Exhibit 10.2

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this “Agreement”) is made and entered into
as of May 26, 2005, among NovaDel Pharma Inc., a Delaware corporation (the
“Company”), and the purchasers signatory hereto (each such purchaser is a
“Purchaser” and collectively, the “Purchasers”).

This Agreement is made pursuant to the Securities Purchase Agreement, dated as
of May 26, 2005, among the Company and the Purchasers (the “Purchase
Agreement”).

The Company and the Purchasers hereby agree as follows:

1. Definitions.

Capitalized terms used and not otherwise defined herein that are defined in the
Purchase Agreement shall have the meanings given to such terms in the Purchase
Agreement. As used in this Agreement, the following terms shall have the
following meanings:

“Advice” shall have the meaning set forth in Section 6(c).

“Commission” means the United States Securities and Exchange Commission.

“Effectiveness Date” means, (a) with respect to the initial Registration
Statement required to be filed hereunder, the 90th calendar day following the
date hereof (120th calendar day in the event that the Commission reviews and
provides written comments to the Registration Statement), and (b) with respect
to any additional Registration Statements which may be required pursuant to
Section 3(c), the 90th calendar day following the date on which the Company
first knows, or reasonably should have known, that such additional Registration
Statement is required hereunder (120th calendar day in the event that the
Commission reviews and provides written comments to any additional Registration
Statement); provided, however, in the event the Company is notified by the
Commission that one of the above Registration Statements will not be reviewed or
is no longer subject to further review and comments, the Effectiveness Date as
to such Registration Statement shall be the fifth Trading Day following the date
on which the Company is so notified if such fifth Trading Date precedes the
applicable date required above. Notwithstanding the foregoing, if any day
otherwise designated as an “Effectiveness Date” pursuant to this definition
falls on a day other than a Trading Day, the Effectiveness Date shall be deemed
to be the next Trading Day.

“Effectiveness Period” shall have the meaning set forth in Section 2(a).

“Event” shall have the meaning set forth in Section 2(b).

“Event Date” shall have the meaning set forth in Section 2(b).

“Filing Date” means, with respect to the initial Registration Statement required
hereunder, the 45th calendar day following the date hereof and with respect to
any additional Registration Statements which may be required pursuant to Section
3(c), the 45th day following the date on which the Company first knows, or
reasonably should have known, that such additional Registration Statement is
required hereunder. Notwithstanding the foregoing, if any day otherwise
designated as a “Filing Date” pursuant to this definition falls on a day other
than a Trading Day, the Filing Date shall be deemed to be the next Trading Day.

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“Holder” or “Holders” means the holder or holders, as the case may be, from time
to time of Registrable Securities.

“Indemnified Party” shall have the meaning set forth in Section 5(c).

“Indemnifying Party” shall have the meaning set forth in Section 5(c).

“Initial Filing Date” means the 45th calendar day following the date hereof.
Notwithstanding the foregoing, if the day otherwise designated as the “Initial
Filing Date” pursuant to this definition falls on a day other than a Trading
Day, the Initial Filing Date shall be deemed to be the next Trading Day.

“Liquidated Damages Payment Date” shall have the meaning set forth in Section
2(b).

“Losses” shall have the meaning set forth in Section 5(a).

“Person” means an individual, 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.

“Plan of Distribution” shall have the meaning set forth in Section 2(a).

“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” means the prospectus included in a Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by a
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.

“Registrable Securities” means (i) (A) all Shares and (B) all shares of Common
Stock issuable upon exercise of the Warrants and the Placement Warrants and (ii)
any securities issued or issuable upon any stock split, dividend or other
distribution, recapitalization or similar event with respect to the foregoing;
provided, however, that Registrable Securities shall not include those
securities that (a) have been effectively registered under Section 5 of the
Securities Act and disposed of pursuant to a registration statement or (b) have
been transferred pursuant to Rule 144 promulgated under the Securities Act or
any successor rule.

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“Registration Statement” means any registration statement required to be filed
hereunder and any additional registration statements contemplated by Section
3(c), including (in each case) the Prospectus, amendments and supplements to
such registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference in such registration statement.

“Rule 415” means Rule 415 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 purpose and effect as such Rule.

“Rule 424” means Rule 424 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 purpose and effect as such Rule.

