Exhibit 10.1

 

COMMON STOCK PURCHASE AGREEMENT

This Common Stock Purchase Agreement (this “Agreement”) is dated as of June 26,
2009, by and between NovaDel Pharma Inc., a Delaware corporation (the
“Company”), and Seaside 88, LP, a Florida limited partnership (such investor,
including its successors and assigns, “Seaside”).

WHEREAS, subject to the terms and conditions set forth in this Agreement, the
Company desires to issue and sell to Seaside, and Seaside desires to purchase
from the Company, up to 13,000,000 shares of Common Stock on the Closing Dates;

NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and Seaside agree as
follows:

ARTICLE I

DEFINITIONS

 

1.1

Definitions

. In addition to the terms defined elsewhere in this Agreement, for all purposes
of this Agreement, the following terms have the meanings indicated in this
Section 1.1:

“3-Day VWAP” means the daily volume weighted average of actual trading prices
measured in hundredths of cents of the Common Stock of the Company on the
Trading Market for the three consecutive trading days immediately prior to a
Subsequent Closing Date.

“Action” shall have the meaning ascribed to such term in Section 3.1(j).

“Affiliate” means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
Person as such terms are used in and construed under Rule 144.

“Cap” shall have the meaning ascribed to such term in Section 2.2.

“Closing” means the Initial Closing and each Subsequent Closing.

“Closing Dates” means the Initial Closing Date and each Subsequent Closing Date.

“Commission” means the Securities and Exchange Commission.

“Common Stock” means the common stock of the Company, par value $0.001 per
share, and any securities into which such common stock may hereafter be
reclassified.

“Common Stock Equivalents” means any securities of the Company or the
Subsidiaries which would entitle the holder thereof to acquire at any time
Common Stock, including without limitation, any debt, preferred stock, rights,
options, warrants or other

 

--------------------------------------------------------------------------------

instrument that is at any time convertible into or exchangeable for, or
otherwise entitles the holder thereof to receive, Common Stock.

“Company Counsel” means Morgan, Lewis & Bockius, LLP, or other counsel
(including in-house counsel) reasonably acceptable to Seaside.

“DTC” means the Depository Trust Company.

“DWAC” means DTC’s Deposit Withdrawal Agent Commission system.

“Disclosure Schedules” means the disclosure schedules of the Company delivered
concurrently herewith.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Floor” shall mean $0.25.

“GAAP” shall have the meaning ascribed to such term in Section 3.1(h).

“Initial Closing” means the closing of the purchase and sale of the Common Stock
pursuant to Section 2.1.

“Initial Closing Date” means one business day after such date when all of the
Transaction Documents have been executed and delivered by the applicable parties
thereto, and all conditions precedent to (i) Seaside’s obligations to purchase
the Shares and (ii) the Company’s obligations to deliver the Shares have been
satisfied or waived.

“Initial Per Share Purchase Price” shall be an amount equal to the daily volume
weighted average of actual trading prices measured in hundredths of cents of the
Common Stock of the Company on the Trading Market for the one trading day
immediately prior to the Initial Closing Date multiplied by 87%.

“Intellectual Property” shall have the meaning ascribed to such term in Section
3.1(q).

“Liens” means a lien, charge, security interest, encumbrance, right of first
refusal, preemptive right or other restriction.

“Material Adverse Effect” means any condition, event, change or effect that
could reasonably be expected to have (i) a material adverse effect on the
legality, validity or enforceability of any Transaction Document, (ii) a
material adverse effect on the results of operations, assets, business,
prospects or financial condition of the Company and the Subsidiaries, taken as a
whole, or (iii) a material adverse effect on the Company’s ability to perform in
any material respect on a timely basis its obligations under any Transaction
Document, but shall not mean or include changes or effects (1) which are or
result from events or occurrences relating to the economy in general (including
arising from terrorist attacks, acts of war or civil unrest) or the Company’s
industry in general and not specifically relating to the Company or having a

 

2

 

--------------------------------------------------------------------------------

disproportionate impact on the Company, or (2) which result from the
announcement of this Agreement or the transactions contemplated hereby or by the
other Transaction Documents.

“Per Share Purchase Price” shall be an amount equal to the daily volume weighted
average of actual trading prices measured in hundredths of cents of the Common
Stock of the Company on the Trading Market for the ten consecutive trading days
immediately prior to a Subsequent Closing Date multiplied by 87%.

“Permits” shall have the meaning ascribed to such term in Section 3.1(r).

“Person” means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.

“Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.

“Prospectus Supplement” means the supplements to the base prospectus contained
in the Registration Statement to be filed in connection with the sale to
Seaside, or the resale by Seaside, of the Shares.

“Registration Statement” means the registration statement of the Company,
Commission File No. 333-159485, as amended, covering the sale to Seaside, or the
resale by Seaside, of the Shares.

“Required Approvals” shall have the meaning ascribed to such term in Section
3.1(e).

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the
same effect as such Rule.

“Seaside Party” shall have the meaning ascribed to such term in Section 4.6.

“SEC Reports” shall have the meaning ascribed to such term in Section 3.1(h).

“Securities Act” means the Securities Act of 1933, as amended.

“Shares” means the shares of Common Stock issued or issuable to Seaside pursuant
to this Agreement.

“Short Sales” shall include, without limitation, all “short sales” as defined in
Rule 200 of Regulation SHO of the Exchange Act.

