Exhibit 10.50

EMPLOYMENT AGREEMENT

AGREEMENT (the “Agreement”), dated as of January 22, 2008, effective December
20, 2007 by and between NOVADEL PHARMA INC., a Delaware corporation with
principal executive offices at 25 Minneakoning Rd., Flemington, New Jersey 08822
(the “Company”), and Michael E.B. Spicer, residing at 25 Princess Pine Lane,
Easton, Connecticut 06612 (the “Executive”).

W I T N E S S E T H:

WHEREAS, the Company and the Executive entered into an employment agreement (the
“Prior Agreement”) which expires by its term December 20, 2007; and

 

WHEREAS, the Company wishes to continue to employ the Executive as Chief
Financial Officer of the Company, and the Executive desires to continue 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 term of this Agreement (the “Term”) shall begin as of
the Effective Date and shall terminate on the day immediately prior to the
anniversary of the Effective Date, unless sooner terminated by either party as
hereinafter provided; provided, however, that the Term shall automatically be
extended for successive one-year periods on the anniversary of the Effective
Date and on each subsequent anniversary thereof unless, not later than 90 days
preceding the date of any such extension, either party gives the other party
written notice of such party’s intention not to further extend the Term. If the
Company elects not to renew the Agreement, the Agreement will continue in effect
according to its terms until the end of the then current Term, at which time the
Agreement shall terminate, with the exception of the Executive’s obligations set
forth in Sections 5 and 6. Nothing in this Agreement shall be construed as
giving the Executive any right to be retained in the employ of the Company, and
the Executive specifically acknowledges that the Executive is subject to
discharge at any time by the Company with or without Cause (as defined in
Section 8 below) and without compensation of any nature, except as provided in
Section 9 below. The expiration or non-renewal of this Agreement shall be deemed
a termination of the Executive’s employment for purposes of this Agreement,
including a termination without Cause for purposes of Section 9.

 

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3.     Duties; Best Efforts; Place of Performance.

 

(a)         The Executive shall initially serve as Chief Financial 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 Financial
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 duties or that
will adversely affect, or negatively reflect upon, the Company. Notwithstanding
the above, Executive may hold external directorships 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 compensation for the performance by the Executive
of his duties under this Agreement, the Company shall pay the Executive as
follows:

 

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(a)          Base Salary. The Company shall pay the Executive a base salary (the
“Base Salary”) at a rate of $256,200 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. Executive shall be eligible to receive a discretionary
annual bonus of up to 30% 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 in each 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. The discretionary annual bonus, if any,
will be determined as of the end of each fiscal year during the Term and shall
be payable as soon as practicable after the end of each fiscal year to which the
bonus relates, but in no event, later than 2-1/2 months after the end of such
fiscal year, except as provided in Section 8. Except as otherwise specifically
provided in Sections 8 and 9, to be eligible to receive an annual bonus, or any
portion thereof, the Executive must be employed by the Company both at the time
the amount of the annual bonus, if any, is determined, and at the time the
annual bonus, if any, is to be paid.

 

(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. In addition to equity awards which the Executive has
already received, at the sole discretion of the Compensation Committee of the
Board of Directors, the Executive shall be eligible for additional grants of
stock options and other equity awards.

 

(e)          Expenses. The Company shall reimburse the Executive for all normal,
usual and necessary expenses incurred by the Executive in furtherance of the
business 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.
The Company shall also reimburse the Executive for all reasonable professional
fees, including but not limited to, the annual licensing fees for a certified
public accountant.

 

(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 four (4) weeks per annum, in addition to holidays and
sick/personal/bereavement days observed by the Company, in accordance with the
Company’s vacation, holiday and other pay-for-time-not-worked policies. Vacation
not taken cannot be carried over into a subsequent year.

 

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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 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, 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
in “know how” and other trade secrets, other 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 5(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

 

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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, trade secrets 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 Term shall be and remain the sole and exclusive property
of the Company or such affiliate and the Executive shall have no 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 received by Executive through his
relationship as member of such other entities’ boards of directors (such board
memberships to have received the prior approval of the Board of Directors of the
Company) 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 twelve (12) 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 be employed by any business that is competitive with 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

 

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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 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, the
Executive will not be in breach of this paragraph 6(a) if, during the twelve
(12) months following the termination of his employment with the Company, he
becomes employed by or consults to a Person whose primary business is outside
the area of novel application oral drug delivery systems for use with small
molecule, non-biologic pharmaceuticals – provided that the Executive’s work for
said Person during the twelve (12) months following the termination of his
employment does not relate to novel application oral drug delivery systems for
use with small molecule, non-biologic pharmaceuticals. 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 twelve (12) 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 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 is
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

 

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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 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 represent and warrant 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

 

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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 wrongdoing 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 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 for any felony or conviction of a
misdemeanor involving moral turpitude (including entry of a nolo contendere
plea) where such event has the effect of injuring, in a material way (whether
financial or otherwise), the business or reputation of the Company, or of any of
its affiliates, including but not limited to, any officer, director, or
executive of the Company or any of its affiliates;

 

(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 and vii of this section.