2. Shelf Registration.

(a) On or prior to the Initial Filing Date, the Company shall prepare and file
with the Commission a shelf Registration Statement covering the resale of all of
the Shares and the Registrable Securities underlying the Warrants and Placement
Warrants on such Filing Date for an offering to be made on a continuous basis
pursuant to Rule 415. The Registration Statement shall be on Form S-3 (except if
the Company is not then eligible to register for resale the Registrable
Securities on Form S-3, in which case such registration shall be on another
appropriate form in accordance herewith) and shall contain (unless otherwise
directed by the Holders holding a majority of the Registrable Securities to be
registered under the applicable Registration Statement) a “Plan of Distribution”
section substantially in the form attached hereto as Annex A. Subject to the
terms, conditions and limitations of this Agreement, the Company shall use its
commercially reasonable efforts to cause the Registration Statement to be
declared effective under the Securities Act as promptly as possible after the
filing thereof, but in any event prior to the applicable Effectiveness Date, and
shall use its commercially reasonable efforts to keep such Registration
Statement continuously effective under the Securities Act until the date on
which all of the Registrable Securities covered by such Registration Statement
have been sold or may be sold without volume restrictions pursuant to Rule
144(k) as determined by counsel to the Company pursuant to a written opinion
letter to such effect, addressed and acceptable to the Company’s transfer agent
and the affected Holders but in any event for no more than two years from the
date on which all of the shares of Common Stock issuable upon exercise of the
Warrants and Placement Warrants have been issued (the “Effectiveness Period”).
The Company shall immediately notify the Holders (which may be via e-mail or
facsimile) of the effectiveness of the Registration Statement within the next
Trading Day following the day that the Company receives notification of the
effectiveness from the Commission. Failure to so notify the Holders within one
Trading Day of such notification shall be deemed an “Event” under Section 2(b).

(b) If: (i) a Registration Statement is not filed on or prior to its Filing Date
(if the Company files a Registration Statement without affording the Holders the
opportunity to review and comment on the same as required by Section 3(a), the
Company shall not be deemed to have satisfied this clause (i); (ii) the Company
fails to file with the Commission a request for acceleration in accordance with
Rule 461 promulgated under the Securities Act, within five Trading Days of the
date that the Company is notified (orally or in writing, whichever is earlier)
 
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by the Commission that a Registration Statement will not be “reviewed,” or not
subject to further review; (iii) prior to its Effectiveness Date, the Company
fails to file a pre-effective amendment and otherwise respond in writing to
comments made by the Commission in respect of such Registration Statement within
15 Trading Days after the receipt of written comments by or notice from the
Commission that such amendment is required in order for a Registration Statement
to be declared effective; (iv) a Registration Statement filed or required to be
filed hereunder is not declared effective by the Commission by its Effectiveness
Date; or (v) after the Effectiveness Date and during the Effectiveness Period, a
Registration Statement ceases for any reason to remain continuously effective as
to all Registrable Securities for which it is required to be effective and the
Holders are not permitted to utilize the Prospectus therein to resell such
Registrable Securities for 10 consecutive Trading Days but no more than an
aggregate of 20 Trading Days during any 12-month period (which need not be
consecutive Trading Days); (any such failure or breach being referred to as an
“Event”, and for purposes of clause (i) or (iv) the date on which such Event
occurs, or for purposes of clause (ii) the date on which such five Trading Day
period is exceeded, or for purposes of clause (iii) the date which such 15
Trading Day period is exceeded, or for purposes of clause (v) the date on which
such 10 or 20 Trading Day period, as applicable, is exceeded being referred to
as “Event Date”), then, as long as such Holders shall have complied with their
obligations hereunder, in addition to any other rights the Holders may have
hereunder or under applicable law, on each such Event Date and on each monthly
anniversary of each such Event Date beginning with the first monthly anniversary
of the applicable Event Date (if the applicable Event shall not have been cured
by such date) until the applicable Event is cured (each a “Liquidated Damages
Payment Date”), the Company shall pay to each Holder an amount in cash, as
partial liquidated damages and not as a penalty, with respect to each Liquidated
Damages Payment Date, equal to 1% of the aggregate purchase price paid by such
Holder pursuant to the Purchase Agreement for any issued and outstanding
unregistered Registrable Securities then held by such Holder or issued and
outstanding Registrable Securities held by such Holder that are registered by a
suspended Registration Statement as applicable. If the Company fails to pay any
partial liquidated damages pursuant to this Section in full within seven
calendar days after the date payable, the Company will pay interest on such
payment at a rate equal to 10% per annum (or such lesser maximum amount that is
permitted to be paid by applicable law) to the Holder, accruing daily from the
date such partial liquidated damages are due until such amounts, plus all such
interest thereon, are paid in full. The partial liquidated damages pursuant to
the terms hereof shall apply on a daily pro-rata basis for any portion of a
month prior to the cure of an Event; provided, that there shall be no penalty or
damages in the event that the Company suspends the use of the Registration
Statement (or the Prospectus forming a part thereof) in response to a request
from the Commission for technical supplements to such Registration Statement or
if the Company suspends the use of the Registration Statement in connection with
a primary offering by the Company of equity securities of the Company for a
limited time preceding and including the date such offering is declared
effective by the Commission; and provided, further, that it shall not be deemed
an “Event” if the Company files a Registration Statement (or any amendment or
supplement to a Registration Statement) by the applicable Filing Date but such
Registration Statement (or any amendment or supplement to a Registration
Statement) is not declared effective by the applicable Effectiveness Date due to
the Commission’s failure to respond within the customary time period or if the
delay in effectiveness is not reasonably attributable to the Company and the
Company has complied and continues to comply with its obligation to use its
commercially reasonable efforts to cause the Registration Statement (or any
amendment or supplement to a Registration Statement) to become effective.

