Exhibit 10.1

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

 

 

TERM LOAN AGREEMENT

dated as of

February 21, 2017

among

BIODELIVERY SCIENCES INTERNATIONAL, INC.,

as Borrower,

The Subsidiary Guarantors from Time to Time Party Hereto,

The Lenders from Time to Time Party Hereto,

and

CRG SERVICING LLC,

as Administrative Agent and Collateral Agent

U.S. $75,000,000

 

 

 

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Table of Contents

 

         Page  

SECTION 1

 

DEFINITIONS

     1  

1.01

 

Certain Defined Terms

     1  

1.02

 

Accounting Terms and Principles

     22  

1.03

 

Interpretation

     22  

1.04

 

Changes to GAAP

     22  

SECTION 2

 

THE COMMITMENT

     23  

2.01

 

Commitments

     23  

2.02

 

Borrowing Procedures

     23  

2.03

 

Fees

     23  

2.04

 

Use of Proceeds

     23  

2.05

 

Defaulting Lenders

     23  

2.06

 

Substitution of Lenders

     24  

2.07

 

Permitted Commercialization Arrangements

     25  

SECTION 3

 

PAYMENTS OF PRINCIPAL AND INTEREST

     25  

3.01

 

Repayment

     25  

3.02

 

Interest

     26  

3.03

 

Prepayments

     26  

SECTION 4

 

PAYMENTS, ETC

     29  

4.01

 

Payments

     29  

4.02

 

Computations

     29  

4.03

 

Notices

     29  

4.04

 

Set-Off

     29  

4.05

 

Pro Rata Treatment

     30  

SECTION 5

 

YIELD PROTECTION, ETC

     31  

5.01

 

Additional Costs

     31  

5.02

 

Illegality

     32  

5.03

 

Taxes

     33  

SECTION 6

 

CONDITIONS PRECEDENT

     36  

6.01

 

Conditions to the First Borrowing

     36  

6.02

 

Conditions to Second Borrowing

     39  

6.03

 

Conditions to Third Borrowing

     39  

6.04

 

Conditions to Each Borrowing

     40  

 

-i-

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Table of Contents

(continued)

 

         Page  

SECTION 7

 

REPRESENTATIONS AND WARRANTIES

     41  

7.01

 

Power and Authority

     41  

7.02

 

Authorization; Enforceability

     41  

7.03

 

Governmental and Other Approvals; No Conflicts

     41  

7.04

 

Financial Statements; Material Adverse Change

     41  

7.05

 

Properties

     42  

7.06

 

No Actions or Proceedings

     45  

7.07

 

Compliance with Laws and Agreements

     45  

7.08

 

Taxes

     45  

7.09

 

Full Disclosure

     46  

7.10

 

Regulation

     46  

7.11

 

Solvency

     47  

7.12

 

Subsidiaries

     47  

7.13

 

Indebtedness and Liens

     47  

7.14

 

Material Agreements

     47  

7.15

 

Restrictive Agreements

     47  

7.16

 

Real Property

     47  

7.17

 

Pension Matters

     48  

7.18

 

Collateral; Security Interest

     48  

7.19

 

Regulatory Approvals

     48  

7.20

 

[Reserved]

     48  

7.21

 

Update of Schedules

     49  

SECTION 8

 

AFFIRMATIVE COVENANTS

     49  

8.01

 

Financial Statements and Other Information

     49  

8.02

 

Notices of Material Events

     51  

8.03

 

Existence; Conduct of Business

     53  

8.04

 

Payment of Obligations

     53  

8.05

 

Insurance

     53  

 

-ii-

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Table of Contents

(continued)

 

         Page  

8.06

 

Books and Records; Inspection Rights

     53  

8.07

 

Compliance with Laws and Other Obligations

     54  

8.08

 

Maintenance of Properties, Etc

     54  

8.09

 

Licenses

     56  

8.10

 

Action under Environmental Laws

     56  

8.11

 

Use of Proceeds

     56  

8.12

 

Certain Obligations Respecting Subsidiaries; Further Assurances

     56  

8.13

 

Termination of Non-Permitted Liens

     58  

8.14

 

Intellectual Property

     58  

8.15

 

[Post-Closing Items]

     58  

SECTION 9

 

NEGATIVE COVENANTS

     58  

9.01

 

Indebtedness

     58  

9.02

 

Liens

     60  

9.03

 

Fundamental Changes and Acquisitions

     61  

9.04

 

Lines of Business

     62  

9.05

 

Investments

     62  

9.06

 

Restricted Payments

     63  

9.07

 

Payments of Indebtedness

     63  

9.08

 

Change in Fiscal Year

     64  

9.09

 

Sales of Assets, Etc

     64  

9.10

 

Transactions with Affiliates

     65  

9.11

 

Restrictive Agreements

     65  

9.12

 

Amendments to Material Agreements

     65  

9.13

 

Preservation of Borrower Lease; Operating Leases

     65  

9.14

 

Sales and Leasebacks

     66  

9.15

 

[Reserved]

     66  

9.16

 

Accounting Changes

     66  

9.17

 

Compliance with ERISA

     66  

SECTION 10

 

FINANCIAL COVENANTS

     67  

10.01

 

Minimum Liquidity

     67  

10.02

 

Minimum Revenue

     67  

10.03

 

Cure Right

     67  

 

-iii-

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Table of Contents

(continued)

 

         Page  

SECTION 11

 

EVENTS OF DEFAULT

     68  

11.01

 

Events of Default

     68  

11.02

 

Remedies

     71  

SECTION 12

 

ADMINISTRATIVE AGENT

     72  

12.01

 

Appointment and Duties

     72  

12.02

 

Binding Effect

     73  

12.03

 

Use of Discretion

     73  

12.04

 

Delegation of Rights and Duties

     74  

12.05

 

Reliance and Liability

     74  

12.06

 

Administrative Agent Individually

     75  

12.07

 

Lender Credit Decision

     75  

12.08

 

Expenses; Indemnities

     75  

12.09

 

Resignation of Administrative Agent

     76  

12.10

 

Release of Collateral or Guarantors

     76  

12.11

 

Additional Secured Parties

     77  

12.12

 

Use of Certain Information

     77  

SECTION 13

 

MISCELLANEOUS

     78  

13.01

 

No Waiver

     78  

13.02

 

Notices

     78  

13.03

 

Expenses, Indemnification, Etc

     78  

13.04

 

Amendments, Etc

     79  

13.05

 

Successors and Assigns

     80  

13.06

 

Survival

     82  

13.07

 

Captions

     82  

13.08

 

Counterparts

     82  

13.09

 

Governing Law

     82  

13.10

 

Jurisdiction, Service of Process and Venue

     83  

13.11

 

Waiver of Jury Trial

     83  

 

-iv-

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Table of Contents

(continued)

 

         Page  

13.12

 

Waiver of Immunity

     83  

13.13

 

Entire Agreement

     83  

13.14

 

Severability

     84  

13.15

 

No Fiduciary Relationship

     84  

13.16

 

Confidentiality

     84  

13.17

 

USA PATRIOT Act

     84  

13.18

 

Maximum Rate of Interest

     84  

13.19

 

Certain Waivers

     85  

13.20

 

Tax Treatment

     86  

13.21

 

Original Issue Discount

     86  

SECTION 14

 

GUARANTEE

     86  

14.01

 

The Guarantee

     86  

14.02

 

Obligations Unconditional

     87  

14.03

 

Reinstatement

     87  

14.04

 

Subrogation

     88  

14.05

 

Remedies

     88  

14.06

 

Instrument for the Payment of Money

     88  

14.07

 

Continuing Guarantee

     88  

14.08

 

Rights of Contribution

     88  

14.09

 

General Limitation on Guarantee Obligations

     89  

 

-v-

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EXHIBITS

   

Exhibit A

  -  

Form of Guarantee Assumption Agreement

Exhibit B

  -  

Form of Notice of Borrowing

Exhibit C-1

  -  

Form of U.S. Tax Compliance Certificate

Exhibit C-2

  -  

Form of U.S. Tax Compliance Certificate

Exhibit C-3

  -  

Form of U.S. Tax Compliance Certificate

Exhibit C-4

  -  

Form of U.S. Tax Compliance Certificate

Exhibit D

  -  

Form of Compliance Certificate

Exhibit E

  -  

Opinion Request

Exhibit F

  -  

Form of Landlord Consent

Exhibit G

  -  

Form of Subordination Agreement

Exhibit H

  -  

Form of Warrant

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

TERM LOAN AGREEMENT, dated as of February 21, 2017 (this “Agreement”), among
BIODELIVERY SCIENCES INTERNATIONAL, INC., a Delaware corporation (“Borrower”),
the Subsidiary Guarantors from time to time party hereto, the Lenders from time
to time party hereto and CRG SERVICING LLC, a Delaware limited liability company
(“CRG Servicing”), as administrative agent and collateral agent for the Lenders
(in such capacities, together with its successors and assigns, “Administrative
Agent”).

WITNESSETH:

Borrower has requested the Lenders to make term loans to Borrower, and the
Lenders are prepared to make such loans on and subject to the terms and
conditions hereof. Accordingly, the parties agree as follows:

SECTION 1

DEFINITIONS

1.01    Certain Defined Terms. As used herein, the following terms have the
following respective meanings:

“Accounting Change Notice” has the meaning set forth in Section 1.04(a).

“Act” has the meaning set forth in Section 13.17.

“Acquisition” means any transaction, or any series of related transactions, by
which any Person directly or indirectly, by means of a take-over bid, tender
offer, amalgamation, merger, purchase of assets, or similar transaction having
the same effect as any of the foregoing, (a) acquires any business or product,
or any division, product or line of business or all or substantially all of the
assets of any Person engaged in any business or any division, product or line of
business, (b) acquires control of securities of a Person engaged in a business
representing more than 50% of the ordinary voting power for the election of
directors or other governing body if the business affairs of such Person are
managed by a board of directors or other governing body, or (c) acquires control
of more than 50% of the ownership interest in any Person engaged in any business
that is not managed by a board of directors or other governing body.

“Affected Lender” has the meaning set forth in Section 2.06(a).

“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.

“Agreement” has the meaning set forth in the introduction hereto.

“Anti-Corruption Laws” means all laws, rules, and regulations of any
jurisdiction applicable to any Obligor, its Subsidiaries or Affiliates from time
to time concerning or relating to bribery or corruption, including, without
limitation, the United States Foreign Corrupt Practices Act of 1977, as amended,
and the rules and regulations thereunder.

“Anti-Money Laundering Laws” means any and all laws, statutes, regulations or

 

1

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

obligatory government orders, decrees, ordinances or rules applicable to an
Obligor, its Subsidiaries or Affiliates related to terrorism financing or money
laundering, including any applicable provision of the Act and The Currency and
Foreign Transaction Reporting Act (also known as the “Bank Secrecy Act,” 31
U.S.C. §§5311-5330 and 12 U.S.C. §§ 1818(s), 1820(b) and 1951-1959).

“Arius” means Arius Pharmaceuticals, Inc., a Delaware corporation.

“Arius Two” means Arius Two, Inc., a Delaware corporation.

“Asset Sale” has the meaning set forth in Section 9.09.

“Asset Sale Net Proceeds” means the aggregate amount of the cash proceeds
received from any Asset Sale, net of any bona fide costs incurred in connection
with such Asset Sale, plus, with respect to any non-cash proceeds of an Asset
Sale, the fair market value of such non cash proceeds as determined by the
Majority Lenders, acting reasonably.

“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee of such Lender.

“Bankruptcy Code” means Title 11 of the United States Code entitled
“Bankruptcy.”

“Benefit Plan” means any employee benefit plan as defined in Section 3(3) of
ERISA (whether governed by the laws of the United States or otherwise) to which
any Obligor or Subsidiary thereof incurs or otherwise has any obligation or
liability, contingent or otherwise.

“Borrower” has the meaning set forth in the introduction hereto.

“Borrower Facility” means the premises located at 4131 ParkLake Avenue, Suite
#225, Raleigh, North Carolina 27612, which are leased by Borrower pursuant to
the Borrower Lease.

“Borrower Landlord” means HRLP Raleigh, L.P.

“Borrower Lease” means the Office Lease dated as of November 14, 2014 by and
between Borrower and Borrower Landlord and amended by the Lease Amendment, dated
as of May 12, 2016 between Borrower and Borrower Landlord.

“Borrower Party” has the meaning set forth in Section 13.03(b).

“Borrowing” means a borrowing consisting of Loans made on the same day by the
Lenders according to their respective Commitments (including without limitation
a borrowing of a PIK Loan).

“Borrowing Date” means the date of a Borrowing.

“Borrowing Notice Date” means, (a) in the case of the first Borrowing, a date
that is at least *** prior to the Borrowing Date of such Borrowing and, (b) in
the case of a subsequent Borrowing, a date that is at least *** prior to the
Borrowing Date of such Borrowing.

 

2

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

“Business” means the business of Borrower from time to time (i.e., as of the
Closing Date, the discovery, testing, manufacturing, marketing, sale and
distribution of pharmaceutical products or pharmaceutical delivery systems or
devices).

“Business Day” means a day (other than a Saturday or Sunday) on which commercial
banks are not authorized or required to close in New York City.

“Capital Lease Obligations” means, as to any Person, the obligations of such
Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real and/or personal Property which obligations are
required to be classified and accounted for as a capital lease on a balance
sheet of such Person under GAAP and, for purposes of this Agreement, the amount
of such obligations shall be the capitalized amount thereof, determined in
accordance with GAAP.

“Change of Control” means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group of Persons acting
jointly or otherwise in concert of capital stock representing more than 35% of
the aggregate ordinary voting power represented by the issued and outstanding
capital stock of Borrower, (b) during any period of twelve (12) consecutive
calendar months, the occupation of a majority of the seats (other than vacant
seats) on the board of directors of Borrower by Persons who were neither
(i) nominated by the board of directors of Borrower, nor (ii) appointed by
directors so nominated, or (c) the acquisition of direct or indirect Control of
Borrower by any Person or group of Persons acting jointly or otherwise in
concert; in each case whether as a result of a tender or exchange offer, open
market purchases, privately negotiated purchases or otherwise.

“Claims” means any claims, demands, complaints, grievances, actions,
applications, suits, causes of action, orders, charges, indictments,
prosecutions, informations (brought by a public prosecutor without grand jury
indictment) or other similar processes, assessments or reassessments.

“Closing Date” means the date of the first Borrowing.

“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and the rules and regulations promulgated thereunder from time to time.

“Collateral” means any Property in which a Lien is purported to be granted under
any of the Security Documents (or all such Property, as the context may
require), but excluding the Excluded Assets (as defined in the Security
Agreement).

“Commitment” means, with respect to each Lender, the obligation of such Lender
to make Loans to Borrower in accordance with the terms and conditions of this
Agreement, which commitment is in the amount set forth opposite such Lender’s
name on Schedule 1 under the caption “Commitment”, as such Schedule may be
amended from time to time. The aggregate Commitments on the date hereof equal
$75,000,000. For purposes of clarification, the amount of any PIK Loans shall
not reduce the amount of the available Commitment.

“Commitment Period” means the period from and including the first date on which
all of the conditions precedent set forth in Section 6.01 have been satisfied
(or waived by the Lenders) and through and including September 27, 2018.

 

3

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

“Commodity Account” has the meaning set forth in the Security Agreement.

“Compliance Certificate” has the meaning given to such term in Section 8.01(d).

“Connection Income Taxes” means Other Connection Taxes that are imposed on or
measured by net income (however denominated) or that are franchise Taxes or
branch profits Taxes.

“Contracts” means contracts, licenses, leases, agreements, obligations,
promises, undertakings, understandings, arrangements, documents, commitments,
entitlements or engagements under which a Person has, or will have, any
liability or contingent liability (in each case, whether written or oral,
express or implied).

“Control” means, in respect of a particular Person, the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ability to exercise voting power,
by contract or otherwise. “Controlling” and “Controlled” have meanings
correlative thereto.

“Controlled Foreign Corporation” means a “controlled foreign corporation” as
defined in Section 957(a) of the Code.

“Copyright” has the meaning set forth in the Security Agreement.

“Cure Amount” has the meaning set forth in Section 10.03(a).

“Cure Right” has the meaning set forth in Section 10.03(a).

“Default” means any Event of Default and any event that, upon the giving of
notice, the lapse of time or both, would constitute an Event of Default.

“Default Rate” has the meaning set forth in Section 3.02(b).

“Defaulting Lender” means, subject to Section 2.05, any Lender that (a) has
failed to perform any of its funding obligations hereunder, including in respect
of its Loans, within three (3) Business Days of the date required to be funded
by it hereunder, (b) has notified Borrower or any Lender that it does not intend
to comply with its funding obligations or has made a public statement to that
effect with respect to its funding obligations hereunder or under other
agreements in which it commits to extend credit, or (c) has, or has a direct or
indirect parent company that has, (i) become the subject of an Insolvency
Proceeding, (ii) had a receiver, conservator, trustee, administrator, assignee
for the benefit of creditors or similar Person charged with reorganization or
liquidation of its business or a custodian appointed for it, or (iii) taken any
action in furtherance of, or indicated its consent to, approval of or
acquiescence in any such proceeding or appointment; provided that a Lender shall
not be a Defaulting Lender solely by virtue of the ownership or acquisition of
any equity interest in that Lender or any direct or indirect parent company
thereof by a Governmental Authority.

 

4

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

“Deposit Account” is defined in the Security Agreement.

“Disclosure Letter” means that certain Disclosure Letter relating to this
Agreement of even date herewith and as amended from time to time to which
certain of the Schedules referenced and identified herein are attached.

“Disqualified Stock” means Equity Interests of a Person subject to repurchase or
redemption rights or obligations (excluding repurchases or redemptions at the
sole option of such Person).

“Dollars” and “$” means lawful money of the United States of America.

“Eligible Transferee” means and includes a commercial bank, an insurance
company, a finance company, a financial institution, any investment fund that
invests in loans or any other institutional “accredited investor” (as defined in
Regulation D of the Securities Act) that is principally in the business of
managing investments or holding assets for investment purposes; provided, that
any such Eligible Transferee (other than Administrative Agent or any fund that
is an Affiliate of the Administrative Agent) shall (i) have assets under
management of no less than $1,000,000,000, (ii) have a rating of BBB or higher
from S&P Global Ratings and a rating of Baa2 or higher from Moody’s Investors
Services, Inc. at the date it becomes a Lender and (iii) shall be capable of
fulfilling of the assigning Lender’s obligations (including funding obligations)
hereunder.

“Environmental Law” means any federal, state, provincial or local governmental
law, rule, regulation, order, writ, judgment, injunction or decree relating to
pollution or protection of the environment or the treatment, storage, disposal,
release, threatened release or handling of hazardous materials, and all local
laws and regulations related to environmental matters and any specific
agreements entered into with any competent authorities which include commitments
related to environmental matters.

“Equity Cure Right” has the meaning set forth in Section 10.03(a).

“Equity Interest” means, with respect to any Person, any and all capital stock
(including common stock, preferred stock and warrants to purchase preferred
stock or common stock), rights, interests, participations or other equivalents,
including, without limitation: (i) if such Person is a limited liability
company, membership interests (however designated, whether voting or nonvoting),
of equity of such Person and (ii) if such Person is a partnership, partnership
interests (whether general or limited) and (iii) any other interest or
participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of property of, the issuer of such
Equity Interests, but excluding debt securities convertible or exchangeable into
such Equity Interests.

“Equivalent Amount” means, with respect to an amount denominated in one
currency, the amount in another currency that could be purchased by the amount
in the first currency determined by reference to the Exchange Rate at the time
of determination.

“ERISA” means the United States Employee Retirement Income Security Act of 1974,
as amended.

 

5

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

“ERISA Affiliate” means, collectively, any Obligor, Subsidiary thereof, and any
Person under common control, or treated as a single employer, with any Obligor
or Subsidiary thereof, within the meaning of Section 414(b), (c), (m) or (o) of
the Code.

“ERISA Event” means (a) a reportable event as described in Section 4043(c) of
ERISA with respect to a Title IV Plan, excluding, however, such events as to
which the PBGC by regulation has waived the requirement of Section 4043(a) of
ERISA that it be notified within 30 days of the occurrence of such event;
(b) the applicability of the requirements of Section 4043(b) of ERISA with
respect to a contributing sponsor, as defined in Section 4001(a)(13) of ERISA,
to any Title IV Plan where an event described in paragraph (9), (10), (11), (12)
or (13) of Section 4043(c) of ERISA is reasonably expected to occur with respect
to such plan within the following 30 days; (c) a withdrawal by any Obligor or
any ERISA Affiliate thereof from a Title IV Plan or the termination of any Title
IV Plan resulting in liability under Sections 4063 or 4064 of ERISA; (d) the
withdrawal of any Obligor or any ERISA Affiliate thereof in a complete or
partial withdrawal (within the meaning of Section 4203 and 4205 of ERISA) from
any Multiemployer Plan if there is any potential liability therefore, or the
receipt by any Obligor or any ERISA Affiliate thereof of notice from any
Multiemployer Plan that it is in reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA; (e) the filing of a notice of intent to
terminate, the treatment of a plan amendment as a termination under Section 4041
or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a
Title IV Plan or Multiemployer Plan; (f) the imposition of liability on any
Obligor or any ERISA Affiliate thereof pursuant to Sections 4062(e) or 4069 of
ERISA or by reason of the application of Section 4212(c) of ERISA; (g) the
failure by any Obligor or any ERISA Affiliate thereof to make any required
contribution to a Plan, or the failure to meet the minimum funding standard of
Section 412 of the Code with respect to any Title IV Plan (whether or not waived
in accordance with Section 412(c) of the Code) or the failure to make by its due
date a required installment under Section 430 of the Code with respect to any
Title IV Plan or the failure to make any required contribution to a
Multiemployer Plan; (h) the determination that any Title IV Plan is considered
an at-risk plan or a plan in endangered to critical status within the meaning of
Sections 430. 431and 432 of the Code or Section 303 of ERISA; (i) an event or
condition which might reasonably be expected to constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Title IV Plan or Multiemployer Plan; (j) the imposition of any
liability under Title I or Title IV of ERISA, other than PBGC premiums due but
not delinquent under Section 4007 of ERISA, upon any Obligor or any ERISA
Affiliate thereof; (k) an application for a funding waiver under Sections 303,
304 and 305 of ERISA or an extension of any amortization period pursuant to
Section 412 of the Code with respect to any Title IV Plan; (l) the occurrence of
a non-exempt prohibited transaction under Sections 406 or 407 of ERISA for which
any Obligor or any Subsidiary thereof may be directly or indirectly liable;
(m) a violation of the applicable requirements of Section 404 or 405 of ERISA or
the exclusive benefit rule under Section 401(a) of the Code by any fiduciary or
disqualified person for which any Obligor or any ERISA Affiliate thereof may be
directly or indirectly liable; (n) the occurrence of an act or omission which
could give rise to the imposition on any Obligor or any ERISA Affiliate thereof
of fines, penalties, taxes or related charges under Chapter 43 of the Code or
under Sections 409, 502(c), (i) or (1) or 4071 of ERISA; (o) the assertion of a
material claim (other than routine claims for benefits) against any Plan or the
assets thereof, or against any Obligor or any Subsidiary thereof in connection
with any such Plan; (p) receipt from the IRS of notice of the failure of any
Qualified Plan to qualify under Section 401(a) of the Code, or the failure of
any

 

6

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

trust forming part of any Qualified Plan to fail to qualify for exemption from
taxation under Section 501(a) of the Code; (q) the imposition of any Lien (or
the fulfillment of the conditions for the imposition of any Lien) on any of the
rights, properties or assets of any Obligor or any ERISA Affiliate thereof, in
either case pursuant to Title I or IV (including Section 302(f) or 303(k)) of
ERISA or to Section 401(a)(29) or 430(k) of the Code; or (r) the establishment
or amendment by any Obligor or any Subsidiary thereof of any “welfare plan”, as
such term is defined in Section 3(1) of ERISA, that provides post-employment
welfare benefits in a manner that would increase the liability of any Obligor.

