Exhibit 10.1

EMPLOYMENT AGREEMENT

          AGREEMENT (the “Agreement”), dated as of December 4, 2006 by and
between NOVADEL PHARMA INC., a Delaware corporation with principal executive
offices at 25 Minneakoning Rd., Flemington, New Jersey 08822 (the “Company”),
and DAVID H. BERGSTROM, Ph.D. residing at 15 Kerby Lane, Mendham, New Jersey
07945-2901 (the “Executive”).

W I T N E S S E T H:

          WHEREAS, the Company desires to employ the Executive as Chief
Operating Officer of the Company, and the Executive desires to serve the Company
in that capacity, upon the terms and subject to the conditions contained in this
Agreement;

          NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereto hereby agree as follows:

          1.      Employment.

          The Company agrees to employ the Executive, and the Executive agrees
to be employed by the Company, upon the terms and subject to the conditions of
this Agreement.

          2.      Term.

          The employment of the Executive by the Company as provided in Section
1 shall be for a period of three (3) years commencing on the date hereof, unless
sooner terminated in accordance with the provisions of Section 8 below (the
“Term”).

          3.       Duties; Best Efforts; Place of Performance.

           (a)     The Executive shall initially serve as Chief Operating
Officer of the Company and shall perform, subject to the direction of the Chief
Executive Officer, such duties as are customarily performed by the Chief
Operating Officer. The Executive shall also have such other powers and duties as
may be from time to time prescribed by the Chief Executive Officer or Board of
Directors of the Company provided that the nature of the Executive’s powers and
duties so prescribed shall not be inconsistent with the Executive’s position and
duties hereunder.

          (b)      The Executive shall devote substantially all of his business
time, attention and energies to the business and affairs of the Company and
shall use his best efforts to advance the best interests of the Company and
shall not, during the Term, be actively engaged in any other business activity,
whether or not such business activity is pursued for gain, profit or other
pecuniary advantage, that will interfere with the performance by the Executive
of his duties hereunder or the Executive’s availability to perform such

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duties or that will adversely affect, or negatively reflect upon, the Company.
Notwithstanding the above, Executive may hold external directorships or
executive positions with the advance approval of the Company’s Board of
Directors.

          (c)      The duties to be performed by the Executive hereunder shall
be performed primarily at the office of the Company in Flemington, New Jersey,
subject to reasonable travel requirements on behalf of the Company.

          4.       Compensation. As full compensation for the performance by the
Executive of his duties under this Agreement, the Company shall pay the
Executive as follows:

          (a)      Base Salary. The Company shall pay the Executive a base
salary (the “Base Salary”) at a rate of $300,000 per annum, payable in equal
semi-monthly installments during the Term. The Executive’s Base Salary shall be
subject to annual review by the Compensation Committee of the Board of Directors
and may be increased, but not decreased, from time to time at the discretion of
the Compensation Committee of the Board of Directors.

          (b)      Bonus. The company shall pay the Executive a cash bonus of
$100,000 for the period commencing on January 1, 2007 and ending on December 31,
2007, such bonus will be paid in January 2008. In the remaining years of the
contract, the Executive shall be eligible to receive a bonus equal to 30%
(thirty percent) of his base salary, provided, however, that such bonus shall be
payable only upon the successful achievement of certain performance milestones
related to the Executive’s role in the Company, which milestones shall be
defined and enumerated by mutual agreement between the Executive and the
President & Chief Executive Officer of the Company within the first month of
Executive’s term of employment, and again at the same time in each succeeding
year of Executive’s term of employment with the Company. The amount of Bonus
paid to the Executive shall be increased or decreased from time to time at the
discretion of the Compensation Committee of the Board.

          (c)      Withholding. The Company shall withhold all applicable
federal, state and local taxes and social security and such other amounts as may
be required by law from all amounts payable to the Executive under this Section
4.

