to
the extent such election or designation is available under the CPEX 401(k) Plan.



               (d) Form 5310-A. No later than thirty (30) days prior to the date of any transfer of
Assets and Liabilities pursuant to Section 3.1(b), Bentley and CPEX (each acting directly or
through their respective Affiliates) shall, to the extent necessary, file Internal Revenue Service
Form 5310-A regarding the transfer of Assets and Liabilities from the Bentley 401(k) Plan to the
CPEX 401(k) Plan as described in this Section 3.1.



               (e) Contributions as of the Distribution Date. All contributions payable to the
Bentley 401(k) Plan with respect to employee deferrals and contributions, matching contributions
and other contributions for CPEX Participants through the Distribution Date, determined in
accordance with the terms and provisions of the Bentley 401(k) Plan, ERISA and the Code, shall be
paid by Bentley to the Bentley 401(k) Plan prior to the date of the Asset transfer described in
subsection (b), above.



ARTICLE IV




HEALTH AND WELFARE PLANS




          Section 4.1 Health And Welfare Plans Maintained By Bentley Prior To The Distribution Date.




               (a) Establishment of Welfare Plans. Bentley or one or more of its Affiliates maintain
health and welfare plans (the “Bentley Welfare Plans”) for the benefit of eligible Bentley
Participants and CPEX Participants. Effective as of the Distribution Date, CPEX shall, or shall
cause a CPEX Affiliate to, adopt, for the benefit of eligible CPEX Participants, health and welfare
plans (collectively, the “CPEX Welfare Plans”).



               (b) Terms of Participation in CPEX Welfare Plans. CPEX (acting directly or through
its Affiliates) shall use reasonable best efforts to cause all CPEX Welfare Plans, respectively, to
(i) waive all limitations as to preexisting conditions, exclusions, and service conditions with
respect to participation and coverage requirements applicable to CPEX Participants, respectively,
other than limitations that were in effect with respect to CPEX Participants as of the Distribution
Date under the Bentley Welfare Plans, and (ii) waive any waiting period limitation or evidence of
insurability requirement that would otherwise be applicable to a CPEX Participant, respectively,
following the Distribution Date to the extent such CPEX Participant had satisfied any similar
limitation under the analogous Bentley Welfare Plan.



               (c) Employees on Leave. Notwithstanding any other provision of this Agreement to the
contrary, CPEX shall assume Liability for payment of any salary continuation, short term disability
or health and welfare coverage with respect to CPEX Employees and Bentley



8









 




shall have no further responsibility for such disabled employees or employees on approved
leave after the Distribution Date.




               (d) COBRA and HIPAA. Effective as of the Distribution Date, Bentley shall retain
responsibility for compliance with the health care continuation coverage requirements of COBRA with
respect to CPEX Participants who, as of the day prior to the Distribution Date, were covered under
a Bentley Welfare Plan pursuant to COBRA. Bentley (acting directly or through its Affiliates)
shall be responsible for administering compliance with any certificate of creditable coverage
requirements of HIPAA or Medicare applicable to the Bentley Welfare Plans with respect to CPEX
Participants. The Parties hereto agree that neither the Distribution nor any transfers of
employment that occur as of the Distribution Date shall constitute a COBRA qualifying event for
purposes of COBRA; provided, that, in all events, CPEX (acting directly or through
its Affiliates) shall assume, or shall have caused the CPEX Welfare Plans to assume, responsibility
for compliance with the health care continuation coverage requirements of COBRA with respect to
those individuals whose employment is transferred directly from the Bentley Group to the CPEX
Group, as of the Distribution Date, to the extent such individual was, as of the day prior to such
transfer of employment, covered under a Bentley Welfare Plan.



               (e) Liabilities.




               (i) Insured Benefits. With respect to employee welfare and fringe
benefits that are provided through the purchase of insurance (including, without
limitation, health, disability and workers’ compensation benefits), Bentley shall
timely pay all premiums in respect of coverage of CPEX Participants in respect of
the period before the Distribution Date and shall retain all claims incurred by the
CPEX Participants prior to the Distribution Date, and CPEX shall cause Bentley not
to have any liability in respect of any and all claims of CPEX Participants that are
incurred under the CPEX Welfare Plans.




               (ii) Incurred Claim Definition. For purposes of this Section 4.1(e), a
claim or Liability is deemed to be incurred (A) with respect to medical, dental,
vision and/or prescription drug benefits, upon the rendering of health services
giving rise to such claim or Liability; (B) with respect to life insurance,
accidental death and dismemberment and business travel accident insurance, upon the
occurrence of the event giving rise to such claim or Liability; and (C) with respect
to disability benefits, upon the date of an individual’s disability, as determined
by the disability benefit insurance carrier or claim administrator, giving rise to
such claim or Liability.