“ERISA Funding Rules” means the rules regarding minimum required contributions
(including any installment payment thereof) to Title IV Plans, as set forth in
Sections 412, 430, 431, 432 and 436 of the Code and Sections 302 and 303 of
ERISA.

“Event of Default” has the meaning set forth in Section 11.01.

“Exchange Act” has the meaning set forth in Section 7.04(a) below.

“Exchange Rate” means the rate at which any currency (the “Pre-Exchange
Currency”) may be exchanged into another currency (the “Post-Exchange
Currency”), as set forth on such date on the relevant Reuters screen at or about
11:00 a.m. (Central time) on such date. In the event that such rate does not
appear on the Reuters screen, the “Exchange Rate” with respect to exchanging
such Pre-Exchange Currency into such Post-Exchange Currency shall be determined
by reference to such other publicly available service for displaying exchange
rates as may be agreed upon by Borrower and Administrative Agent or, in the
absence of such agreement, such Exchange Rate shall instead be determined by
Administrative Agent by any reasonable method as they deem applicable to
determine such rate, and such determination shall be conclusive absent manifest
error.

“Excluded Intellectual Property” has the meaning set forth in the Security
Agreement.

“Excluded Foreign Subsidiary” means any Foreign Subsidiary that is (i) a
Controlled Foreign Corporation or (ii) a Foreign Subsidiary owned by a
Subsidiary described in clause (i).

“Excluded Taxes” means any of the following Taxes imposed on or with respect to
a Recipient or required to be withheld or deducted from a payment to a
Recipient: (a) Taxes imposed on or measured by net income (however denominated),
franchise Taxes and branch profits Taxes, in each case (i) imposed as a result
of such Recipient being organized under the laws of, or having its principal
office or, in the case of any Lender, its applicable lending office located in,
the jurisdiction imposing such Tax, or (ii) that are Other Connection Taxes,
(b) U.S. federal withholding Taxes that are imposed on amounts payable to a
Lender to the extent that the obligation to withhold amounts existed on the date
that such Lender became a “Lender” under this Agreement (other than pursuant to
an assignment request by Borrower under Section 5.03(g)), except in each case to
the extent such Lender is a direct or indirect assignee of any other Lender that
was entitled, at the time the assignment of such other Lender became effective,
to receive additional amounts under Section 5.03, (c) any U.S. federal
withholding Taxes imposed under FATCA, and (d) Taxes attributable to such
Recipient’s failure to comply with Section 5.03(e).

 

7

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

“Existing Debt Facility” means obligations and loans made to Borrower pursuant
to the Amended and Restated Credit and Security Agreement, dated May 29, 2015,
by and among Borrower, Arius, Arius Two and Midcap Financial Trust, as amended
from time to time.

“Expense Cap” has the meaning set forth in the Fee Letter.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement (or any amended or successor version that is substantively comparable
and not more onerous to comply with), any regulations or official
interpretations thereof and any agreements entered into pursuant to Section
1471(b)(1) of the Code.

“Federal Funds Effective Rate” means, for any day, the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for the day of such transactions received by Administrative Agent
from three federal funds brokers of recognized standing selected by it.

“Fee Letter” means that fee letter agreement dated as of the date hereof between
Borrower and Administrative Agent.

“First-Tier Foreign Subsidiary” means an Excluded Foreign Subsidiary that is a
direct Subsidiary of an Obligor.

“Foreign Lender” means a Lender that is not a U.S. Person.

“Foreign Subsidiary” means a Subsidiary of Borrower that is not a U.S. Person.

“GAAP” means generally accepted accounting principles in the United States of
America, as in effect from time to time, set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants, in the statements and pronouncements of the
Financial Accounting Standards Board and in such other statements by such other
entity as may be in general use by significant segments of the accounting
profession that are applicable to the circumstances as of the date of
determination. Subject to Section 1.02, all references to “GAAP” shall be to
GAAP applied consistently with the principles used in the preparation of the
financial statements described in Section 7.04(a).

“Governmental Approval” means any consent, authorization, approval, order,
license, franchise, permit, certificate, accreditation, registration, filing or
notice, of, issued by, from or to, or other act by or in respect of, any
Governmental Authority.

“Governmental Authority” means any nation, government, branch of power (whether
executive, legislative or judicial), state, province or municipality or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, monetary, regulatory or administrative functions of or pertaining to
government, including without limitation regulatory authorities, governmental
departments, agencies, commissions, bureaus, officials, ministers, courts,
bodies, boards, tribunals and dispute settlement panels, and other law-, rule-
or regulation-making organizations or entities of any State, territory, county,
city or other political subdivision of the United States.

 

8

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

“Guarantee” of or by any Person (the “guarantor”) means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the “primary obligor”) in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.

“Guarantee Assumption Agreement” means a Guarantee Assumption Agreement
substantially in the form of Exhibit A by an entity that, pursuant to Section
8.12(a), is required to become a “Subsidiary Guarantor” hereunder.

“Guaranteed Obligations” has the meaning set forth in Section 14.01.

“Hazardous Material” means any substance, element, chemical, compound, product,
solid, gas, liquid, waste, by-product, pollutant, contaminant or material which
is hazardous or toxic, and includes, without limitation, (a) asbestos,
polychlorinated biphenyls and petroleum (including crude oil or any fraction
thereof) and (b) any material classified or regulated as “hazardous” or “toxic”
or words of like import pursuant to an Environmental Law.

“Hedging Agreement” means any interest rate exchange agreement, foreign currency
exchange agreement, commodity price protection agreement or other interest or
currency exchange rate or commodity price hedging arrangement.

“Indebtedness” of any Person means, without duplication, (a) all obligations of
such Person for borrowed money or obligations of such Person with respect to
deposits or advances of any kind by third parties, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person upon which interest charges are customarily paid,
(d) all obligations of such Person under conditional sale or other title
retention agreements relating to property acquired by such Person, (e) all
obligations of such Person in respect of the deferred purchase price of property
or services (excluding current accounts payable incurred in the ordinary course
of business), (f) all Indebtedness of others secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on property owned or acquired by such Person, whether or
not the Indebtedness secured thereby has been assumed, (g) all Guarantees by
such Person of Indebtedness or obligations of others, (h) all Capital Lease
Obligations of such Person, (i) all obligations, contingent or otherwise, of
such Person as an account party in respect of letters of credit and letters of
guaranty, (j) obligations under any Hedging Agreement currency swaps, forwards,
futures or derivatives transactions, (k) all obligations, contingent or
otherwise, of such

 

9

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

Person in respect of bankers’ acceptances, (l) all obligations of such Person
under license or other agreements containing a guaranteed minimum payment or
purchase by such Person, and (m) all Disqualified Stock of such Person. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person’s ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.

“Indemnified Party” has the meaning set forth in Section 13.03(b).

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any Obligation and (b) to
the extent not otherwise described in clause (a), Other Taxes.

“Insolvency Proceeding” means (a) any case, action or proceeding before any
court or other Governmental Authority relating to bankruptcy, reorganization,
insolvency, liquidation, receivership, dissolution, winding-up or relief of
debtors, or (b) any general assignment for the benefit of creditors,
composition, marshaling of assets for creditors, or other, similar arrangement
in respect of any Person’s creditors generally or any substantial portion of
such Person’s creditors, in each case undertaken under U.S. federal, state or
foreign law, including the Bankruptcy Code.

“Intellectual Property” means all Patents, Trademarks, Copyrights, and Technical
Information, whether registered or not, domestic and foreign. Intellectual
Property shall include all:

(a)    applications or registrations relating to such Intellectual Property;

(b)    rights and privileges arising under applicable Laws with respect to such
Intellectual Property;

(c)    rights to sue for past, present or future infringements of such
Intellectual Property; and

(d)    rights of the same or similar effect or nature in any jurisdiction
corresponding to such Intellectual Property throughout the world.

“Interest-Only Period” means the period from and including the first Borrowing
Date and through and including (a) the twelfth (12th) Payment Date following the
first Borrowing Date or (b) so long as no Default or Event of Default has
occurred and is continuing, if Borrower achieves both (i) Product Revenue
Milestone and (ii) Market Capitalization of at least $*** for *** consecutive
days ending on or prior to December 31, 2019, the sixteenth (16th) Payment Date
following the first Borrowing Date.

“Interest Period” means, with respect to each Borrowing, (a) initially, the
period commencing on and including the Borrowing Date thereof and ending on and
excluding the next Payment Date, and, (b) thereafter, each period beginning on
and including the last day of the immediately preceding Interest Period and
ending on and excluding the next succeeding Payment Date.

 

10

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

“Invention” means any novel, inventive and useful art, apparatus, method,
process, machine (including article or device), manufacture or composition of
matter, or any novel, inventive and useful improvement in any art, method,
process, machine (including article or device), manufacture or composition of
matter.

“Investment” means, for any Person: (a) the acquisition (whether for cash,
property, services or securities or otherwise) of capital stock, bonds, notes,
debentures, partnership or other ownership interests or other securities of any
other Person or any agreement to make any such acquisition (including any “short
sale” or any sale of any securities at a time when such securities are not owned
by the Person entering into such sale); (b) the making of any deposit with, or
advance, loan or other extension of credit to, any other Person (including the
purchase of property from another Person subject to an understanding or
agreement, contingent or otherwise, to resell such property to such Person), but
excluding any such advance, loan or extension of credit having a term not
exceeding *** arising in connection with the sale of inventory or supplies by
such Person in the ordinary course of business; (c) the entering into of any
Guarantee of, or other contingent obligation with respect to, Indebtedness or
other liability of any other Person and (without duplication) any amount
committed to be advanced, lent or extended to such Person; or (d) the entering
into of any Hedging Agreement.

“IRS” means the U.S. Internal Revenue Service or any successor agency, and to
the extent relevant, the U.S. Department of the Treasury.

“Knowledge” means, with respect to any Person, the actual knowledge of any
Responsible Officer of such Person and, in the case of Borrower, so long as he
or she is employed by Borrower or its Subsidiaries, the actual knowledge of Mark
Sirgo and Ernest De Paolantonio, so long as such Person is an officer of
Borrower.

“Landlord Consent” means a Landlord Consent substantially in the form of Exhibit
F.

“Laws” means, collectively, all international, foreign, federal, state,
provincial, territorial, municipal and local statutes, treaties, rules,
guidelines, regulations, ordinances, codes and administrative or judicial
precedents or authorities, including the interpretation or administration
thereof by any Governmental Authority charged with the enforcement,
interpretation or administration thereof, and all applicable administrative
orders, directed duties, requests, licenses, authorizations and permits of, and
agreements with, any Governmental Authority, in each case whether or not having
the force of law.

“Lender” means each Person listed as a “Lender” on a signature page hereto,
together with its successors, and each assignee of a Lender pursuant to Section
13.05(b).

“Lien” means any mortgage, lien, pledge, charge or other security interest, or
any lease, title retention agreement, mortgage, restriction, easement,
right-of-way, option or adverse claim (of ownership or possession) or other
encumbrance of any kind or character whatsoever or any preferential arrangement
that has the practical effect of creating a security interest.

“Liquidity” means (i) a cash balance that is unencumbered by Liens (other than
Liens

 

11

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

securing the Obligations and Liens permitted pursuant to Section 9.02(j)) plus
(ii) the amount of Permitted Cash Equivalent Investments (which for greater
certainty shall not include any undrawn credit lines), in each case, to the
extent held in an account over which the Secured Parties have a perfected
security interest.

“Loan” means (a) each loan advanced by a Lender pursuant to Section 2.01 and
(b) each PIK Loan deemed to have been advanced by a Lender pursuant to Section
3.02(d). For purposes of clarification, any calculation of the aggregate
outstanding principal amount of Loans on any date of determination shall include
both the aggregate principal amount of loans advanced pursuant to Section 2.01
and not yet repaid, and all PIK Loans deemed to have been advanced and not yet
repaid, on or prior to such date of determination.

“Loan Documents” means, collectively, this Agreement, the Fee Letter, the
Security Documents, each Warrant, any subordination agreement or any
intercreditor agreement entered into by Administrative Agent (on behalf of the
Lenders) with any other creditors of Obligors or any agent acting on behalf of
such creditors, and any other present or future document, instrument, agreement
or certificate executed by Obligors and delivered to Administrative Agent or any
Secured Party in connection with or pursuant to this Agreement or any of the
other Loan Documents, all as amended, restated, supplemented or otherwise
modified.

“Loss” means judgments, debts, liabilities, expenses, costs, damages or losses,
contingent or otherwise, whether liquidated or unliquidated, matured or
unmatured, disputed or undisputed, contractual, legal or equitable, including
loss of value, professional fees, including fees and disbursements of legal
counsel on a full indemnity basis, and all costs incurred in investigating or
pursuing any Claim or any proceeding relating to any Claim.

“Majority Lenders” means, at any time, Lenders having at such time in excess of
50% of the aggregate Commitments (or, if such Commitments are terminated, the
outstanding principal amount of the Loans) then in effect, ignoring, in such
calculation, the Commitments of and outstanding Loans owing to any Defaulting
Lender.

“Margin Stock” means “margin stock” within the meaning of Regulations U and X.

“Market Capitalization” means, as of the date of determination, the product of
(a) the number of shares of Borrower’s common stock outstanding other than
treasury stock, as of such date of determination and (b) the closing sale price
for the regular trading session of Borrower’s common stock on the NASDAQ Capital
Market (or other principal exchange on which the Borrower’s common stock is then
traded) on such date of determination.

“Material Adverse Change” and “Material Adverse Effect” mean a material adverse
change in or effect on (a) the Business, condition (financial or otherwise),
operations, performance, Property or prospects (as such prospects are disclosed
in Borrower’s filings under the Exchange Act) of Borrower and its Subsidiaries
taken as a whole, (b) the ability of any Obligor to perform its obligations
under the Loan Documents, or (c) the legality, validity, binding effect or
enforceability of the Loan Documents or the rights and remedies of
Administrative Agent or any Lender under any of the Loan Documents.

“Material Agreements” means (a) the agreements which are listed in Schedule 7.14
of

 

12

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

the Disclosure Letter (as updated by Borrower from time to time in accordance
with Section 7.21 to list all such agreements that meet the description set
forth in clauses (b) and (c) of this definition), (b) material inbound and
outbound license agreements, (c) agreements relating to Permitted
Commercialization Arrangement and (d) all other agreements held by the Obligors
from time to time, the absence or termination of any of which would reasonably
be expected to result in a Material Adverse Effect; provided, however, that
“Material Agreements” exclude all: (i) licenses implied by the sale of a
product; and (ii) paid-up licenses for commonly available software programs
under which an Obligor is the licensee. “Material Agreement” means any one such
agreement.

“Material Indebtedness” means, at any time, any Indebtedness of any Obligor, the
outstanding principal amount of which, individually or in the aggregate, exceeds
$*** (or the Equivalent Amount in other currencies).

“Material Intellectual Property” means, the Obligor Intellectual Property
described in Schedule 7.05(c) of the Disclosure Letter and any other Obligor
Intellectual Property after the date hereof the loss of which could reasonably
be expected to have a Material Adverse Effect.

“Maturity Date” means the earlier to occur of (a) the Stated Maturity Date, and
(b) the date on which the Loans are accelerated pursuant to Section 11.02.

“Maximum Rate” has the meaning set forth in Section 13.18.

“Minimum Required Revenue” has the meaning set forth in Section in 10.02.

“Multiemployer Plan” means any multiemployer plan, as defined in Section
400l(a)(3) of ERISA, to which any ERISA Affiliate incurs or otherwise has any
obligation or liability, contingent or otherwise.

“Net Cash Proceeds” means with respect to any issuance of Equity Interests in a
Qualified Equity Issuance, the gross amount of cash proceeds paid to or received
by Borrower in respect of such Equity Interests (including cash proceeds
subsequently as and when received at any time in respect of such or issuance of
Equity Interests from non-cash consideration initially received or otherwise),
less the sum of underwriting discounts and commissions or placement fees,
investment banking fees, legal fees, consulting fees, accounting fees and other
customary fees and expenses incurred by Borrower in connection therewith.

“Non-Consenting Lender” has the meaning set forth in Section 2.06(a).

“Non-Disclosure Agreement” has the meaning set forth in Section 13.16.

“Notice of Borrowing” has the meaning set forth in Section 2.02.

“Obligations” means, with respect to any Obligor, all amounts, obligations,
liabilities, covenants and duties of every type and description owing by such
Obligor to any Lender, any other indemnitee hereunder or any participant,
arising out of, under, or in connection with, any Loan Document, whether direct
or indirect (regardless of whether acquired by assignment), absolute or
contingent, due or to become due, whether liquidated or not, now existing or

 

13

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

hereafter arising and however acquired, and whether or not evidenced by any
instrument or for the payment of money, including, without duplication, (a) if
such Obligor is Borrower, all Loans, (b) all interest, whether or not accruing
after the filing of any petition in bankruptcy or after the commencement of any
insolvency, reorganization or similar proceeding, and whether or not a claim for
post-filing or post-petition interest is allowed in any such proceeding, and
(c) all other fees, expenses (including fees, charges and disbursement of
counsel), interest, commissions, charges, costs, disbursements, indemnities and
reimbursement of amounts paid and other sums chargeable to such Obligor under
any Loan Document.

“Obligor Intellectual Property” means Intellectual Property owned by or licensed
to any of the Obligors.

“Obligors” means, collectively, Borrower and the Subsidiary Guarantors and their
respective successors and permitted assigns.

“OFAC” means the Office of Foreign Assets Control of the United States
Department of the Treasury.

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as
a result of a present or former connection between such Recipient and the
jurisdiction imposing such Tax (other than connections arising from such
Recipient having executed, delivered, become a party to, performed its
obligations under, received payments under, received or perfected a security
interest under, engaged in any other transaction pursuant to or enforced any
Loan Document, or sold or assigned an interest in any Loan or Loan Document).

“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Loan Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment (other than an assignment
made pursuant to Section 5.03(g)).

“Participant” has the meaning set forth in Section 13.05(e).

“Participant Register” has the meaning set forth in Section 13.05(f).

“Patents” has the meaning set forth in the Security Agreement.

“Payment Date” means each March 31, June 30, September 30, December 31 and the
Maturity Date, commencing on the first such date to occur following the first
Borrowing Date; provided that, if any such date shall occur on a day that is not
a Business Day, the applicable Payment Date shall be the next preceding Business
Day.

“PBGC” means the United States Pension Benefit Guaranty Corporation referred to
and defined in ERISA and any successor entity performing similar functions.

“Perfection Certificate” means that certain Perfection Certificate, dated as of
the date hereof delivered by Borrower to Administrative Agent.

 

14

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

“Permitted Acquisition” means any acquisition by Borrower or any of its
wholly-owned Subsidiaries, whether by purchase, merger or otherwise, of all or
substantially all of the assets of, all of the Equity Interests of, or a
business line or unit or a division of, any Person; provided that:

(a)    immediately prior to, and after giving effect thereto, no Default or
Event of Default shall have occurred and be continuing or would result
therefrom;

(b)    all transactions in connection therewith shall be consummated, in all
material respects, in accordance with all applicable Laws and in conformity with
all applicable Governmental Approvals;

(c)    in the case of the acquisition of all of the Equity Interests of such
Person, all of the Equity Interests (except for any such securities in the
nature of directors’ qualifying shares required pursuant to applicable Law)
acquired, or otherwise issued by such Person or any newly formed Subsidiary of
Borrower in connection with such acquisition, shall be owned 100% by an Obligor
or any other Subsidiary, and Borrower shall have taken, or caused to be taken,
as of the date such Person becomes a Subsidiary of Borrower, each of the actions
set forth in Section 8.12, if applicable;

(d)    Borrower and its Subsidiaries shall be in compliance with the financial
covenants set forth in Section 10.01 and Section 10.02 on a pro forma basis
after giving effect to such acquisition; and

(e)    such Person (in the case of an acquisition of Equity Interests) or assets
(in the case of an acquisition of assets or a division) (i) shall be engaged or
used, as the case may be, in the same general business or lines of business in
which Borrower and/or its Subsidiaries are engaged (i.e., as of the date of this
Agreement, the discovery, testing, manufacturing, marketing, sale and
distribution of pharmaceutical products or pharmaceutical delivery systems or
devices), or (ii) shall have a similar customer base as Borrower and/or its
Subsidiaries.

“Permitted Acquisitions Amount” ***.

“Permitted Cash Equivalent Investments” means (a) marketable direct obligations
issued or unconditionally guaranteed by the United States or any agency or any
State thereof having maturities of not more than two (2) years from the date of
acquisition and (b) commercial paper maturing no more than one (1) year after
its creation and having the highest rating from either Standard & Poor’s Ratings
Group or Moody’s Investors Service, Inc.

“Permitted Commercialization Arrangement” means such commercialization, research
and development, co-marketing and other collaborative arrangements, including
joint ventures, where such arrangements provide for exclusive licenses, to
Patents, Trademarks, Copyrights or other Intellectual Property rights and assets
of Borrower with Persons (including a Permitted Commercialization Arrangement
Vehicle) with a primary line of business in the development, commercialization
or manufacture of medical, biologics or pharmaceutical products or
devices; provided that such licenses (a) must be bona fide arms’-length
transfers of the right to use such Intellectual Property that do not have the
economic substance of a sale and Borrower retains legal ownership of such
Intellectual Property and (b) shall constitute Material Agreements.

 

15

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

“Permitted Commercialization Arrangement Vehicle” means an entity, which may be
a joint venture enterprise, engaged in the business of a Permitted
Commercialization Arrangement and in which Borrower or its Subsidiaries have
substantial representation in the governing body of such entity.