“Subsequent Closing” means each closing of the purchase and sale of the Common
Stock pursuant to Section 2.2.

 

3

 

--------------------------------------------------------------------------------

“Subsequent Closing Date” means the day two weeks subsequent to the prior
Closing Date (or, if such day is not a Trading Day, then the first day
thereafter that is a Trading Day) commencing two weeks following the Initial
Closing Date and ending on or about a date that results in twenty-six (26)
Closings (including the Initial Closing) over a fifty-two (52) week period, or
such later dates when all of the Transaction Documents have been executed and
delivered by the applicable parties thereto, and all conditions precedent to (i)
Seaside’s obligations to purchase the Shares and (ii) the Company’s obligations
to deliver the Shares have been satisfied or waived, in each event with respect
to such Subsequent Closing.

“Subsidiary” shall have the meaning ascribed to such term in Section 3.1(a).

“Trading Day” means a day on which the Common Stock is traded on a Trading
Market.

“Trading Market” means the following markets or exchanges on which the Common
Stock is listed or quoted for trading on the date in question: the New York
Stock Exchange, the NYSE Alternext Exchange, the NYSE AMEX, the Nasdaq Capital
Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the NASD
OTC Bulletin Board.

“Transaction Documents” means this Agreement and any other documents or
agreements executed in connection with the transactions contemplated hereunder.

ARTICLE II

PURCHASE AND SALE

2.1       Initial Closing. On the Initial Closing Date, Seaside shall purchase
from the Company, and the Company shall issue and sell to Seaside, 500,000
Shares at the Initial Per Share Purchase Price. Upon satisfaction or waiver of
the conditions set forth in Sections 2.3, 2.4 and 2.5, the Initial Closing shall
occur at the offices of White White & Van Etten PC, 55 Cambridge Parkway,
Cambridge, MA 02142, or such other location as the parties shall mutually agree.

2.2       Subsequent Closings; The Floor. On each Subsequent Closing Date,
Seaside shall purchase from the Company, and the Company shall issue and sell to
Seaside, 500,000 Shares at the Per Share Purchase Price; provided, however, that
in no event shall the Company issue and sell Shares in an amount that shall
equal more than 19.9% of the Company’s outstanding shares of Common Stock as of
the date hereof pursuant to this Agreement without first obtaining stockholder
approval of the issuance, or potential issuance, of such excess Shares (the
“Cap”). In the event that the 3-Day VWAP does not equal or exceed the Floor, as
calculated with respect to any Subsequent Closing Date, then such Subsequent
Closing will not occur. In each such event, there will be one fewer Subsequent
Closing pursuant to this Agreement and the aggregate number of Shares to be
purchased hereunder shall be reduced by 500,000 Shares for each such Subsequent
Closing that does not occur because the Floor has not been reached. Upon
satisfaction or waiver of the conditions set forth in Sections 2.3, 2.4 and 2.5,
each Subsequent Closing shall occur at the offices of White White & Van Etten
PC, 55 Cambridge Parkway, Cambridge, MA 02142, or such other location as the
parties shall mutually agree.

2.3       Deliveries by the Company. On each Closing Date, the Company shall
deliver or cause to be delivered to Seaside the following:

 

4

 

--------------------------------------------------------------------------------

(a)    500,000 Shares, registered in the name of Seaside, via the DTC DWAC
system, as specified on the signature pages hereto;

(b)    an officer’s certificate of the Company’s Chief Executive Officer or
Chief Financial Officer, in form reasonably acceptable to Seaside, certifying
the accuracy, in all material respects (without giving effect to any limitation
as to “materiality” or “knowledge” set forth therein), of (x) the Company’s
representations and warranties made in this Agreement, as updated by the
Disclosure Schedules as of the Closing Date, and (y) the Company’s performance
of the covenants to be performed by it pursuant to this Agreement at or prior to
the Closing; and

(c)    solely on the Initial Closing Date, a legal opinion of Company Counsel,
in the form of Exhibit A attached hereto.

2.4       Deliveries by Seaside. On each Closing Date, Seaside shall deliver or
cause to be delivered to the Company an amount equal to the Initial Per Share
Purchase Price or Per Share Purchase Price, as applicable, times 500,000, by
wire transfer to the account as specified in writing by the Company, less the
amount due Seaside for reimbursement of its expenses as described in Section 5.2
hereof.

 

2.5

Closing Conditions.

(a)       The obligations of the Company hereunder in connection with each
Closing are subject to the following conditions being met:

(i)        the accuracy on the Closing Date of the representations and
warranties of Seaside contained herein;

(ii)       all obligations, covenants and agreements of Seaside required to be
performed at or prior to the Closing Date shall have been performed;

(iii)      the delivery by Seaside of the items set forth in Section 2.4 of this
Agreement; and

(iv)      with respect to any Subsequent Closing, to the extent that the
purchase and sale of Shares hereunder would cause the Cap to be exceeded, then
stockholder approval of the issuance, or potential issuance, of such excess
Shares shall have been obtained.