               (iii) Claim Experience. Notwithstanding the foregoing, the Parties
(acting directly or through their Affiliates) shall take any action necessary to
ensure that any claims experience under the Bentley Welfare Plans attributable to
CPEX Participants shall be available to the CPEX Welfare Plans.



          Section 4.2 Time-Off Benefits. CPEX shall credit each CPEX Participant with the amount of
accrued but unused vacation time, sick time and other time-off benefits as such CPEX Participant
had with the Bentley Group as of the Distribution Date. Notwithstanding the




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above, CPEX shall not be required to credit any CPEX Participant with any accrual to the extent
that a benefit attributable to such accrual is provided by the Bentley Group.




ARTICLE V




LONG-TERM INCENTIVE AWARDS




          Section 5.1 Treatment of Outstanding Bentley Options.




               (a) Treatment of Outstanding Bentley Option held by Bentley Employees Other than Spanish
Employees.




               (i) Except with respect to Bentley Options held by Spanish Employees (each, a
“Spanish Employee Option”), each Bentley Option that is outstanding
immediately prior to the Distribution Date shall, as of the Distribution Date, be
converted into a CPEX Option and an adjusted Bentley Option (a
“Post-Distribution Bentley Option”) in accordance with the succeeding
paragraphs of this Section 5.1(a).




               (ii) The number of shares subject to the CPEX Option shall be equal to the
number of shares of CPEX Common Stock to which the option holder would be entitled
in the Distribution had the shares subject to the Bentley Option represented
outstanding shares of Bentley Common Stock as of the Record Date, the resulting
number of shares subject to the CPEX Option being rounded down to the nearest whole
share. The per share exercise price of the CPEX Option shall be equal to the
product of (1) the per share exercise price of the Bentley
Option immediately prior to the Distribution Date (the
“Pre-Distribution Bently Option Price”) multiplied by (2) a
fraction, the numerator of which shall be the Initial CPEX Stock Price and the
denominator of which shall be the Pre-Distribution Bentley Stock Price. The number
of shares subject to the Post-Distribution Bentley Option shall be equal to the
number of shares subject to the Bentley Option immediately prior to the Distribution
Date. The per share exercise price of the Post-Distribution Bentley Option shall be
equal to the product of (1) the Pre-Distribution Bentley Option
Price multiplied by (2) a fraction, the numerator of which shall be the
Post-Distribution Bentley Stock Price and the denominator of which shall be the
Pre-Distribution Bentley Stock Price.




               (iii) Prior to the Distribution Date, Bentley shall take all actions necessary
to provide that, effective as of the Distribution Date, for purposes of the
Post-Distribution Bentley Options (including in determining exercisability and the
post-termination exercise period), a CPEX Employee’s continuous service with the
CPEX Group (including applicable successors) following the Distribution Date shall
be deemed continued service with Bentley. CPEX shall issue each CPEX Option under
the CPEX Stock Plan with terms such that, except as otherwise provided herein, the
terms and conditions applicable to the CPEX Options shall be substantially similar
to the terms and conditions applicable to the corresponding
Bentley Option, including the terms and conditions relating to vesting and the



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post-termination exercise period and including a provision to the effect that, for
purposes of the CPEX Options, continuous service with the Bentley Group or CPEX
Group (in each case, including applicable successors) from and after the
Distribution Date shall be deemed to constitute service with CPEX.




               (iv) Except as otherwise provided herein, the CPEX Options and the
Post-Distribution Bentley Options shall remain subject to the terms and conditions
of the underlying Bentley Option as in effect immediately prior to the Distribution
Date (taking into account changes in the identity of the employer, including for
purposes of determining whether a change in control has occurred).




               (v) Upon the exercise of a CPEX Option, regardless of the holder thereof, the
exercise price shall be paid to (or otherwise satisfied to the satisfaction of) CPEX
in accordance with the terms of the CPEX Option, and CPEX shall be solely
responsible for the issuance of CPEX Common Stock, for ensuring the collection of
the employee portion of all applicable withholding tax on behalf of the employing
entity of such holder, and for ensuring the remittance of such withholding taxes to
the employing entity of such holder. Upon the exercise of a Post-Distribution
Bentley Option, regardless of the holder thereof, the exercise price shall be paid
to (or otherwise satisfied to the satisfaction of) Bentley in accordance with the
terms of the Post-Distribution Bentley Option, and Bentley shall be solely
responsible for the issuance of Bentley Common Stock, for ensuring the collection of
the employee portion of all applicable withholding tax on behalf of the employing
entity of such holder and for ensuring the remittance of such withholding taxes to
the employing entity of such holder.



