Exhibit 10.2

 

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April 30, 2009

 

Deni M. Zodda, Ph.D.

440 Coldstream Dr.

Berwyn, PA 19312

 

Re:

Separation, Consulting and General Release Agreement

 

Dear Dr. Zodda:

 

This letter represents the agreement between NovaDel Pharma Inc. (“NovaDel
Pharma” or the “Company”) and Deni M. Zodda (“you”) with respect to the April
30, 2009 termination of your employment (the “Agreement”). Except as expressly
set forth herein, the Employment Agreement between the parties dated February
22, 2007 (the “Employment Agreement”) is hereby terminated.

1.

Consulting Services, Compensation and Benefits.

(a)       Services to be Provided. Upon the terms and subject to the conditions
of this Agreement, you shall be engaged by the Company as an independent
contractor, and not as an employee, to render the services described on Exhibit
A attached hereto and made a part hereof (the “Services”), and you hereby accept
such engagement. The Services shall be performed by you from time to time during
the Term, as hereinafter defined, upon the reasonable request of the Company in
accordance with the business needs of the Company (all requests for Services
hereunder shall be upon reasonable notice (such notice to be verbal or in
writing (by U.S. Mail, facsimile or email)) except that in no event shall you
perform greater than thirty (30) hours of Services per calendar month during the
Term and all such requests for Services hereunder shall be for a minimum of four
(4) hours a day. Notwithstanding the foregoing, the parties agree that there is
no minimum hour requirement for Services rendered hereunder in order for you to
receive the fees described in Section 1(c) below.

(b)       Term. Beginning on the Effective Date as defined in Paragraph 17, this
Agreement, with respect to the Services and certain other provisions herein,
shall remain in effect until October 31, 2009 (the “Term”). Upon expiration of
the Term, any additional services to be provided by you to the Company shall be
by mutual agreement. NovaDel retains the right to terminate the consulting
arrangement during the Term if it determines that you are not performing your
responsibilities in a good and workmanlike fashion consistent with your skill,
expertise and experience.

 

 

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(c)       Conflicts of Interest. You shall not assume other commitments nor seek
other employment nor undertake other endeavors during the Term of this Agreement
that interferes or conflicts with the performance of your duties and
responsibilities hereunder or otherwise violate the terms of the Agreement. If,
however, after July 31, 2009, you obtain employment which, by contractual
obligation, precludes you from providing the Services hereunder, you shall have
the right to terminate the consulting arrangement without any further obligation
to the Company.

(d)       Authorized Conduct. This Agreement does not create a contract of
employment. During the Term, you shall perform the Services as an independent
contractor of NovaDel, and not as an agent, servant, employee or representative
of NovaDel or its affiliates. Consequently, you shall not have, and shall not
make any statement or take any action that might cause any third party to
believe that you have the authority to transact any business, enter into any
agreements, or in any way bind or make a commitment on behalf of NovaDel or any
of its affiliates, unless expressly authorized in writing by NovaDel.

 

(e)

Compensation.

(i)        Fees and Expenses. NovaDel Pharma will pay you for Services rendered
and for making yourself available to render Services a one-time, non-refundable
fee of One Hundred Thirty Seven Thousand Five Hundred Dollars ($137,500). This
payment will be made within seven (7) calendar days following the Effective Date
of this Agreement. Such payment will be subject to applicable withholding taxes
and you will receive only the net amount of such payment remaining after those
withholding taxes have been collected. All reasonable and documented
out-of-pocket expenses incurred by you for travel other than to and from NovaDel
Pharma’s headquarters in connection with Services performed hereunder shall be
reimbursed by NovaDel subject to pre-approval by NovaDel Pharma for any amounts
in excess of $100.00. You must submit to NovaDel receipts and other details of
each such expense in the form required by NovaDel within 60 days after the later
of (i) your incurrence of such expense or (ii) your receipt of the invoice for
such expense. If such expense qualifies for reimbursement, then NovaDel will
reimburse the expense within 30 days thereafter. In no event will such expense
be reimbursed after December 31, 2009. Your right to reimbursement cannot be
liquidated or exchanged for any other benefit or payment.