(b)       The obligations of Seaside hereunder in connection with each Closing
are subject to the following conditions being met:

(i)        the accuracy on the Closing Date of the representations and
warranties of the Company contained herein, as may be supplemented by updated
Disclosure Schedules;

(ii)       all obligations, covenants and agreements of the Company required to
be performed at or prior to the Closing Date shall have been performed;

 

5

 

--------------------------------------------------------------------------------

(iii)      the delivery by the Company of the items set forth in Section 2.3 of
this Agreement;

(iv)      there shall have been no Material Adverse Effect with respect to the
Company since the date hereof that has not been cured by the Company;

(v)       with respect to any Subsequent Closing, to the extent that the
purchase and sale of Shares hereunder would cause the Cap to be exceeded, then
stockholder approval of the issuance, or potential issuance, of such excess
Shares shall have been obtained;

(vi)      the purchase of Shares at a Subsequent Closing from the Company shall
not cause Seaside’s beneficial ownership of the Company’s Common Stock,
calculated in accordance with Rule 13d-3 promulgated by the Commission, to
exceed 10%; and

(vii)     from the date hereof to each Closing Date, trading in the Common Stock
shall not have been suspended by the Commission and trading in securities
generally as reported by Bloomberg Financial Markets shall not have been
suspended or limited, or minimum prices shall not have been established on
securities whose trades are reported by such service, or on any Trading Market,
nor shall a banking moratorium have been declared either by the United States or
New York State authorities nor shall there have occurred any material outbreak
or escalation of hostilities or other national or international calamity of such
magnitude in its effect on, or any material adverse change in, any financial
market which, in each case, in the reasonable judgment of Seaside, makes it
impracticable or inadvisable to purchase the Shares at the Closing.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

3.1       Representations and Warranties of the Company. Except as set forth
under the corresponding section of the Disclosure Schedules, which Disclosure
Schedules may be updated before any Closing and shall be deemed a part hereof,
the Company hereby makes the representations and warranties set forth below to
Seaside as of each Closing Date:

(a)    Subsidiaries. All of the direct and indirect subsidiaries of the Company
are listed in the Company’s most recent Annual Report on Form 10-K as modified
by any subsequent reports filed with the SEC (each a “Subsidiary”). The Company
owns, directly or indirectly, all of the capital stock or other equity interests
of each Subsidiary free and clear of any Liens, and all the issued and
outstanding shares of capital stock of each Subsidiary are validly issued and
are fully paid, non-assessable and free of preemptive and similar rights to
subscribe for or purchase securities. If the Company has no subsidiaries, then
references in the Transaction Documents to the Subsidiaries will be disregarded.

(b)    Organization and Qualification. The Company and each of the Subsidiaries
is an entity duly incorporated or otherwise organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation or
organization (as applicable), with the requisite power and authority to own and
use its properties and assets and to carry on its business as currently
conducted. Neither the Company nor any Subsidiary is in violation or default of
any of the provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter documents. Each of the
Company and the Subsidiaries is duly qualified

 

6

 

--------------------------------------------------------------------------------

to conduct business and is in good standing as a foreign corporation or other
entity in each jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary, except where the
failure to be so qualified or in good standing, as the case may be, could not
reasonably be expected to result in a Material Adverse Effect and, to the
knowledge of the Company, no Proceeding has been instituted in any such
jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or
curtail such power and authority or qualification.

(c)    Authorization; Enforcement. The Company has the requisite corporate power
and authority to enter into and to consummate the transactions contemplated by
each of the Transaction Documents and otherwise to carry out its obligations
thereunder. The execution and delivery of each of the Transaction Documents by
the Company and the consummation by it of the transactions contemplated thereby
have been duly authorized by all necessary action on the part of the Company and
its stockholders, except for stockholder approval for the issuance of Shares in
excess of the Cap, and no further action is required by the Company or its
stockholders in connection therewith other than in connection with the Required
Approvals. Each Transaction Document has been (or upon delivery will have been)
duly executed by the Company and, when delivered in accordance with the terms
hereof, will constitute the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms except (i) as
limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be
limited by applicable law.

(d)    No Conflicts. The execution, delivery and performance of the Transaction
Documents by the Company, the issuance and sale of the Shares and the
consummation by the Company of the other transactions contemplated thereby do
not and will not (i) conflict with or violate any provision of the Company’s or
any Subsidiary’s certificate or articles of incorporation, bylaws or other
organizational or charter documents, or (ii) conflict with, violate or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or result in the creation of any Lien upon any of
the properties or assets of the Company or any Subsidiary pursuant to, or give
to others any rights of termination, amendment, acceleration or cancellation
(with or without notice, lapse of time or both) of, any agreement, credit
facility, debt or other instrument (evidencing a Company or Subsidiary debt or
otherwise) or other understanding to which the Company or any Subsidiary is a
party or by which any property or asset of the Company or any Subsidiary is
bound or affected, or (iii) subject to the Required Approvals, conflict with or
result in a violation of any law, rule, regulation, order, judgment, injunction,
decree or other restriction of any court or governmental authority to which the
Company or a Subsidiary is subject (including federal and state securities laws
and regulations), or by which any property or asset of the Company or a
Subsidiary is bound or affected, except in the case of each of clauses (ii) and
(iii), such as could not reasonably be expected to result in a Material Adverse
Effect.

(e)    Filings, Consents and Approvals. The Company is not required to obtain
any consent, waiver, authorization or order of, give any notice to, or make any
filing or registration with, any court or other federal, state, local or other
governmental authority, the Trading Market or

 

7

 

--------------------------------------------------------------------------------

other Person in connection with the execution, delivery and performance by the
Company of the Transaction Documents, other than (i) the filing of the
Prospectus Supplement, (ii) any notice filings as are required to be made
following each Closing Date under applicable federal and state securities laws
or under applicable rules and regulations of the Trading Market and (iii)
stockholder approval for the issuance of Shares in excess of the Cap
(collectively, the “Required Approvals”).