               (b) Treatment of Outstanding Bentley Options held by Spanish Employees.




               (i) Each Spanish Employee Option that is outstanding immediately prior to the
Distribution Date shall, as of the Distribution Date, be converted into an adjusted
Spanish Employee Option (a “Post-Distribution Spanish Employee Option”) in
accordance with the succeeding paragraphs of this Section 5.1(b).




               (ii) The number of shares subject to the Post-Distribution Spanish Employee
Option shall be equal to the product of (1) the number of shares subject to the
Spanish Employee Option multiplied by (2) a fraction, the numerator of which shall
be the Pre-Distribution Bentley Stock Price and the denominator of which shall be
the Post-Distribution Bentley Stock Price. The per share exercise price of the
Post-Distribution Spanish Employee Option shall be equal to the product of (1) the
exercise price of the Spanish Employee Option multiplied by (2) a fraction, the
numerator of which shall be the Post-Distribution Bentley Stock Price and the
denominator of which shall be the Pre-Distribution Bentley Stock Price.



11









 






               (iii) Except as otherwise provided herein, the Post-Distribution Spanish
Employee Options shall remain subject to the terms and conditions of the underlying
Spanish Employee Option as in effect prior to the Distribution Date.




               (iv) Upon the exercise of a Post-Distribution Spanish Employee Option,
regardless of the holder thereof, the exercise shall be paid to (or otherwise
satisfied to the satisfaction of) Bentley in accordance with the terms of the
Post-Distribution Spanish Employee Option, and Bentley shall be solely responsible
for the issuance of Bentley Common Stock, for ensuring the collection of the
employee portion of all applicable withholding tax, for the satisfaction of all tax
reporting requirements in respect of such exercise, for remitting the appropriate
withholding amounts to the appropriate taxing authorities and shall be entitled to
the benefit of any tax deduction in respect of the exercise of all such
Post-Distribution Spanish Employee Options.



          Section 5.2 Treatment of Outstanding Bentley Restricted Stock Units.




               (a) Treatment of Outstanding Bentley Restricted Stock Units held by Bentley Employees
other than Spanish Employees.




               (i) Except with respect to Bentley Restricted Stock Units held by Spanish
Employees (each, a “Spanish Employee Restricted Stock Unit”) each Bentley
Restricted Stock Unit that is outstanding immediately prior to the Distribution Date
shall be converted, as of the Distribution Date, into a CPEX Restricted Stock Unit
and an adjusted Bentley Restricted Stock Unit in accordance with the succeeding
paragraphs of this Section 5.2.




               (ii) The number of CPEX Restricted Stock Units shall be equal to the number of shares of CPEX Common Stock to which the holder of Bentley Restricted Stock Units
would be entitled in the Distribution had the Bentley Restricted Stock Units
represented actual shares of Bentley Common Stock as of the Distribution Record
Date, the resulting number of CPEX Restricted Stock Units being rounded down to the
nearest whole unit. The number of adjusted Bentley Restricted Stock Units shall
equal the number of Bentley Restricted Stock Units. All CPEX Restricted Stock Units
and adjusted Bentley Restricted Stock Units shall become vested upon the date the
Bentley Restricted Stock Units would have otherwise vested in accordance with the
existing vesting schedule.




               (iii) Prior to the Distribution Date, Bentley shall take all actions necessary
to provide that, effective as of the Distribution Date, for purposes of continued
vesting of the adjusted Bentley Restricted Stock Units, a CPEX Employee’s continuous
service with the CPEX Group following the Distribution Date shall be deemed
continued service with Bentley. Except as otherwise provided herein, the terms and
conditions applicable to the CPEX Restricted Stock Units shall be substantially
similar to the terms and conditions applicable to the corresponding Bentley
Restricted Stock Unit (taking into account changes in the



12









 






identity of the employer, including for purposes of determining whether a
change in control has occurred), including a provision to the effect that, for
purposes of the CPEX Restricted Stock Units, continuous service of a Bentley
Employee or CPEX Employee with any member of the Bentley Group or CPEX Group shall
be deemed to constitute service with CPEX; provided, that, nothing
in this Section 5.2(a) shall require the payment or crediting of dividends to
holders of Bentley Common Stock or CPEX Common Stock.