          (d)      Stock Options and Restricted Shares. On the first day of
employment, and as additional compensation for the services to be rendered by
the Executive pursuant to this Agreement, the Company shall grant the Executive
non-qualified stock options (“Stock Options”) to purchase 900,000 shares of
Common Stock of the Company. Such option grant will have a term of ten (10)
years. The stock options shall vest upon

 * 12.5% upon FDA acceptance of NDA submission for zolpidem
 * 12.5% upon FDA acceptance of NDA submission for sumatriptan
 * 12.5% upon Board of Directors approval and successful implementation of
   portfolio plan for next generation compounds

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 * 12.5% upon CEO approval and successful implementation of organization plan to
   address issues in analytical, clinical and regulatory
 * 15% upon completion of a Board of Directors approved licensing deal for
   zolpidem
 * 15% upon completion of a Board of Directors approved licensing deal for
   sumatriptan
 * 20% at Board of Directors discretion upon completion of approved licensing
   deal for zolpidem or sumatriptan

subject, in each case, to the provisions of Section 9 below.

          If the Agreement is not renewed by the Executive beyond its initial
term and the Company wishes to renew the Agreement beyond the initial term
without substantial change in the terms of this Agreement, but not including
Section 4 (d), then such options which have not vested will expire upon
termination. In connection with such grant, the Executive shall enter into the
Company’s standard stock option agreement which will incorporate the foregoing
vesting schedule and the Stock Option related provisions contained in Section 9
below. The exercise price of said 900,000 shares shall be equal to 100% of the
Fair Market Value (trading price) on the first date of employment. Such option
grants are not incentive stock options, as such, research of taxation for these
stock option grants shall be the sole responsibility of the Executive.

          On the first day of employment, and as additional compensation for the
services to be rendered by the Executive pursuant to this Agreement, the Company
shall grant the Executive 100,000 shares of restricted stock (“Restricted
Shares”) pursuant to the Company’s 2006 Equity Incentive Plan. The grant price
of said 100,000 Restricted Shares shall be equal to 100% of the Fair Market
Value (trading price) on the first date of employment. Such Restricted Shares
grant shall contain restrictions that will vest ratably over a three-year period
ending on the third anniversary of the grant so that 33,333 shares of the
Company’s Stock will vest on the first anniversary of the grant, the second
anniversary of the grant, and 33,334 shares of the Company’s Stock will vest on
the third anniversary of the grant, subject to the provisions of Section 9
below. If (i) the Executive’s employment is terminated prior to end of term by
the Company other than as a result of the Executive’s death or Disability and
other than for reasons specified in Sections 9(b) or (c), or (ii) the
Executive’s employment is terminated by the Executive for Good Reason or the
Company provides notice to Executive this Employment agreement will not be
renewed, then all Restricted Shares that are subject to forfeiture as of the
termination date or nonrenewal date shall be forfeited and returned to the
Company.

          In addition to the equity awards contemplated under this Section 4(b),
the Executive shall be eligible for additional annual grants of Stock Options
and other equity awards at the discretion of the Compensation Committee of the
Board of Directors.

          (e)      Expenses. The Company shall reimburse the Executive for all
normal, usual and necessary expenses incurred by the Executive in furtherance of
the business

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and affairs of the Company, including reasonable travel and entertainment, upon
timely receipt by the Company of appropriate vouchers or other proof of the
Executive’s expenditures and otherwise in accordance with any expense
reimbursement policy as may from time to time be adopted by the Company.

          (f)      Other Benefits. The Executive shall be entitled to all rights
and benefits for which he shall be eligible under any benefit or other plans
including, without limitation, dental, medical, medical reimbursement and
hospital plans, supplemental life insurance plans, pension plans, employee stock
purchase plans, profit sharing plans, bonus plans and other so-called “fringe”
benefits) as the Company shall make available to its senior executives from time
to time.

          (g)      Vacation. The Executive shall, during the Term, be entitled
to a vacation of five (5) weeks per annum commencing January 1, 2007, in
addition to holidays observed by the Company. The Executive shall not be
entitled to carry any vacation forward to the next year of employment.