(f)     Issuance of the Shares. The Shares are duly authorized and, when issued
and paid for in accordance with the Transaction Documents, will be duly and
validly issued, fully paid and nonassessable, free and clear of all Liens. The
Company has reserved from its duly authorized capital stock the maximum number
of shares of Common Stock issuable pursuant to this Agreement subject to the
Cap. The issuance by the Company to Seaside, or the resale by Seaside, of the
Shares has been registered under the Securities Act and all of the Shares when
delivered will be freely transferable and tradable on the Trading Market by
Seaside without restriction (other than any restrictions arising solely from an
act or omission of a Seaside). The Registration Statement is effective and
available for the issuance or resale of the Shares thereunder and the Company
has not received any notice that the Commission has issued or intends to issue a
stop-order with respect to the Registration Statement or that the Commission
otherwise has suspended or withdrawn the effectiveness of the Registration
Statement, either temporarily or permanently, or intends or has threatened in
writing to do so. The “Plan of Distribution” section under the Registration
Statement as supplemented by the Prospectus Supplement permits the issuance and
sale or resale of the Shares hereunder.

(g)    Capitalization. The capitalization of the Company is as set forth in the
Registration Statement. The Company has not issued any capital stock since its
most recently filed periodic report under the Exchange Act, other than pursuant
to the exercise of employee stock options under the Company’s stock option
plans, the issuance of shares of Common Stock to employees pursuant to the
Company’s employee stock purchase plan and pursuant to the conversion or
exercise of outstanding Common Stock Equivalents. No Person has any right of
first refusal, preemptive right, right of participation, or any similar right to
participate in the transactions contemplated by the Transaction Documents.
Except as disclosed in the SEC Reports or Schedule 3.1(g), there are no
outstanding options, warrants, rights to subscribe to, calls or commitments of
any character whatsoever relating to, or securities, rights or obligations
convertible into or exchangeable for, or giving any Person any right to
subscribe for or acquire, any shares of Common Stock, or contracts, commitments,
understandings or arrangements by which the Company or any Subsidiary is or may
become bound to issue additional shares of Common Stock or Common Stock
Equivalents. Except as disclosed in the SEC Reports or Schedule 3.1(g), the
issue and sale of the Shares will not obligate the Company to issue shares of
Common Stock or other securities to any Person (other than Seaside) and will not
result in a right of any holder of Company securities to adjust the exercise,
conversion, exchange or reset price under such securities. All of the
outstanding shares of capital stock of the Company are validly issued, fully
paid and nonassessable, have been issued in compliance with all federal and
state securities laws and requirements of the Trading Market, and none of such
outstanding shares was issued in violation of any preemptive rights or similar
rights to subscribe for or purchase securities. No further approval or
authorization of any stockholder or the Board of Directors of the Company is
required for the issuance and sale of the Shares, other than the Required
Approvals. There are no stockholders agreements, voting agreements or other
similar agreements with respect

 

8

 

--------------------------------------------------------------------------------

to the Company’s capital stock to which the Company is a party or, to the
knowledge of the Company, between or among any of the Company’s stockholders.

(h)    SEC Reports; Financial Statements. The Company has filed or furnished all
reports, schedules, forms, statements and other documents required to be filed
or furnished by it under the Securities Act and the Exchange Act (including all
required exhibits thereto), including pursuant to Section 13(a) or 15(d)
thereof, for the 12 months preceding the date hereof (or such shorter period as
the Company was required by law to file such material) (the foregoing materials,
including the exhibits thereto and documents incorporated by reference therein,
being collectively referred to herein as the “SEC Reports”) and any notices,
reports or other filings pursuant to applicable requirements of the Trading
Market on a timely basis or has received a valid extension of such time of
filing and has filed any such SEC Reports prior to the expiration of any such
extension. As of their respective dates, the SEC Reports complied in all
material respects with the applicable requirements of the Securities Act and the
Exchange Act and the rules and regulations of the Commission promulgated
thereunder, and none of the SEC Reports, when filed, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The financial
statements of the Company included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and regulations
of the Commission with respect thereto as in effect at the time of filing. Such
financial statements (i) have been prepared in accordance with United States
generally accepted accounting principles applied on a consistent basis during
the periods involved (“GAAP”), except as may be otherwise specified in such
financial statements or the notes thereto and except that unaudited financial
statements may not contain all footnotes required by GAAP, and (ii) fairly
present in all material respects the financial position of the Company and its
consolidated subsidiaries as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, year-end audit adjustments.

(i)     Material Changes. Since the date of the latest audited financial
statements included within the SEC Reports, except as specifically disclosed in
the SEC Reports, (i) there has been no event, occurrence or development that has
had or that could reasonably be expected to result in a Material Adverse Effect,
except as has been reasonably cured by the Company, (ii) the Company has not
incurred any liabilities (contingent or otherwise) other than (A) trade payables
and accrued expenses incurred in the ordinary course of business consistent with
past practice and (B) liabilities not required to be reflected in the Company’s
financial statements pursuant to GAAP or required to be disclosed in filings
made with the Commission, (iii) the Company has not altered its method of
accounting, (iv) the Company has not declared or made any dividend or
distribution of cash or other property to its stockholders or purchased,
redeemed or made any agreements to purchase or redeem any shares of its capital
stock and (v) the Company has not issued any equity securities to any officer,
director or Affiliate, except pursuant to existing Company stock option and
incentive plans.