(ii)       Option Acceleration and Extension. Each option previously granted to
you to acquire shares of NovaDel common stock which is outstanding and vested as
of the April 30, 2009 termination date of your employment (the “Termination
Date”) shall remain outstanding until the earlier of (i) the expiration of the
twelve (12) month period following the Termination Date or (ii) the expiration
of the option term. You shall have until the expiration of this period in which
to exercise those options. The unvested portion of each such option will
terminate on the Termination Date and you will have no further rights or
entitlement to acquire shares of NovaDel under such terminated options.

(f)        Medical and Dental Benefits. If you timely elect health care
continuation coverage benefits under the Consolidated Omnibus Budget
Reconciliation Act of 1986 and/or applicable state laws (“COBRA”), which
generally is available for up to 18 months, NovaDel will pay your COBRA premiums
between April 30, 2009 and October 31, 2009,. In order to qualify for such
payment, you must submit appropriate documentation prior to the end of each
month

 

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notifying the Company that you are maintaining coverage for the ensuing month.
During the coverage period, the following provisions shall govern the
arrangement: (i) the amount of post-termination coverage costs eligible for
payment in any one calendar year of such coverage will not affect the amount of
post-termination coverage costs eligible for reimbursement in any other calendar
year for which such reimbursement is to be provided hereunder; (ii) no
post-termination coverage costs will be paid after the close of the calendar
year following the calendar year in which those coverage costs were incurred;
and (iii) your right to the payment of such post-termination coverage costs
cannot be liquidated or exchanged for any other benefit. After October 31, 2009,
you will be responsible for paying the entire COBRA premium. You (and your
eligible dependents) will receive a COBRA election packet that sets forth the
details of the continuation coverage available under COBRA, including an
explanation about whether you (and your eligible dependents) are eligible for a
subsidy of your COBRA premiums under the American Recovery and Reinvestment Act
of 2009, which was signed into law on February 17, 2009, and the requirements
related to such subsidy.

(g)       Other Benefits. You will no longer be eligible to participate in
NovaDel Pharma’s benefit plans, including, but not limited to, its 401(k)
program.

(h)       Release of Obligations. You acknowledge and agree that all
compensation paid under Sections 1(e) and 1(f) covers and releases any and all
severance obligations due and owing to you under the Employment Agreement.

(i)        Tax, Legal and Financial Advice. You hereby acknowledge that you have
consulted with and are relying upon your own tax, legal and financial advisors
regarding tax and other consequences and risks under your Employment Agreement
(including its termination) and the payments under this Agreement. Neither
NovaDel nor its counsel have advised you, and are not now advising you, on any
tax or other consequences arising from the Employment Agreement or the payments
under this Agreement. You will be responsible for all taxes, fines, penalties,
interest and fees assessed by or otherwise owed to the Internal Revenue Service
or other taxing authority in connection with the Employment Agreement and this
Agreement. You hereby agree to indemnify and hold harmless NovaDel to the full
extent of any liabilities, payments or costs, including taxes, fines, penalties,
interest and fees, which may be assessed against NovaDel for not satisfying any
reporting requirements under the Employment Agreement or this Agreement , or
failing to withhold taxes in connection with payments thereunder.

2.         Release. In consideration of NovaDel Pharma’s commitment to the
various arrangements described herein, including but not limited to the
compensation provisions provided in Sections 1(e), you hereby release and
discharge NovaDel Pharma, its parent, divisions, subsidiaries and affiliates and
their current and former directors, officers, shareholders, agents and
employees, and each of their predecessors, successors, and assigns (hereinafter
“the Company”), from any and all claims and causes of action (except for the
benefits specifically set forth in this Agreement) arising out of or related to
any act or omission prior to the date of this Agreement, including claims
related to your employment or the termination of your employment. This release
includes, but is not limited to, any claims for salary, bonuses, severance pay,
vacation pay or any benefits under the Employee Retirement Income Security Act
(except for vested benefits which are not affected by this Agreement); claims
under Title VII of the 1964 Civil Rights Act, as amended, Americans With
Disabilities Act, Family and Medical Leave Act, Age Discrimination in Employment
Act (“ADEA”), New Jersey Law Against Discrimination, New

 