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3. Registration Procedures. In connection with the Company’s registration
obligations hereunder, the Company shall:

(a) Not less than five Trading Days prior to the filing of each Registration
Statement or any related Prospectus or any amendment or supplement thereto
(including any document that would be incorporated or deemed to be incorporated
therein by reference), the Company shall (i) furnish to each Holder copies of
all documents proposed to be filed, (which may be delivered via e-mail or
facsimile) which documents (other than those incorporated or deemed to be
incorporated by reference) will be subject to the review of such Holders and
(ii) cause its officers and directors, counsel and independent registered public
accounting firm to respond to such inquiries as shall be necessary, in the
reasonable opinion of respective counsel to conduct a reasonable investigation
within the meaning of the Securities Act. The Company shall not file the
Registration Statement or any such Prospectus or any amendments or supplements
thereto to which the Holders holding a majority of the Registrable Securities
proposed to be registered under such Registration Statement shall reasonably
object in good faith; provided, that the Company is notified of such objection
in writing no later than three Trading Days after the Holders have been so
furnished copies (which may be delivered via email or facsimile) of such
documents.

(b) (i) Prepare and file with the Commission such amendments, including
post-effective amendments, to a Registration Statement and the Prospectus used
in connection therewith as may be necessary to keep a Registration Statement
continuously effective as to the applicable Registrable Securities for the
Effectiveness Period and prepare and file with the Commission such additional
Registration Statements in order to register for resale under the Securities Act
all of the Registrable Securities; (ii) cause the related Prospectus to be
amended or supplemented by any required Prospectus supplement (subject to the
terms of this Agreement), and as so supplemented or amended to be filed pursuant
to Rule 424; (iii) respond as promptly as reasonably possible to any comments
received from the Commission with respect to a Registration Statement or any
amendment thereto and as promptly as reasonably possible provide the Holders
true and complete copies (which may be delivered via email or facsimile) of all
material written correspondence from and to the Commission relating to a
Registration Statement; and (iv) comply in all material respects with the
provisions of the Securities Act and the Exchange Act with respect to the
disposition of all Registrable Securities covered by a Registration Statement
during the applicable period in accordance with (subject to the terms of this
Agreement) the intended methods of disposition by the Holders thereof set forth
in such Registration Statement as so amended or in such Prospectus as so
supplemented.

(c) If during the Effectiveness Period, the number of Registrable Securities
outstanding or issuable at any time exceeds 100% of the number of shares of
Common Stock then registered in a Registration Statement, the Company shall file
as soon as reasonably practicable but in any case prior to the applicable Filing
Date, an additional Registration Statement covering the resale by the Holders of
not less than 120% of the number of Registrable Securities outstanding or
issuable less the number of shares of Common Stock then registered in a
Registration Statement or otherwise disposed of pursuant to a Registration
Statement or an exemption therefrom.