          5.        Confidential Information and Inventions.

          (a)      The Executive recognizes and acknowledges that in the course
of his duties he is likely to receive confidential or proprietary information
owned by the Company, its affiliates or third parties with whom the Company or
any such affiliates has an obligation of confidentiality. Accordingly, during
and after the Term, the Executive agrees to keep confidential and not disclose
or make accessible to any other person or use for any other purpose other than
in connection with the fulfillment of his duties under this Agreement, any
Confidential and Proprietary Information (as defined below) owned by, or
received by or on behalf of, the Company or any of its affiliates. “Confidential
and Proprietary Information” shall include, but shall not be limited to,
confidential or proprietary scientific or technical information, data, formulas
and related concepts, business plans (both current and under development),
client lists, promotion and marketing programs, trade secrets, or any other
confidential or proprietary business information relating to development
programs, costs, revenues, marketing, investments, sales activities, promotions,
credit and financial data, manufacturing processes, financing methods, plans or
the business and affairs of the Company or of any affiliate or client of the
Company. The Executive expressly acknowledges the trade secret status of the
Confidential and Proprietary Information and that the Confidential and
Proprietary Information constitutes a protectable business interest of the
Company. The Executive agrees: (i) not to use any such Confidential and
Proprietary Information for himself or others; and (ii) not to take any Company
material or reproductions (including but not limited to writings,
correspondence, notes, drafts, records, invoices, technical and business
policies, computer programs or disks) thereof from the Company’s offices at any
time during his employment by the Company, except as required in the execution
of the Executive’s duties to the Company. The Executive agrees to return
immediately all Company material and reproductions (including but not limited,
to writings, correspondence, notes, drafts, records, invoices, technical and
business policies,

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computer programs or disks) thereof in his possession to the Company upon
request and in any event immediately upon termination of employment.

          (b)      The Executive agrees not to disclose or publish any of the
Confidential and Proprietary Information, or any confidential, scientific,
technical or business information of any other party to whom the Company or any
of its affiliates owes an obligation of confidence, at any time during or after
his employment with the Company. Such restriction does not apply to Executive’s
utilization of that information in furtherance of Company’s normal business
objectives.

          (c)      The Executive agrees that all inventions, discoveries,
improvements and patentable or copyrightable works (“Inventions”) initiated,
conceived or made by him, either alone or in conjunction with others, during the
Term, other than those Inventions listed on Schedule 6(c) attached hereto, shall
be the sole property of the Company to the maximum extent permitted by
applicable law and, to the extent permitted by law, shall be “works made for
hire” as that term is defined in the United States Copyright Act (17 U.S.C.A.,
Section 101). The Company shall be the sole owner of all patents, copyrights,
trade secret rights, and other intellectual property or other rights in
connection therewith. The Executive hereby assigns to the Company all right,
title and interest he may have or acquire in all such Inventions; provided,
however, that the Board of Directors of the Company may in its sole discretion
agree to waive the Company’s rights pursuant to this Section 5(c) with respect
to any Invention that is not directly or indirectly related to the Company’s
business. The Executive further agrees to assist the Company in every proper way
(but at the Company’s expense) to obtain and from time to time enforce patents,
copyrights or other rights on such Inventions in any and all countries, and to
that end the Executive will execute all documents necessary:

          

          (i)      to apply for, obtain and vest in the name of the Company
alone (unless the Company otherwise directs) letters patent, copyrights or other
analogous protection in any country throughout the world and when so obtained or
vested to renew and restore the same; and

          (ii)      to defend any opposition proceedings in respect of such
applications and any opposition proceedings or petitions or applications for
revocation of such letters patent, copyright or other analogous protection.