 

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(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 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 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 this Agreement (a
“Material Breach”), (ii) a material reduction by the Company or by the Board of
Directors of the Company of the Executive’s duties, title or authority,
including but not limited to reporting to the Chief Executive Officer of the
Company, 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 through the date of his
death or Disability and (y) the Bonus, if any, that would otherwise have been
due at the end of the calendar year in which such death or Disability occurs;

 

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and the pro rata portion of the Stock Options earned by the Executive during the
year of his death or Disability, prorated in accordance with the number of full
months in such year during which the Executive was employed by the Company; (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 Disability; and (iii) pay any
expense reimbursement amounts owed through the date of death or 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
non-forfeitable.

 

(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 or a Change in Control, 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, upon receiving a copy of a release and
separation agreement signed by the Executive, and containing, among other
provisions, the release provisions attached hereto as Exhibit A (the “Release”),
pay to the Executive within ten (10) business days: (i) a lump sum equivalent to
twelve (12) months of his then current Base Salary, and (ii) a lump sum
equivalent to the Bonus, if any, that would otherwise have been due at the end
of the calendar year in which such termination occurs; and (iii) 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 the date of the Change of Control. All restrictions
on the Executive’s Restricted Shares shall lapse immediately.

 

(d)         If (i) the Executive’s employment is terminated by the Company other
than as a result of the Executive’s death or Disability and other than for
reasons specified in Sections 9(c); or (ii) the Executive’s employment is
terminated by the Executive for Good Reason, the Company shall, upon receiving a
copy of the Release signed by the Executive, pay to the Executive: (i) severance
payments made in semi-monthly installments equivalent to the Executive’s current
Base Salary divided by twenty-four (24), for a period of twelve (12) months;
(ii) within ten (10) business days the Bonus, if any, that would otherwise have
been due at the

 

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end of the calendar year in which such termination or non-renewal occurs; and
(iii) any expense reimbursement amounts owed through the date of termination or
non-renewal. All vested options at date of termination shall expire ninety (90)
days post termination of employment, all Stock Options that have not vested as
of the date of termination shall be deemed to have expired as of such date. All
Restricted Shares that are subject to forfeiture as of the termination or
non-renewal 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 Sections 9(a), 9(c), and 9(d), and 9(e) 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.

 

(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.

 

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(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.

(l)                Application of Section 280G of the Code. In the event that it
shall be determined that any payment or distribution in the nature of
compensation (within the meaning of section 280G(b)(2) of the Code) to or for
the benefit of the Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise (a
“Payment”), would constitute an “excess parachute payment” within the meaning of
section 280G of the Code, the aggregate present value of the Payments under the
Agreement shall be

 

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reduced (but not below zero) to the Reduced Amount (defined below), provided
that the reduction shall be made only if the Accounting Firm (described below)
determines that the reduction will provide the Executive with a greater net
after-tax benefit than would no reduction. The “Reduced Amount” shall be an
amount expressed in present value which maximizes the aggregate present value of
Payments under this Agreement without causing any Payment under this Agreement
to be subject to the Excise Tax (defined below), determined in accordance with
section 280G(d)(4) of the Code. The term “Excise Tax” means the excise tax
imposed under section 4999 of the Code, together with any interest or penalties
imposed with respect to such excise tax. Unless the Executive shall have elected
another method of reduction by written notice to the Company prior to the Change
of Control, the Company shall reduce the Payments under this Agreement by first
reducing Payments that are not payable in cash and then by reducing cash
Payments. Only amounts payable under this Agreement shall be reduced pursuant to
this subsection (b). All determinations to be made under this subsection (b)
shall be made by an independent certified public accounting firm selected by the
Company immediately prior to the Change of Control (the “Accounting Firm”),
which shall provide its determinations and any supporting calculations both to
the Company and the Executive within 10 days of the Change of Control. Any such
determination by the Accounting Firm shall be binding upon the Company and the
Executive. All of the fees and expenses of the Accounting Firm in performing the
determinations referred to in this subsection (b) shall be borne solely by the
Company.

(m)               Law Changes. To the extent that any payment under this
Agreement is deemed to be deferred compensation subject to the requirements of
section 409A of the Code, the Company and the Executive shall amend this
Agreement so that such payments will be made in accordance with the requirements
of section 409A of the Code.

 

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

 

 

 

NOVADEL PHARMA INC.

 

 

 

 

 

 

 

By: /s/ Steven B. Ratoff

 

 

 

Chairman, President and Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

 

EXECUTIVE

 

 

 

 

 

 

 

By: /s/ Michael E.B. Spicer

 

 

 

Michael E.B. Spicer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Exhibit A

 

Form of Release

 

1.            You hereby release and discharge NovaDel Pharma, Inc., 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
[______] (the “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 Agreement 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 Jersey Conscientious Employee Protection Act,
the New Jersey Wage and Hour Law, 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 Agreement excludes any waiver of claims that cannot be
waived as a matter of law.

2.            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 (7) days after
signing this Agreement to revoke it in writing. Revocation must be made by
sending a written notice of revocation to NovaDel Pharma Inc., 25 Minneakoning
Rd, Flemington, NJ 08822. Accordingly, no payments required under this Agreement
shall be made until the expiration of seven (7) calendar days following your
execution of this Agreement.

 

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