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(d) Notify the Holders of Registrable Securities to be sold (which notice shall,
pursuant to clauses (ii) through (vi) hereof, be accompanied by an instruction
to suspend the use of the Prospectus until the requisite changes have been made)
as promptly as reasonably possible (and, in the case of (i)(A) below, not less
than five Trading Days prior to such filing) and (if requested by any such
Person) confirm such notice in writing no later than one Trading Day following
the day (i)(A) when a Prospectus or any Prospectus supplement or post-effective
amendment to a Registration Statement is proposed to be filed; (B) when the
Commission notifies the Company whether there will be a “review” of such
Registration Statement and whenever the Commission comments in writing on such
Registration Statement (the Company shall provide true and complete copies
(which may be delivered via e-mail or facsimile) thereof and all written
responses thereto to each of the Holders); and (C) with respect to a
Registration Statement or any post-effective amendment, when the same has become
effective; (ii) of any request by the Commission or any other Federal or state
governmental authority for amendments or supplements to a Registration Statement
or Prospectus or for additional information; (iii) of the issuance by the
Commission or any other federal or state governmental authority of any stop
order suspending the effectiveness of a Registration Statement covering any or
all of the Registrable Securities or the initiation of any Proceedings for that
purpose; (iv) of the receipt by the Company of any notification with respect to
the suspension of the qualification or exemption from qualification of any of
the Registrable Securities for sale in any jurisdiction, or the initiation or
threatening of any Proceeding for such purpose; (v) of the occurrence of any
event or passage of time that makes the financial statements included in a
Registration Statement ineligible for inclusion therein or any statement made in
a Registration Statement or Prospectus or any document incorporated or deemed to
be incorporated therein by reference untrue in any material respect or that
requires any revisions to a Registration Statement, Prospectus or other
documents so that, in the case of a Registration Statement or the Prospectus, as
the case may be, it will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading; and (vi) the occurrence or existence of any pending
corporate development with respect to the Company that the Company believes may
be material and that, in the determination of the Company (which determination
shall be conclusive if made by the Company in good faith), makes it not in the
best interest of the Company to allow continued availability of the Registration
Statement or Prospectus; provided that any and all of such information shall
remain confidential to each Holder until such information otherwise becomes
public, unless disclosure by a Holder is required by law; provided, further,
that notwithstanding each Holder’s agreement to keep such information
confidential, the Holders make no acknowledgement that any such information is
material, non-public information.

(e) Use its commercially reasonable efforts to avoid the issuance of, or, if
issued, obtain the withdrawal of, (i) any order suspending the effectiveness of
a Registration Statement or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction, at the earliest practicable moment.

(f) Furnish to each Holder (upon the request of such Holder, without charge,
which may be delivered via e-mail or facsimile), at least one conformed copy of
each such Registration Statement and each amendment or supplement thereto,
including financial statements and schedules, all documents incorporated or
deemed to be incorporated therein by reference to the extent requested by such
Person, and all exhibits to the extent requested by such Person (including those
previously furnished or incorporated by reference) promptly after the filing of
such documents with the Commission.

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(g) Promptly deliver to each Holder (upon the request of such Holder, without
charge, which may be delivered via email or facsimile), as many copies of the
Prospectus or Prospectuses (including each form of prospectus) and each
amendment or supplement thereto as such Persons may reasonably request in
connection with resales by the Holder of Registrable Securities. Subject to the
terms of this Agreement, the Company hereby consents to the use of such
Prospectus and each amendment or supplement thereto by each of the selling
Holders in connection with the offering and sale of the Registrable Securities
covered by such Prospectus and any amendment or supplement thereto, except after
the giving on any notice pursuant to Section 3(d).

(h) Prior to any resale of Registrable Securities by a Holder, use its
commercially reasonable efforts to register or qualify or cooperate with the
selling Holders in connection with the registration or qualification (or
exemption from such registration or qualification) of such Registrable
Securities for the resale by the Holder under the securities or Blue Sky laws of
such jurisdictions within the United States as any Holder reasonably requests in
writing, to keep each registration or qualification (or exemption therefrom)
effective during the Effectiveness Period and to do any and all other acts or
things reasonably necessary to enable the disposition in such jurisdictions of
the Registrable Securities covered by each Registration Statement; provided,
that the Company shall not be required to qualify generally to do business in
any jurisdiction where it is not then so qualified, subject itself to any
material tax in any such jurisdiction where it is not then so subject or file a
general consent to service of process in any such jurisdiction.

