exv10w11






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














 






	 	 	 	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









 





     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









 








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













 




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.













 





     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.













 





	 	 	 	 	 
	Witness:

	 	 	 	Employee:
	 
	 	 	 	 
	 

	 	 	 	 
	Signature

	 	 	 	Signature
	 
	 	 	 	 
	 

	 	 	 	Nils Bergenhem
	 

	 	 	 	 
	Witness Name Printed

	 	 	 	Employee Name Printed
	 
	 	 	 	 
	 

	 	 	 	 
	Date

	 	 	 	Date






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















 





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.







 









 







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