(j)     Litigation. Except as disclosed in the SEC Reports, there is no action,
suit, notice of violation, or proceeding pending or, to the knowledge of the
Company, threatened against or affecting the Company, any Subsidiary or any of
their respective properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state,

 

9

 

--------------------------------------------------------------------------------

county, local or foreign) (collectively, an “Action”) which (i) adversely
affects or challenges the legality, validity or enforceability of any of the
Transaction Documents or the Shares or (ii) could, if there were an unfavorable
decision, have or reasonably be expected to result in a Material Adverse Effect.
Neither the Company nor any Subsidiary, nor, to the knowledge of the Company,
any director or officer thereof, is or has been the subject of any Action
involving a claim or violation of or liability under federal or state securities
laws or a claim of breach of fiduciary duty. There has not been and, to the
knowledge of the Company, there is not currently pending or contemplated, any
investigation by the Commission involving the Company or any current or former
director or officer of the Company. The Commission has not issued any stop order
or other order suspending the effectiveness of any registration statement filed
by the Company or any Subsidiary under the Exchange Act or the Securities Act
and, to the Company’s knowledge, no proceeding for such purpose is pending
before or threatened by the Commission.

(k)    Compliance. Neither the Company nor any Subsidiary (i) is in default
under or in violation of (and no event has occurred that has not been waived
that, with notice or lapse of time or both, could reasonably be expected to
result in a default by the Company or any Subsidiary under), nor has the Company
or any Subsidiary received notice of a claim that it is in default under or that
it is in violation of, any indenture, loan or credit agreement or any other
agreement or instrument to which it is a party or by which it or any of its
properties is bound (whether or not such default or violation has been waived),
(ii) is in violation of any order of any court, arbitrator or governmental body,
or (iii) is in violation of any statute, rule or regulation of any governmental
authority or the Trading Market, including without limitation all foreign,
federal, state and local laws applicable to its business, except in each case as
would not have a Material Adverse Effect.

(l)     Listing and Maintenance Requirements. The Company’s Common Stock is
registered pursuant to Section 12(b) of the Exchange Act, and the Company has
taken no action designed to, or which to its knowledge is likely to have the
effect of, terminating the registration of the Common Stock under the Exchange
Act nor has the Company received any notification that the Commission is
contemplating terminating such registration. The Company has not, in the 12
months preceding the date hereof, received notice from any Trading Market on
which the Common Stock is or has been listed or quoted to the effect that the
Company is not in compliance with the listing or maintenance requirements of
such Trading Market. The Company is, and immediately after the consummation of
the transactions contemplated hereby will be, in compliance with all such
listing and maintenance requirements.

(m)   Application of Takeover Protections. The Company and its Board of
Directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other similar
anti-takeover provision under the Company’s certificate of incorporation (or
similar charter documents) and the laws of its state of incorporation that is or
could become applicable to Seaside as a result of Seaside and the Company
fulfilling their obligations or exercising their rights under the Transaction
Documents, including without limitation the Company’s issuance of the Shares and
Seaside’s ownership of the Shares.

(n)    Effective Registration Statement. The Registration Statement has been
declared effective by the Commission and the Company knows of no reason why the
Registration

 

10

 

--------------------------------------------------------------------------------

Statement will not continue to remain effective for the foreseeable future. The
Company is eligible to use Form S-3 registration statements for the issuance of
securities.

(o)    Acknowledgment Regarding Seaside’s Purchase of Shares. The Company
acknowledges and agrees that Seaside is acting solely in the capacity of an
arm’s length purchaser with respect to this Agreement and the other Transaction
Documents and the transactions contemplated hereby and thereby. The Company
further acknowledges that Seaside is not acting as a financial advisor or
fiduciary of the Company (or in any similar capacity) with respect to this
Agreement or the other Transaction Documents and the transactions contemplated
hereby and thereby and any advice given by Seaside or any of its representatives
or agents in connection with this Agreement and the other Transaction Documents
and the transactions contemplated hereby and thereby is merely incidental to
Seaside’s purchase of the Shares. The Company further represents to Seaside that
the Company’s decision to enter into this Agreement and the other Transaction
Documents has been based solely on the independent evaluation of the
transactions contemplated thereby by the Company and its representatives.

(p)    Approvals. The issuance and listing on the Trading Market of the Shares
requires no further approvals, including but not limited to, the approval of
stockholders, except for stockholder approval for the issuance of Shares in
excess of the Cap.

(q)    Intellectual Property. The Company possesses such right, title and
interest in and to all patents, patent rights, trade secrets, inventions,
know-how, trademarks, trade names, copyrights, service marks and other
proprietary rights (“Intellectual Property”) material to the conduct of the
Company’s business except Intellectual Property the failure of which to possess
would not have a Material Adverse Effect. Except as disclosed in the SEC
Reports, the Company has not received any notice of infringement,
misappropriation or conflict from any third party as to Intellectual Property
owned by or exclusively licensed to the Company that has not been resolved or
disposed of, which infringement, misappropriation or conflict would if adversely
decided have a Material Adverse Effect. To the Company’s knowledge, it has not
infringed, misappropriated, or otherwise conflicted with the Intellectual
Property of any third parties, which infringement, misappropriation or conflict
would if adversely decided have a Material Adverse Effect.