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Jersey Conscientious Employee Protection Act, the New Jersey Family Medical
Leave Act, the New Jersey Wage and Hour Law, the New Jersey Wage Payment laws,
the New Jersey Constitution, and or any other federal, state, or local laws, and
claims for breach of implied or express contract, breach of promise,
misrepresentation, negligence, fraud, estoppel, defamation, infliction of
emotional distress, violation of public policy or wrongful or constructive
discharge, and for attorneys’ fees, that you or you heirs, executors,
administrators, successors, and assigns now have, ever had or may hereafter
have, whether known or unknown, suspected or unsuspected, up to and including
the date of this Agreement. You represent and warrant that you have not filed
any complaints, charges, lawsuits or legal actions with any court or government
agency against the Company. You agree that if any court or agency assumes
jurisdiction of any such complaint, charge, lawsuit, or other legal action filed
by you or on your behalf relating to any claims being released by you in this
Agreement, you will request such court or agency to withdraw from the matter and
you hereby agree to waive any right to relief and to return any relief afforded.
You are not waiving any claims that may arise after you execute the Agreement.
This release excludes any waiver of claims that cannot be waived as a matter of
law.

3.         Cooperation with Agencies. Nothing in this Agreement is intended to
prohibit or restrict you from: (i) making any disclosure of information required
by law; (ii) providing information to, or testifying or otherwise assisting in
any investigation or proceeding brought by, any federal regulatory or law
enforcement agency or legislative body, or any self-regulatory organization; or
(iii) filing, testifying, participating in, or otherwise assisting in a
proceeding relating to an alleged violation of any federal, state, or municipal
law relating to fraud or any rule or regulation of the Securities and Exchange
Commission or any self-regulatory organization. You further agree that you will
not seek or accept personal equitable or monetary relief in any civil action,
suit or legal proceeding that involves any matter occurring at any time prior to
the Effective Date of this Agreement.

4.

Confidentiality.

(a)       You covenant and agree that Section 5 of your Employment Agreement
survives termination of the Employment Agreement and the Term hereof. You
covenant and agree that during and after the Term, you will keep confidential
and not disclose or make accessible to any other person or use for any purpose,
for yourself or others, 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” includes, but is not
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. You expressly acknowledge 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.

 

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(b)       You further covenant and agree that, in accordance with Section 5 of
your Employment Agreement, all inventions, discoveries, improvements and
patentable or copyrightable works (“Inventions”) initiated, conceived or made by
you, either alone or in conjunction with others, during your term of the
Employment Agreement and during the Term hereof 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).

(c)       You further covenant and agree that all rights to, interests in or
opportunities regarding patented or patentable inventions having commercial
potential in the fields of pharmacy, pharmaceutical, biotechnology, healthcare,
technology and other fields of potential interest to the Company or one of its
affiliates (the “Third-Party Inventions”) identified by the Company, any of its
affiliates or either of the foregoing persons’ officers, directors, employees
(including you), agents or consultants shall be and remain the sole and
exclusive property of the Company or such affiliate. You shall have no rights
whatsoever to such Third-Party Inventions and will not pursue for yourself or
others any transaction relation to the Third-Party Inventions.

(d)       You further covenant and agree that unless required by law, you will
not disclose the terms of this Agreement to anyone other than your immediate
family, tax advisor and legal counsel without the written consent of NovaDel
Pharma and that you will immediately instruct your immediate family, tax advisor
and legal counsel not to disclose such information to anyone.

5.

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

(a)       You covenant and agree that Section 6 of your Employment Agreement
survives termination of the Employment Agreement and the Term hereof to the
following extent. You covenant and agree that during the Term and for a period
of twelve (12) months thereafter, you will not, on behalf of yourself or any
person, firm, partnership, joint venture, corporation or other business entity
(“Person”), directly or indirectly enter into or engage in any business which is
engaged in any business directly competitive with the business of the Company,
either as an individual for your 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 you agree is deemed to be worldwide For purposes of
this Agreement, the Company shall be deemed to be actively engaged on the date
hereof in the development of novel application oral drug delivery systems for
presently marketed prescription and over-the-counter drugs where such drug is a
small molecule, non-biologic, 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. For the sake of clarity, you
will not be in breach of this paragraph 5(a) if you become employed by or
consult to a Person whose primary business is outside the area of novel oral
drug delivery systems for use with small molecule, non-biologic pharmaceuticals.
Notwithstanding the foregoing, nothing contained herein shall be deemed to
prohibit you from acquiring or holding, directly or indirectly (including
through membership in a partnership, corporation, limited liability company or
other entity in which you recuse yourself from involvement therein), solely for
investment, publicly traded securities of any corporation, some or all of the
activities of which are competitive with