          (d)      The Executive acknowledges that while performing the services
under this Agreement the Executive may locate, identify and/or evaluate patented
or patentable inventions having commercial potential in the fields of pharmacy,
pharmaceutical, biotechnology, healthcare, technology and other fields which may
be of potential interest to the Company or one of its affiliates (the “Third
Party Inventions”). The Executive understands, acknowledges and agrees that all
rights to, interests in or opportunities regarding, all Third-Party Inventions
identified by the Company, any of its affiliates or either of the foregoing
persons’ officers, directors, employees (including the Executive), agents or
consultants during the Employment Term shall be and remain the sole and
exclusive property of the Company or such affiliate and the Executive shall have
no

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rights whatsoever to such Third-Party Inventions and will not pursue for himself
or for others any transaction relating to the Third-Party Inventions which is
not on behalf of the Company.

          (e)      The provisions of this Section 5 shall survive any
termination of this Agreement, but shall not apply during or after Executive’s
employment term to information or inventions of other entities that Executive
may serve as a director with prior Board of Directors approval.

          6.       Non-Competition, Non-Solicitation and Non-Disparagement.

          (a)      The Executive understands and recognizes that his services to
the Company are special and unique and that in the course of performing such
services the Executive will have access to and knowledge of Confidential and
Proprietary Information (as defined in Section 5) and the Executive agrees that,
during the Term and for a period of eighteen (18) months thereafter, he shall
not in any manner, directly or indirectly, on behalf of himself or any person,
firm, partnership, joint venture, corporation or other business entity
(“Person”), enter into or engage in any business which is engaged in any
business competitive with the business of the Company, either as an individual
for his own account, or as a partner, joint venturer, owner, executive,
employee, independent contractor, principal, agent, consultant, salesperson,
officer, director or shareholder of a Person in a business competitive with the
Company within the geographic area of the Company’s business, which is deemed by
the parties hereto to be worldwide. The Executive acknowledges that, due to the
unique nature of the Company’s business, the loss of any of its clients or
business flow or the improper use of its Confidential and Proprietary
Information could create significant instability and cause substantial damage to
the Company and its affiliates and therefore the Company has a strong legitimate
business interest in protecting the continuity of its business interests and the
restriction herein agreed to by the Executive narrowly and fairly serves such an
important and critical business interest of the Company. For purposes of this
Agreement, the Company shall be deemed to be actively engaged on the date hereof
in the development of novel application drug delivery systems for presently
marketed prescription and over-the-counter drugs and providing consulting
services in connection therewith, and in the future in any other business in
which it actually devotes substantive resources to study, develop or pursue.
Notwithstanding the foregoing, nothing contained in this Section 6(a) shall be
deemed to prohibit the Executive from (i) acquiring or holding, solely for
investment, publicly traded securities of any corporation, some or all of the
activities of which are competitive with the business of the Company so long as
such securities do not, in the aggregate, constitute more than 4.9%of any class
or series of outstanding securities of such corporation.

          (b)      During the Term and for eighteen (18) months thereafter, the
Executive shall not, directly or indirectly, without the prior written consent
of the Company:     

                     (i)      solicit or induce any employee of the Company or
any of its affiliates to leave the employ of the Company or any such affiliate;
or hire for any

 

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purpose any employee of the Company or any affiliate or any employee who has
left the employment of the Company or any affiliate within one year of the
termination of such employee’s employment with the Company or any such affiliate
or at any time in violation of such employee’s non-competition agreement with
the Company or any such affiliate; or

          (ii)      solicit or accept employment or be retained by any Person
who, at any time during the term of this Agreement, was an agent, client or
customer of the Company or any of its affiliates where his position will be
related to the business of the Company or any such affiliate; or

          (iii)      solicit or accept the business of any agent, client or
customer of the Company or any of its affiliates with respect to products,
services or investments similar to those provided or supplied by the Company or
any of its affiliates.

          (c)      The Executive and the Company mutually agree that both during
the Term and at all times thereafter, they shall not directly or indirectly
disparage, whether or not true, the name or reputation of the Executive, Company
or any of its affiliates, including but not limited to, any officer, director,
employee or shareholder of the Company or any of its affiliates.