(i) If requested by the Holders, cooperate with the Holders to facilitate the
timely preparation and delivery of certificates representing Registrable
Securities to be delivered to a transferee pursuant to a Registration Statement,
which certificates shall be free, to the extent permitted by applicable laws and
regulations, and the Purchase Agreement, of all restrictive legends, and to
enable such Registrable Securities to be in such denominations and registered in
such names as any such Holders may request. Each Holder acknowledges and agrees
that the Registrable Securities sold pursuant to a Registration Statement are
not transferable on the books of the Company unless the stock certificate
submitted to the transfer agent evidencing such Registrable Securities is
accompanied by a certificate reasonably satisfactory to the Company to the
effect that (i) the Registrable Securities have been sold in accordance with
such Registration Statement and (ii) the requirement of delivering a current
Prospectus has been satisfied.

(j) Upon the occurrence of any event contemplated by Section 3(d)(ii)-(vi), as
promptly as reasonably possible under the circumstances taking into account the
Company’s good faith assessment of any adverse consequences to the Company and
its stockholders of the premature disclosure of such event, prepare a supplement
or amendment, including a post-effective amendment, to a Registration Statement
or a supplement to the related Prospectus or any document incorporated or deemed
to be incorporated therein by reference, and file any other required document so
that, as thereafter delivered, neither a Registration Statement nor such
Prospectus will contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. If the Company notifies the Holders in accordance with Section
3(d)(ii)-(vi) to suspend the use of any Prospectus until the requisite changes
to such Prospectus have been made, then the Holders shall suspend use of such
Prospectus. The Company shall use its commercially reasonable efforts to ensure
that the use of the Prospectus may be resumed as promptly as is practicable. The
Company shall be entitled to exercise its right under this Section 3(j) to
suspend the availability of a Registration Statement and Prospectus, subject to
the payment of partial liquidated damages pursuant to Section 2(b), if any, for
a period not to exceed 60 days (which need not be consecutive days) in any 12
month period.

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(k) The Company may require each selling Holder, and each Holder hereby agrees,
to furnish to the Company a certified statement as to the number of Registrable
Securities beneficially owned by such Holder and other information relating to
such Holder (to the extent required for a Registration Statement), the
Registrable Securities it intends to sell and its plan of distribution, and, if
required by the Commission, the Person who has voting and dispositive control
over such Registrable Securities. It is a condition precedent to the Company’s
performance of its obligations under this Agreement that such Holder supplies
such requested information and during any periods that the Company is unable to
meet its obligations hereunder with respect to the registration of the
Registrable Securities solely because any Holder fails to furnish such
information within three Trading Days of the Company’s request, any liquidated
damages that are accruing at such time as to such Holder only shall be tolled
and any Event that may otherwise occur solely because of such delay shall be
suspended as to such Holder only, until such information is delivered to the
Company and such Holder shall be responsible for any additional reasonable
expenses incurred by the Company of said failure or delay; provided, further,
that the Holders agree and acknowledge that the Company will not delay the
filing of a Registration Statement (or amendment or supplement to a Registration
Statement) due to the failure of any Holder to deliver the information required
hereby in accordance with the terms hereof and if a Registration Statement (or
amendment or supplement to a Registration Statement) is filed without any
Holder’s information, such Holder shall not have any right under this Agreement
to require the Company to file any additional Registration Statement (or
amendment or supplement to a Registration Statement) on behalf of such Holder.

(l) Each Holder agrees not to take any action with respect to any distribution
deemed to be made pursuant to such registration statement which would constitute
a violation of Regulation M under the Exchange Act or any other applicable rule,
regulation or law.