“Permitted Cure Debt” means Indebtedness incurred in connection with the
exercise of the Subordinated Debt Cure Right and (a) that is governed by
documentation containing representations, warranties, covenants and events of
default no more burdensome or restrictive than those contained in the Loan
Documents, (b) that has a maturity date later than the Maturity Date, (c) in
respect of which no cash payments of principal or interest are required prior to
the Maturity Date, and (d) in respect of which the holders have agreed in favor
of Borrower, Administrative Agent and Lenders (i) that prior to the date on
which the Commitments have expired or been terminated and all Obligations (other
than Warrant Obligations) have been paid in full indefeasibly in cash, such
holders will not exercise any remedies available to them in respect of such
Indebtedness, (ii) that such Indebtedness is unsecured, and (iii) to terms of
subordination in substantially the form attached hereto as Exhibit G or
otherwise satisfactory to Administrative Agent.

“Permitted Indebtedness” means any Indebtedness permitted under Section 9.01.

“Permitted Liens” means any Liens permitted under Section 9.02.

“Permitted Priority Liens” means (a) Liens permitted under Section 9.02(d), (e),
(f), (g), and (j), and (b) Liens permitted under Section 9.02(b) provided that
such Liens are also of the type described in Section 9.02 (d), (e), (f), (g),
and (j).

“Permitted Refinancing” means, with respect to any Indebtedness, any extensions,
renewals and replacements of such Indebtedness; provided that such extension,
renewal or replacement (a) shall not increase the outstanding principal amount
of such Indebtedness, (b) contains terms relating to outstanding principal
amount, amortization, maturity, collateral (if any) and subordination (if any),
and other material terms taken as a whole no less favorable in any material
respect to Borrower and its Subsidiaries or the Secured Parties than the terms
of any agreement or instrument governing such existing Indebtedness, (c) shall
have an applicable interest rate which does not exceed the rate of interest of
the Indebtedness being replaced, and (d) shall not contain any new requirement
to grant any lien or security or to give any guarantee that was not an existing
requirement of such Indebtedness.

“Person” means any individual, corporation, company, voluntary association,
partnership, limited liability company, joint venture, trust, unincorporated
organization or Governmental Authority or other entity of whatever nature.

“PIK Loan” has the meaning set forth in Section 3.02(d).

“PIK Period” means the period beginning on the first Borrowing Date through and
including the earlier to occur of (a) the twelfth (12th) Payment Date after the
first Borrowing Date (or, if Borrower achieves both (1) the Product Revenue
Milestone and (2) a Market Capitalization of at least $*** for any ***
consecutive days ending on or prior to December 31, 2019, the sixteenth (16)

 

16

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

Payment Date after the first Borrowing Date), and (b) the date on which any
Default shall have occurred (provided that (i) if such Default shall have been
cured or waived , the PIK Period shall resume until the earlier to occur of the
next Default and such twelfth (12th) Payment Date or sixteenth (16th) Payment
Date, as applicable, after the first Borrowing Date).

“Plan” means any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which Borrower or any ERISA Affiliate is
(or, if such plan were terminated, would under Section 4069 of ERISA be deemed
to be) an “employer” as defined in Section 3(5) of ERISA.

“Prepayment Premium” has the meaning set forth in Section 3.03(a).

“Product” means Belbuca, Bunavail and any other products developed or acquired
by the Obligors, and each of their respective successors.

“Product Revenue” means all revenue of the Obligors from any Product properly
recognized under GAAP, consistently applied, including royalty revenue, but
excluding non-recurring items and any milestone, licensing, extraordinary items,
research and development service revenues, and other similar items calculated
net of all rebates, discounts and other price allowances.

“Product Revenue Milestone” means Borrower achieves Product Revenue of at least
$*** during any consecutive twelve (12) month period ending on or prior to
December 31, 2019; provided that (a) Borrower shall have delivered to
Administrative Agent a notice certifying satisfaction of the Product Revenue
Milestone no later than *** thereafter, (b) Borrower shall have delivered all
supporting information reasonably requested by Administrative Agent with respect
thereto and (c) Administrative Agent shall have been reasonably satisfied with
the results of the audit of the Product Revenue Milestone by examining such
information, Borrower’s books and records and any other information reasonably
related thereto.

“Property” of any Person means any property or assets, or interest therein, of
such Person.

“Proportionate Share” means, with respect to any Lender, the percentage obtained
by dividing (a) the sum of the Commitment (or, if the Commitments are
terminated, the outstanding principal amount of the Loans) of such Lender then
in effect by (b) the sum of the Commitments (or, if the Commitments are
terminated, the outstanding principal amount of the Loans) of all Lenders then
in effect.

“Qualified Equity Issuance” means any issuance of Equity Interests (other than
Disqualified Stock) by the Borrower in a bona fide private or public offering
(or series of related offerings) effected for financing purposes, but excluding
any issuance of Equity Interests in connection with the exercise of the Cure
Right. For the avoidance of doubt, a Qualified Equity Issuance shall not include
any issuance of Equity Interests pursuant to equity incentive plans or programs,
employee stock purchase programs and/or dividend reinvestment programs
(including the grant or exercise of stock options, restricted stock, restricted
stock units and similar equity incentives granted to directors, employees and
consultants).

 

17

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

“Qualified Plan” means an employee benefit plan (as defined in Section 3(3) of
ERISA) other than a Multiemployer Plan (a) that is or was at any time during the
six (6) plan years of such plan preceding any Borrowing Date maintained or
sponsored by any Obligor or any ERISA Affiliate thereof or to which any Obligor
or any ERISA Affiliate thereof has made, or was during the six (6) plan years of
such plan preceding any Borrowing Date obligated to make, contributions or with
respect to which any Obligor has or could reasonably be expected to have any
liability, and (b) that is intended to be tax qualified under Section 401(a) of
the Code.

“Real Property Security Documents” means the Landlord Consent and any mortgage
or deed of trust or any other real property security document executed or
required hereunder to be executed by any Obligor and granting a security
interest in real Property owned or leased (as tenant) by any Obligor in favor of
the Secured Parties.

“Recipient” means Administrative Agent, any Lender or any other recipient of any
payment to be made by or on account of any Obligation.

“Redemption Date” has the meaning set forth in Section 3.03(a).

“Redemption Price” has the meaning set forth in Section 3.03(a).

“Register” has the meaning set forth in Section 13.05(d).

“Regulation T” means Regulation T of the Board of Governors of the Federal
Reserve System, as amended.

“Regulation U” means Regulation U of the Board of Governors of the Federal
Reserve System, as amended.

“Regulation X” means Regulation X of the Board of Governors of the Federal
Reserve System, as amended.

“Regulatory Approvals” means any registrations, licenses, authorizations,
permits or approvals issued by any Governmental Authority and applications or
submissions related to any of the foregoing.

“Related Person” means, with respect to any Person, such Person’s Affiliates and
the partners, directors, officers, employees, agents, trustees, administrators,
managers, advisors and representatives of such Person and of such Person’s
Affiliates.

“Requirement of Law” means, as to any Person, any statute, law, treaty, rule or
regulation or determination, order, injunction or judgment of an arbitrator or a
court or other Governmental Authority, in each case applicable to or binding
upon such Person or any of its Properties or revenues.

“Responsible Officer” of any Person means each of the chief executive officer
and chief financial officer of such Person.

 

18

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interest of Borrower or
any of its Subsidiaries, or any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any such shares of capital stock of Borrower or any of its Subsidiaries or any
option, warrant or other right to acquire any such shares of capital stock of
Borrower or any of its Subsidiaries.

“Restrictive Agreement” has the meaning set forth in Section 7.15.

“Sanctions” means any international economic sanction administered or enforced
by the United States Government (including, without limitation, OFAC), the
United Nations Security Council, the European Union, Her Majesty’s Treasury or
other relevant sanctions authority.

“Sanctioned Jurisdiction” means any country or territory to the extent that such
country or territory is the subject of any Sanction.

“Sanctioned Person” means, at any time, (a) any Person listed in any
Sanctions-related list of designated Persons maintained by OFAC, the U.S.
Department of State, the United Nations Security Council, the European Union,
Her Majesty’s Treasury, or other relevant sanctions authority, (b) any Person
operating, organized or resident in a Sanctioned Jurisdiction or (c) any Person
owned or Controlled by any such person or Persons described in clauses (a) and
(b).

“Second Draw Milestone” means Borrower achieves (a) Product Revenue of at least
(i) $*** during any consecutive *** period ending on or prior to September 30,
2017 or (ii) $*** during any consecutive *** period ending on or prior to
December 31, 2017 and (b) an average Market Capitalization of at least $*** for
the *** day period prior to the Notice of Borrowing for the second Borrowing.

“Secured Parties” means the Lenders, Administrative Agent, each other
Indemnified Party and any other holder of any Obligation.

“Security Agreement” means the Security Agreement, dated as of the date hereof,
among the Obligors and Administrative Agent, granting a security interest in the
Collateral in favor of the Secured Parties.

“Security Documents” means, collectively, the Security Agreement, each
Short-Form IP Security Agreement, each Real Property Security Document, and each
other security document, control agreement or financing statement required or
recommended to perfect Liens in favor of the Secured Parties.

“SEC” means the U.S. Securities and Exchange Commission.

“Securities Account” has the meaning set forth in the Security Agreement.

 

19

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

“Short-Form IP Security Agreements” means short-form copyright, patent or
trademark (as the case may be) security agreements, dated as of the date hereof,
entered into by one or more Obligors in favor of the Secured Parties, each in
form and substance satisfactory to the Majority Lenders (and as amended,
modified or replaced from time to time).

“Solvent” means, with respect to any Person at any time, that (a) the present
fair saleable value of the Property of such Person is greater than the total
amount of liabilities (including contingent liabilities) of such Person, (b) the
present fair saleable value of the Property of such Person is not less than the
amount that will be required to pay the probable liability of such Person on its
debts as they become absolute and matured, (c) such Person has not incurred and
does not intend to, and does not believe that it will in the foreseeable future,
incur debts or liabilities beyond such Person’s ability to pay as such debts and
liabilities mature and (d) such Person would not be unable to obtain a letter
from its auditors that did not contain a going concern qualification.

“Specified Financial Covenants” has the meaning set forth in Section 10.03(a).

“Stated Maturity Date” means the twenty-fourth (24th) Payment Date following the
first Borrowing Date.

“Subordinated Debt Cure Right” has the meaning set forth in Section 10.03(a).

“Subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity
the accounts of which would be consolidated with those of the parent in the
parent’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held by the parent and/or one or more subsidiaries of
the parent or (b) that is, as of such date, otherwise Controlled by the parent
and/or one or more subsidiaries of the parent. Unless the context requires
otherwise, “Subsidiary” refers to a Subsidiary of Borrower.

“Subsidiary Guarantors” means each of the Subsidiaries of Borrower identified
under the caption “SUBSIDIARY GUARANTORS” on the signature pages hereto and each
Subsidiary of Borrower that becomes, or is required to become, a “Subsidiary
Guarantor” after the date hereof pursuant to Section 8.12(a) or (b).

“Substitute Lender” has the meaning set forth in Section 2.06(a).

“Taxes” means all present or future taxes, levies, imposts, duties, deductions,
withholdings (including backup withholding), assessments, fees or other charges
imposed by any Governmental Authority, including any interest, additions to tax
or penalties applicable thereto.

“Tax Affiliate” means (a) Borrower and its Subsidiaries, (b) each other Obligor
and (c) any Affiliate of an Obligor with which such Obligor files or is eligible
to file consolidated, combined or unitary Tax returns.

 

20

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

“Tax Returns” has the meaning set forth in Section 7.08.

“Technical Information” means all trade secrets and other proprietary or
confidential information, public information, non-proprietary know-how, any
information of a scientific, technical, or business nature in any form or
medium, standards and specifications, conceptions, ideas, innovations,
discoveries, Invention disclosures, all documented research, developmental,
demonstration or engineering work and all other information, data, plans,
specifications, reports, summaries, experimental data, manuals, models, samples,
know-how, technical information, systems, methodologies, computer programs,
information technology and any other information.

“Third Draw Milestone” means Borrower achieves both (a) Product Revenue of at
least (i) $*** during any consecutive *** period ending on or prior to June 30,
2018 or (ii) $*** during any consecutive *** period ending on or prior to
September 30, 2018 and (b) an average Market Capitalization of at least $*** for
the *** day period prior to the Notice of Borrowing for the third Borrowing.

“Title IV Plan” means an employee benefit plan (as defined in Section 3(3) of
ERISA) other than a Multiemployer Plan (i) that is or was during the six
(6) plan years of such plan preceding any Borrowing Date maintained or sponsored
by any Obligor or any ERISA Affiliate thereof or to which any Obligor or any
ERISA Affiliate thereof has made, or was during the six (6) plan years of such
plan preceding any Borrowing Date obligated to make, contributions or with
respect to which any Obligor has or could reasonably be expected to have any
liability, and (ii) that is or was subject to Section 412 of the Code,
Section 302 of ERISA or Title IV of ERISA.

“Trademarks” is defined in the Security Agreement.

“Transactions” means the execution, delivery and performance by each Obligor of
this Agreement and the other Loan Documents to which such Obligor is intended to
be a party and the Borrowings (and the use of the proceeds of the Loans).

“U.S. Person” means a “United States person” within the meaning of Section
7701(a)(30) of the Code.

“U.S. Tax Compliance Certificate” has the meaning set forth in Section
5.03(e)(ii)(B)(3).

“Warrant” means each common stock purchase warrant of Borrower, issued by
Borrower to the Lenders in connection with the Transactions, per the Warrant
Shares table on Schedule 1 and in the form of Exhibit H.

“Warrant Obligations” means, with respect to any Obligor, all Obligations
arising out of, under or in connection with, any Warrant.

“Withdrawal Liability” means, at any time, any liability incurred (whether or
not assessed) by any ERISA Affiliate and not yet satisfied or paid in full at
such time with respect to any Multiemployer Plan pursuant to Section 4201 of
ERISA.

 

21

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

“Withholding Agent” means any Obligor and Administrative Agent.

1.02    Accounting Terms and Principles. All accounting determinations required
to be made pursuant hereto shall, unless expressly otherwise provided herein, be
made in accordance with GAAP. All components of financial calculations made to
determine compliance with this Agreement, including Section 10, shall be
adjusted to include or exclude, as the case may be, without duplication, such
components of such calculations attributable to any Acquisition consummated
after the first day of the applicable period of determination and prior to the
end of such period, as determined in good faith by Borrower based on assumptions
expressed therein and that were reasonable based on the information available to
Borrower at the time of preparation of the Compliance Certificate setting forth
such calculations.

1.03    Interpretation. For all purposes of this Agreement, except as otherwise
expressly provided herein or unless the context otherwise requires, (a) the
terms defined in this Agreement include the plural as well as the singular and
vice versa; (b) words importing gender include all genders; (c) any reference to
a Section, Annex, Schedule or Exhibit refers to a Section of, or Annex, Schedule
or Exhibit to, this Agreement; (d) any reference to “this Agreement” refers to
this Agreement, including all Annexes, Schedules and Exhibits hereto, and the
words herein, hereof, hereto and hereunder and words of similar import refer to
this Agreement and its Annexes, Schedules and Exhibits as a whole and not to any
particular Section, Annex, Schedule, Exhibit or any other subdivision;
(e) references to days, months and years refer to calendar days, months and
years, respectively; (f) all references herein to “include” or “including” shall
be deemed to be followed by the words “without limitation”; (g) the word “from”
when used in connection with a period of time means “from and including” and the
word “until” means “to but not including”; and (h) accounting terms not
specifically defined herein shall be construed in accordance with GAAP (except
for the term “property” , which shall be interpreted as broadly as possible,
including, in any case, cash, securities, other assets, rights under contractual
obligations and permits and any right or interest in any property, except where
otherwise noted). Unless otherwise expressly provided herein, references to
organizational documents, agreements (including the Loan Documents) and other
contractual instruments shall be deemed to include all permitted subsequent
amendments, restatements, extensions, supplements and other modifications
thereto.

1.04    Changes to GAAP. If, after the date hereof, any change occurs in GAAP or
in the application thereof and such change would cause any amount required to be
determined for the purposes of the covenants to be maintained or calculated
pursuant to Section 8, 9 or 10 to be materially different than the amount that
would be determined prior to such change, then:

(a)    Borrower will provide a detailed notice of such change (an “Accounting
Change Notice”) to Administrative Agent within *** of such change;

(b)    either Borrower or the Majority Lenders may indicate within *** following
the date of the Accounting Change Notice that they wish to revise the method of
calculating such financial covenants or amend any such amount, in which case the
parties will in good faith attempt to agree upon a revised method for
calculating the financial covenants;

 

22

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

(c)    until Borrower and the Majority Lenders have reached agreement on such
revisions, (i) such financial covenants or amounts will be determined without
giving effect to such change and (ii) all financial statements, Compliance
Certificates and similar documents provided hereunder shall be provided together
with a reconciliation between the calculations and amounts set forth therein
before and after giving effect to such change in GAAP;

(d)    if no party elects to revise the method of calculating the financial
covenants or amounts, then the financial covenants or amounts will not be
revised and will be determined in accordance with GAAP without giving effect to
such change; and

(e)    any Event of Default arising as a result of such change which is cured by
operation of this Section 1.04 shall be deemed to be of no effect ab initio.

SECTION 2

THE COMMITMENT

2.01    Commitments. Each Lender agrees severally, on and subject to the terms
and conditions of this Agreement (including Section 6), to make up to three term
loans (provided that PIK Loans shall be deemed not to constitute “term loans”
for purposes of this Section 2.01) to Borrower, each on a Business Day during
the Commitment Period in Dollars in an aggregate principal amount for such
Lender not to exceed such Lender’s unfunded Commitment; provided, however, that
no Lender shall be obligated to make a Loan in excess of such Lender’s
Proportionate Share of the applicable amount of borrowing set forth in Section
6.01(b), Section 6.02(c) and Section 6.03(c), as applicable, other than PIK
Loans. Amounts of Loans repaid may not be reborrowed.

2.02    Borrowing Procedures. Subject to the terms and conditions of this
Agreement (including Section 6), each Borrowing (other than a Borrowing of PIK
Loans) shall be made on written notice in the form of Exhibit B given by
Borrower to Administrative Agent not later than 11:00 a.m. (Central time) on the
Borrowing Notice Date (a “Notice of Borrowing”).

2.03    Fees. Borrower shall pay to Administrative Agent and/or the Lenders, as
applicable, such fees as described in the Fee Letter.

2.04    Use of Proceeds. Borrower shall use the proceeds of the Loans for
repayment of all outstanding Indebtedness and obligations under the Existing
Debt Facility, and to pay fees, costs and expenses incurred in connection with
the Transactions and thereafter in Borrower’s sole discretion for general
working capital purposes and corporate purposes, but otherwise consistent with
the terms and provisions of this Agreement; provided that the Lenders shall have
no responsibility as to the use of any proceeds of Loans.

2.05    Defaulting Lenders.

(a)    Adjustments. Notwithstanding anything to the contrary contained in this
Agreement, if any Lender becomes a Defaulting Lender, then, until such time as
that Lender is no longer a Defaulting Lender, to the extent permitted by
applicable law:

(i)    Waivers and Amendments. Such Defaulting Lender’s right to approve or
disapprove any amendment, waiver or consent with respect to this Agreement shall
be restricted as set forth in Section 13.04.

 

23

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

(ii)    Reallocation of Payments. Any payment of principal, interest, fees or
other amounts received by the Lenders for the account of such Defaulting Lender
(whether voluntary or mandatory, at maturity, pursuant to Section 11 or
otherwise), shall be applied at such time or times as follows: first, as
Borrower may request (so long as no Default exists), to the funding of any Loan
in respect of which such Defaulting Lender has failed to fund its portion
thereof as required by this Agreement; second, if so determined by the Majority
Lenders and Borrower, to be held in a non-interest bearing deposit account and
released in order to satisfy obligations of such Defaulting Lender to fund Loans
under this Agreement; third, to the payment of any amounts owing to the Lenders
as a result of any judgment of a court of competent jurisdiction obtained by any
Lender against such Defaulting Lender as a result of such Defaulting Lender’s
breach of its obligations under this Agreement; fourth, so long as no Default
exists, to the payment of any amounts owing to Borrower as a result of any
judgment of a court of competent jurisdiction obtained by Borrower against such
Defaulting Lender as a result of such Defaulting Lender’s breach of its
obligations under this Agreement; and fifth, to such Defaulting Lender or as
otherwise directed by a court of competent jurisdiction; provided that if
(A) such payment is a payment of the principal amount of any Loans in respect of
which such Defaulting Lender has not fully funded its appropriate share and
(B) such Loans were made at a time when the conditions set forth in Section 6
were satisfied or waived, such payment shall be applied solely to pay the Loans
of all non-Defaulting Lenders on a pro rata basis prior to being applied to the
payment of any Loans of such Defaulting Lender. Any payments, prepayments or
other amounts paid or payable to a Defaulting Lender that are applied (or held)
to pay amounts owed by a Defaulting Lender pursuant to this Section 2.05(a)(ii)
shall be deemed paid to and redirected by such Defaulting Lender, and each
Lender irrevocably consents hereto.

(b)    Defaulting Lender Cure. If Borrower and the Majority Lenders agree in
writing in their sole discretion that a Defaulting Lender should no longer be
deemed to be a Defaulting Lender, that Lender will, to the extent applicable,
purchase that portion of outstanding Loans of the other Lenders or take such
other actions as necessary to cause the Loans to be held on a pro rata basis by
the Lenders in accordance with their Proportionate Share, whereupon that Lender
will cease to be a Defaulting Lender; provided that no adjustments will be made
retroactively with respect to fees accrued or payments made by or on behalf of
Borrower while that Lender was a Defaulting Lender; and provided further that,
except to the extent otherwise expressly agreed by the affected parties, no
change hereunder from Defaulting Lender to Lender will constitute a waiver or
release of any claim of any party hereunder arising from that Lender’s having
been a Defaulting Lender.

2.06    Substitution of Lenders.

(a)    Substitution Right. If any Lender (an “Affected Lender”), (i) becomes a
Defaulting Lender or (ii) does not consent to any amendment, waiver or consent
to any Loan Document for which the consent of the Majority Lenders is obtained
but that requires the consent of other Lenders (a “Non-Consenting Lender”), then
(x) Borrower may elect to pay in full such Affected Lender with respect to all
Obligations due to such Affected Lender or (y) either

 

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

Borrower or Administrative Agent shall identify any willing Lender or Affiliate
of any Lender or Eligible Transferee (in each case, a “Substitute Lender”) to
substitute for such Affected Lender; provided that any substitution of a
Non-Consenting Lender shall occur only with the consent of Administrative Agent.