          (d)      In the event that the Executive breaches any provisions of
Section 5 or this Section 6 or there is a threatened breach, then, in addition
to any other rights which the Company may have, the Company shall (i) be
entitled, without the posting of a bond or other security, to injunctive relief
to enforce the restrictions contained in such Sections and (ii) have the right
to require the Executive to account for and pay over to the Company all
compensation, profits, monies, accruals, increments and other benefits
(collectively “Benefits”) derived or received by the Executive as a result of
any transaction constituting a breach of any of the provisions of Sections 5 or
6 and the Executive hereby agrees to account for and pay over such Benefits to
the Company.

          (e)      Each of the rights and remedies enumerated in Section 6(d)
shall be independent of the others and shall be in addition to and not in lieu
of any other rights and remedies available to the Company at law or in equity.
If any of the covenants contained in this Section 6, or any part of any of them,
is hereafter construed or adjudicated to be invalid or unenforceable, the same
shall not affect the remainder of the covenant or covenants or rights or
remedies which shall be given full effect without regard to the invalid
portions. If any of the covenants contained in this Section 6 is held to be
invalid or unenforceable because of the duration of such provision or the area
covered thereby, the parties agree that the court making such determination
shall have the power to reduce the duration and/or area of such provision and in
its reduced form such provision shall then be enforceable. No such holding of
invalidity or unenforceability in one jurisdiction shall bar or in any way
affect the Company’s right to the relief provided in this Section 6 or otherwise
in the courts of any other state or jurisdiction within the geographical scope
of such covenants as to breaches of such covenants in such other

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respective states or jurisdictions, such covenants being, for this purpose,
severable into diverse and independent covenants.

          (f)      In the event that an actual proceeding is brought in equity
to enforce the provisions of Section 5 or this Section 6, the Executive shall
not urge as a defense that there is an adequate remedy at law nor shall the
Company be prevented from seeking any other remedies which may be available. The
Executive agrees that he shall not raise in any proceeding brought to enforce
the provisions of Section 5 or this Section 6 that the covenants contained in
such Sections limit his ability to earn a living.

          (g)     The provisions of this Section 6 shall survive any termination
of this Agreement.

          7.      Representations and Warranties by the Executive and Company.

          The Executive and the Company hereby represents and warrants to each
other as follows:

          

          (i)      Neither the execution or delivery of this Agreement nor the
performance by the Executive of his duties and other obligations hereunder
violate or will violate any statute, law, determination or award, or conflict
with or constitute a default or breach of any covenant or obligation under
(whether immediately, upon the giving of notice or lapse of time or both) any
prior employment agreement, contract, or other instrument to which the Executive
or Company is a party or by which they are bound.

          (ii)      The Executive and the Company have the full right, power and
legal capacity to enter and deliver this Agreement and to perform their duties
and other obligations hereunder. This Agreement constitutes the legal, valid and
binding obligation of the Executive and the Company enforceable against them in
accordance with its terms. No approvals or consents of any persons or entities
are required for the Executive or Company to execute and deliver this Agreement
or perform their duties and other obligations hereunder.

          8.       Termination. The Executive’s employment hereunder shall be
terminated upon the Executive’s death and may be terminated as follows:

          (a)      The Executive’s employment hereunder may be terminated for
“Cause”. Cause is defined as:

          

          (i)     The willful failure, disregard or refusal by the Executive to
perform his duties hereunder;

          (ii)      Any willful, intentional or grossly negligent act by the
Executive having the effect of injuring, in a material way (whether financial or
otherwise), the business or reputation of the Company or any of its affiliates,
including but

 

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not limited to, any officer, director, or executive of the Company or any of its
affiliates;

          (iii)     Willful misconduct by the Executive in respect of the duties
or obligations of the Executive under this Agreement, including, without
limitation, insubordination with respect to legal directions received by the
Executive from the President and CEO or the Board of Directors of the Company;

          (iv)     The Executive’s indictment of any felony or a conviction
misdemeanor involving moral turpitude (including entry of a nolo contendere
plea);

          (v)      The determination by the Company, after a reasonable and
good-faith investigation by the Company following a written allegation by
another employee of the Company, that the Executive engaged in some form of
harassment prohibited by law (including, without limitation, age, sex or race
discrimination.