4. Registration Expenses. All fees and expenses incident to the performance of
or compliance with this Agreement by the Company shall be borne by the Company
whether or not any Registrable Securities are sold pursuant to the Registration
Statement. The fees and expenses referred to in the foregoing sentence shall
include, without limitation, (i) all registration and filing fees (including,
without limitation, fees and expenses (A) with respect to filings required to be
made with the Trading Market on which the Common Stock is then listed for
trading and (B) in compliance with applicable state securities or “blue sky”
laws reasonably agreed to by the Company in writing (including, without
limitation, fees and disbursements of counsel for the
 

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Company in connection with blue sky qualifications or exemptions of the
Registrable Securities and determination of the eligibility of the Registrable
Securities for investment under the laws of such jurisdictions as requested by
the Holders), (ii) printing expenses (including, without limitation, expenses of
printing certificates for Registrable Securities and of printing prospectuses if
the printing of prospectuses is reasonably requested by the Holders of a
majority of the Registrable Securities included in a Registration Statement),
(iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of
counsel for the Company, (v) Securities Act liability insurance, if the Company
so desires such insurance, and (vi) fees and expenses of all other Persons
retained by the Company in connection with the consummation of the transactions
contemplated by this Agreement). In addition, the Company shall be responsible
for all of its internal expenses incurred in connection with the consummation of
the transactions contemplated by this Agreement (including, without limitation,
all salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder. Notwithstanding the foregoing, in no
event shall the Company be responsible for any underwriters’ discount or broker
or similar commissions or, except to the extent provided for in the Transaction
Documents, any legal fees or other costs of the Holders.
 
5. Indemnification.

(a) Indemnification by the Company. The Company shall, notwithstanding any
termination of this Agreement, indemnify and hold harmless each Holder, the
officers, directors, agents, investment advisors and employees of each of them,
each Person who controls any such Holder (within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act) and the officers,
directors, agents and employees of each such controlling Person, to the fullest
extent permitted by applicable law, from and against any and all losses, claims,
damages, liabilities, costs (including, without limitation, reasonable
attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising out
of or relating to any untrue or alleged untrue statement of a material fact
contained in a Registration Statement, any Prospectus or any form of prospectus
or in any amendment or supplement thereto or in any preliminary prospectus, or
arising out of or relating to any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
(in the case of any Prospectus or form of prospectus or supplement thereto, in
light of the circumstances under which they were made) not misleading, except to
the extent, but only to the extent, that (i) such untrue statements or omissions
are based solely upon information regarding such Holder furnished in writing to
the Company by such Holder expressly for use therein, or to the extent that such
information relates to such Holder or such Holder’s proposed method of
distribution of Registrable Securities and was reviewed and expressly approved
in writing by such Holder expressly for use in a Registration Statement, such
Prospectus or such form of Prospectus or in any amendment or supplement thereto
(it being understood that the Holder has approved Annex A hereto for this
purpose) or (ii) such losses were caused by the use by such Holder of a
suspended, outdated or defective Prospectus after the Company has notified such
Holder in writing that such Prospectus is suspended, outdated or defective and
prior to the receipt by such Holder of the Advice contemplated in Section 6(c).
The Company shall notify the Holders promptly of the institution, threat or
assertion of any Proceeding arising from or in connection with the transactions
contemplated by this Agreement of which the Company is aware.

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(b) Indemnification by Holders. Each Holder shall, severally and not jointly,
indemnify and hold harmless each other Holder, the Company, its directors,
officers, agents and employees, each Person who controls the Company (within the
meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act),
and the directors, officers, agents or employees of such controlling Persons, to
the fullest extent permitted by applicable law, from and against all Losses, as
incurred, to the extent arising out of or based solely upon: (x) such Holder’s
failure to comply with the prospectus delivery requirements of the Securities
Act or (y) any untrue or alleged untrue statement of a material fact contained
in any Registration Statement, any Prospectus, or any form of prospectus, or in
any amendment or supplement thereto or in any preliminary prospectus, or arising
out of or relating to any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading (i) to the extent, but only to the extent, that such untrue statement
or omission is contained in any information so furnished in writing by such
Holder to the Company specifically for inclusion in such Registration Statement
or such Prospectus or (ii) to the extent that (1) such untrue statements or
omissions are based solely upon information regarding such Holder furnished in
writing to the Company by such Holder expressly for use therein, or to the
extent that such information relates to such Holder or such Holder’s proposed
method of distribution of Registrable Securities and was reviewed and expressly
approved in writing by such Holder expressly for use in the Registration
Statement (it being understood that the Holder has approved Annex A hereto for
this purpose), such Prospectus or such form of Prospectus or in any amendment or
supplement thereto or (2) such losses were caused by the use by such Holder of
an outdated or defective Prospectus after the Company has notified such Holder
in writing that the Prospectus is outdated or defective and prior to the receipt
by such Holder of the Advice contemplated in Section 6(c). In no event shall the
liability of any selling Holder hereunder be greater in amount than the dollar
amount of the net proceeds received by such Holder upon the sale of the
Registrable Securities giving rise to such indemnification obligation.