(b)    Procedure. To substitute such Affected Lender or pay in full all
Obligations owed to such Affected Lender, Borrower shall deliver a notice to
such Affected Lender. The effectiveness of such payment or substitution shall be
subject to the delivery by Borrower (or, as may be applicable in the case of a
substitution, by the Substitute Lender) of (i) payment for the account of such
Affected Lender, of, to the extent accrued through, and outstanding on, the
effective date for such payment or substitution, all Obligations owing to such
Affected Lender (which for the avoidance of doubt, shall not include any
Prepayment Premium) and (ii) in the case of a substitution, an Assignment and
Assumption executed by the Substitute Lender, which shall thereunder, among
other things, agree to be bound by the terms of the Loan Documents.

(c)    Effectiveness. Upon satisfaction of the conditions set forth in Sections
2.06(a) and (b), Administrative Agent shall record such substitution or payment
in the Register, whereupon (i) in the case of any payment in full of an Affected
Lender, such Affected Lender’s Commitments shall be terminated and (ii) in the
case of any substitution of an Affected Lender, (A) such Affected Lender shall
sell and be relieved of, and the Substitute Lender shall purchase and assume,
all rights and claims of such Affected Lender under the Loan Documents, except
that the Affected Lender shall retain such rights under the Loan Documents that
expressly provide that they survive the repayment of the Obligations and the
termination of the Commitments, (B) such Affected Lender shall no longer
constitute a “Lender” hereunder and such Substitute Lender shall become a
“Lender” hereunder and (C) such Affected Lender shall execute and deliver an
Assignment and Assumption to evidence such substitution; provided, however, that
the failure of any Affected Lender to execute any such Assignment and Assumption
shall not render such sale and purchase (or the corresponding assignment)
invalid.

2.07    Permitted Commercialization Arrangements. Lenders each understand and
agree that Borrower and its Subsidiaries will have the right, subject to
compliance with the provisions of this Agreement, enter into Permitted
Commercialization Arrangements that will, in the reasonable opinion of
Borrower’s board of directors, support the Business and permit Borrower to repay
the Obligations as such Obligations become due hereunder. The Administrative
Agent further agrees to cooperate reasonably with Borrower in entering into,
implementing and amending such Permitted Commercialization Arrangements, subject
in each case to each of the Lenders’ rights under the Loan Documents and unless
such amendment or implementation is materially adverse to the Lenders..

SECTION 3

PAYMENTS OF PRINCIPAL AND INTEREST

3.01    Repayment.

(a)    Repayment. During the Interest-Only Period, no scheduled payments of
principal of the Loans shall be due. Borrower agrees to repay to the Lenders the
outstanding principal amount of the Loans, on each Payment Date occurring after
the Interest-Only Period, in

 

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

equal installments. The amounts of such installments shall be calculated by
dividing (i) the sum of the aggregate principal amount of the Loans outstanding
on the first day following the end of the Interest-Only Period, by (ii) the
number of Payment Dates remaining prior to and including the Stated Maturity
Date.

(b)    Application. Any optional or mandatory prepayment of the Loans shall be
applied to the installments thereof under Section 3.01(a) in the inverse order
of maturity. To the extent not previously paid, the principal amount of the
Loans, together with all other outstanding Obligations (other than Warrant
Obligations), shall be due and payable on the Maturity Date.

3.02    Interest.

(a)    Interest Generally. Subject to Section 3.02(d), Borrower agrees to pay to
the Lenders interest on the unpaid principal amount of the Loans, for the period
from the applicable Borrowing Date until paid in full, at a rate per annum equal
to 12.50%.

(b)    Default Interest. Notwithstanding the foregoing, upon the occurrence and
during the continuance of any Event of Default (but not, for the avoidance of
doubt, following the cure or discontinuance of any Event of Default), the
interest payable pursuant to Section 3.02(a) shall increase automatically by
4.00% per annum (such aggregate increased rate, the “Default Rate”).
Notwithstanding any other provision herein (including Section 3.02(d)), if
interest is required to be paid at the Default Rate, it shall be paid entirely
in cash. If any Obligation other than the unpaid principal amount of the Loans
is not paid when due under the applicable Loan Document, the amount thereof
shall accrue interest at a rate equal to 4.00% per annum (without duplication of
interest payable at the Default Rate).

(c)    Interest Payment Dates. Subject to Section 3.02(d), accrued interest on
the Loans shall be payable in arrears on each Payment Date with respect to the
most recently completed Interest Period in cash, and upon the payment or
prepayment of the Loans (on the principal amount being so paid or prepaid);
provided that interest payable at the Default Rate shall be payable from time to
time on demand.

(d)    Paid In-Kind Interest. Notwithstanding Section 3.02(a), at any time
during the PIK Period, Borrower may elect to pay the interest on the outstanding
principal amount of the Loans payable pursuant to Section 3.01 as follows:
(i) only 9.00% of the 12.50% per annum interest in cash and (ii) 3.50% of the
12.50% per annum interest as compounded interest, added to the aggregate
principal amount of the Loans (the amount of any such compounded interest being
a “PIK Loan”). The principal amount of each PIK Loan shall accrue interest in
accordance with the provisions of this Agreement applicable to the Loans.

3.03    Prepayments.

(a)    Optional Prepayments. Upon prior written notice to Administrative Agent
delivered pursuant to Section 4.03, Borrower shall have the right to optionally
prepay in whole or in part the outstanding principal amount of the Loans on any
Payment Date (a “Redemption Date”) for an amount equal to the aggregate
principal amount of the Loans being prepaid plus the Prepayment Premium plus any
accrued but unpaid interest and any fees then due and owing (such aggregate
amount, the “Redemption Price”). The applicable “Prepayment Premium” shall be an
amount calculated pursuant to Section 3.03(a)(i).

 

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

(i)    If the Redemption Date occurs:

(A)    on or prior to the fourth (4th) Payment Date, the Prepayment Premium
shall be an amount equal to ***% of the aggregate outstanding principal amount
of the Loans being prepaid on such Redemption Date;

(B)    after the fourth (4th) Payment Date, and on or prior to the eighth (8th)
Payment Date, the Prepayment Premium shall be an amount equal to ***% of the
aggregate outstanding principal amount of the Loans being prepaid on such
Redemption Date;

(C)    after the eighth (8th) Payment Date, and on or prior to the twelfth
(12th) Payment Date, the Prepayment Premium shall be an amount equal to ***% of
the aggregate outstanding principal amount of the Loans being prepaid on such
Redemption Date;

(D)    after the twelfth (12th) Payment Date, and on or prior to the sixteenth
(16th) Payment Date, the Prepayment Premium shall be an amount equal to ***% of
the aggregate outstanding principal amount of the Loans being prepaid on such
Redemption Date;

(E)    after the sixteenth (16th) Payment Date, and on or prior to the twentieth
(20th) Payment Date, the Prepayment Premium shall be an amount equal to ***% of
the aggregate outstanding principal amount of the Loans being prepaid on such
Redemption Date;

(F)    after the twentieth (20th) Payment Date, the Prepayment Premium shall be
an amount equal to ***% of the aggregate outstanding principal amount of the
Loans being prepaid on such Redemption Date.

(ii)    To determine the aggregate outstanding principal amount of the Loans,
and how many Payment Dates have occurred, as of any Redemption Date for purposes
of Section 3.03(a):

(A)    if, as of such Redemption Date, Borrower shall have made only one
Borrowing, the number of Payment Dates shall be deemed to be the number of
Payment Dates that shall have occurred following the first Borrowing Date;

(B)    if, as of such Redemption Date, Borrower shall have made more than one
Borrowing, then the Redemption Price shall equal the sum of multiple Redemption
Prices calculated with respect to the Loans of each Borrowing, each of which
Redemption Prices shall be calculated based on solely the aggregate outstanding
principal amount of the Loans borrowed in such Borrowing (and PIK Loans
subsequently borrowed in respect of interest payments thereon), as though the
applicable number of Payment Dates equals the number of Payment Dates that shall
have occurred following the applicable Borrowing Date. In the case of any
partial prepayment, the amount of such prepayment shall be allocated to Loans
made in the various Borrowings (and PIK Loans in respect thereof) in the order
in which such Borrowings were made;

 

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

(iii)    No partial prepayment shall be made under this Section 3.03(a) in
connection with any event described in Section 3.03(b).

The Prepayment Premium payable upon any prepayment shall be in addition to any
payments required pursuant to the Fee Letter.

(b)    Mandatory Prepayments.

(i)    Asset Sales. In the event of any Asset Sale or series of Asset Sales
(other than any Asset Sale permitted under Section 9.09(a), (b), (d), (f), (g)
or (h) or any Permitted Commercialization Arrangements) yielding Asset Sale Net
Proceeds in excess of $*** in the aggregate, Borrower shall provide *** prior
written notice of the anticipated closing such Asset Sale to Administrative
Agent and, if within such notice period Majority Lenders or Administrative Agent
advise Borrower that the Majority Lenders require a prepayment pursuant to this
Section 3.03(b)(i), Borrower shall: (x) ***, prepay the aggregate outstanding
principal amount of the Loans in an amount equal to the Redemption Price
applicable on the date of such Asset Sale in accordance with Section 3.03(a),
and (y) in the case of all other Asset Sales not described in the foregoing
clause (x), prepay the Loans in an amount equal to the entire amount of the
Asset Sale Net Proceeds of such Asset Sale, plus any accrued but unpaid interest
and any fees then due and owing, credited in the following order:

(A)    first, in reduction of Borrower’s obligation to pay any unpaid interest
and any fees then due and owing (including any fees payable pursuant to the Fee
Letter);

(B)    second, in reduction of Borrower’s obligation to pay any Claims or Losses
referred to in Section 13.03 then due and owing;

(C)    third, in reduction of Borrower’s obligation to pay any amounts due and
owing on account of the unpaid principal amount of the Loans;

(D)    fourth, in reduction of any other Obligation then due and owing; and

(E)    fifth, to Borrower or such other Persons as may lawfully be entitled to
or directed by Borrower to receive the remainder.

(ii)    Change of Control. In the event of the consummation of a Change of
Control, Borrower shall immediately provide notice of such Change of Control to
Administrative Agent and, if within *** of receipt of such notice Majority
Lenders or Administrative Agent advise Borrower that the Majority Lenders
require a prepayment pursuant to this Section 3.03(b)(ii), Borrower shall prepay
the aggregate outstanding principal amount of the Loans in an amount equal to
the Redemption Price applicable on the date of such Change of Control in
accordance with Section 3.03(a) and any fees payable pursuant to the Fee Letter.

 

28

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

SECTION 4

PAYMENTS, ETC.

4.01    Payments.

(a)    Payments Generally. Each payment of principal, interest and other amounts
to be made by the Obligors under this Agreement or any other Loan Document shall
be made in Dollars, in immediately available funds, without deduction, set off
or counterclaim, to an account to be designated by Administrative Agent by
notice to Borrower, not later than 4:00 p.m. (Central time) on the date on which
such payment shall become due (each such payment made after such time on such
due date to be deemed to have been made on the next succeeding Business Day).

(b)    Application of Payments. Each Obligor shall, at the time of making each
payment under this Agreement or any other Loan Document, specify to
Administrative Agent the amounts payable by such Obligor hereunder to which such
payment is to be applied (and in the event that Obligors fail to so specify, or
if an Event of Default has occurred and is continuing, the Lenders may apply
such payment in the manner they determine to be appropriate).

(c)    Non-Business Days. If the due date of any payment under this Agreement
(other than of principal of or interest on the Loans) would otherwise fall on a
day that is not a Business Day, such date shall be extended to the next
succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension.

4.02    Computations. All computations of interest and fees hereunder shall be
computed on the basis of a year of 360 days and actual days elapsed during the
period for which payable.

4.03    Notices. Each notice of optional prepayment shall be effective only if
received by Administrative Agent not later than 4:00 p.m. (Central time) on the
date *** prior to the date of prepayment (or such shorter period as may be
agreed to in Administrative Agent’s sole discretion). Each notice of optional
prepayment shall specify the amount to be prepaid and the date of prepayment.

4.04    Set-Off.

(a)    Set-Off Generally. Upon the occurrence and during the continuance of any
Event of Default, each of Administrative Agent, each Lender and each of their
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by Administrative Agent, any Lender and any
of their Affiliates to or for the credit or the account of any Obligor against
any and all of the Obligations, whether or not such Person shall have made any
demand and although such obligations may be unmatured. Administrative Agent and
each Lender agree promptly to notify Borrower after any such set-off and
application; provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of Administrative Agent,
each Lender and each of their Affiliates under this Section 4.04 are in addition
to other rights and remedies (including other rights of set-off) that such
Persons may have.

 

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

(b)    Exercise of Rights Not Required. Nothing contained herein shall require
Administrative Agent, any Lender or any of their respective Affiliates to
exercise any such right or shall affect the right of such Person to exercise,
and retain the benefits of exercising, any such right with respect to any other
indebtedness or obligation of any Obligor.

4.05    Pro Rata Treatment.

(a)    Unless Administrative Agent shall have been notified in writing by any
Lender prior to the proposed date of any Borrowing that such Lender will not
make the amount that would constitute its share of such Borrowing available to
Administrative Agent, Administrative Agent may assume that such Lender has made
such amount available to Administrative Agent on such date in accordance with
Section 2, and Administrative Agent may, in reliance upon such assumption, make
available to Borrower a corresponding amount. If such amount is not in fact made
available to Administrative Agent by the required time on the applicable
Borrowing Date therefor, such Lender and Borrower severally agree to pay to
Administrative Agent forthwith, on demand, such corresponding amount with
interest thereon, for each day from and including the date on which such amount
is made available to Borrower but excluding the date of payment to
Administrative Agent, at (i) in the case of a payment to be made by such Lender,
a rate equal to the greater of (A) the Federal Funds Effective Rate and (B) a
rate reasonably determined by Administrative Agent in accordance with banking
industry rules on interbank compensation. If Borrower and such Lender shall pay
such interest to Administrative Agent for the same or an overlapping period,
Administrative Agent shall promptly remit to Borrower the amount of such
interest paid by Borrower for such period. If such Lender pays its share of the
applicable borrowing to Administrative Agent, then the amount so paid shall
constitute such Lender’s Loan included in such borrowing. Any payment by
Borrower shall be without prejudice to any claim Borrower may have against a
Lender that shall have failed to make such payment to Administrative Agent.

(b)    Unless Administrative Agent shall have received notice from Borrower
prior to the date on which any payment is due to Administrative Agent for the
account of the Lenders hereunder that Borrower will not make such payment,
Administrative Agent may assume that Borrower has made such payment on such date
in accordance herewith and may, in reliance upon such assumption, distribute to
the Lenders the amount due. In such event, if Borrower has not in fact made such
payment, then each of the Lenders severally agrees to repay to Administrative
Agent forthwith on demand the amount so distributed to such Lender, with
interest thereon, for each day from and including the date such amount is
distributed to it to but excluding the date of payment to Administrative Agent,
at the greater of the Federal Funds Effective Rate and a rate determined by
Administrative Agent in accordance with banking industry rules on interbank
compensation. Nothing herein shall be deemed to limit the rights of
Administrative Agent or any Lender against any Obligor.

(c)    If any Lender shall obtain any payment (whether voluntary, involuntary,
through the exercise of any right of set-off, or otherwise) on account of the
principal of or interest on any Loan made by it or other obligations hereunder,
as applicable (other than pursuant to a provision hereof providing for non-pro
rata treatment), in excess of its Proportionate Share, of such payment on
account of the Loans, such Lender shall (i) notify Administrative Agent of the
receipt of such payment, and (ii) within five (5) Business Days of such receipt
purchase (for cash

 

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

at face value) from the other Lenders, as applicable (directly or through
Administrative Agent), without recourse, such participations in the Loans made
by them or make such other adjustments as shall be equitable, as shall be
necessary to cause such purchasing Lender to share the excess payment ratably
with each of the other Lenders in accordance with their respective Proportionate
Shares, as applicable; provided, however, that (A) if any such participations
are purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest and (B) the provisions
of this paragraph shall not be construed to apply to (x) any payment made by
Borrower pursuant to and in accordance with the express terms of this Agreement
(including the application of funds arising from the existence of a Defaulting
Lender) or (y) any payment obtained by a Lender as consideration for the
assignment or sale of a participation in any of its Loans to any assignee or
participant, other than to Borrower or any of its Affiliates (as to which the
provisions of this paragraph shall apply). Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section 4.05(c)
may exercise all its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Lender were the direct
creditor of Borrower in the amount of such participation. No documentation other
than notices and the like referred to in this Section 4.05(c) shall be required
to implement the terms of this Section 4.05(c). Administrative Agent shall keep
records (which shall be conclusive and binding in the absence of manifest error)
of participations purchased pursuant to this Section 4.05(c) and shall in each
case notify the Lenders following any such purchase. Borrower consents on behalf
of itself and each other Obligor to the foregoing and agrees, to the extent it
may effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against each
Obligor rights of setoff and counterclaim with respect to such participation as
fully as if such Lender were a direct creditor of each Obligor in the amount of
such participation.

SECTION 5

YIELD PROTECTION, ETC.

5.01    Additional Costs.

(a)    Change in Requirements of Law Generally. If, on or after the date hereof,
the adoption of any Requirement of Law, or any change in any Requirement of Law,
or any change in the interpretation or administration thereof by any court or
other Governmental Authority charged with the interpretation or administration
thereof, or compliance by any of the Lenders (or its lending office) with any
request or directive (whether or not having the force of law) of any such
Governmental Authority, shall impose, modify or deem applicable any reserve
(including any such requirement imposed by the Board of Governors of the Federal
Reserve System), special deposit, contribution, insurance assessment or similar
requirement, in each case that becomes effective after the date hereof, against
assets of, deposits with or for the account of, or credit extended by, a Lender
(or its lending office) or shall impose on a Lender (or its lending office) any
other condition affecting the Loans or the Commitment, and the result of any of
the foregoing is to increase the cost to such Lender of making or maintaining
the Loans, or to reduce the amount of any sum received or receivable by such
Lender under this Agreement or any other Loan Document, in each case by an
amount deemed by such Lender in its reasonable discretion to be material (other
than (i) Indemnified Taxes, (ii) Taxes described in clauses (b) through (d) of
the definition of “Excluded Taxes” and (iii) Connection Income Taxes), then
Borrower shall,

 

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

upon written demand from such Lender (which demand shall be accompanied by the
certification referenced in Section 5.01(c)) pay to such Lender such additional
amount or amounts as will compensate such Lender for such increased cost or
reduction so long as such amounts have accrued on or after the day which is two
hundred seventy (270) days prior to the date on which the Administrative Agent
or such Lenders first made written demand therefor.

(b)    Change in Capital Requirements. If a Lender shall have determined in its
reasonable discretion that, on or after the date hereof, the adoption of any
Requirement of Law regarding capital adequacy, or any change therein, or any
change in the interpretation or administration thereof by any Governmental
Authority charged with the interpretation or administration thereof, or any
request or directive regarding capital adequacy (whether or not having the force
of law) of any such Governmental Authority, in each case that becomes effective
after the date hereof, has or would have the effect of reducing the rate of
return on capital of a Lender (or its parent) as a consequence of a Lender’s
obligations hereunder or the Loans to a level below that which a Lender (or its
parent) could have achieved but for such adoption, change, request or directive
by an amount reasonably deemed by it to be material, then Borrower shall, upon
written demand from such Lender (which demand shall be accompanied by the
certification referenced in Section 5.01(c)) pay to such Lender such additional
amount or amounts as will compensate such Lender (or its parent) for such
reduction.

(c)    Notification by Lender. Each Lender (directly or through Administrative
Agent) will promptly notify Borrower of any event of which it has knowledge,
occurring after the date hereof, which will entitle such Lender to compensation
pursuant to this Section 5.01. Before giving any such notice pursuant to this
Section 5.01(c) such Lender shall designate a different lending office, to the
extent such Lender has more than one lending office, if such designation
(x) will, in the reasonable judgment of such Lender, avoid the need for, or
reduce the amount of, such compensation and (y) will not, in the reasonable
judgment of such Lender, be materially disadvantageous to such Lender. A
certificate of the Lender claiming compensation under this Section 5.01, setting
forth the additional amount or amounts to be paid to it hereunder, shall be
conclusive and binding on Borrower in the absence of manifest error.

(d)    Notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall
Street Reform and Consumer Protection Act and all requests, rules, guidelines or
directives thereunder or issued in connection therewith and (y) all requests,
rules, guidelines or directives promulgated by the Bank for International
Settlements, the Basel Committee on Banking Supervision (or any successor or
similar authority) or the United States or foreign regulatory authorities, in
each case pursuant to Basel III, shall in each case be deemed to constitute a
change in Requirements of Law for all purposes of this Section 5.01, regardless
of the date enacted, adopted or issued.

5.02    Illegality. Notwithstanding any other provision of this Agreement, in
the event that on or after the date hereof the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof by any
competent Governmental Authority shall, in the reasonable discretion of a
Lender, make it unlawful for such Lender or its lending office to make or
maintain the Loans (and, in the opinion of such Lender, the designation of a
different lending office would either not avoid such unlawfulness or would be
disadvantageous to such Lender), then such Lender shall promptly notify Borrower
thereof following which (a) the Lender’s Commitment shall be suspended until
such time as such Lender may again make and maintain

 

32

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

the Loans hereunder and (b) if such Requirement of Law shall so mandate, the
Loans shall be prepaid by Borrower within *** after demand, to the extent
permitted by Law or as otherwise mandated by such Requirement of Law in an
amount equal to the Redemption Price applicable on the date of such prepayment
in accordance with Section 3.03(a). Before giving any such notice pursuant to
this Section 5.02, such Lender shall designate a different lending office, to
the extent such Lender has more than one lending office, if such designation
(x) will, in the reasonable judgment of such Lender, avoid the need for such
prepayment of the Loans and (y) will not, in the reasonable judgment of such
Lender, be materially disadvantageous to such Lender.

5.03    Taxes.

(a)    Payments Free of Taxes. Any and all payments by or on account of any
Obligation shall be made without deduction or withholding for any Taxes, except
as required by applicable law. If any applicable law requires the deduction or
withholding of any Tax from any such payment by a Withholding Agent, then the
applicable Withholding Agent shall be entitled to make such deduction or
withholding and shall timely pay the full amount deducted or withheld to the
relevant Governmental Authority in accordance with applicable law and, if such
Tax is an Indemnified Tax, then the sum payable by the applicable Obligor shall
be increased as necessary so that after such deduction or withholding has been
made (including such deductions and withholdings applicable to additional sums
payable under this Section 5) the applicable Recipient receives an amount equal
to the sum it would have received had no such deduction or withholding been
made.

(b)    Payment of Other Taxes by Borrower. The Obligors shall timely pay to the
relevant Governmental Authority in accordance with applicable law, or at the
option of each Lender, timely reimburse it for, Other Taxes.