               (iv) Upon the vesting of the Bentley Restricted Stock Units that are settled in shares of Bentley Common Stock, Bentley shall be solely responsible for the
settlement of all Bentley Restricted Stock Units, regardless of the holder thereof,
and for ensuring the satisfaction of the employee portion of all applicable tax
withholding requirements on behalf of the employing entity of such holder and for
ensuring the remittance of such withholding taxes to the employing entity of such
holder. Upon the vesting of the CPEX Restricted Stock Units that are settled in
shares of CPEX Common Stock, CPEX shall be solely responsible for the settlement of
all CPEX Restricted Stock Units, regardless of the holder thereof, and for ensuring
the satisfaction of the employee portion of all applicable tax withholding
requirements on behalf of the employing entity of such holder and for ensuring the
remittance of such withholding taxes to the employing entity of such holder.



               (b) Treatment of Outstanding Bentley Restricted Stock Units held by Spanish Employees.




               (i) Each Spanish Restricted Stock Unit that is outstanding immediately prior to
the Distribution Date shall, as of the Distribution Date, be converted into an
adjusted Spanish Employee Restricted Stock Unit (a “Post-Distribution Spanish
Employee Restricted Stock Unit”) in accordance with the succeeding paragraphs of
this Section 5.2(b)




               (ii) The number of Post-Distribution Spanish Employee Restricted Stock Units
shall be equal to the product of (1) the number of Spanish Employee Restricted Stock
Units multiplied by (2) a fraction, the numerator of which shall be the
Pre-Distribution Bentley Stock Price and the denominator of which shall be
Post-Distribution Bentley Stock Price. All Post-Distribution Spanish Employee
Restricted Stock Units shall become vested upon the date the Spanish Employee
Restricted Stock Units would have otherwise vested in accordance with the existing
vesting schedule.




               (iii) Upon the vesting of the Post-Distribution Spanish Employee Restricted
Stock Units, whether settled in cash or in shares of Bentley Common Stock, Bentley
shall be solely responsible for the settlement of the unit (including any
attributable dividend equivalents) and for ensuring the satisfaction of all tax
reporting and withholding requirements in respect of such settlement, for ensuring
the remittance of such withholding taxes and shall be entitled to the



13









 






benefit of any tax deduction in respect of the settlement of all such
Post-Distribution Spanish Employee Restricted Stock Units.



          Section 5.3 Cooperation and Special Award Terms. Each of the Parties shall establish an
appropriate administration system in order to handle in an orderly manner exercises of Bentley
Options, CPEX Options and Post-Distribution Spanish Employee Options and the settlement of Bentley
Stock Units, CPEX Restricted Stock Units and Post-Distribution Spanish Employee Restricted Stock
Units. Each of the Parties will work together to unify and consolidate all indicative data and
payroll and employment information on regular timetables and make certain that each applicable
entity’s data and records in respect of such awards are correct and updated on a timely basis. The
foregoing shall include employment status and information required for tax withholding/remittance,
compliance with trading windows and compliance with the requirements of the Exchange Act and other
applicable Laws. Each of the parties shall honor the terms of any agreement entered into before
the Distribution Date with any employee of another party insofar as such agreement provides for
accelerated vesting or the extension of the term of any Bentley Options, CPEX Options,
Post-Distribution Spanish Employee Options, Bentley Restricted Stock Units, CPEX Restricted Stock
Units or Post-Distribution Spanish Employee Restricted Stock Units.




          Section 5.4 SEC Registration. The Parties mutually agree to use reasonable best efforts to
maintain effective registration statements with the SEC with respect to the long-term incentive
awards described in this Article V, to the extent any such registration statement is required by
applicable Law.




          Section 5.5 Savings Clause. The Parties hereby acknowledge that the provisions of this
Article V are intended to achieve certain tax, legal and accounting objectives as set forth in the
Separation Agreement and, in the event such objectives are not achieved, the Parties agree to
negotiate in good faith regarding such other actions that may be necessary or appropriate to
achieve such objectives.




ARTICLE VI




ADDITIONAL COMPENSATION MATTERS




          Section 6.1 Workers’ Compensation Liabilities. Except as provided in Section 4.1(e)(i),
all workers’ compensation Liabilities relating to, arising out of, or resulting from any claim that
results from an accident, incident or event occurring, or from an occupational disease which
becomes manifest, at, before or after the Distribution Date by (i) any Bentley Employee or Former
Bentley Employee shall be retained by Bentley, and (ii) by a CPEX Employee or Former CPEX Employee
shall be assumed by CPEX.