 

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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)       You further covenant and agree that during the Term and for twelve
(12) months thereafter, you will 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 employee of the Company or any
such affiliate; or hire for any 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 your employment with the Company, was an agent, client or customer of the
Company or any of its affiliates where your position will be related to the
business of the Company of 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)       You further covenant and agree that you will not directly or
indirectly disparage, whether or not true, the name or reputation of the 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.

6.

Additional Covenants.

(a)       Cooperation. You covenant and agree to cooperate with and make
yourself readily available to NovaDel Pharma or its counsel, as NovaDel Pharma
may reasonably request, to assist it in any matter, including but not limited
to, providing information, giving truthful testimony in any litigation or
potential litigation over which you may have knowledge, information or
expertise, and signing routine documents for administrative purposes. All
reasonable and documented out-of-pocket expenses incurred by you in connection
therewith shall be reimbursed by the Company.

(b)       Return of Company Property. You covenant and agree that to the best of
your knowledge, you have previously returned any and all property of the
Company, including but not limited to all records, files, notes, memoranda,
reports, work product and similar items and any manuals, drawings, sketches,
plans, tape recordings, computer programs, disks cassettes and other physical
representations of and information relating to the Company, whether or not
constituting confidential information, and you will promptly return to the
Company any of the same that you discover after the date hereof.

7.         Public Filings. Any public filings made by the Company that refer to
your termination will characterize it as resignation by you. You will be
entitled to reasonable consultation and review with regard to the Company’s
initial press release disclosing your termination. The Company shall have the
right to make any and all subsequent filings required by law.

 

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8.        Indemnification.

(a)       The Company agrees to indemnify and hold you harmless to the extent
fully permitted by law from and against any losses, claims, damages and
liabilities, joint or several (collectively, the “Damages”), to which you may
become subject in connection with or otherwise relating to or arising from
Services provided hereunder, and will reimburse you for all reasonable fees and
expenses (including the reasonable fees and expenses of counsel) (collectively,
“Expenses”) as incurred in connection with investigating, preparing, pursuing or
defending any reasonably believed to be threatened or pending claim, action,
proceeding or investigation (collectively, the “Proceedings”) arising therefrom,
so long as you are a formal party to such Proceeding, and in enforcing this
Agreement; provided, that the Company will not be liable to you to the extent
that any Damages are found in a final non-appealable judgment by a court of
competent jurisdiction to have resulted solely from your bad faith, gross
negligence or willful misconduct. The Company also agrees that you will not have
any liability (whether direct or indirect, in contract, tort or otherwise) to
the Company or any person asserting claims on behalf of the Company arising out
of or in connection with the performance of Services by you hereunder except to
the extent that any Damages are found in a final non-appealable judgment by a
court of competent jurisdiction to have resulted solely from your bad faith,
gross negligence or willful misconduct.

(b)       You agree to indemnify and hold harmless the Company and its
affiliates and their respective present and former directors, officers,
employees, agents and controlling persons (each such person, including the
Company, a “Company Indemnified Party”) to the extent fully permitted by law
from and against any Damages, to which such Company Indemnified Party may become
subject in connection with or otherwise relating to or arising from the bad
faith, gross negligence or willful misconduct by you in performance of Services
hereunder, and will reimburse each Company Indemnified Party for all Expenses as
incurred in connection with any Proceedings arising therefrom, so long as the
Company Indemnified Party is a formal party to such Proceeding, and in enforcing
this agreement.

9.         Unemployment Benefits. The Company will not oppose your application
for unemployment benefits.

10.       No Admission of Liability. By entering into this Agreement, the
Company does not admit and specifically denies, any liability or wrongdoing, and
it is expressly understood and agreed that this Agreement is being entered into
solely for the purposes of avoiding and amicably resolving all disputes and
potential claims between you and the Company.