(c)    Evidence of Payments. As soon as practicable after any payment of Taxes
by any Obligor to a Governmental Authority pursuant to this Section 5, such
Obligor shall deliver to Administrative Agent the original or a certified copy
of a receipt issued by such Governmental Authority evidencing such payment.

(d)    Indemnification. The Obligors shall jointly and severally reimburse and
indemnify each Recipient, within *** after demand therefor, for the full amount
of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or
attributable to amounts payable under this Section 5) payable or paid by such
Recipient or required to be withheld or deducted from a payment to such
Recipient and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to Borrower by a Lender shall be
conclusive absent manifest error.

(e)    Status of Lenders.

(i)    Any Lender that is entitled to an exemption from, or reduction of
withholding Tax with respect to payments made under any Loan Document shall make
available

 

33

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

to Borrower (directly or through Administrative Agent) such properly completed
and executed documentation reasonably requested by Borrower or Administrative
Agent as will permit such payments to be made without withholding or at a
reduced rate of withholding; provided that, other than in the case of U.S.
federal withholding Taxes, such Lender has received written notice from Borrower
advising it of the availability of such exemption or reduction and containing
all applicable documentation. In addition, any Lender shall make available
(directly or through Administrative Agent) such other documentation prescribed
by applicable law as reasonably requested by Borrower or Administrative Agent as
will enable Borrower or Administrative Agent to determine whether or not such
Lender is subject to backup withholding or information reporting requirements.
Notwithstanding anything to the contrary in the preceding two sentences, the
completion, execution and submission of such documentation (other than such
documentation set forth in Section 5.03(e)(ii)(A), (B) or (D)) shall not be
required if in the Lender’s reasonable judgment such completion, execution or
submission would subject such Lender to any material unreimbursed cost or
expense or would materially prejudice the legal or commercial position of such
Lender.

(ii)    Without limiting the generality of the foregoing, in the event that
Borrower is a U.S. Person:

(A)    any Lender that is a U.S. Person shall make available to Borrower
(directly or through Administrative Agent) on or prior to the date on which such
Lender becomes a Lender under this Agreement (and from time to time thereafter
upon the reasonable request of Borrower), executed originals of IRS Form W-9 (or
successor form) certifying that such Lender is exempt from U.S. federal backup
withholding tax;

(B)    any Foreign Lender shall, to the extent it is legally entitled to do so,
make available to Borrower (directly or through Administrative Agent and in such
number of copies as shall be requested by the recipient) on or prior to the date
on which such Foreign Lender becomes a Lender under this Agreement (and from
time to time thereafter upon the reasonable request of Borrower), whichever of
the following is applicable:

(1)    in the case of a Foreign Lender claiming the benefits of an income tax
treaty to which the United States is a party (x) with respect to payments of
interest under any Loan Document, executed originals of IRS Form W-8BEN or IRS
Form W-8BEN-E, as applicable (or successor form) establishing an exemption from,
or reduction of, U.S. Federal withholding Tax pursuant to the “interest” article
of such tax treaty and (y) with respect to any other applicable payments under
any Loan Document, IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable (or
successor form) establishing an exemption from, or reduction of, U.S. federal
withholding Tax pursuant to the “business profits” or “other income” article of
such tax treaty;

(2)    executed originals of IRS Form W-8ECI (or successor form);

(3)    in the case of a Foreign Lender claiming the benefits of the exemption
for portfolio interest under Section 881(c) of the Code, (x) a certificate
substantially in the form of Exhibit C-1 to the effect that such Foreign Lender
is not a “bank” within the

 

34

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the
applicable Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a
“controlled foreign corporation” described in Section 881(c)(3)(C) of the Code
(a “U.S. Tax Compliance Certificate”) and (y) executed originals of IRS Form
W-8BEN or IRS Form W-8BEN-E, as applicable (or successor form); or

(4)    to the extent a Foreign Lender is not the beneficial owner, executed
originals of IRS Form W-8IMY (or successor form), accompanied by IRS Form W-8ECI
(or successor form), IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable (or
successor form), a U.S. Tax Compliance Certificate substantially in the form of
Exhibit C-2 or Exhibit C-3, IRS Form W-9 (or successor form), and/or other
certification documents from each beneficial owner, as applicable; provided that
if the Foreign Lender is a partnership and one or more direct or indirect
partners of such Foreign Lender are claiming the portfolio interest exemption,
such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially
in the form of Exhibit C-4 on behalf of each such direct and indirect partner.

(C)    any Foreign Lender shall, to the extent it is legally entitled to do so,
make available to Borrower (directly or through Administrative Agent and in such
number of copies as shall be requested by the recipient) on or prior to the date
on which such Foreign Lender becomes a Lender under this Agreement (and from
time to time thereafter upon the reasonable request of Borrower), executed
originals of any other form prescribed by applicable law as a basis for claiming
exemption from or a reduction in U.S. federal withholding Tax, duly completed,
together with such supplementary documentation as may be prescribed by
applicable law to permit Borrower to determine the withholding or deduction
required to be made; and

(D)    if a payment made to a Lender under any Loan Document would be subject to
U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to
comply with the applicable reporting requirements of FATCA (including those
contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender
shall make available to Borrower (directly or through Administrative Agent) at
the time or times prescribed by law as reasonably requested by Borrower or
Administrative Agent any necessary forms and information reasonably requested by
Borrower or Administrative Agent to establish that such Lender is not subject to
withholding tax under FATCA.

(iii)    Each Lender agrees that if any form or certification it previously made
available becomes inaccurate in any respect, or if Borrower notifies such Lender
that any form or certification such Lender previously made available has expired
or becomes obsolete in any respect, such Lender shall update such form or
certification or promptly notify Borrower in writing of its legal inability to
do so.

(f)    Treatment of Certain Refunds. If any party determines, in its sole
discretion exercised in good faith, that it has received a refund of any Taxes
as to which it has been indemnified pursuant to this Section 5 (including by the
payment of additional amounts pursuant to this Section 5), it shall pay to the
indemnifying party an amount equal to such refund (but only to the extent of
indemnity payments made under this Section 5 with respect to the Taxes giving
rise to such refund), net of all out-of-pocket expenses (including Taxes) of
such indemnified party and without interest (other than any interest paid by the
relevant Governmental Authority

 

35

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

with respect to such refund). Such indemnifying party, upon the request of such
indemnified party, shall repay to such indemnified party the amount paid over
pursuant to this paragraph (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) in the event that such
indemnified party is required to repay such refund to such Governmental
Authority. Notwithstanding anything to the contrary in this Section 5.03(f), in
no event will the indemnified party be required to pay any amount to an
indemnifying party pursuant to this Section 5.03(f) the payment of which would
place the indemnified party in a less favorable net after-Tax position than the
indemnified party would have been in if the indemnification payments or
additional amounts giving rise to such refund had never been paid. This Section
5.03(f) shall not be construed to require any indemnified party to make
available its Tax returns (or any other information relating to its Taxes that
it deems confidential) to the indemnifying party or any other Person.

(g)    Mitigation Obligations. If Borrower is required to pay any Indemnified
Taxes or additional amounts to any Lender or to any Governmental Authority for
the account of any Lender pursuant to Section 5.01 or this Section 5.03, then
such Lender shall (at the request of Borrower) use commercially reasonable
efforts to designate a different lending office for funding or booking its Loans
hereunder or to assign and delegate its rights and obligations hereunder to
another of its offices, branches or Affiliates if, in the sole reasonable
judgment of such Lender, such designation or assignment and delegation would
(i) eliminate or reduce amounts payable pursuant to Section 5.01 or this
Section 5.03, as the case may be, in the future, (ii) not subject such Lender to
any unreimbursed cost or expense and (iii) not otherwise be disadvantageous to
such Lender. Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment and
delegation.

SECTION 6

CONDITIONS PRECEDENT

6.01    Conditions to the First Borrowing. The obligation of each Lender to make
a Loan as part of the first Borrowing shall not become effective until the
following conditions precedent shall have been satisfied or waived in writing by
the Lenders:

(a)    Borrowing Date. Such Borrowing shall be made on the date hereof; provided
that Borrower shall have delivered to Administrative Agent a Notice of Borrowing
two (2) Business Days prior to the date hereof.

(b)    Amount of First Borrowing. The amount of such Borrowing shall equal
$45,000,000.

(c)    Terms of Material Agreements, Etc. Lenders shall be reasonably satisfied
with the terms and conditions of all of the Obligors’ Material Agreements.

(d)    No Law Restraining Transactions. No applicable law or regulation shall
restrain, prevent or, in the reasonable judgment of the Lenders, impose
materially adverse conditions upon the Transactions.

 

36

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

(e)    Payment of Fees. Lenders shall be satisfied with the arrangements to
deduct the fees set forth in the Fee Letter (including without limitation the
financing fee required pursuant to the Fee Letter) from the proceeds advanced.

(f)    Lien Searches. Lenders shall be satisfied with Lien searches regarding
Borrower and its Subsidiaries made prior to such Borrowing.

(g)    Documentary Deliveries. The Lenders shall have received the following
documents, each of which shall be in form and substance satisfactory to the
Lenders:

(i)    Agreement. This Agreement duly executed and delivered by Borrower and
each of the other parties hereto.

(ii)    Security Documents.

(A)    The Security Agreement, duly executed and delivered by each of the
Obligors.

(B)    Reserved.

(C)    (1) Each of the Short-Form IP Security Agreements, duly executed and
delivered by the applicable Obligor, and (2) such Intellectual Property security
agreements, duly executed and delivered by the applicable Obligor, as the
Lenders may require with respect to foreign Intellectual Property.

(D)    Original share certificates or other documents or evidence of title with
regard to all Equity Interests owned by the Obligors (to the extent that such
Equity Interests are certificated), together with share transfer documents,
undated and executed in blank.

(E)    Duly executed control agreements in favor of Administrative Agent for the
benefit of the Secured Parties for all Deposit Accounts, Securities Accounts and
Commodity Accounts owned by the Obligors in the United States.

(F)    Evidence of filing of UCC-1 financing statements against each Obligor in
its jurisdiction of formation or incorporation, as the case may be.

(G)    Reserved.

(H)    Evidence of filing of (1) each of the Short-Form IP Security Agreements
in the United States Patent and Trademark Office or the United States Copyright
office, as applicable, and (2) such foreign filings as the Lenders may require
with respect to foreign Intellectual Property.

(I)    Without limitation, all other documents and instruments reasonably
required to perfect the Secured Parties’ Lien on, and security interest in, the
Collateral required to be delivered on or prior to such Borrowing Date shall
have been duly executed and delivered and be in proper form for filing, and
shall create in favor of the Secured Parties, a perfected Lien on, and security
interest in, the Collateral, subject to no Liens other than Permitted Liens.

 

37

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

(iii)    Fee Letter. The Fee Letter duly executed and delivered by Borrower and
Administrative Agent.

(iv)    Warrants. For the Lenders, pro rata in accordance with their
Proportionate Shares, the Warrants, duly executed by Borrower (for such number
of shares as indicated on Schedule 1)

(v)    Perfection Certificate. The Perfection Certificate duly executed and
delivered by Borrower.

(vi)    [Reserved]

(vii)    Corporate Documents. Certified copies of the constitutive documents of
each Obligor (if publicly available in such Obligor’s jurisdiction of formation)
and of resolutions of the Board of Directors (or shareholders, if applicable) of
each Obligor authorizing the making and performance by it of the Loan Documents
to which it is a party.

(viii)    Incumbency Certificate. A certificate of each Obligor as to the
authority, incumbency and specimen signatures of the persons who have executed
the Loan Documents and any other documents in connection herewith on behalf of
the Obligors.

(ix)    Officer’s Certificate. A certificate, dated such Borrowing Date and
signed by the President, a Vice President or a financial officer of Borrower,
confirming compliance with the conditions set forth in Section 6.04(b) and
certification that all material licenses, consents, authorizations and approvals
of, and notices to and filings and registrations with, any Governmental
Authority (including all foreign exchange approvals), and of all third-party
consents and approvals, necessary in connection with the making and performance
by the Obligors of the Loan Documents and the Transactions have been provided to
the Administrative Agent.

(x)    Opinions of Counsel. A favorable opinion, dated such Borrowing Date, of
counsel to each Obligor in form acceptable to the Lenders and their counsel,
responsive to the requests set forth in Exhibit E.

(xi)    Insurance. Certificates and endorsements of insurance evidencing the
existence of all insurance required to be maintained by Borrower pursuant to
Section 8.05(b) and the designation of Administrative Agent as the lender’s loss
payees or additional named insured, as the case may be, thereunder.

(xii)    Payoff Letter. A duly executed and delivered payoff letter with respect
to Borrower’s Existing Debt Facility, together with a release of such secured
parties’ existing liens, each in form and substance satisfactory to
Administrative Agent.

(xiii)    [Reserved]

(xiv)    Other Liens. Duly executed and delivered copies of such acknowledgement
letters as are reasonably requested by Administrative Agent with respect to
existing Liens.

 

38

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

6.02    Conditions to Second Borrowing. The obligation of each Lender to make a
Loan as part of a second Borrowing is subject to the following conditions
precedent, which shall have been satisfied or waived in writing by the Lenders:

(a)    First Borrowing. The first Borrowing shall have occurred.

(b)    Borrowing Date. Such Borrowing shall occur on or prior to March 29, 2018.

(c)    Amount of Borrowing. The amount of such Borrowing shall equal
$15,000,000.

(d)    Borrowing Milestone. The Second Draw Milestone shall have occurred.

(e)    Notice of Milestone Achievement and Audit. Borrower shall have delivered
to Administrative Agent a notice certifying satisfaction of the condition set
forth in clause (a) of the Second Draw Milestone no later than *** thereafter,
and the Lenders shall have been reasonably satisfied with the results of its
audit of Borrower’s Product Revenue by examining Borrower’s books and records.

(f)    Notice of Borrowing. A Notice of Borrowing shall have been received no
later than *** after satisfaction of the condition set forth in clause (a) of
the Second Draw Milestone.

(g)    Financing Fee. Administrative Agent shall have received, for the account
of each Lender, the fees payable pursuant to the Fee Letter.

(h)    Warrants. For the Lenders, pro rata in accordance with their
Proportionate Shares, the Warrants, duly executed by Borrower equal to ***% of
the common stock of Borrower, calculated on a Fully-Diluted Basis (as defined in
the Warrant) as of the dated of the Second Borrowing.

Notwithstanding the foregoing, in the event Borrower fails to achieve the Second
Draw Milestone, but achieves an average Market Capitalization of at least $***
for the *** ending December 31, 2017, subject to the conditions precedent set
forth in clauses (a), (b), and (g) above and subject to the receipt of a Notice
of Borrowing no later than *** after December 31, 2017, a second Borrowing in an
amount equal to $5,000,000 shall be made available to Borrower.

6.03    Conditions to Third Borrowing. The obligation of each Lender to make a
Loan as part of a third Borrowing is subject to the following conditions
precedent, which shall have been satisfied or waived in writing by the Lenders:

(a)    Second Borrowing. The second Borrowing shall have occurred.

(b)    Borrowing Date. Such Borrowing shall occur on or prior to December 28,
2018.

(c)    Amount of Borrowing. The amount of such Borrowing shall equal
$15,000,000.

(d)    Borrowing Milestone. The Third Draw Milestone shall have occurred.

 

39

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

(e)    Notice of Milestone Achievement and Audit. Borrower shall have delivered
to Administrative Agent a notice certifying satisfaction of the condition set
forth in clause (a) of the Third Draw Milestone no later than *** thereafter,
and the Lenders shall have been reasonably satisfied with the results of its
audit of Borrower’s Product Revenue by examining Borrower’s books and records.

(f)    Notice of Borrowing. A Notice of Borrowing shall have been received no
later than *** after satisfaction of clause (a) of the Third Draw Milestone.

(g)    Financing Fee. Administrative Agent shall have received, for the account
of each Lender, the fees payable pursuant to the Fee Letter.

(h)    Warrants. For the Lenders, pro rata in accordance with their
Proportionate Shares, the Warrants, duly executed by Borrower equal to ***% of
the common stock of Borrower, calculated on a Fully-Diluted Basis (as defined in
the Warrant) as of the dated of the Third Borrowing).

6.04    Conditions to Each Borrowing. The obligation of each Lender to make a
Loan as part of any Borrowing (including the first Borrowing) is also subject to
satisfaction of the following further conditions precedent on the applicable
Borrowing Date, which shall have been satisfied or waived in writing by the
Lenders:

(a)    Commitment Period. Except in the case of any PIK Loan, such Borrowing
Date shall occur during the Commitment Period.

(b)    No Default; Representations and Warranties. Both immediately prior to the
making of such Loan and after giving effect thereto and to the intended use
thereof:

(i)    no Default shall have occurred and be continuing or would result from
such proposed Loan or the application of the proceeds thereof;

(ii)    the representations and warranties made in Section 7 (A) in the case of
representations and warranties qualified by “materiality”, “Material Adverse
Effect” or “knowledge”, shall be true and correct in all respects and (B) in the
case of all other representations and warranties, true in all material respects
on and as of the Borrowing Date, and immediately after giving effect to the
application of the proceeds of the Borrowing, with the same force and effect as
if made on and as of such date (except that the representation regarding
representations and warranties that refer to a specific earlier date shall be
that they were true and correct on such earlier date);and

(iii)    no Material Adverse Effect has occurred or is reasonably likely to
occur after giving effect to such proposed Borrowing.

(c)    Notice of Borrowing. Except in the case of any PIK Loan, Administrative
Agent shall have received a Notice of Borrowing as and when required pursuant to
Section 2.02.

Each Borrowing shall constitute a certification by Borrower to the effect that
the conditions set forth in this Section 6.04 have been fulfilled as of the
applicable Borrowing Date.

 

40

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

SECTION 7

REPRESENTATIONS AND WARRANTIES

Each Obligor represents and warrants to Administrative Agent and the Lenders
that:

7.01    Power and Authority. Each of Borrower and its Subsidiaries (a) is a duly
organized and validly existing under the laws of its jurisdiction of
organization, (b) has all requisite corporate or other power, and has all
material governmental licenses, authorizations, consents and approvals necessary
to own its assets and carry on its Business as now being or as proposed to be
conducted except to the extent that failure to have the same could not
reasonably be expected to have a Material Adverse Effect, (c) is qualified to do
business and is in good standing in all jurisdictions in which the nature of the
Business conducted by it makes such qualification necessary and where failure so
to qualify could (either individually or in the aggregate) have a Material
Adverse Effect, and (d) has full power, authority and legal right to make and
perform each of the Loan Documents to which it is a party and, in the case of
Borrower, to borrow the Loans hereunder.

7.02    Authorization; Enforceability. The Transactions are within each
Obligor’s corporate powers and have been duly authorized by all necessary
corporate and, if required, by all necessary shareholder action. This Agreement
has been duly executed and delivered by each Obligor and constitutes, and each
of the other Loan Documents to which it is a party when executed and delivered
by such Obligor will constitute, a legal, valid and binding obligation of such
Obligor, enforceable against each Obligor in accordance with its terms, except
as such enforceability may be limited by (a) bankruptcy, insolvency,
reorganization, moratorium or similar laws of general applicability affecting
the enforcement of creditors’ rights and (b) the application of general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).

7.03    Governmental and Other Approvals; No Conflicts. The Transactions (a) do
not require any consent or approval of, registration or filing with, or any
other action by, any Governmental Authority or any third party, except for
(i) such as have been obtained or made and are in full force and effect and
(ii) filings and recordings in respect of the Liens created pursuant to the
Security Documents, (b) will not violate any applicable law or regulation or the
charter, bylaws or other organizational documents of Borrower and its
Subsidiaries, (c) will not violate any order of any Governmental Authority , (d)
will not violate or result in a default under any indenture, agreement or other
instrument binding upon Borrower and its Subsidiaries or assets, or give rise to
a right thereunder to require any payment to be made by any such Person, and
(e) will not result in the creation or imposition of any Lien (other than
Permitted Liens) on any asset of Borrower and its Subsidiaries.

7.04    Financial Statements; Material Adverse Change.

(a)    Financial Statements. The financial statements of Borrower (i) for the
periods prior to the Closing Date as filed with the U.S. Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), and (ii) as shall be furnished to the Lenders following the
Closing Date as provided for in Section 8.01 present fairly, in all material
respects, the financial position and results of operations and cash flows of

 

41

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

Borrower and its Subsidiaries as of such dates and for such periods in
accordance with GAAP, subject to year-end audit adjustments and the absence of
footnotes in the case of the statements previously-delivered statements of the
type described in Section 8.01(b). Neither Borrower nor any of its Subsidiaries
has any material contingent liabilities or unusual forward or long-term
commitments not disclosed in the aforementioned financial statements.

(b)    No Material Adverse Change. Except as may be disclosed in the Borrower’s
filings under the Exchange Act and filed prior to the Closing Date, since
December 31, 2015, there has been no Material Adverse Change.

7.05    Properties.

(a)    Property Generally. Each Obligor has good and marketable fee simple title
to, or valid leasehold interests in, all its real and personal Property material
to its Business, subject only to Permitted Liens and except for minor defects in
title that do not interfere with its ability to conduct its Business as
currently conducted or to utilize such properties for their intended purposes.

(b)    Intellectual Property. The Obligors represent and warrant to the Lenders
as follows, as of the date hereof, each Borrowing Notice Date and each Borrowing
Date:

(i)    Schedule 7.05(b)(i) of the Disclosure Letter (as amended from time to
time by Borrower in accordance with Section 7.21) contains:

(A)    a complete and accurate list of all applied for or registered Patents,
owned by or licensed to any Obligor, including the jurisdiction and patent
number;

(B)    a complete and accurate list of all applied for or registered Trademarks,
owned by or licensed to any Obligor, including the jurisdiction, trademark
application or registration number and the application or registration date; and

(C)    a complete and accurate list of all applied for or registered Copyrights,
owned by or licensed to any Obligor;

(ii)    Each Obligor is the absolute beneficial owner of all right, title and
interest in and to and have the right to use the Obligor Intellectual Property
with no breaks in chain of title with good and marketable title, free and clear
of any Liens or Claims of any kind whatsoever other than Permitted Liens.
Without limiting the foregoing, and except as set forth in Schedule 7.05(b)(ii)
of the Disclosure Letter.