(r)     Permits. The Company has made all filings, applications and submissions
required by, andpossesses all approvals, licenses, certificates, certifications,
clearances, consents, exemptions, marks, notifications, orders, permits and
other authorizations issued by, the appropriate federal, state or foreign
regulatory authorities necessary to own or lease its properties and to conduct
its businesses (collectively, “Permits”), except for such Permits the failure of
which to possess or obtain would not reasonably be expected to have a Material
Adverse Effect. The Company has not received any written notice of proceedings
relating to the limitation, revocation, cancellation, suspension, modification
or non-renewal of any such Permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a Material
Adverse Effect, and has no reason to believe that any such Permit will not be
renewed in the ordinary course.

(s)    Disclosure. The Company confirms that neither the Company nor any
officer, director or employee of the Company acting on its behalf has provided
Seaside or its agents or counsel with any information that constitutes or might
reasonably be expected to constitute

 

11

 

--------------------------------------------------------------------------------

material, non-public information. The Company understands and confirms that
Seaside will rely on the foregoing representations and covenants in effecting
transactions in securities of the Company. None of the representations and
warranties of the Company contained herein, nor any statement made by the
Company in any disclosure, schedule, exhibit, certificate or other document
furnished to Seaside in connection herewith, contains or will contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading. The Company acknowledges and agrees that
Seaside does not make and has not made any representations or warranties with
respect to the transactions contemplated hereby other than those specifically
set forth in Section 3.2 hereof.

3.2       Representations and Warranties of Seaside. Seaside hereby makes the
representations and warranties set forth below to the Company as of each Closing
Date:

(a)    Organization; Authority. Seaside is a limited partnership duly organized,
validly existing and in good standing under the laws of the state of Florida,
with full right, power and authority to own and use its properties and assets
and to carry on its business as currently conducted and to enter into and to
consummate the transactions contemplated by this Agreement and the other
Transaction Documents and otherwise to carry out its obligations hereunder and
thereunder. The execution, delivery and performance by Seaside of the
transactions contemplated by this Agreement and each other Transaction Document
have been duly authorized by all necessary action on the part of Seaside and no
such further action is required. Each Transaction Document to which Seaside is a
party has been (or upon delivery will have been) duly executed by Seaside, and,
when delivered by Seaside in accordance with the terms thereof, will constitute
the valid and legally binding obligation of Seaside, enforceable against it in
accordance with its terms, except (i) as limited by general equitable principles
and applicable bankruptcy, insolvency, reorganization, moratorium and other laws
of general application affecting enforcement of creditors’ rights generally,
(ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable law.

(b)    Experience of Seaside. Seaside, either alone or together with its
representatives, has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risks of
the prospective investment in the Shares, and has so evaluated the merits and
risks of such investment. Seaside is able to bear the economic risk of an
investment in the Shares and, at the present time, is able to afford a complete
loss of such investment.

(c)    Short Sales. Seaside has not directly or indirectly executed any Short
Sales in the securities of the Company through the date hereof.

ARTICLE IV

OTHER AGREEMENTS OF THE PARTIES

4.1       No Transfer Restrictions. Certificates evidencing the Shares shall not
contain any legend restricting their transferability by Seaside. The Company
shall cause its counsel to issue a legal opinion to the Company’s transfer agent
if required by the Company’s transfer agent to

 

12

 

--------------------------------------------------------------------------------

effect a transfer of any of the Shares; such opinion shall be provided by the
Company’s counsel at no expense to Seaside.

 

4.2       Furnishing of Information. As long as Seaside owns Shares, the Company
covenants to use its best efforts to timely file (or obtain extensions in
respect thereof and file within the applicable grace period) all reports
required to be filed by the Company after the date hereof pursuant to the
Exchange Act. As long as Seaside owns Shares that are “restricted securities” as
that term is defined in Rule 144 that it has owned for less than one year in
accordance with Rule 144(d), if the Company is not required to file reports
pursuant to the Exchange Act, it will prepare and furnish to Seaside and make
publicly available in accordance with Rule 144(c) such information as is
required for Seaside to sell the Shares under Rule 144.

4.3       Securities Laws Disclosure; Publicity. The Company shall, by 9:00 a.m.
Eastern time on the Trading Day following the date hereof, file a Current Report
on Form 8-K which attaches as exhibits all agreements relating to this
transaction, in each case reasonably acceptable to Seaside and its counsel,
disclosing the material terms of the transactions contemplated hereby.

4.4       Shareholders Rights Plan. No claim will be made or enforced by the
Company or, with the consent of the Company, any other Person that Seaside is an
“Acquiring Person” or similar designation under any shareholders rights plan or
similar plan or arrangement in effect or hereafter adopted by the Company, or
that Seaside could be deemed to trigger the provisions of any such plan or
arrangement, by virtue of receiving Shares under the Transaction Documents or
under any other agreement between the Company and Seaside. The Company shall
conduct its business in a manner so that it will not become subject to the
Investment Company Act of 1940, as amended.

4.5       Non-Public Information. The Company covenants and agrees that neither
it nor any other Person acting on its behalf will provide Seaside or its agents
or counsel with any information that the Company believes constitutes material
non-public information. The Company understands and confirms that Seaside shall
be relying on the foregoing representations in effecting transactions in
securities of the Company.