(c) Conduct of Indemnification Proceedings. If any Proceeding shall be brought
or asserted against any Person entitled to indemnity hereunder (an “Indemnified
Party”), such Indemnified Party shall promptly notify the Person from whom
indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying
Party shall have the right to assume the defense thereof, including the
employment of counsel reasonably satisfactory to the Indemnified Party and the
payment of all reasonable fees and expenses incurred in connection with defense
thereof; provided, that the failure of any Indemnified Party to give such notice
shall not relieve the Indemnifying Party of its obligations or liabilities
pursuant to this Agreement, except (and only) to the extent that it shall be
finally determined by a court of competent jurisdiction (which determination is
not subject to appeal or further review) that such failure shall have prejudiced
the Indemnifying Party.

An Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (1) the Indemnifying Party has agreed in writing to pay such fees and
expenses; (2) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel reasonably satisfactory to such
Indemnified Party in any such Proceeding; or (3) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified Party
and the Indemnifying Party, in the reasonable written opinion of counsel
satisfactory to the Indemnifying
 

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Party a material conflict of interest under applicable rules of professional
responsibilities for attorneys is likely to exist if the same counsel were to
represent such Indemnified Party and the Indemnifying Party (in which case, if
such Indemnified Party notifies the Indemnifying Party in writing that it elects
to employ separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the defense thereof and
the reasonable fees and expenses of one separate counsel shall be at the expense
of the Indemnifying Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party, unless
such settlement includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such Proceeding.
 
(d) Contribution. If the indemnification under Section 5(a) or 5(b) is
unavailable to an Indemnified Party or insufficient to hold an Indemnified Party
harmless for any Losses, then each Indemnifying Party shall contribute to the
amount paid or payable by such Indemnified Party, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in this Agreement, any reasonable attorneys’ or
other reasonable fees or expenses incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for such fees or
expenses if the indemnification provided for in this Section was available to
such party in accordance with its terms.

The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5(d) were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no Holder shall be required
to contribute, in the aggregate, any amount in excess of the amount by which the
proceeds actually received by such Holder from the sale of the Registrable
Securities subject to the Proceeding exceeds the amount of any damages that such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission, except in the case of fraud by
such Holder. 

The indemnity and contribution agreements contained in this Section are in
addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.

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6. Miscellaneous.

(a) Remedies. In the event of a breach by the Company or by a Holder, of any of
their obligations under this Agreement, each Holder or the Company, as the case
may be, in addition to being entitled to exercise all rights granted by law and
under this Agreement, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement. The Company and each
Holder agree that monetary damages would not provide adequate compensation for
any losses incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.

(b) Compliance. Each Holder covenants and agrees that it will comply with the
prospectus delivery requirements of the Securities Act as applicable to it in
connection with sales of Registrable Securities pursuant to the Registration
Statement.

(c) Discontinued Disposition. Each Holder agrees by its acquisition of such
Registrable Securities that, upon receipt of a notice from the Company of the
occurrence of any event of the kind described in Section 3(d)(ii)-(vi), such
Holder will forthwith discontinue disposition of such Registrable Securities
under a Registration Statement until such Holder’s receipt of the copies of the
supplemented Prospectus and/or amended Registration Statement, or until it is
advised in writing (the “Advice”) by the Company that the use of the applicable
Prospectus may be resumed, and, in either case, has received copies of any
additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus or Registration Statement. The
Company will use its commercially reasonable efforts to ensure that the use of
the Prospectus may be resumed as promptly as it practicable.

(d) Piggy-Back Registrations. If at any time during the Effectiveness Period
there is not an effective Registration Statement covering all of the Registrable
Securities and the Company shall determine to prepare and file with the
Commission a registration statement relating to an offering for the account of
others under the Securities Act of any of its equity securities, other than on
Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their
then equivalents relating to equity securities to be issued solely in connection
with any acquisition of any entity or business or equity securities issuable in
connection with the stock option or other employee benefit plans, then the
Company shall send to each Holder a written notice of such determination and, if
within fifteen days after the date of such notice, any such Holder shall so
request in writing, the Company shall include in such registration statement all
or any part of such Registrable Securities such Holder requests to be
registered; provided, that, the Company shall not be required to register any
Registrable Securities pursuant to this Section 6(d) that are eligible for
resale pursuant to Rule 144(k) promulgated under the Securities Act or that are
the subject of a then effective registration statement.