(A)    other than with respect to the Material Agreements, or as permitted by
Section 9.09, the Obligors have not transferred ownership of Material
Intellectual Property, in whole or in part, to any other Person who is not an
Obligor;

(B)    other than (i) the Material Agreements, (ii) customary restrictions in
in-bound licenses of Intellectual Property and non-disclosure agreements, or
(iii) as would have been or is permitted by Section 9.09, there are no
judgments, covenants not to sue, permits, grants, licenses, Liens (other than
Permitted Liens), Claims, or other agreements or arrangements relating to the
Obligors’ Material Intellectual Property, including any development, submission,
services, research, license or support agreements, which bind, obligate or
otherwise restrict the Obligors;

 

42

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

(C)    the use of any of the Obligor Intellectual Property, to any Obligor’s
Knowledge, does not breach, violate, infringe or interfere with or constitute a
misappropriation of any valid rights arising under any Intellectual Property of
any other Person;

(D)    there are no pending or, to any Obligor’s Knowledge, threatened Claims
against the Obligors asserted by any other Person relating to the Obligor
Intellectual Property, including any Claims of adverse ownership, invalidity,
infringement, misappropriation, violation or other opposition to or conflict
with such Intellectual Property; no Obligor has received any written notice from
any Person that any Obligor business, the use of the Obligor Intellectual
Property, or the manufacture, use or sale of any product or the performance of
any service by any Obligor infringes upon, violates or constitutes a
misappropriation of, or may infringe upon, violate or constitute a
misappropriation of, or otherwise interfere with, any other Intellectual
Property of any other Person;

(E)    no Obligor has any Knowledge that the Obligor Intellectual Property is
being infringed, violated, misappropriated or otherwise used by any other Person
without the express authorization of the Obligors. Without limiting the
foregoing, no Obligor has put any other Person on notice of actual or potential
infringement, violation or misappropriation of any of the Obligor Intellectual
Property; no Obligor has initiated the enforcement of any Claim with respect to
any of the Obligor Intellectual Property;

(F)    all relevant current and former employees and contractors of each Obligor
have executed written confidentiality and invention assignment Contracts with
such Obligor that irrevocably assign to such Obligor or its designee all of
their rights to any Inventions relating to any of Obligor’s business;

(G)    to the Knowledge of the Obligors, the Obligor Intellectual Property is
all the Intellectual Property necessary for the operation of Obligors’ business
as it is currently conducted or as currently contemplated to be conducted;

(H)    each Obligor has taken reasonable precautions to protect the secrecy,
confidentiality and value of its Obligor Intellectual Property consisting of
trade secrets and confidential information;

(I)    each Obligor has delivered to Administrative Agent accurate and complete
copies of all Material Agreements relating to the Obligor Intellectual Property;

(J)    there are no pending or, to the Knowledge of any of the Obligors,
threatened in writing Claims against the Obligors asserted by any other Person
relating to the Material Agreements, including any Claims of breach or default
under such Material Agreements;

 

43

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

(iii)    With respect to the Obligor Intellectual Property consisting of
Patents, except as set forth in Schedule 7.05(b)(ii) of the Disclosure Letter,
and without limiting the representations and warranties in Section 7.05(b)(ii)
of the Disclosure Letter:

(A)    each of the issued claims in such Patents, to Obligors’ Knowledge, is
valid and enforceable;

(B)    the inventors claimed in such Patents have executed written Contracts
with an Obligor or its predecessor-in-interest that properly and irrevocably
assigns to an Obligor or predecessor-in-interest all of their rights to any of
the Inventions claimed in such Patents to the extent permitted by applicable
law;

(C)    none of the Patents, or the Inventions claimed in them, have been
dedicated to the public except as a result of intentional decisions made by the
applicable Obligor;

(D)    to any Obligor’s Knowledge, all prior art material to such Patents was
adequately disclosed to or considered by the respective patent offices during
prosecution of such Patents to the extent required by applicable law or
regulation;

(E)    subsequent to the issuance of such Patents, neither any Obligor nor their
predecessors in interest, have filed any disclaimer or filed any other voluntary
reduction in the scope of the Inventions claimed in such Patents;

(F)    no allowable or allowed subject matter of such Patents, to any Obligor’s
Knowledge, is subject to any competing conception claims of allowable or allowed
subject matter of any patent applications or patents of any third party and have
not been the subject of any interference, re-examination or opposition
proceedings, nor are the Obligors aware of any basis for any such interference,
re-examination or opposition proceedings;

(G)    no such Patents, to any Obligor’s Knowledge, have ever been finally
adjudicated to be invalid, unpatentable or unenforceable for any reason in any
administrative, arbitration, judicial or other proceeding, and, with the
exception of publicly available documents in the applicable Patent Office
recorded with respect to any Patents, no Obligor has received any notice
asserting that such Patents are invalid, unpatentable or unenforceable; if any
of such Patents is terminally disclaimed to another patent or patent
application, all patents and patent applications subject to such terminal
disclaimer are included in the Collateral;

(H)    no Obligor has received an opinion, whether preliminary in nature or
qualified in any manner, which concludes that a challenge to the validity or
enforceability of any of such Patents is more likely than not to succeed;

(I)    no Obligor has any Knowledge that any Obligor or any prior owner of such
Patents or their respective agents or representatives have engaged in any
conduct, or omitted to perform any necessary act, the result of which would
invalidate or render unpatentable or unenforceable any such Patents; and

 

44

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

(J)    all maintenance fees, annuities, and the like due or payable on the
Patents have been timely paid or the failure to so pay was the result of an
intentional decision by the applicable Obligor or would not reasonably be
expected to result in a Material Adverse Change.

(c)    Material Intellectual Property. Schedule 7.05(c) of the Disclosure Letter
(as amended from time to time by Borrower in accordance with Section 7.21)
contains an accurate list of the Obligor Intellectual Property that is material
to any Obligor’s business with an indication as to whether the applicable
Obligor owns or has an exclusive or non-exclusive license to such Obligor
Intellectual Property.

7.06    No Actions or Proceedings.

(a)    Litigation. There is no litigation, investigation or proceeding pending
or, to any Obligor’s Knowledge, threatened with respect to Borrower and its
Subsidiaries by or before any Governmental Authority or arbitrator (i) that
either individually or in the aggregate could reasonably be expected to have a
Material Adverse Effect, except as specified in Schedule 7.06 of the Disclosure
Letter or (ii) that involves this Agreement or the Transactions.

(b)    Environmental Matters. The operations and Property of Borrower and its
Subsidiaries comply with all applicable Environmental Laws, except to the extent
the failure to so comply (either individually or in the aggregate) could not
reasonably be expected to have a Material Adverse Effect.

(c)    Labor Matters. Borrower and its Subsidiaries have not engaged in unfair
labor practices and there are no material labor actions or disputes involving
the employees of Borrower or its Subsidiaries.

7.07    Compliance with Laws and Agreements. Each of the Obligors is in
compliance with all laws, regulations and orders of any Governmental Authority
applicable to it or its property and all indentures, agreements and other
instruments binding upon it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect. No Default has occurred and is continuing.

7.08    Taxes. All federal, state, local and foreign income and franchise and
other material Tax returns, reports and statements (collectively, the “Tax
Returns”) required to be filed by any Tax Affiliate have been timely filed with
the appropriate Governmental Authorities, all such Tax Returns are true and
correct in all material respects, and all Taxes reflected therein or otherwise
due and payable have been timely paid (except for those contested in good faith
by appropriate proceedings diligently conducted and for which adequate reserves
are maintained on the books of the appropriate Tax Affiliate in accordance with
GAAP). No Tax Return is under audit or examination by any Governmental Authority
and no notice of any material audit or examination or any assertion of any claim
for Taxes has been given or made by any Governmental Authority. Proper and
accurate amounts have been withheld by each Tax Affiliate from their respective
employees for all periods in full and complete compliance with the Tax, social
security and unemployment withholding provisions of applicable Laws and such
withholdings have been timely paid to the respective Governmental Authorities.
No Tax Affiliate has participated in a “listed transaction” within the meaning
of Treasury Regulation Section 1.6011-4(b)(2).

 

45

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

7.09    Full Disclosure. Obligors have disclosed to Administrative Agent and the
Lenders all Material Agreements to which any Obligor is subject, and all other
matters to any Obligor’s Knowledge, that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect. None of the
reports, financial statements, certificates or other information furnished by or
on behalf of any Obligor to Administrative Agent or any Lender in connection
with the negotiation of this Agreement and the other Loan Documents or delivered
hereunder or thereunder (as modified or supplemented by other information so
furnished) contains any material misstatement of material fact or omits to state
any material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that, with
respect to projected financial information, Borrower represents only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time.

7.10    Regulation.

(a)    Investment Company Act. Neither Borrower nor any of its Subsidiaries is
an “investment company” as defined in, or subject to regulation under, the
Investment Company Act of 1940.

(b)    Margin Stock. Neither Borrower nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose, whether immediate, incidental or ultimate, of buying or
carrying Margin Stock, and no part of the proceeds of the Loans will be used to
buy or carry any Margin Stock in violation of Regulation T, U or X.

(c)    OFAC; Sanctions, Etc. Neither Borrower nor any of its Subsidiaries or, to
the knowledge of any Obligor, any Related Person (i) is currently the subject of
any Sanctions or is a Sanctioned Person, (ii) is located (or has its assets
located), organized or residing in any Sanctioned Jurisdiction, (iii) is or has
been (within the previous five (5) years) engaged in any impermissible
transaction with any Person who is now or was then the subject of Sanctions or
who is located, organized or residing in any Sanctioned Jurisdiction,
(iv) directly or indirectly derives revenues from investments in, or
transactions with, Sanctioned Persons, (v) has taken any action, directly or
indirectly, that would result in a violation by such Persons of any
Anti-Corruption Laws, or (vi) has violated any Anti-Money Laundering Laws. No
Loan, nor the proceeds from any Loan, has been or will be used, directly or
indirectly, to lend, contributed or provide to, or has been or will be otherwise
made available to fund, any impermissible activity or business of any Person
located, organized or residing in any Sanctioned Jurisdiction or who is the
subject of any Sanctions, or in any other manner that will result in any
violation by any Person (including the Lender and its Affiliates) of Sanctions
or otherwise in violation of any Anti-Corruption Laws or Anti-Money Laundering
Laws. Each of Borrower and its Subsidiaries has implemented and maintains in
effect policies and procedures designed to promote compliance by Borrower and
its Subsidiaries and their respective directors, officers, employees, agents and
Related Persons with the Anti-Corruption Laws.

 

46

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

7.11    Solvency. Each Obligor is and, immediately after giving effect to the
Borrowing and the use of proceeds thereof will be, Solvent.

7.12    Subsidiaries. Set forth on Schedule 7.12 of the Disclosure Letter is a
complete and correct list of all Subsidiaries as of the date hereof. Each such
Subsidiary is duly organized and validly existing under the jurisdiction of its
organization shown in said Schedule 7.12 of the Disclosure Letter, and the
percentage ownership by Borrower of each such Subsidiary is as shown in said
Schedule 7.12 of the Disclosure Letter.

7.13    Indebtedness and Liens. Set forth on Schedule 7.13(a) of the Disclosure
Letter is a complete and correct list of all Indebtedness of each Obligor
outstanding as of the date hereof. Schedule 7.13(b) of the Disclosure Letter is
a complete and correct list of all Liens granted by Borrower and other Obligors
with respect to their respective Property and outstanding as of the date hereof.

7.14    Material Agreements. Set forth on Schedule 7.14 of the Disclosure Letter
(as amended from time to time by Borrower in accordance with Section 7.21) is a
complete and correct list of (i) each Material Agreement and (ii) each agreement
creating or evidencing any Material Indebtedness. No Obligor is in default under
any such Material Agreement or agreement creating or evidencing any Material
Indebtedness. Except as otherwise disclosed on Schedule 7.14 of the Disclosure
Letter, all material vendor purchase agreements and provider contracts of the
Obligors are in full force and effect without material modification from the
form in which the same were disclosed to Administrative Agent and the Lenders.

7.15    Restrictive Agreements. None of the Obligors is subject to any
indenture, agreement, instrument or other arrangement that prohibits, restricts
or imposes any condition upon (a) the ability of Borrower or any Subsidiary to
create, incur or permit to exist any Lien upon any of its property or assets
(other than (x) customary provisions in contracts (including without limitation
leases and in-bound licenses of Intellectual Property) restricting the
assignment thereof or (y) restrictions or conditions imposed by any agreement
governing secured Permitted Indebtedness permitted under Section 9.01(h), to the
extent that such restrictions or conditions apply only to the property or assets
securing such Indebtedness) or (b) the ability of any Subsidiary to pay
dividends or other distributions with respect to any shares of its capital stock
or to make or repay loans or advances to Borrower or any other Subsidiary or to
Guarantee Indebtedness of Borrower or any other Subsidiary (each, a “Restrictive
Agreement”), except in each case for those listed on Schedule 7.15 of the
Disclosure Letter or otherwise permitted under Section 9.11.

7.16    Real Property.

(a)    Generally. Neither Borrower nor any of its Subsidiaries owns or leases
(as tenant thereof) any real property, except as described on Schedule 7.16 of
the Disclosure Letter (as amended from time to time by Borrower in accordance
with Section 7.21).

(b)    Borrower Lease. (i) Borrower has delivered a true, accurate and complete
copy of the Borrower Lease to Administrative Agent.

(ii)    The Borrower Lease is in full force and effect and no default has
occurred under the Borrower Lease and, to the Knowledge of Borrower, there is no
existing condition which, but for the passage of time or the giving of notice,
could reasonably be expected to result in a default under the terms of the
Borrower Lease.

 

47

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

(iii)    Borrower is the tenant under the Borrower Lease and has not
transferred, sold, assigned, conveyed, disposed of, mortgaged, pledged,
hypothecated, or encumbered any of its interest in, the Borrower Lease.

7.17    Pension Matters. Schedule 7.17 of the Disclosure Letter sets forth, as
of the date hereof, a complete and correct list of, and that separately
identifies, (a) all Title IV Plans, (b) all Multiemployer Plans and (c) all
material Benefit Plans. Each Benefit Plan, and each trust thereunder, intended
to qualify for tax exempt status under Section 401 or 501 of the Code or other
Requirements of Law so qualifies. Except for those that could not, in the
aggregate, have a Material Adverse Effect, (x) each Benefit Plan is in
compliance with applicable provisions of ERISA, the Code and other Requirements
of Law, (y) there are no existing or pending (or to the Knowledge of any Obligor
or Subsidiary thereof, threatened) claims (other than routine claims for
benefits in the normal course and administrative appeals of denied claims),
sanctions, actions, lawsuits or other proceedings or investigation involving any
Benefit Plan to which any Obligor or Subsidiary thereof incurs or otherwise has
or could have an obligation or any liability or Claim and (z) no ERISA Event is
reasonably expected to occur. Borrower and each of its ERISA Affiliates has met
all applicable requirements under the ERISA Funding Rules with respect to each
Title IV Plan, and no waiver of the minimum funding standards under the ERISA
Funding Rules has been applied for or obtained. As of the most recent valuation
date for any Title IV Plan, the funding target attainment percentage (as defined
in Section 430(d)(2) of the Code) is at least 60%, and neither Borrower nor any
of its ERISA Affiliates knows of any facts or circumstances that could
reasonably be expected to cause the funding target attainment percentage to fall
below 60% as of the most recent valuation date. As of the date hereof, no ERISA
Event has occurred in connection with which obligations and liabilities
(contingent or otherwise) remain outstanding. No ERISA Affiliate would have any
Withdrawal Liability as a result of a complete withdrawal from any Multiemployer
Plan on the date this representation is made.

7.18    Collateral; Security Interest. Each Security Document is effective to
create in favor of the Secured Parties a legal, valid and enforceable security
interest in the Collateral subject thereto and each such security interest is
perfected to the extent required by (and has the priority required by) the
applicable Security Document. The Security Documents collectively are effective
to create in favor of the Secured Parties a legal, valid and enforceable
security interest in the Collateral, which security interests are first-priority
(subject only to Permitted Priority Liens).

7.19    Regulatory Approvals. Borrower and its Subsidiaries hold, and will
continue to hold, either directly or through licensees and agents, all
Regulatory Approvals, licenses, permits and similar governmental authorizations
of a Governmental Authority necessary or required for Borrower and its
Subsidiaries to conduct the Business in the manner currently conducted.

7.20    [Reserved].

 

48

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

7.21    Update of Schedules. Each of Schedules 7.05(b)(i), 7.05(c), 7.14 and
7.16 of the Disclosure Letter may be updated by Borrower from time to time in
order to ensure the continued accuracy of such Schedule as of any upcoming date
on which representations and warranties are made incorporating the information
contained on such Schedule. Such update may be accomplished by Borrower
providing to Administrative Agent, in writing (including by electronic means), a
revised version of such Schedule in accordance with the provisions of
Section 13.02. Each such updated Schedule shall be effective immediately upon
the receipt thereof by the Lenders.

SECTION 8

AFFIRMATIVE COVENANTS

Each Obligor covenants and agrees with Administrative Agent and the Lenders
that, until the Commitments have expired or been terminated and all Obligations
(other than Warrant Obligations) have been paid in full indefeasibly in cash:

8.01    Financial Statements and Other Information. Borrower will furnish to
Administrative Agent:

(a)    as soon as available and in any event within *** following the date
Borrower files or is required to file (or would be required to file if it were
subject to the reporting requirements under the Exchange Act) a Quarterly Report
on Form 10-Q with the SEC, the consolidated balance sheets of the Obligors as of
the end of such quarter, and the related consolidated statements of income,
shareholders’ equity and cash flows of Borrower and its Subsidiaries for such
quarter and the portion of the fiscal year through the end of such quarter,
prepared in accordance with GAAP consistently applied, all in reasonable detail
and setting forth in comparative form the figures for the corresponding period
in the preceding fiscal year, together with a certificate of a Responsible
Officer of Borrower stating that such financial statements fairly present in all
material respects the financial condition of Borrower and its Subsidiaries as at
such date and the results of operations of Borrower and its Subsidiaries for the
period ended on such date and have been prepared in accordance with GAAP
consistently applied, subject to changes resulting from normal, year-end audit
adjustments and except for the absence of notes; provided that, so long as
Borrower is subject to the public reporting requirements of the Exchange Act,
Borrower’s filing of a Quarterly Report on Form 10-Q with the SEC shall be
deemed to satisfy the requirements of this Section 8.01(a) on the date on which
such report is first available via the SEC’s EDGAR system or a successor system
related thereto;

(b)    as soon as available and in any event within *** following the date
Borrower files or is required to file (or would be required to file if it were
subject to the reporting requirements under the Exchange Act) its Annual Report
on Form 10-K with the SEC, the consolidated balance sheets of Borrower and its
Subsidiaries as of the end of such fiscal year, and the related consolidated
statements of income, shareholders’ equity and cash flows of Borrower and its
Subsidiaries for such fiscal year, prepared in accordance with GAAP consistently
applied, all in reasonable detail and setting forth in comparative form the
figures for the previous fiscal year, accompanied by a report and opinion
thereon of Cherry Bekaert LLP or another firm of independent certified public
accountants of recognized national standing approved by the Administrative
Agent, such approval not to be unreasonably withheld or delayed, which report

 

49

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

and opinion shall be prepared in accordance with generally accepted auditing
standards; provided that, so long as Borrower is subject to the public reporting
requirements of the Exchange Act, Borrower’s filing of an Annual Report on Form
10-K with the SEC shall be deemed to satisfy the requirements of
this Section 8.01(b) on the date on which such report is first available via the
SEC’s EDGAR system or a successor system related thereto;

(c)    [reserved]

(d)    together with the financial statements required pursuant to Sections
8.01(a) and (b), a compliance certificate of a Responsible Officer as of the end
of the applicable accounting period (which delivery may, unless a Lender
requests executed originals, be by electronic communication including fax or
email and shall be deemed to be an original authentic counterpart thereof for
all purposes) in the form of Exhibit D (a “Compliance Certificate”) including
details of any material issues that are raised by auditors;

(e)    promptly upon receipt thereof, copies of all letters of representation
signed by an Obligor to its auditors and copies of all auditor reports delivered
for each fiscal quarter;

(f)    as soon as available, but in no event delivered later than *** after the
end of each fiscal year, a consolidated financial forecast for Borrower and its
Subsidiaries for the following five fiscal years, including forecasted
consolidated balance sheets, consolidated statements of income, shareholders’
equity and cash flows of Borrower and its Subsidiaries;

(g)    promptly after the same are released, copies of all press releases,
unless the same are available publicly via PR Newswire, Bloomberg, Yahoo!
Finance or similar services;

(h)    promptly, and in any event within *** after receipt thereof by an Obligor
thereof, copies of each notice or other correspondence received from any
securities regulator or exchange to the authority of which an Obligor may become
subject from time to time concerning any investigation or possible investigation
or other inquiry by such agency regarding financial or other operational results
of such Obligor;

(i)    the information regarding insurance maintained by Borrower and its
Subsidiaries as required under Section 8.05;

(j)    within *** following Administrative Agent’s request at any time, proof of
Borrower’s compliance with Section 10.01; and

(k)    within *** following the occurrence of any meeting of Borrower’s Board of
Directors or holders of Borrower’s Equity Interests, as applicable, copies of
all statements, reports and notices (including board kits) made available to
Borrower’s Board of Directors or holders of Borrower’s Equity Interests;
provided that any such material may be redacted by Borrower to exclude
information relating to the Lenders (including Borrower’s strategy regarding the
Loans) and provided, further that materials made available via the SEC’s EDGAR
system or a successor system shall be deemed to satisfy the requirements of
this Section 8.01(k) upon being made so available.