          (vi)      Any misappropriation or embezzlement of the property of the
Company or its affiliates (whether or not a misdemeanor or felony);

          (vii)     Breach by the Executive of any of the provisions of Sections
5, 6 or 7 of this Agreement; and

          (viii)    Breach by the Executive of any provision of this Agreement
other than those contained in Sections 5, 6 or 7 which is not cured by the
Executive within thirty (30) days after written notice thereof is given to the
Executive by the Company.

          (ix)      Before constituting grounds for termination for cause,
Executive will be given written notice and five (5) business days to cure
conduct under Paragraphs i, iii, vii, and viii of this section.

          (b)      The Executive’s employment hereunder may be terminated by the
Board of Directors of the Company due to the Executive’s Disability. For
purposes of this Agreement, a termination for “Disability” shall occur (i) when
the Board of Directors of the Company has provided a written termination notice
to the Executive supported by a written statement from a two reputable
independent physicians one of which has been selected by Executive, to the
effect that the Executive shall have become so physically or mentally
incapacitated as to be unable to resume, within the ensuing twelve (12) months,
his employment hereunder by reason of physical or mental illness or injury, or
(ii) upon rendering of a written termination notice by the Board of Directors of
the Company after the Executive has been unable to substantially perform his
duties hereunder for 90 or more consecutive days, or more than 120 days in any
consecutive twelve month period, by reason of any physical or mental illness or
injury. Such written statements supporting Disability will have the same meaning
as Long Term Disability allowing coverage by the

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Company’s Long Term Disability Insurance. For purposes of this Section 8(b), the
Executive agrees to make himself available and to cooperate in any reasonable
examination by a reputable independent physician retained by the Company.

          (c)      The Executive’s employment hereunder may be terminated by the
Executive for Good Reason. For purposes of this Agreement, “Good Reason” means
(i) a breach by the Company of its material obligations under Section 4 of this
Agreement (a “Material Breach”), (ii) a material reduction by the Board of
Directors of the Company of the Executive’s duties, title or authority provided
for in this Agreement (a “Material Change”), or (iii) the relocation of the
principal executive office of the Company in excess of fifty (50) miles from its
present location not consented to by the Executive; provided, however, that a
Material Breach or a Material Change shall constitute Good Reason only if the
Executive has notified the Board of Directors of the Company in writing of the
existence and particulars of such Material Breach or Material Change and the
Board of Directors has failed to remedy such Material Change or Material Breach
within thirty (30) days of such notice.

          (d)      The Executive’s employment hereunder may be terminated by the
Board of Directors of the Company (or its successor) upon the occurrence of a
Change of Control. For purposes of this Agreement, “Change of Control” means (i)
the acquisition, directly or indirectly, following the date hereof by any person
(as such term is defined in Section 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended), in one transaction or a series of related
transactions, of securities of the Company representing in excess of fifty
percent (50%) of the combined voting power of the Company’s then outstanding
securities if such person or his or its affiliate(s) do not own in excess of 50%
of such voting power on the date of this Agreement, or (ii) the future
disposition by the Company (whether direct or indirect, by sale of assets or
stock, merger, consolidation or otherwise) of all or substantially all of its
business and/or assets in one transaction or series of related transactions
(other than a merger effected exclusively for the purpose of changing the
domicile of the Company).

          9.       Compensation upon Termination.

          (a)      If the Executive’s employment is terminated as a result of
his death or Disability, the Company shall (i) pay to the Executive or to the
Executive’s estate, as applicable, (x) his Base Salary and any accrued and
unpaid Bonus and expense reimbursement amounts through the date of his death or
Disability and (y) the pro rata portion of the Guaranteed Bonus and Stock
Options earned by the Executive during the year of his death or Disability
(which, for this purpose, shall be prorated in accordance with the number of
full months in such year during which the Executive was employed hereunder), and
(ii) for the longer of twelve (12) months following his death or Disability or
the balance of the Term (as if such termination had not occurred) provide
continuation coverage to the members of the Executive’s family and, in the case
of termination for Disability, the Executive under all major medical and other
health, accident, life or other disability plans and programs in which such
family members and, in the case of termination for Disability, the Executive
participated immediately prior to his death or