          Section 6.2 Sections 162(m)/409A. Notwithstanding anything in this Agreement to the
contrary (including the treatment of outstanding long-term incentive awards and annual incentive
awards as described herein), the Parties agree to negotiate in good faith regarding the need for
any treatment different from that otherwise provided herein to ensure that (i) a federal income Tax
deduction for the payment of such long-term incentive award, annual incentive award or other compensation is not limited by reason of Section 162(m) of the Code, and (ii) the




14









 







treatment of such long-term incentive award, annual incentive award or other compensation does not
cause the imposition of a tax under Section 409A of the Code.




          Section 6.3 Director Programs.




               (a) Director Fees. Bentley shall retain responsibility for the payment of any fees
payable in respect of service on the Bentley Board of Directors that are payable but not yet paid
as of the Distribution Date, and CPEX shall not have any responsibility for any such payments (to
an individual who is a member of the CPEX Board of Directors as of the Distribution Date or
otherwise).



          Section 6.4 Certain Payroll, Bonus and Supplemental Plan Matters.




               (a) Payroll of Transferring Employees. In the case of an individual who transfers
employment at the Distribution Date from Bentley to CPEX, CPEX shall be responsible for paying the
entire payroll amount due to such individual for the first payroll cycle ending after the
Distribution Date and for satisfying all applicable tax reporting and withholding requirements in
respect of such payment; provided, that, Bentley shall reimburse CPEX for the gross
amount of the payroll payment (i.e., including any applicable deductions) and for all tax
withholdings remitted in respect of such portion of the payroll period ending before the
Distribution Date. Bentley shall be entitled to the benefit of any tax deduction in respect of its
payment for the portion of the payroll period ending before the Distribution Date.



ARTICLE VII




INDEMNIFICATION




          Section 7.1 General Indemnification. Any claim for indemnification under this Agreement
shall be governed by, and be subject to, the provisions of Article V of the Separation Agreement,
which provisions are hereby incorporated by reference into this Agreement and any references to
“Agreement” in such Article V as incorporated herein shall be deemed to be references to this
Agreement.




ARTICLE VIII




GENERAL AND ADMINISTRATIVE




          Section 8.1 Sharing Of Information. Bentley and CPEX (acting directly or through their
respective Affiliates) shall provide to each other and their respective agents and vendors all
Information as the other may reasonably request to enable the requesting Party to administer
efficiently and accurately each of its Benefit Plans, to timely and accurately comply with and
report under Section 14 of the Exchange Act, and to determine the scope of, as well as fulfill, its
obligations under this Agreement. Such information shall, to the extent reasonably practicable, be
provided in the format and at the times and places requested, but in no event shall the Party
providing such information be obligated to incur any out-of-pocket expenses not reimbursed by the Party making such request or make such information available outside of its




15









 







normal business hours and premises. Any information shared or exchanged pursuant to this Agreement
shall be subject to the confidentiality requirements set forth in the Separation Agreement. The
Parties also hereby agree to enter into any business associate agreements that may be required for
the sharing of any Information pursuant to this Agreement to comply with the requirements of HIPAA.




          Section 8.2 Reasonable Efforts/Cooperation. Each of the Parties hereto will use its
reasonable best efforts to promptly take, or cause to be taken, all actions and to do, or cause to
be done, all things necessary, proper or advisable under applicable Laws and regulations to
consummate the transactions contemplated by this Agreement, including adopting plans or plan
amendments. Each of the Parties hereto shall cooperate fully on any issue relating to the
transactions contemplated by this Agreement for which the other Party seeks a determination letter
or private letter ruling from the Internal Revenue Service, an advisory opinion from the
Department of Labor or any other filing, Consent or Governmental Approval.




          Section 8.3 Employer Rights. Nothing in this Agreement shall prohibit any Party or
any of their respective Affiliates from amending, modifying or terminating any of their respective
Benefit Plans at any time within their sole discretion.




          Section 8.4 Effect on Employment. Except as expressly provided in this Agreement,
the occurrence of the Distribution alone shall not cause any employee to be deemed to have
incurred a termination of employment which entitles such individual to the commencement of
benefits under any of the Bentley Benefit Plans. Furthermore, nothing in this Agreement is
intended to confer upon any employee or former employee of Bentley, CPEX or any of their
respective Affiliates any right to continued employment, or any recall or similar rights to an
individual on layoff or any type of approved leave.