4.6       Indemnification of Seaside. Subject to the provisions of this Section
4.6, the Company will indemnify and hold Seaside, Seaside’s Affiliates and their
respective directors, officers, stockholders, partners, members, employees and
agents (each, a “Seaside Party”) harmless from any and all losses, liabilities,
obligations, claims, demands, contingencies, damages, costs and expenses,
including all judgments, amounts paid in settlements, court costs and reasonable
attorneys’ fees and costs of investigation reasonably incurred in connection
with defending or investigating any suit or action in respect thereof to which
any Seaside Party is or may become a party under the Securities Act, the
Exchange Act or any other federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, liabilities, obligations,
claims, demands, contingencies, damages, costs and expenses arise out of or are
based on (a) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or any Prospectus Supplement, or (b) the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements

 

13

 

--------------------------------------------------------------------------------

therein not misleading, provided that the Company will not be liable in any such
case to the extent that any such liability, obligation, claim, demand,
contingency, damage, cost or expense arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by and regarding Seaside expressly for inclusion therein. If any
action shall be brought against any Seaside Party in respect of which indemnity
may be sought pursuant to this Agreement, such Seaside Party shall promptly
notify the Company in writing, and the Company shall have the right to assume
the defense thereof with counsel of its own choosing. Any Seaside Party shall
have the right to employ separate counsel in any such action and participate in
the defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Seaside Party except to the extent that (i) the employment
thereof has been specifically authorized by the Company in writing, (ii) the
Company has failed after a reasonable period of time to assume such defense and
to employ counsel or (iii) in such action there is, in the reasonable opinion of
such separate counsel, a material conflict on any material issue between the
position of the Company and the position of such Seaside Party. The Company will
not be liable to any Seaside Party under this Agreement (x) for any settlement
by a Seaside Party effected without the Company’s prior written consent, which
consent shall not be unreasonably withheld or delayed; or (y) to the extent, but
only to the extent, that a loss, liability, obligation, claim, demand, damage,
cost or expense is attributable to any Seaside Party’s breach of any of the
representations, warranties, covenants or agreements made by Seaside in this
Agreement or in the other Transaction Documents.

4.7       Listing of Common Stock. The Company hereby agrees to use its best
efforts to maintain the listing of the Common Stock on a Trading Market. The
Company further agrees that, if the Company applies to have the Common Stock
traded on any other Trading Market, it will include in such application all of
the Shares and will take such other action as is necessary to cause all of the
Shares to be listed on such other Trading Market as promptly as possible. The
Company will take all action reasonably necessary to continue the listing and
trading of its Common Stock on a Trading Market and will comply in all respects
with the Company’s reporting, filing and other obligations under the bylaws or
rules of the Trading Market.

4.8       Stockholder Approval. The Company shall not issue shares of Common
Stock or Common Stock Equivalents, if such issuance would require stockholder
approval pursuant to applicable rules of the Trading Market, unless and until
such stockholder approval is obtained.

4.9       Short Sales. Seaside covenants that neither it nor any Affiliates
acting on its behalf or pursuant to any understanding with it will execute any
Short Sales in the securities of the Company from the date hereof until the
final Subsequent Closing contemplated hereby.

4.10     Prospectus Supplement. The Company will use its best efforts to file
the Prospectus Supplement in accordance with the requirements of Rule 424
promulgated under the Securities Act on or before the Initial Closing Date and,
if required, before each Subsequent Closing Date.

ARTICLE V

MISCELLANEOUS

 

5.1

Termination; Liquidated Damages. This Agreement may be terminated:

 

14

 

--------------------------------------------------------------------------------

(a)       by Seaside, by written notice to the Company, if the Initial Closing
has not been consummated on or before July 2, 2009,

(b)       by Seaside, immediately upon written notice to the Company, if at any
time prior to the final Subsequent Closing Date the Company consummates a
financing to which Seaside is not a party, and

(c)       by the Company, upon at least 30 days’ prior written notice to
Seaside, after the fifth Subsequent Closing Date but prior to the sixth
Subsequent Closing Date,

provided, however, that no such termination pursuant to this Section 5.1 will
affect the right of any party to sue for any breach by the other party (or
parties) and provided, further, that in the event the Company exercises its
termination right pursuant to subsection (c) of this Section 5.1 and within six
months of such termination initiates another financing having committed funding
dates scheduled at pre-determined intervals of between one week and two months
then the Company shall be obligated to pay to Seaside liquidated damages in the
amount of $300,000 immediately upon the first closing of any such subsequent
financing.

5.2       Fees and Expenses. Except as otherwise set forth in this Agreement and
as set forth in this Section 5.2 below, each party shall pay the fees and
expenses of its own advisers, counsel, accountants and other experts, if any,
and all other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement. The Company
shall pay all stamp and other taxes and duties levied in connection with the
delivery of the Shares. Notwithstanding the foregoing, at the Initial Closing
the Company shall reimburse Seaside for the fees and expenses of its counsel,
White White & Van Etten PC, in an amount equal to $20,000 and at each Subsequent
Closing the Company shall reimburse Seaside for the fees and expenses of its
counsel, White White & Van Etten PC, in an amount equal to $1,500. Such legal
fees may be withheld by Seaside from the amount to be paid for the Shares
purchased at the Initial Closing and any Subsequent Closing.