 

50

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

8.02    Notices of Material Events. Borrower will furnish to Administrative
Agent written notice of the following promptly after a Responsible Officer first
learns of the existence of:

(a)    the occurrence of any Default;

(b)    notice of the occurrence of any event with respect to an Obligor’s
property or assets resulting in a Loss aggregating $*** (or the Equivalent
Amount in other currencies) or more;

(c)    (A) any proposed acquisition of stock, assets or property by any Obligor
that would reasonably be expected to result in environmental liability under
Environmental Laws, and (B)(1) spillage, leakage, discharge, disposal, leaching,
migration or release of any Hazardous Material required to be reported to any
Governmental Authority under applicable Environmental Laws, and (2) all actions,
suits, claims, notices of violation, hearings, investigations or proceedings
pending, or to any Obligor’s Knowledge, threatened against or affecting Borrower
or any of its Subsidiaries or with respect to the ownership, use, maintenance
and operation of their respective businesses, operations or properties, relating
to Environmental Laws or Hazardous Material;

(d)    the assertion of any environmental matter by any Person against, or with
respect to the activities of, Borrower or any of its Subsidiaries and any
alleged violation of or non-compliance with any Environmental Laws or any
permits, licenses or authorizations which could reasonably be expected to
involve damages in excess of $*** other than any environmental matter or alleged
violation that, if adversely determined, could not (either individually or in
the aggregate) have a Material Adverse Effect;

(e)    the filing or commencement of any action, suit or proceeding by or before
any arbitrator or Governmental Authority against or affecting Borrower or any of
its Affiliates that, if adversely determined, could reasonably be expected to
result in a Material Adverse Effect provided that (1) notices required for this
subsection (e) may be delivered with Borrower’s quarterly Compliance Certificate
unless any of the foregoing events would reasonably be expected to have a
Material Adverse Effect and (2) for so long as Borrower is subject to the public
reporting requirements of the Exchange Act, items in this subsection (e) shall
be deemed to be furnished in writing pursuant to this subsection (e) on the date
on which such information is first available via the SEC’s EDGAR system or any
successor thereto;

(f)    (i) on or prior to any filing by any ERISA Affiliate of any notice of
intent to terminate any Title IV Plan, a copy of such notice and (ii) promptly,
and in any event within ***, after any Responsible Officer of any ERISA
Affiliate knows or has reason to know that a request for a minimum funding
waiver under Section 412 of the Code has been filed with respect to any Title IV
Plan or Multiemployer Plan, a notice (which may be made by telephone if promptly
confirmed in writing) describing such waiver request and any action that any
ERISA Affiliate proposes to take with respect thereto, together with a copy of
any notice filed with the PBGC or the IRS pertaining thereto;

(g)    the termination of any Material Agreement other than upon its scheduled
termination date as set forth in the applicable Material Agreement; (ii) the
receipt by Borrower or

 

51

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

any of its Subsidiaries of a written notice from a counterparty asserting a
default or breach by Borrower or any of its subsidiaries under any Material
Agreement where such alleged default or breach, if accurate, would permit such
counterparty to terminate such Material Agreement; (iii) the entering into of
any new Material Agreement by an Obligor; or (iv) any material amendment to a
Material Agreement in any manner adverse to Lenders; provided that (1) notices
required for this subsection (g) may be delivered with Borrower’s quarterly
Compliance Certificate unless any of the foregoing events would reasonably be
expected to have a Material Adverse Effect and (2) for so long as Borrower is
subject to the public reporting requirements of the Exchange Act, items (i),
(iii) and (iv) shall be deemed to be furnished in writing pursuant to this
subsection (g) on the date on which such information is first available via the
SEC’s EDGAR system or any successor thereto (provided, however, that, if
Borrower redacts any part of such agreement or other document that it files with
the SEC, then Borrower shall, prior to or concurrently with filing such
agreement or document with the SEC, deliver to Administrative Agent a completely
unredacted version of such agreement or document);

(h)    the reports and notices as required by the Security Documents;

(i)    within *** of the date thereof, or, if earlier, on the date of delivery
of any financial statements pursuant to Section 8.01, notice of any material
change in accounting policies or financial reporting practices by the Obligors;

(j)    promptly after the occurrence thereof, notice of any labor controversy
resulting in or threatening to result in any strike, work stoppage, boycott,
shutdown or other material labor disruption against or involving an Obligor;

(k)    a licensing agreement or arrangement entered into by Borrower or any
Subsidiary in connection with any infringement or alleged infringement of the
Intellectual Property of another Person;

(l)    any other development that results in, or could reasonably be expected to
result in, a Material Adverse Effect;

(m)    concurrently with the delivery of financial statements under Section
8.01(b), the creation or other acquisition of any Intellectual Property by
Borrower or any Subsidiary after the date hereof and during such prior fiscal
year which is registered or becomes registered or the subject of an application
for registration with the U.S. Copyright Office or the U.S. Patent and Trademark
Office, as applicable, or with any other equivalent foreign Governmental
Authority;

(n)    any change to any Obligor’s ownership of Deposit Accounts, Securities
Accounts and Commodity Accounts, by delivering to Administrative Agent an
updated Annex 7 to the Security Agreement setting forth a complete and correct
list of all such accounts as of the date of such change; or

(o)    such other information respecting the operations, properties, business or
condition (financial or otherwise) of the Obligors (including with respect to
the Collateral) as Administrative Agent may from time to time reasonably
request.

 

52

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

Each notice delivered under this Section 8.02 shall be accompanied by a
statement of a financial officer or other executive officer of Borrower setting
forth the details of the event or development requiring such notice and any
action taken or proposed to be taken with respect thereto.

8.03    Existence; Conduct of Business. Such Obligor will, and will cause each
of its Subsidiaries to, do or cause to be done all things necessary to preserve,
renew and keep in full force and effect its legal existence and the rights,
licenses, permits, privileges and franchises material to the conduct of its
Business, except where failure to do so could not reasonably be expected to have
a Material Adverse Effect; provided that the foregoing shall not prohibit any
merger, amalgamation, consolidation, liquidation or dissolution permitted under
Section 9.03.

8.04    Payment of Obligations. Such Obligor will, and will cause each of its
Subsidiaries to, pay and discharge its obligations, including (i) all Taxes,
fees, assessments and governmental charges or levies imposed upon it or upon its
properties or assets prior to the date on which penalties attach thereto, and
all lawful claims for labor, materials and supplies which, if unpaid, might
become a Lien upon any properties or assets of Borrower or any Subsidiary,
except to the extent such Taxes, fees, assessments or governmental charges or
levies, or such claims are being contested in good faith by appropriate
proceedings and are adequately reserved against in accordance with GAAP; and
(ii) all lawful claims which, if unpaid, would by law become a Lien upon its
property not constituting a Permitted Lien.

8.05    Insurance. Such Obligor will, and will cause each of its Subsidiaries to
maintain, with financially sound and reputable insurance companies, insurance in
such amounts and against such risks as are customarily maintained by companies
engaged in the same or similar businesses operating in the same or similar
locations. Upon the request of Administrative Agent or the Majority Lenders,
such Obligor shall furnish Administrative Agent from time to time with full
information as to the insurance carried by it and, if so requested, copies of
all such insurance policies. Such Obligor also shall furnish to Administrative
Agent from time to time upon the request of Administrative Agent or the Majority
Lenders a certificate from such Obligor’s insurance broker or other insurance
specialist stating that all premiums then due on the policies relating to
insurance on the Collateral have been paid, that such policies are in full force
and effect and that such insurance coverage and such policies comply with all
the requirements of this Section 8.05. Such Obligor shall use commercially
reasonable efforts to ensure, or cause others to ensure, that all insurance
policies required under this Section 8.05 shall provide that they shall not be
terminated or cancelled nor shall any such policy be materially changed in a
manner adverse to such Obligor without at least *** prior written notice to such
Obligor and Administrative Agent. Receipt of notice of termination or
cancellation of any such insurance policies or reduction of coverages or amounts
thereunder shall entitle the Secured Parties to renew any such policies, cause
the coverages and amounts thereof to be maintained at levels required pursuant
to the first sentence of this Section 8.05 or otherwise to obtain similar
insurance in place of such policies, in each case at the expense of such Obligor
(payable on demand). The amount of any such expenses shall accrue interest at
the Default Rate if not paid on demand, and shall constitute “Obligations.”

8.06    Books and Records; Inspection Rights. Such Obligor will, and will cause
each of its Subsidiaries to, keep proper books of record and account in which
full, true and correct entries

 

53

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

are made of all dealings and transactions in relation to its Business and
activities. Such Obligor will, and will cause each of its Subsidiaries to,
permit any representatives designated by Administrative Agent, upon reasonable
(but no less than ***) prior notice, to visit and inspect its properties, to
examine and make extracts from its books and records, and to discuss its
affairs, finances and condition with its officers and independent accountants,
all at such reasonable times (but not more often than once a year unless an
Event of Default has occurred and is continuing) as Administrative Agent may
request. The Obligors shall pay all documented out-of-pocket costs of all such
inspections.

8.07    Compliance with Laws and Other Obligations. Such Obligor will, and will
cause each of its Subsidiaries to, (i) comply in all material respects with all
laws, rules, regulations and orders of any Governmental Authority applicable to
it or its property (including Environmental Laws) and (ii) comply in all
material respects with all terms of Indebtedness and all other Material
Agreements.

8.08    Maintenance of Properties, Etc.

(a)    Such Obligor shall, and shall cause each of its Subsidiaries to, maintain
and preserve all of its properties necessary or useful in the proper conduct of
its Business in good working order and condition in accordance with the general
practice of other Persons of similar character and size, ordinary wear and tear
and damage from casualty or condemnation excepted except where failure to do so
could not reasonably be expected to have a Material Adverse Effect.

(b)    Without limiting the generality of Section 8.08(a), each Obligor shall
comply with each of the following covenants with respect to the Borrower Lease:

(i)    Borrower shall diligently perform and timely observe all of the terms,
covenants and conditions of the Borrower Lease on the part of Borrower to be
performed and observed prior to the expiration of any applicable grace period
therein provided and do everything necessary to preserve and to keep unimpaired
and in full force and effect the Borrower Lease.

(ii)    Borrower shall promptly notify Administrative Agent of the giving of any
written notice by Borrower Landlord to Borrower of any default by Borrower
thereunder, and promptly deliver to Administrative Agent a true copy of each
such notice. If Borrower shall be in default under the Borrower Lease,
Administrative Agent and the Lenders shall have the right (but not the
obligation) to cause the default or defaults under the Borrower Lease to be
remedied and otherwise exercise any and all rights of Borrower under the
Borrower Lease, as may be necessary to prevent or cure any default.
Administrative Agent and Lenders shall have the right to enter all or any
portion of the Property, at such times and in such manner as Administrative
Agent or the Majority Lenders reasonably deem necessary, to prevent or to cure
any such default. Without limiting the foregoing, upon any such default,
Borrower shall promptly execute, acknowledge and deliver to Administrative Agent
such instruments as may reasonably be required of Borrower to permit
Administrative Agent and Lenders to cure any default under the Borrower Lease or
permit Administrative Agent and Lenders to take such other action required to
enable Lenders to cure or remedy the matter in default and preserve the security

 

54

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

interest of Lenders under the Loan Documents with respect to the Borrower
Facility. Any amounts paid by Administrative Agent or any Lender pursuant to
this Section 8.08(b) shall be payable on demand by Obligors, shall accrue
interest at the Default Rate if not paid on demand, and shall constitute
“Obligations.”

(iii)    Borrower shall use commercially reasonable efforts to enforce, in a
commercially reasonable manner, each covenant or obligation of Borrower Landlord
in the Borrower Lease in accordance with its terms. Subject to the terms and
requirements of the Borrower Lease, within *** after receipt of written request
by Administrative Agent or Lenders, Borrower shall use reasonable efforts to
obtain from Borrower Landlord under the Borrower Lease and furnish to
Administrative Agent an estoppel certificate from Borrower Landlord stating the
date through which rent has been paid and whether or not, to Borrower Landlord’s
knowledge, there are any defaults thereunder and specifying the nature of such
claimed defaults, if any, and such other matters as Administrative Agent or
Lenders may reasonably request or in the form required pursuant to the terms of
the Borrower Lease. Borrower shall furnish to Administrative Agent all
information that Administrative Agent or Lenders may reasonably request from
time to time in the possession of Borrower (or reasonably available to Borrower)
concerning the Borrower Lease and Borrower’s compliance with the Borrower Lease.

(iv)    Borrower, promptly upon learning that Borrower Landlord has failed to
perform the material terms and provisions under the Borrower Lease and
immediately upon learning of a rejection or disaffirmance or purported rejection
or disaffirmance of the Borrower Lease pursuant to any state or federal
bankruptcy law, shall notify Administrative Agent thereof. Borrower shall
promptly notify Administrative Agent of any request that any party to the
Borrower Lease makes for arbitration or other dispute resolution procedure
pursuant to the Borrower Lease and of the institution of any such arbitration or
dispute resolution. Borrower hereby authorizes Administrative Agent and Lenders
to attend any such arbitration or dispute, and upon the occurrence and during
the continuance of an Event of Default participate in any such arbitration or
dispute resolution but such participation shall not be to the exclusion of
Borrower; provided, however, that, in any case, Borrower shall consult with
Administrative Agent with respect to the matters related thereto. Borrower shall
promptly deliver to Administrative Agent a copy of the determination of each
such arbitration or dispute resolution mechanism.

(v)    If Administrative Agent, any Lender or any of their respective designees
shall acquire or obtain a new Borrower Lease following a termination of the
Borrower Lease, then Borrower shall have no right, title or interest whatsoever
in or to such new Borrower Lease, or any proceeds or income arising from the
estate arising under any such new Borrower Lease, including from any sale or
other disposition thereof. Administrative Agent, such Lender or such designee
shall hold such new Borrower Lease free and clear of any right or claim of
Borrower.

(vi)    Borrower shall promptly, after obtaining knowledge of such filing notify
Administrative Agent orally of any filing by or against Borrower Landlord under
the Borrower Lease of a petition under the Bankruptcy Code or other applicable
law. Borrower shall thereafter promptly give written notice of such filing to
Administrative Agent, setting forth any information available to Borrower as to
the date of such filing, the court in which such petition was filed, and the
relief sought in such filing. Borrower shall promptly deliver to Administrative
Agent any and all notices, summonses, pleadings, applications and other
documents received by Borrower in connection with any such petition and any
proceedings relating to such petition.

 

55

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

8.09    Licenses. Such Obligor shall, and shall cause each of its Subsidiaries
to, obtain and maintain all material licenses, authorizations, consents,
filings, exemptions, registrations and other Governmental Approvals necessary in
connection with the execution, delivery and performance of the Loan Documents,
the consummation of the Transactions or the operation and conduct of its
Business and ownership of its properties.

8.10    Action under Environmental Laws. Such Obligor shall, and shall cause
each of its Subsidiaries to, upon becoming aware of the presence of any
Hazardous Materials or the existence of any environmental liability under
applicable Environmental Laws with respect to their respective businesses,
operations or properties, take all actions, at their cost and expense, as shall
be necessary or advisable to investigate and clean up the condition of their
respective businesses, operations or properties, including all required removal,
containment and remedial actions, and restore their respective businesses,
operations or properties to a condition in compliance with applicable
Environmental Laws.

8.11    Use of Proceeds. The proceeds of the Loans will be used only as provided
in Section 2.04. No part of the proceeds of the Loans will be used, whether
directly or indirectly, for any purpose that entails a violation of any of the
Regulations of the Board of Governors of the Federal Reserve System, including
Regulations T, U and X.

8.12    Certain Obligations Respecting Subsidiaries; Further Assurances.

(a)    Subsidiary Guarantors. Such Obligor will take such action, and will cause
each of its Subsidiaries to take such action, from time to time as shall be
necessary to ensure that all Subsidiaries (other than any Excluded Foreign
Subsidiary not required to be a Subsidiary Guarantor under Section 8.12(b)(i),
are “Subsidiary Guarantors” hereunder. Without limiting the generality of the
foregoing, in the event that Borrower or any of its Subsidiaries shall form or
acquire any new Subsidiary (other than any new Excluded Foreign Subsidiary not
required to be a Subsidiary Guarantor under Section 8.12(b)(i)), such Obligor
and its Subsidiaries concurrently will:

(i)    cause such new Subsidiary to become a “Subsidiary Guarantor” hereunder,
and a “Grantor” under the Security Agreement, pursuant to a Guarantee Assumption
Agreement;

(ii)    take such action or cause such Subsidiary to take such action (including
delivering such shares of stock together with undated transfer powers executed
in blank) as shall be necessary to create and perfect valid and enforceable
first priority (subject to Permitted Priority Liens) Liens on substantially all
of the property of such new Subsidiary as collateral security for the
obligations of such new Subsidiary hereunder;

(iii)    to the extent that the parent of such Subsidiary is not a party to the
Security Agreement or has not otherwise pledged Equity Interests in its
Subsidiaries in accordance with the terms of the Security Agreement and this
Agreement, cause the parent of such Subsidiary to execute and deliver a pledge
agreement in favor of the Secured Parties in respect of all outstanding issued
shares of such Subsidiary; and

 

56

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

(iv)    deliver such proof of corporate action, incumbency of officers, opinions
of counsel and other documents as is consistent with those delivered by each
Obligor pursuant to Section 6.01 or as Administrative Agent or the Majority
Lenders shall have requested.

(b)    Excluded Foreign Subsidiaries.

(i)    In the event that, at any time, Excluded Foreign Subsidiaries have, in
the aggregate, (i) total revenues constituting 5% or more of the total revenues
of Borrower and its Subsidiaries on a consolidated basis, or (ii) total assets
constituting 5% or more of the total assets of Borrower and its Subsidiaries on
a consolidated basis, promptly (and, in any event, within *** after such time)
Obligors shall cause one or more of such Excluded Foreign Subsidiaries to become
Subsidiary Guarantors in the manner set forth in Section 8.12(a), such that,
after such Subsidiaries become Subsidiary Guarantors, the non-guarantor Excluded
Foreign Subsidiaries in the aggregate shall cease to have revenues or assets, as
applicable, that meet the thresholds set forth in clauses (i) and (ii) above;
provided that no Excluded Foreign Subsidiary shall be required to become a
Subsidiary Guarantor if doing so would result in material adverse tax
consequences for Borrower and its Subsidiaries, taken as a whole.

(ii)    With respect to each First-Tier Foreign Subsidiary that is not a
Subsidiary Guarantor, such Obligor shall grant a security interest and Lien in
65% of each class of voting Equity Interest and 100% of all other Equity
Interests in such First-Tier Foreign Subsidiaries in favor of the Secured
Parties as Collateral for the Obligations. Without limiting the generality of
the foregoing, in the event that any Obligor shall form or acquire any new
Subsidiary that is a First-Tier Foreign Subsidiary, such Obligor will promptly
and in any event within *** of the formation or acquisition of such Subsidiary
(or such longer time as consented to by Administrative Agent in writing) grant a
security interest and Lien in 65% of each class of voting Equity Interests and
100% of all other Equity Interests of such Subsidiary in favor of the Secured
Parties as Collateral for the Obligations (provided that in the case of a First
Tier Foreign Subsidiary that is a Subsidiary Guarantor, such Obligor shall grant
a security interest and Lien in 100% of the Equity Interests of such Subsidiary
in favor of the Secured Parties as Collateral for the Obligations), including
entering into any necessary local law security documents and delivery of
certificated securities issued by such First-Tier Foreign Subsidiary as required
by this Agreement or the Security Agreement.

(c)    Further Assurances. Such Obligor will, and will cause each of its
Subsidiaries to, take such action from time to time as shall reasonably be
requested by Administrative Agent or the Majority Lenders to effectuate the
purposes and objectives of this Agreement. Without limiting the generality of
the foregoing, each Obligor will, and will cause each Person that is required to
be a Subsidiary Guarantor to, take such action from time to time (including
executing and delivering such assignments, security agreements, control
agreements and other instruments) as shall be reasonably requested by
Administrative Agent or the Majority Lenders to create, in favor of the Secured
Parties, perfected security interests and Liens in substantially all of the
property of such Obligor as collateral security for the Obligations; provided
that any such security interest or Lien shall be subject to the relevant
requirements of the Security Documents.

 

57

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

8.13    Termination of Non-Permitted Liens. In the event that Borrower or any of
its Subsidiaries shall become aware or be notified by Administrative Agent or
any Lender of the existence of any outstanding Lien against any Property of
Borrower or any of its Subsidiaries, which Lien is not a Permitted Lien, such
Obligor shall use its best efforts to promptly terminate or cause the
termination of such Lien.

8.14    Intellectual Property. In the event that the Obligors acquire Obligor
Intellectual Property during the term of this Agreement, then the provisions of
this Agreement shall automatically apply thereto and any such Obligor
Intellectual Property shall automatically constitute part of the Collateral
under the Security Documents, without further action by any party, in each case
from and after the date of such acquisition (except that any representations or
warranties of any Obligor shall apply to any such Obligor Intellectual Property
only from and after the date, if any, subsequent to such acquisition that such
representations and warranties are brought down or made anew as provided
herein).

8.15    Post-Closing Items

(a)    On or prior to ten (10) days after the Closing Date (or such later date
as may be agreed by the Administrative Agent in its sole discretion), Borrower
shall cause to be executed and delivered to the Administrative Agent a landlord
waiver with regards to the premises located at 4131 Parklake Ave, Suite 225,
Raleigh, NC 27612 in form and substance reasonably satisfactory to
Administrative Agent; and

(b)    On or prior to ten (10) days after the Closing Date (or such later date
as may be agreed by the Administrative Agent in its sole discretion), Borrower
shall cause to be executed, a bailee waiver or other agreement in form and
substance reasonably satisfactory to Administrative Agent from the bailee of
consignee with respect to any warehouse, processor, converted facility or other
location where Collateral in excess of $*** is stored or located at such
individual location.

SECTION 9

NEGATIVE COVENANTS

Each Obligor covenants and agrees with Administrative Agent and the Lenders
that, until the Commitments have expired or been terminated and all Obligations
(other than Warrant Obligations) have been paid in full indefeasibly in cash:

9.01    Indebtedness. Such Obligor will not, and will not permit any of its
Subsidiaries to, create, incur, assume or permit to exist any Indebtedness,
whether directly or indirectly, except:

(a)    the Obligations;

(b)    Indebtedness existing on the date hereof and set forth in Part II of
Schedule 7.13(a) of the Disclosure Letter and Permitted Refinancings thereof;
provided that, in each case, such Indebtedness is subordinated to the
Obligations on terms satisfactory to the Majority Lenders;

(c)    [Reserved];

 

58

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

(d)    accounts payable to trade creditors for goods and services and current
operating liabilities (not the result of the borrowing of money) incurred in the
ordinary course of Borrower’s or such Subsidiary’s business in accordance with
customary terms and paid within the specified time, unless contested in good
faith by appropriate proceedings and reserved for in accordance with GAAP;

(e)    Indebtedness consisting of guarantees resulting from endorsement of
negotiable instruments for collection by any Obligor in the ordinary course of
business;

(f)    Indebtedness of any Obligor to any other Obligor;

(g)    Guarantees by any Obligor of Indebtedness of any other Obligor; provided
that the aggregate outstanding principal amount of such Indebtedness does not
exceed $*** (or the Equivalent Amount in other currencies) at any time;

(h)    normal course of business equipment financing; provided that (i) if
secured, the collateral therefor consists solely of the assets being financed,
the products and proceeds thereof and books and records related thereto, and
(ii) the aggregate outstanding principal amount of such Indebtedness does not
exceed $*** (or the Equivalent Amount in other currencies) at any time;

(i)    Permitted Cure Debt;

(j)    (i) Indebtedness in an outstanding principal amount of up to $***
incurred, assumed or otherwise acquired in connection with a Permitted
Acquisition (which may be Indebtedness existing prior to the Permitted
Acquisition secured by the assets acquired as described
in Section 9.02(c)(ii)); provided that, (A) unless such Indebtedness was
previously existing and not incurred in connection with such Permitted
Acquisition, (B) such Indebtedness is unsecured and subordinated to the
Obligations pursuant to a subordination agreement in substantially the form
of Exhibit G or otherwise satisfactory to the Majority Lenders and (C) the sum
of the principal amount of all such Indebtedness incurred under this clause
(j) and the cash consideration for such Permitted Acquisition (and any other
Permitted Acquisitions) shall not exceed the amount permitted in Section
9.03(e), and (ii) Permitted Refinancings thereof;

(k)    Unsecured Indebtedness in connection with corporate credit cards in an
aggregate principal amount not exceed $***;

(l)    Indebtedness in respect of any agreement providing for treasury,
depositary, cash management services, including in connection with any automated
clearing house transfers of funds or any similar transactions, securities
settlements, foreign exchange contracts, assumed settlement, netting services,
overdraft protections and other cash management, intercompany cash pooling and
similar arrangements, in each case in the ordinary course of business;

(m)    Indebtedness with respect to letters of credit outstanding and secured
solely by cash and/or Permitted Cash Equivalent Investments; provided that the
outstanding principal amount of such Indebtedness shall not exceed $*** at any
time outstanding;

 

59

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

(n)    advance or deposits from customers or vendors received in the ordinary
course of business and held with a deposit bank insured by the Federal Deposit
Insurance Corporation;

(o)    workers’ compensation claims, payment obligations in connection with
health disability or other types of social security benefits, unemployment or
other insurance obligations, reclamation and statutory obligations or
(ii) Indebtedness related to employee benefit plans, including, without
limitation, annual employee bonuses, accrued wage increases and 401(k) plan
matching obligations, in each case incurred in the ordinary course of Borrower’s
or its Subsidiary’s business;

(p)    contingent return obligations consistent with market practice in respect
of unspent advances to Borrower by a third-party entity (each such entity, a
“Research Partner”) whereby such funds are used to pay costs and expenses for
the research performed and expenses incurred by Borrower in compliance with
agreements between Borrower and such Research Partner;

(q)    Indebtedness approved in advance in writing by the Majority Lenders.