(e) Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the same shall be in writing and signed by the Company and the Holders
holding 75% of Registrable Securities. Notwithstanding the foregoing, a waiver
or consent to depart from the provisions hereof with respect to a matter that
relates exclusively to the rights of a Holders and that does not directly or
indirectly affect the rights of other Holders may be given by the Holder(s) of
all of the Registrable Securities to which such waiver or consent relates;
provided, however, that the provisions of this sentence may not be amended,
modified or supplemented except in accordance with the provisions of the
immediately preceding sentence.

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(f) Notices. Any and all notices or other communications or deliveries required
or permitted to be provided hereunder shall be delivered as set forth in the
Purchase Agreement.

(g) Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of each of the parties and
shall inure to the benefit of each Holder. The right to cause the Company to
register Registrable Securities granted to the Holders by the Company under this
Agreement may be assigned in full by a Holder in connection with a transfer by
such Holder of its Registrable Securities, but only if: (i) such transfer may
otherwise be effected in accordance with applicable securities laws; (ii) such
Holder gives written notice of the proposed transfer to the Company including
the name and address of such transferee and a copy of the transfer documents and
agreements; and (iii) such transfer is otherwise in compliance with this
Agreement. Except as specifically permitted by this Section 6(g), the rights of
a Holder with respect to Registrable Securities as set out herein shall not be
transferable to any other Person, the Company may impose stop transfer orders
with respect to any such transfer or attempted transfer, and any such transfer
or attempted transfer shall be null and void.

(h) No Inconsistent Agreements. Neither the Company nor any of its subsidiaries
has entered, as of the date hereof, nor shall the Company or any of its
subsidiaries, during the period beginning on the date of this Agreement and
ending at the end of the Effectiveness Period, enter into any agreement with
respect to its securities, that would have the effect of impairing the rights
granted to the Holders in this Agreement or that otherwise conflicts with the
provisions hereof. Except as set forth on Schedule 6(h), neither the Company nor
any of its subsidiaries has previously entered into any agreement granting any
registration rights with respect to any of its securities to any Person that
have not been satisfied in full.

(i) Execution and Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and, all of which taken together shall constitute one and the same Agreement. In
the event that any signature is delivered by facsimile transmission, such
signature shall create a valid binding obligation of the party executing (or on
whose behalf such signature is executed) the same with the same force and effect
as if such facsimile signature were the original thereof.

(j) Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be determined in
accordance with the governing law provisions set forth in the Purchase
Agreement.

(k) Cumulative Remedies. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law.

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(l) Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.

(m) Headings. The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.

(n) Independent Nature of Holders’ Obligations and Rights. The obligations of
each Holder hereunder are several and not joint with the obligations of any
other Holder hereunder, and no Holder shall be responsible in any way for the
performance of the obligations of any other Holder hereunder. Nothing contained
herein or in any other agreement or document delivered at any closing, and no
action taken by any Holder pursuant hereto or thereto, shall be deemed to
constitute the Holders as a partnership, an association, a joint venture or any
other kind of entity, or create a presumption that the Holders are in any way
acting in concert with respect to such obligations or the transactions
contemplated by this Agreement. Each Holder shall be entitled to protect and
enforce its rights, including without limitation the rights arising out of this
Agreement, and it shall not be necessary for any other Holder to be joined as an
additional party in any Proceeding for such purpose.

********************

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

        NOVADEL PHARMA INC.  
   
   
  By:    

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Name:
Title:

 
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[SIGNATURE PAGE OF HOLDERS FOLLOWS]

[SIGNATURE PAGE OF HOLDERS TO NOVADEL PHARMA INC.]
 
Name of Holder: __________________________
Signature of Authorized Signatory of Holder: __________________________
Name of Authorized Signatory: _________________________
Title of Authorized Signatory: __________________________
Facsimile Number: __________________________
Email Address: __________________________

[SIGNATURE PAGES CONTINUE]

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