          Section 8.5 Consent Of Third Parties. If any provision of this Agreement is
dependent on the consent of any Third Party and such consent is withheld, the Parties hereto shall
use their reasonable best efforts to implement the applicable provisions of this Agreement to the
fullest extent practicable. If any provision of this Agreement cannot be implemented due to the
failure of such Third Party to consent, the Parties hereto shall negotiate in good faith to
implement the provision (as applicable) in a mutually satisfactory manner.




          Section 8.6 Access To Employees. Following the Distribution Date, Bentley and CPEX
shall, or shall cause each of their respective Affiliates to, make available to each other those
of their employees who may reasonably be needed in order to defend or prosecute any legal or
administrative action (other than a legal action between or among any of the Parties) to which any
employee, director or Benefit Plan of the Bentley Group or CPEX Group is a party and which relates
to their respective Benefit Plans prior to the Distribution Date. The Party to whom an employee is
made available in accordance with this Section 8.6 shall pay or reimburse the other Party for all
reasonable expenses which may be incurred by such employee in connection therewith, including all
reasonable travel, lodging, and meal expenses, but excluding any amount for such employee’s time
spent in connection herewith.




          Section 8.7 Beneficiary Designation/Release Of Information/Right To Reimbursement.
To the extent permitted by applicable Law and except as otherwise provided




16









 







for in this Agreement,
all beneficiary designations, authorizations for the release of Information and rights to
reimbursement made by or relating to CPEX Participants under Bentley Benefit Plans shall be
transferred to and be in full force and effect under the corresponding CPEX Benefit Plans and
Bentley Benefit Plans until such beneficiary designations, authorizations or rights are replaced
or revoked by, or no longer apply, to the relevant CPEX Participant.




ARTICLE IX




MISCELLANEOUS




          Section 9.1 Effect If Certain Events Do Not Occur. Notwithstanding anything in this
Agreement to the contrary, if the Separation Agreement is terminated prior to the Distribution
Date, then all actions and events that are, under this Agreement, to be taken or occur effective
prior to, as of or following the Effective Time, or otherwise in connection with the Separation,
shall not be taken or occur except to the extent specifically agreed to in writing by Bentley on
the one hand and CPEX on the other hand and no Party shall have any Liability or further
obligation to any other Party under this Agreement.




          Section 9.2 Relationship Of Parties. Nothing in this Agreement shall be deemed or
construed by the Parties or any Third Party as creating the relationship of principal and agent,
partnership or joint venture between or among the Parties, it being understood and agreed that no
provision contained herein, and no act of the Parties, shall be deemed to create any relationship
between or among the Parties other than the relationship set forth herein.




          Section 9.3 Subsidiaries. Each of the Parties shall cause to be performed all
actions, agreements and obligations set forth herein to be performed by any Subsidiary or
Affiliate of such Party or by any entity that becomes a Subsidiary or Affiliate of such Party on
and after the Distribution Date. The Parties acknowledge that certain actions, agreements and
obligations that certain of their Affiliates and Subsidiaries may be required to perform in
connection with the performance of the Parties obligations under this Agreement may require
Governmental Approval under applicable Law, and therefore agree that performance of such actions,
agreements and obligations is subject to the receipt of all such necessary Governmental Approvals,
which approvals each Party shall, and shall cause the members of its respective Group to, use its
reasonable best efforts to obtain.




          Section 9.4 Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed to be duly given when
(a) delivered in person or (b) deposited in the United States mail or private express mail,
postage prepaid, addressed as follows:



To Bentley:



Bentley Pharmaceuticals, Inc.

Bentley Park, 2 Holland Way

Exeter, NH 03833




17









 







Attn: President

Facsimile: 603-658-6101



To CPEX:



CPEX Pharmaceuticals, Inc.

Bentley Park, 2 Holland Way

Exeter, NH 03833

Attn: President

Facsimile: 603-658-6101




          Either Party may, by notice to the other Party, change the address to which such notices are
to be given.




          Section 9.5 Entire Agreement. This Agreement, the Separation Agreement, and each other
Ancillary Agreement, including the Exhibits and Schedules thereto contain the entire agreement
between the Parties with respect to the subject matter hereof and shall supersede all previous
agreements, negotiations, discussions, writings, understandings, commitments and conversations with
respect to such subject matter and there are no agreements or understandings between the Parties
other than those set forth or referred to herein or therein. In the event of any conflict between
the terms and conditions of this Agreement and the terms and conditions of the Separation
Agreement, the terms and conditions of the Separation Agreement (including amendments thereto)
shall control.




          Section 9.6 Waivers. The failure of any Party to require strict performance by the other
Party of any provision in this Agreement will not waive or diminish that Party’s right to demand
strict performance thereafter of that or any other provision hereof.