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Disability. All Stock Options that are scheduled to vest by the end of the
calendar year in which such termination occurs shall be accelerated and deemed
to have vested as of the termination date. All Stock Options that have not
vested (or been deemed pursuant to the immediately preceding sentence to have
vested) as of the date of termination shall be deemed to have expired as of such
date. Any Stock Options that have vested as of the date of the Executive’s death
(including the Options described in the immediately preceding sentence) shall
remain exercisable for a period of one hundred and eighty (180) days after the
date of his death; in the event of a Disability, any unexercised option may be
exercised in whole or in part, within the first ninety (90) days after such
termination of employment or service. Any Restricted Shares that were
forfeitable shall thereupon become nonforfeitable.

          (b)      If the Executive’s employment is terminated by the Board of
Directors of the Company for Cause or by the Executive other than for Good
Reason, the Company shall pay to the Executive his Base Salary through the date
of his termination and the Executive shall have no further entitlement to any
other compensation or benefits from the Company. All Stock Options that have not
vested as of the date of any such termination shall be deemed to have expired as
of such date and, in addition, the Executive’s right to exercise any vested
Stock Options shall terminate as of such date. Any Restricted Shares that are
then forfeitable shall be forfeited immediately.

          (c)      If the Executive’s employment is terminated by the Company
(or its successor) upon the occurrence of a Change of Control, the Company (or
its successor, as applicable) shall (i) continue to pay to the Executive his
Base Salary for a period of one year following such termination, and (ii) pay
the Executive any Bonus that would have otherwise been due to the Executive by
the end of the calendar end of the year in which such termination occurs as well
as any expense reimbursement amounts owed through the date of termination. All
Stock Options that have not vested as of the date of such termination shall be
accelerated and deemed to have vested as of such date. All restrictions on the
Executive’s Restricted Shares shall lapse immediately.

          (d)      If (i) the Executive’s employment is terminated prior to end
of term by the Company other than as a result of the Executive’s death or
Disability and other than for reasons specified in Sections 9(b) or (c), or (ii)
the Executive’s employment is terminated by the Executive for Good Reason or the
Company provides notice to Executive this Employment agreement will not be
renewed, the Company shall (i) continue to pay to the Executive twelve (12)
month severance from date of public announcement of same, (ii) pay the Executive
the Bonus that would have otherwise been due, unless there is documentation on
file for a period of at least three (3) months regarding performance issues
which have not been cured, to the Executive in the calendar year in which such
termination or non-renewal occurs and (iii) pay the Executive any expense
reimbursement amounts owed through the date of termination. The Company’s
obligation under clauses (i) and (ii) in the preceding sentence will be reduced,
however, if compensation is received from other employment for these amounts
otherwise actually earned by the Executive during the one year period following
the termination of his employment. All Stock Options that are granted shall be
accelerated and deemed to have

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vested as of the termination date. All vested options at date of termination
shall expire ninety (90) days post termination of employment. All Restricted
Shares that are subject to forfeiture as of the termination date or nonrenewal
date shall be forfeited and returned to the Company.

          (e)      The continuation coverage under any major medical and other
health, accident, life or other disability plans and programs for the periods
provided in Section 9(a) shall be provided (i) at the expense of the Company and
(ii) in satisfaction of the Company’s obligation under Section 4980B of the
Internal Revenue Code of 1986 (and any similar state law) with respect to the
period of time such benefits are continued hereunder. Notwithstanding anything
to the contrary contained herein, the Company’s obligation to provide such
continuation coverage under such Sections shall cease immediately upon the date
any covered individual becomes eligible for similar benefits under the plans or
policies of another employer.

          (f)      This Section 9 sets forth the only obligations of the Company
with respect to the termination of the Executive’s employment with the Company,
and the Executive acknowledges that, upon the termination of his employment, he
shall not be entitled to any payments or benefits which are not explicitly
provided in Section 9.