5.3       Entire Agreement. The Transaction Documents, together with the
exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules.

5.4       Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile number
set forth on the signature pages attached hereto prior to 5:30 p.m. (Eastern
time) on a Trading Day, (b) the next Trading Day after the date of transmission,
if such notice or communication is delivered via electronic mail or facsimile at
the facsimile number set forth on the signature pages attached hereto on a day
that is not a Trading Day or later than 5:30 p.m. (Eastern time) on any Trading
Day, (c) the second Trading Day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service, or (d) upon actual receipt by
the party to whom such notice is required to be given. The address for such
notices and communications shall be as set forth on the signature pages attached
hereto.

 

15

 

--------------------------------------------------------------------------------

5.5       Amendments; Waivers. No provision of this Agreement may be waived or
amended except in a written instrument signed, in the case of an amendment, by
the Company and Seaside or, in the case of a waiver, by the party against whom
enforcement of any such waiver is sought. No waiver of any default with respect
to any provision, condition or requirement of this Agreement shall be deemed to
be a continuing waiver in the future or a waiver of any subsequent default or a
waiver of any other provision, condition or requirement hereof, nor shall any
delay or omission of either party to exercise any right hereunder in any manner
impair the exercise of any such right.

5.6       Headings. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.

5.7       Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and their successors and permitted assigns. The
Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of Seaside. Seaside may assign this Agreement
or any rights or obligations hereunder without the prior written consent of the
Company.

5.8       No Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person, except as otherwise set forth in Section 4.6.

5.9       Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law thereof. The
parties hereby waive all rights to a trial by jury. If either party shall
commence an action or proceeding to enforce any provisions of the Transaction
Documents, then the prevailing party in such action or proceeding shall be
reimbursed by the other party for its attorneys’ fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such
action or proceeding.

5.10     Survival. The representations and warranties herein shall survive the
Closings and delivery of the Shares.

5.11     Execution. This Agreement may be executed in two or more counterparts,
all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and
delivered to the other party, it being understood that both parties need not
sign the same counterpart. In the event that any signature is delivered by
facsimile or email transmission, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile or email signature
page were an original thereof.

5.12     Severability. If any provision of this Agreement is held to be invalid
or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions

 

16

 

--------------------------------------------------------------------------------

of this Agreement shall not in any way be affected or impaired thereby and the
parties will attempt to agree upon a valid and enforceable provision that is a
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Agreement.

5.13     Rescission and Withdrawal Right. Notwithstanding anything to the
contrary contained in (and without limiting any similar provisions of) the
Transaction Documents, whenever Seaside exercises a right, election, demand or
option under a Transaction Document and the Company does not timely perform its
related obligations within the periods therein provided, then Seaside may
rescind or withdraw, in its sole discretion from time to time upon written
notice to the Company, any relevant notice, demand or election in whole or in
part without prejudice to its future actions and rights.

5.14     Remedies. In addition to being entitled to exercise all rights provided
herein or granted by law, including recovery of damages, Seaside and the Company
will be entitled to specific performance under the Transaction Documents. The
parties agree that monetary damages may not be adequate compensation for any
loss incurred by reason of any breach of the obligations set forth herein and
hereby agree to waive in any such action for specific performance of any such
obligation the defense that a remedy at law would be adequate.

5.15     Payment Set Aside. To the extent that either party hereto makes a
payment or payments to the other party hereto pursuant to any Transaction
Document or enforces or exercises its rights thereunder, and such payment or
payments or the proceeds of such enforcement or exercise or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside,
recovered from, disgorged by or are required to be refunded, repaid or otherwise
restored to the other party, a trustee, receiver or any other person under any
law (including, without limitation, any bankruptcy law, state or federal law,
common law or equitable cause of action), then to the extent of any such
restoration the obligation or part thereof originally intended to be satisfied
shall be revived and continued in full force and effect as if such payment had
not been made or such enforcement or setoff had not occurred.

5.16     Construction. The parties agree that each of them and/or their
respective counsel has reviewed and had an opportunity to revise the Transaction
Documents and, therefore, the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of the Transaction Documents or any amendments hereto.

(Signature Pages Follow)

 

17

 

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have caused this Common Stock Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

NovaDel Pharma Inc.

 

 

Address for Notice:

By: /s/ Steven B. Ratoff

Name: Steven B. Ratoff

Title: Interim Chief Executive Officer and President

 

25 Minneakoning Road

Flemington, NJ 08822

Attention: Steven B. Ratoff

 

With a copy to (which shall not constitute notice):

 

 

Morgan, Lewis & Bockius, LLP

502 Carnegie Center

Princeton, NJ 08540

Attention: Emilio Ragosa, Esq.

Fax: 609-919-6701

 

Seaside 88, LP

 

By: Seaside 88 Advisors, LLC

Address for Notice:

 

 

By: /s/ William J. Ritger

Name: William J. Ritger

Title: Manager

 

750 Ocean Royale Way

Suite 805

North Palm Beach, FL 33408

Attention: William J. Ritger and

Denis M. O’Donnell, M.D.

Fax: 866-358-6721

 

With a copy to (which shall not constitute notice):

 

 

 

White White & Van Etten PC

55 Cambridge Parkway

Cambridge, MA 02142

Attention: David A. White, Esq.

Fax: 617-225-0205