11.       Reemployment or Reinstatement. You acknowledge that any employment
relationship between you and the Company terminated on April 30, 2009. With the
exception of the Services to be provided under this Agreement, you agree that
the Company has no obligation, contractual or otherwise, to rehire, reemploy or
recall you in the future.

12.       Entire Agreement and Severability. You and NovaDel Pharma agree that
this Agreement may not be modified, altered or changed except by a written
agreement signed by the parties hereto. You and NovaDel Pharma acknowledge that
this constitutes the entire agreement on the matters addressed herein and except
as set forth herein, supersedes all prior agreements or

 

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understandings between the parties with respect thereto. If any provision of
this Agreement is held to be invalid, the remaining provisions shall remain in
full force and effect.

13.       Remedies. You acknowledge that the Company’s damages at law would be
an inadequate remedy for your breach of any provision of Paragraphs 2, 4 and 5,
and agree in the event of such breach that the Company may obtain temporary and
permanent injunctive relief restraining you from such breach, and, to the extent
permissible under the applicable statutes and rules of procedure, a temporary
injunction may be granted immediately upon the commencement of any such suit.
Nothing contained herein shall be construed as prohibiting the Company from
pursuing any other remedies available at law or equity for such breach or
threatened breach of Paragraphs 2, 4 and 5.

14.       Breach of Agreement. In the event that you breach an obligation under
this Agreement, the Company retains the right to seek all available remedies and
specifically retains the right to retain any outstanding payments due to you
under this Agreement and to seek repayment off any payments already made.
Notwithstanding any such relief, all of the other terms of this Agreement,
including, without limitation, your release of claims, shall remain in full
force and effect. The remedies provided for in this provision shall not be
construed to be exclusive and do not bar any other claims for relief.

15.       Arbitration. Any claim or controversy arising out of or related to
this Agreement or the interpretation thereof will be settled by arbitration
conducted in New Jersey in accordance with the 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. You and the
Company agree that the prevailing party in such a matter shall be entitled to
reimbursement of all reasonable and documented attorney fees and out-of-pocket
expenses incurred in such matter by the other party.

 

16.       Choice of Law and Jurisdiction. The governing law of this Agreement
shall be the substantive and procedural law of the State of New Jersey, without
regard to conflict of law principles..

17.       Acknowledgment. You acknowledge that you have carefully read this
Agreement and understand all of its terms including the full and final release
of claims set forth above. You further acknowledge that you had adequate time to
consider the terms of this Agreement and knowingly and voluntarily entered into
it; that you have not relied upon any representation or statement, written or
oral, not set forth in this Agreement; that the only consideration for signing
this Agreement is as set forth herein; that the consideration received for
executing this Agreement is greater than that to which you may otherwise be
entitled; and that you have been advised in writing to consult with an attorney
prior to executing the Agreement. You also acknowledge that you have been
afforded at least twenty-one (21) calendar days from the receipt of this
Agreement to consider the release provision contained herein and that you have
seven days after signing this Agreement to revoke it in writing. Revocation must
be made by sending a written notice of revocation to Steven B. Ratoff, Interim
President and Chief Executive Officer, c/o NovaDel Pharma Inc. 25 Minneakoning
Road, Flemington, New Jersey 08822. Accordingly,

 

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the Agreement does not become effective until one day after the expiration of
the seven day revocation period (“Effective Date”).

Please indicate your acceptance of the terms of this Agreement by signing your
name in the space provided below.

                 

 

NOVADEL PHARMA INC.

 

 

By:

/s/ Steven B. Ratoff

Name:

Steven B. Ratoff

Title:

Chairman, Interim President and Chief Executive Officer

 

 

 

ACCEPTED AND AGREED

 

/s/ Deni M. Zodda

Deni M. Zodda

Dated: April 30, 2009

 

 

 

 

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EXHIBIT A

 

SERVICES

 

 

1.

As requested, provide transition assistance to the transition/new NovaDel Pharma
Interim Chief Financial Officer, Principal Financial Officer and Corporate
Secretary .

 

 

2.

As requested, provide operational assistance in the areas of business
development and financial planning.

 

 

3.

As requested, provide additional operational and strategic assistance.

 

 

4.

At all times Mr. Zodda shall report to the transition/new NovaDel Pharma Chief
Executive Officer.

 

 

 

 

 

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