          (g)      The provisions of this Section 9 shall survive any
termination of this Agreement.

          10.     Miscellaneous.

          (a)      This Agreement shall be governed by, and construed and
interpreted in accordance with, the laws of the State of New Jersey, without
giving effect to its principles of conflicts of laws.

          (b)      Any dispute arising out of, or relating to, this Agreement or
the breach thereof (other than Sections 5 or 6 hereof), or regarding the
interpretation thereof, shall be finally settled by arbitration conducted in New
Jersey in accordance with the commercial rules of the American Arbitration
Association then in effect before a single arbitrator appointed in accordance
with such rules. Judgment upon any award rendered therein may be entered and
enforcement obtained thereon in any court having jurisdiction. The arbitrator
shall have authority to grant any form of appropriate relief, whether legal or
equitable in nature, including specific performance. For the purpose of any
judicial proceeding to enforce such award or incidental to such arbitration or
to compel arbitration and for purposes of Sections 5 and 6 hereof, the parties
hereby submit to the non-exclusive jurisdiction of the Supreme Court of the
State of New Jersey, Hunterdon County, or the United States District Court for
the District of New Jersey, and agree that service of process in such
arbitration or court proceedings shall be satisfactorily made upon it if sent by
registered mail addressed to it at the address referred to in paragraph (g)
below. The costs of such arbitration shall be borne by the non prevailing party
as determined by the arbitrator. Judgment on the arbitration award may be
entered by any court of competent jurisdiction.

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          (c)      This Agreement shall be binding upon and inure to the benefit
of the parties hereto, and their respective heirs, legal representatives,
successors and assigns.

          (d)      This Agreement, and the Executive’s rights and obligations
hereunder, may not be assigned by the Executive. The Company may assign its
rights, together with its obligations, hereunder in connection with any sale,
transfer or other disposition of all or substantially all of its business or
assets.

          (e)      This Agreement cannot be amended orally, or by any course of
conduct or dealing, but only by a written agreement signed by the parties
hereto.

          (f)      The failure of either party to insist upon the strict
performance of any of the terms, conditions and provisions of this Agreement
shall not be construed as a waiver or relinquishment of future compliance
therewith, and such terms, conditions and provisions shall remain in full force
and effect. No waiver of any term or condition of this Agreement on the part of
either party shall be effective for any purpose whatsoever unless such waiver is
in writing and signed by such party.

          (g)      All notices, requests, consents and other communications,
required or permitted to be given hereunder, shall be in writing and shall be
delivered personally or by an overnight courier service or sent by registered or
certified mail, postage prepaid, return receipt requested, to the parties at the
addresses set forth on the first page of this Agreement, and shall be deemed
given when so delivered personally or by overnight courier, or, if mailed, five
days after the date of deposit in the United States mails. Either party may
designate another address, for receipt of notices hereunder by giving notice to
the other party in accordance with this paragraph (g).

          (h)      This Agreement sets forth the entire agreement and
understanding of the parties relating to the subject matter hereof, and
supersedes all prior agreements, arrangements and understandings, written or
oral, relating to the subject matter hereof. No representation, promise or
inducement has been made by either party that is not embodied in this Agreement,
and neither party shall be bound by or liable for any alleged representation,
promise or inducement not so set forth.

          

          (i)      As used in this Agreement, “affiliate” of a specified Person
shall mean and include any Person controlling, controlled by or under common
control with the specified Person.

          (j)      The section headings contained herein are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.

          (k)     This Agreement may be executed in any number of counterparts,
each of which shall constitute an original, but all of which together shall
constitute one and the same instrument.

 

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          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.

  NOVADEL PHARMA INC

By: /s/ JAN H. EGBERTS
Name: Jan H. Egberts, M.D.
Title: President and Chief Executive Officer

EXECUTIVE

By: /s/ DAVID H. BERGSTROM
Name: DAVID H. BERGSTROM, Ph.D.

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