          Section 9.7 Amendments. Subject to the terms of Section 9.8 of this Agreement, this
Agreement may not be modified or amended except by an agreement in writing signed by each of the
Parties.




          Section 9.8 Termination. This Agreement (including Article VII (Indemnification) hereof)
may be terminated and the Distribution may be amended, modified or abandoned at any time prior to
the Distribution Date by and in the sole discretion of Bentley without the approval of CPEX or the
stockholders of Bentley and it shall be deemed terminated if and when the Separation Agreement is
terminated. In the event of such termination, no Party shall have any Liability of any kind to any
other Party or any other Person. After the Distribution Date, this Agreement may not be terminated
except by an agreement in writing signed by Bentley and CPEX. Notwithstanding the foregoing, this
Agreement may be terminated or amended as among any Parties that remain Affiliates, so long as such
amendment does not adversely affect any Party that is no longer an Affiliate, in which case, only
with the consent of such Party.




          Section 9.9 Governing Law. This Agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of Delaware, irrespective of the
choice of laws principles of the State of Delaware as to all matters, including matters of
validity, construction, effect, enforceability, performance and remedies. Except as provided in
Article IX




18









 







of the Separation Agreement, the Parties hereto irrevocably accept generally and
unconditionally the exclusive jurisdiction and venue of the United States District Court for the
District of Delaware.




          Section 9.10 Dispute Resolution. Any controversy, dispute or claim arising out of, in
connection with, or in relation to the interpretation, performance, nonperformance, validity,
termination or breach of this Agreement or otherwise arising out of, or in any way related to this
Agreement or the transactions contemplated hereby, including any claim based on contract, tort,
statute or constitution (but excluding any controversy, dispute or claim arising out of any
Contract relating to the use or lease of real property if any Third Party is a necessary party to
such controversy, dispute or claim), shall be governed by, and be subject to, the provisions of
Article IX of the Separation Agreement, which provisions (and related defined terms) are hereby
incorporated by reference into this Agreement and any references to “Agreement” in such Article IX
as incorporated herein shall be deemed to be references to this Agreement; provided, however, any
references to “Agreement” in such Article IX as incorporated herein shall be deemed to be
references to this Agreement as defined in this Agreement.




          Section 9.11 Consent to Jurisdiction. Subject to the provisions of Article IX of the
Separation Agreement, each of the Parties irrevocably submits to the exclusive jurisdiction of the
United States District Court for the District of Delaware (the “Delaware Court”), for the
purposes of any suit, action or other proceeding to compel arbitration or for provisional relief in
aid of arbitration in accordance with Article IX of the Separation Agreement or for provisional
relief to prevent irreparable harm, and to the non-exclusive jurisdiction of the Delaware Court for
the enforcement of any award issued thereunder. Each of the Parties further agrees that service of
any process, summons, notice or document by United States registered mail or receipted courier
service to such Party’s respective address set forth in Section 9.4 of this Agreement shall be
effective service of process for any action, suit or proceeding in the Delaware Court with respect
to any matters to which it has submitted to jurisdiction in this Section 9.11. Each of the Parties
irrevocably and unconditionally waives any objection to the laying of venue of any such action,
suit or proceeding in the Delaware Court, and hereby further irrevocably and unconditionally waives
and agrees not to plead or claim in any such court that any such action, suit or proceeding brought
in any such court has been brought in an inconvenient forum.




          Section 9.12 Titles and Headings. Titles and headings to Sections and Articles herein are
inserted for the convenience of reference only and are not intended to be a part of or to affect
the meaning or interpretation of this Agreement.




          Section 9.13 Counterparts. This Agreement may be executed in more than one counterparts,
each of which shall be considered one and the same agreement, and shall become effective when each
counterpart has been signed by each of the Parties and delivered to the other Parties. Execution
of this Agreement or any other documents pursuant to this Agreement by facsimile or other
electronic copy of a signature shall be deemed to be, and shall have the same effect as, executed
by an original signature.




          Section 9.14 Assignment. Except as otherwise expressly provided for in this Agreement,
this Agreement and rights hereunder shall be binding upon, inure to the benefit of and be
enforceable by (and against) the Parties and their respective successors and permitted




19









 







transferees
and assigns. Notwithstanding the foregoing, this Agreement shall not be assignable, in whole or in
part, by any Party without the prior written consent of the other Party, and any attempt to assign
any rights or obligations arising under this Agreement without such consent shall be null and void;
provided, that (i) a Party may assign this Agreement in connection with a merger transaction in
which such Party is not the surviving entity or the sale by such Party of all or substantially all
of its Assets, and upon the effectiveness of such assignment the assigning Party shall be released
from all of its obligations under this Agreement if the surviving entity of such merger or the
transferee of such Assets shall agree in writing, in form and substance reasonably satisfactory to
the other Party, to be bound by all terms of this Agreement as if named as a “Party” hereto.




          Section 9.15 Severability. If any provision of this Agreement is determined by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or
the application of such provision to Persons or circumstances or in jurisdictions other than those
as to which it has been held invalid or unenforceable, shall remain in full force and effect and
shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal
substance of the transactions contemplated hereby or thereby, as the case may be, is not affected
in any manner adverse to any Party. Upon such determination, the Parties shall negotiate in good
faith in an effort to agree upon such a suitable and equitable provision to affect the original
intent of the Parties.




          Section 9.16 Successors and Assigns. The provisions of this Agreement and the obligations
and rights hereunder shall be binding upon, inure to the benefit of and be enforceable by (and
against) the Parties and their respective successors and permitted transferees and assigns.




          Section 9.17 Specific Performance. The Parties agree that irreparable damage would occur
in the event that the provisions of this Agreement were not performed in accordance with their
specific terms. Accordingly, it is hereby agreed that the Parties shall be entitled to (i) an
injunction or injunctions to enforce specifically the terms and provisions hereof in any
arbitration in accordance with Section 9.10 of this Agreement, (ii) provisional or temporary
injunctive relief in accordance therewith in any Delaware Court, and (iii) enforcement of any such
award of an arbitral tribunal or a Delaware Court in any court of the United States, or any other
any court or tribunal sitting in any state of the United States or in any foreign country that has
jurisdiction, this being in addition to any other remedy or relief to which they may be entitled.




          Section 9.18 Waiver of Jury Trial. SUBJECT TO SECTIONS 9.9, 9.10 AND 9.11 OF THIS
AGREEMENT, EACH OF THE PARTIES HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY COURT PROCEEDING CONTEMPLATED BY SECTION
9.11 OF THIS AGREEMENT. EACH OF THE PARTIES HEREBY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED BY




20









 







THIS AGREEMENT, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.18.




          Section 9.19 Force Majeure. No Party (or any Person acting on its behalf) shall have any
liability or responsibility for failure to fulfill any obligation (other than a payment obligation)
under this Agreement so long as and to the extent to which the fulfillment of such obligation is
prevented, frustrated, hindered or delayed as a consequence of circumstances of Force Majeure. A
Party claiming the benefit of this provision shall, as soon as reasonably practicable after the
occurrence of any such event: (a) notify the other Party of the nature and extent of any such Force
Majeure condition and (b) use due diligence to remove any such causes and resume performance under
this Agreement as soon as reasonably practicable.




          Section 9.20 Authorization. Each of the Parties hereby represents and warrants that it has
the power and authority to execute, deliver and perform this Agreement, that this Agreement has
been duly authorized by all necessary corporate action on the part of such Party, that this
Agreement constitutes a legal, valid and binding obligation of each such Party and that the
execution, delivery and performance of this Agreement by such Party does not contravene or conflict
with any provision of law or of its charter or bylaws or any material agreement, instrument or
order binding on such Party.




          Section 9.21 No Third-Party Beneficiaries. The provisions of this Agreement are solely for
the benefit of the Parties and are not intended to confer upon any Person except the Parties any
rights or remedies hereunder. There are no Third Party beneficiaries of this Agreement and this
Agreement shall not provide any Third Party with any remedy, claim, liability, reimbursement, claim
of action or other right in excess of those existing without reference to this Agreement.




          Section 9.22 Construction. The Parties have participated jointly in the negotiation and
drafting of this Agreement. This Agreement shall be construed without regard to any presumption or
rule requiring construction or interpretation against the party drafting or causing any instrument
to be drafted.




[Remainder of this page intentionally left blank.]




21









 








     IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the day
and year first above written.



	 	 	 	 	 
	 	BENTLEY PHARMACEUTICALS, INC.

 	 
	 	By:  	/s/ James R. Murphy 	 
	 	Name: James R. Murphy 	 
	 	Title:   Chief Executive Officer 	 
	 



	 	 	 	 	 
	 	CPEX PHARMACEUTICALS, INC.

 	 
	 	By:  	/s/ John A. Sedor 	 
	 	Name: John A. Sedor 	 
	 	Title:   President and Chief Executive Officer