9.02    Liens. Such Obligor will not, and will not permit any of its
Subsidiaries to, create, incur, assume or permit to exist any Lien on any
property or asset now owned or hereafter acquired by it, or assign or sell any
income or revenues (including accounts receivable) or rights in respect of any
thereof, except:

(a)    Liens securing the Obligations;

(b)    any Lien on any property or asset of Borrower or any of its Subsidiaries
existing on the date hereof and set forth in Part II of Schedule 7.13(b) of the
Disclosure Letter; provided that (i) no such Lien shall extend to any other
property or asset of Borrower or any of its Subsidiaries and (ii) any such Lien
shall secure only those obligations which it secures on the date hereof and
extensions, renewals and replacements thereof that do not increase the
outstanding principal amount thereof;

(c)    Liens securing Indebtedness permitted in reliance on Section 9.01(j),
provided that the Indebtedness secured by such Liens was incurred prior to, and
not in contemplation of, such Permitted Acquisition and that such Liens extend
solely to the assets acquired in such Permitted Acquisition; and (ii) Liens on
property acquired in and existing at the time of a Permitted
Acquisition, provided that such Liens do not attach to any other property of any
other Obligor or Subsidiary; and provided further that such Liens are of the
type otherwise permitted under this Section 9.02;

(d)    Liens securing Indebtedness permitted under Section 9.01(h); provided
that such Liens are restricted solely to the collateral described in Section
9.01(h);

(e)    Liens imposed by law which were incurred in the ordinary course of
business, including (but not limited to) carriers’, warehousemen’s and
mechanics’ liens and other similar liens arising in the ordinary course of
business and which (x) do not in the aggregate materially detract from the value
of the Property subject thereto or materially impair the use thereof in the
operations of the business of such Person or (y) are being contested in good
faith by appropriate proceedings, which proceedings have the effect of
preventing the forfeiture or sale of the Property subject to such liens and for
which adequate reserves have been made if required in accordance with GAAP;

 

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

(f)    pledges or deposits made in the ordinary course of business in connection
with workers’ compensation, unemployment insurance or other similar social
security legislation;

(g)    Liens securing Taxes, assessments and other governmental charges, the
payment of which is not yet due or is being contested in good faith by
appropriate proceedings promptly initiated and diligently conducted and for
which such reserve or other appropriate provisions, if any, as shall be required
by GAAP shall have been made;

(h)    servitudes, easements, rights of way, restrictions and other similar
encumbrances on real Property imposed by applicable Laws and encumbrances
consisting of zoning or building restrictions, easements, licenses, restrictions
on the use of property or minor imperfections in title thereto which, in the
aggregate, are not material, and which do not in any case materially detract
from the value of the property subject thereto or interfere with the ordinary
conduct of the business of any of the Obligors;

(i)    with respect to any real Property, (A) such defects or encroachments as
might be revealed by an up-to-date survey of such real Property; (B) the
reservations, limitations, provisos and conditions expressed in the original
grant, deed or patent of such property by the original owner of such real
Property pursuant to applicable Laws; and (C) rights of expropriation, access or
user or any similar right conferred or reserved by or in applicable Laws, which,
in the aggregate for (A), (B) and (C), are not material, and which do not in any
case materially detract from the value of the property subject thereto or
interfere with the ordinary conduct of the business of any of the Obligors;

(j)    Bankers liens, rights of setoff and similar Liens incurred on deposits
made in the ordinary course of business; and

(k)    The agreement by Borrower not to encumber the Excluded Intellectual
Property pursuant to that certain in Section 8.5.1 of that certain Amended and
Restated Clinical Development and License Agreement, dated November 2, 2016,
among CDC V, LLC, Borrower, Arius, Arius Two and NB Athyrium LLC.

provided that no Lien otherwise permitted under any of the foregoing Sections
9.02(b) through (j) shall apply to any Material Intellectual Property.

9.03    Fundamental Changes and Acquisitions. Such Obligor will not, and will
not permit any of its Subsidiaries to, (i) enter into any transaction of merger,
amalgamation or consolidation (ii) liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or (iii) make any Acquisition or
otherwise acquire any business or substantially all the property from, or
capital stock of, or be a party to any acquisition of, any Person, except:

(a)    Investments permitted under Section 9.05(e);

 

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

(b)    the merger, amalgamation or consolidation of any Subsidiary Guarantor
with or into any other Obligor; provided that, in the case of a merger,
amalgamation or consolidation with or into Borrower, Borrower shall be the
surviving entity;

(c)    the sale, lease, transfer or other disposition by any Subsidiary
Guarantor of any or all of its property (upon voluntary liquidation or
otherwise) to any other Obligor; and

(d)    the sale, transfer or other disposition of the capital stock of any
Subsidiary Guarantor to any other Obligor;

(e)    Permitted Acquisitions, ***; and

(f)    Any Asset Sale permitted under Section 9.09.

9.04    Lines of Business. Such Obligor will not, and will not permit any of its
Subsidiaries to, engage to any material extent in any business other than the
Business engaged in on the date hereof by Borrower or any Subsidiary or a
business reasonably related thereto.

9.05    Investments. Such Obligor will not, and will not permit any of its
Subsidiaries to, make, directly or indirectly, or permit to remain outstanding
any Investments except:

(a)    Investments outstanding on the date hereof and identified in Schedule
9.05 of the Disclosure Letter;

(b)    operating deposit accounts with banks;

(c)    extensions of credit in the nature of accounts receivable or notes
receivable arising from the sales of goods or services in the ordinary course of
business;

(d)    Permitted Cash Equivalent Investments;

(e)    Investments by any Obligor in Borrower’s wholly-owned Subsidiary
Guarantors (for greater certainty, Borrower shall not be permitted to have any
direct or indirect Subsidiaries that are not wholly-owned Subsidiaries);

(f)    Hedging Agreements entered into in the ordinary course of Borrower’s
financial planning solely to hedge currency risks (and not for speculative
purposes) and in an aggregate notional amount for all such Hedging Agreements
not in excess of $*** (or the Equivalent Amount in other currencies);

(g)    Investments consisting of security deposits with utilities and other like
Persons made in the ordinary course of business;

(h)    employee loans, travel advances and guarantees in accordance with
Borrower’s usual and customary practices with respect thereto (if permitted by
applicable law) which in the aggregate shall not exceed $*** outstanding at any
time (or the Equivalent Amount in other currencies);

 

62

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

(i)    Investments received in connection with any Insolvency Proceedings in
respect of any customers, suppliers or clients and in settlement of delinquent
obligations of, and other disputes with, customers, suppliers or clients; and

(j)    Investments permitted under Section 9.03, other than, for the avoidance
of doubt, Investments received upon Asset Sales permitted hereunder.

9.06    Restricted Payments. Such Obligor will not, and will not permit any of
its Subsidiaries to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, except:

(a)    Borrower may declare and pay dividends with respect to its capital stock
payable solely in additional shares of its common stock;

(b)    any Subsidiary Guarantor may pay dividends to any other Obligor;

(c)    for payments pursuant to employee stock plans, which payments must not
exceed $*** in any fiscal year;

(d)    Borrower may make Restricted Payments in connection with the retention of
Equity Interests in payment of withholding taxes in connection with equity-based
compensation;

(e)    Borrower may make cash payments in lieu of the issuance of fractional
shares in connection with the exercise of warrants, options, or other securities
convertible into or exchangeable for Equity Interests of Borrower;

(f)    Borrower may make repurchases of capital stock of Borrower deemed to
occur upon the exercise of options, warrants or other rights to acquire capital
stock of Borrower solely to the extent that shares of such capital stock
represent a portion of the exercise price of such options, warrants or such
rights;

(g)    Borrower may honor conversion or exercise requests in respect of any
convertible or exercisable securities of Borrower pursuant to the terms of such
securities or in exchange therefor to the extent such convertible or exercisable
securities are converted into, exchanged for or exercised for Equity Interests
of (other than Disqualified Stock) Borrower;

(h)    Borrower may distribute rights pursuant to a shareholder rights plan or
redeem such rights for no or nominal consideration not to exceed $0.001 per
right, provided that such redemption is in accordance with the terms of such
plan; and

(i)    Borrower or any Subsidiary may make payments or distributions to
dissenting stockholders pursuant to applicable law in connection with any
Permitted Acquisition; provided that such amounts when taken together with the
aggregate consideration paid or payable for all Permitted Acquisitions shall not
exceed the amounts permitted by Section 9.03(e).

9.07    Payments of Indebtedness. Such Obligor will not, and will not permit any
of its Subsidiaries to, make any payments in respect of any Indebtedness other
than (i) payments of the

 

63

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

Obligations, (ii) scheduled payments of other Indebtedness permitted under the
terms of any subordination to the Obligations and (iii) repayment of
intercompany Indebtedness permitted in reliance upon Section 9.01(f).

9.08    Change in Fiscal Year. Such Obligor will not, and will not permit any of
its Subsidiaries to, change the last day of its fiscal year from that in effect
on the date hereof, except to change the fiscal year of a Subsidiary acquired in
connection with an Acquisition to conform its fiscal year to that of Borrower.

9.09    Sales of Assets, Etc. Such Obligor will not, and will not permit any of
its Subsidiaries to, sell, lease, exclusively license (in terms of geography or
field of use), transfer, or otherwise dispose of any of its Property (including
accounts receivable and capital stock of Subsidiaries) to any Person in one
transaction or series of transactions (any thereof, an “Asset Sale”), except:

(a)    transfers of cash in the ordinary course of its business for equivalent
value;

(b)    sales of inventory in the ordinary course of its business on ordinary
business terms;

(c)    development and other collaborative arrangements (both presently existing
or in the future entered into), including any Permitted Commercialization
Arrangement, where such arrangements provide for the licenses or disclosure of
Patents, Trademarks, Copyrights or other Intellectual Property rights in the
ordinary course of business and consistent with general market practices where
such license requires periodic payments based on per unit sales of a product
over a period of time and provided that such licenses does not effect a legal
transfer of title to such Intellectual Property rights and such licenses must be
true licenses as opposed to licenses that are sales transactions in substance;

(d)    transfers of Property by any Subsidiary Guarantor to any other Obligor;

(e)    dispositions of any Property that is obsolete or worn out or no longer
used or useful in the Business;

(f)    dispositions consisting of the sale, transfer, assignment or other
disposition of unpaid and overdue accounts receivable in connection with the
collection, compromise or settlement thereof in the ordinary course of business
and not as part of a financing transaction;

(g)    dispositions of equipment to the extent that (i) such equipment is
exchanged for credit against the purchase price of similar replacement equipment
or (ii) the proceeds of such disposition are applied to the purchase price of
such replacement equipment within ***;

(h)    dispositions resulting from casualty events or any other insured damage
to any property or asset of any Obligor or any Obligor’s Subsidiary;

(i)    any transaction permitted under Section 9.03 or 9.05; and

(j)    any other Disposition the Asset Sale Net Proceeds of which are applied as
required under Section 3.03(b)(i).

 

64

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

9.10    Transactions with Affiliates. Such Obligor will not, and will not permit
any of its Subsidiaries to, sell, lease, license or otherwise transfer any
assets to, or purchase, lease, license or otherwise acquire any assets from, or
otherwise engage in any other transactions with, any of its Affiliates, except:

(a)    transactions between or among Obligors;

(b)    any transaction permitted under Section 9.01, 9.05, 9.06 or 9.09;

(c)    customary compensation (including equity based compensation) and
indemnification of, and other employment arrangements with, directors, officers,
employees and consultants of Borrower or any Subsidiary and reimbursement of
expenses of current or former directors, officers, employees and consultants, in
each case in the ordinary course of business,

(d)    Borrower may issue Equity Interests to Affiliates in exchange for cash;
provided that the terms thereof are no less favorable (including the amount of
cash received by Borrower) to Borrower than those that would be obtained in a
comparable arm’s-length transaction with a Person not an Affiliate of Borrower;
and

(e)    the transactions set forth on Schedule 9.10 of the Disclosure Letter.

9.11    Restrictive Agreements. Such Obligor will not, and will not permit any
of its Subsidiaries to, directly or indirectly, enter into, incur or permit to
exist any Restrictive Agreement other than (a) restrictions and conditions
imposed by law or by this Agreement and (b) Restrictive Agreements listed on
Schedule 7.15 of the Disclosure Letter.

9.12    Amendments to Material Agreements. Such Obligor will not, and will not
permit any of its Subsidiaries to, enter into any amendment to or modification
of any Material Agreement or terminate any Material Agreement (unless replaced
with another agreement that, viewed as a whole, is on better terms for Borrower
or such Subsidiary) without in each case the prior written consent of the Lender
(which consent shall not be unreasonably withheld or delayed).

9.13    Preservation of Borrower Lease; Operating Leases.

(a)    Notwithstanding any provision of this Agreement to the contrary, Borrower
shall not:

(i)    Surrender, terminate, forfeit, or suffer or permit the surrender,
termination or forfeiture of, or change, modify or amend, the Borrower Lease,
nor transfer, sell, assign, convey, dispose of, mortgage, pledge, hypothecate,
assign or encumber any of its interest in, the Borrower Lease; provided, however
that Borrower may enter into a lease to replace the Borrower Lease on similar or
better terms for Borrower;

(ii)    Consent to, cause, agree to, or permit to occur any subordination, or
consent to the subordination of, the Borrower Lease to any mortgage, deed of
trust or other lien encumbering (or that may in the future encumber) the
interest of Borrower Landlord in the Borrower Facility;

 

65

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

(iii)    Waive, excuse, condone or in any way release or discharge Borrower
Landlord of or from its material obligations, covenants and/or conditions under
the Borrower Lease; or

(iv)    Elect to treat the Borrower Lease as terminated or rejected under
subsection 365 of the Bankruptcy Code or other applicable Law. Any such election
made without Majority Lenders’ prior written consent shall be void. If, pursuant
to subsection 365 of the Bankruptcy Code or other applicable law, Borrower seeks
to offset, against the rent reserved in the Borrower Lease, the amount of any
damages caused by the nonperformance by Borrower Landlord of any of its
obligations thereunder after the rejection by Borrower Landlord of the Borrower
Lease under the Bankruptcy Code or other applicable Law, then Borrower shall not
effect any offset of any amounts objected to by Majority Lenders.

(b)    Borrower will not, and will not permit any of its Subsidiaries to, make
any expenditures in respect of operating leases, except for:

(i)    real estate operating leases;

(ii)    operating leases between Borrower and any of its wholly-owned
Subsidiaries or between any of Borrower’s wholly-owned Subsidiaries; and

(iii)    operating leases that would not cause Borrower and its Subsidiaries, on
a consolidated basis, to make payments exceeding $*** (or the Equivalent Amount
in other currencies) in any fiscal year.

9.14    Sales and Leasebacks. Except as disclosed on Schedule 9.14 of the
Disclosure Letter, such Obligor will not, and will not permit any of its
Subsidiaries to, become liable, directly or indirectly, with respect to any
lease, whether an operating lease or a Capital Lease Obligation, of any property
(whether real, personal, or mixed), whether now owned or hereafter acquired,
(i) which Borrower or such Subsidiary has sold or transferred or is to sell or
transfer to any other Person and (ii) which Borrower or such Subsidiary intends
to use for substantially the same purposes as property which has been or is to
be sold or transferred.

9.15    [Reserved]

9.16    Accounting Changes. Such Obligor will not, and will not permit any of
its Subsidiaries to, make any significant change in accounting treatment or
reporting practices, except as required or permitted by GAAP.

9.17    Compliance with ERISA. No ERISA Affiliate shall cause or suffer to exist
(a) any event that could result in the imposition of a Lien with respect to any
Title IV Plan or Multiemployer Plan or (b) any other ERISA Event that would, in
the aggregate, have a Material Adverse Effect. No Obligor or Subsidiary thereof
shall cause or suffer to exist any event that could result in the imposition of
a Lien with respect to any Benefit Plan.

 

66

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

SECTION 10

FINANCIAL COVENANTS

10.01    Minimum Liquidity. Borrower shall maintain at all times Liquidity in an
amount which shall exceed $***.

10.02    Minimum Revenue. Borrower and its Subsidiaries shall have annual
Product Revenue (for each respective calendar year, the “Minimum Required
Revenue”):

(a)    during the twelve month period beginning on January 1, 2017, of at least
$***;

(b)    during the twelve month period beginning on January 1, 2018, of at least
$***;

(c)    during the twelve month period beginning on January 1, 2019, of at least
$***;

(d)    during the twelve month period beginning on January 1, 2020, of at least
$***;

(e)    during the twelve month period beginning on January 1, 2021, of at least
$***; and

(f)    during the twelve month period beginning on January 1, 2022, of at least
$***.

10.03    Cure Right.

(a)    Notwithstanding anything to the contrary contained in Section 11, in the
event that Borrower fails to comply with the covenants contained in Section
10.02(a) through (f) (such covenants for such applicable periods being the
“Specified Financial Covenants”), Borrower shall have the right within *** of
the end of the respective calendar year:

(i)    to issue additional shares of Equity Interests in exchange for cash (the
“Equity Cure Right”), or

(ii)    to borrow Permitted Cure Debt (the “Subordinated Debt Cure Right” and,
collectively with the Equity Cure Right, the “Cure Right”),

in an amount equal to (x) two (2) multiplied by (y) the Minimum Required Revenue
less Borrower’s annual Product Revenue (the “Cure Amount”). The cash therefrom
immediately shall be contributed as equity or subordinated debt (only as
permitted pursuant to Section 9.01), as applicable, to Borrower, and upon the
receipt by Borrower of the Cure Amount pursuant to the exercise of such Cure
Right, such Cure Amount shall be deemed to constitute Product Revenue of
Borrower for purposes of the Specified Financial Covenants and the Specified
Financial Covenants shall be recalculated for all purposes under the Loan
Documents. If, after giving effect to the foregoing recalculation, Borrower
shall then be in compliance with the requirements of the Specified Financial
Covenants, Borrower shall be deemed to have satisfied the requirements of the
Specified Financial Covenants as of the relevant date of determination with the
same effect as though there had been no failure to comply therewith at such
date, and the applicable breach of the Specified Financial Covenants that had
occurred, the related Default and Event of Default, shall be deemed cured
without any further action of Borrower or Lenders for all purposes under the
Loan Documents.

 

67

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

(b)    Notwithstanding anything herein to the contrary the Cure Amount received
by Borrower from investors investing in or lending to Borrower pursuant to
Section 10.03(a) shall be used to immediately prepay the Loans, including the
applicable Prepayment Premium and any fees payable pursuant to the Fee Letter,
credited in the order set forth in Sections 3.03(b)(i)(A)-(E).

SECTION 11

EVENTS OF DEFAULT

11.01    Events of Default. Each of the following events shall constitute an
“Event of Default”:

(a)    Borrower shall fail to pay any principal of any Loan when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise;

(b)    any Obligor shall fail to pay any Obligation (other than an amount
referred to in Section 11.01(a)) when and as the same shall become due and
payable, and such failure shall continue unremedied for a period of ***;

(c)    any representation or warranty made or deemed made by or on behalf of
Borrower or any of its Subsidiaries in or in connection with this Agreement or
any other Loan Document or any amendment or modification hereof or thereof, or
in any report, certificate, financial statement or other document furnished
pursuant to or in connection with this Agreement or any other Loan Document or
any amendment or modification hereof or thereof, shall: (i) prove to have been
incorrect when made or deemed made to the extent that such representation or
warranty contains any materiality or Material Adverse Effect qualifier; or
(ii) prove to have been incorrect in any material respect when made or deemed
made to the extent that such representation or warranty does not otherwise
contain any materiality or Material Adverse Effect qualifier;

(d)    any Obligor shall fail to observe or perform any covenant, condition or
agreement contained in Section 8.02, 8.03 (with respect to Borrower’s
existence), 8.11, 8.12, 8.14, 8.15, 9 or 10;

(e)    any Obligor shall fail to observe or perform any covenant, condition or
agreement contained in this Agreement (other than those specified in Section
11.01(a), (b) or (d)) or any other Loan Document, and, in the case of any
failure that is capable of cure, if such failure shall continue unremedied for a
period of ***;

(f)    Borrower or any of its Subsidiaries shall fail to make any payment
(whether of principal or interest and regardless of amount) in respect of any
Material Indebtedness, when and as the same shall become due and payable after
giving effect to any applicable grace or cure period as originally provided by
the terms of such Indebtedness;

(g)    (i) any material breach of, or “event of default” or similar event by any
Obligor under, any Material Agreement shall occur and continue unredeemed,
uncured or unwaived for

 

68

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

more than *** after the expiration of any contractual cure period provided
thereunder, (ii) any material breach of, or “event of default” or similar event
under, the documentation governing any Material Indebtedness shall occur and
continue unredeemed, uncured or unwaived after the expiration of any cure period
provided thereunder, or (iii) any event or condition occurs (A) that results in
any Material Indebtedness becoming due prior to its scheduled maturity or
(B) that enables or permits (with or without the giving of notice, the lapse of
time or both) the holder or holders of such Material Indebtedness or any trustee
or agent on its or their behalf to cause such Material Indebtedness to become
due, or to require the prepayment, repurchase, redemption or defeasance thereof,
prior to its scheduled maturity; provided that this Section 11.01(g) shall not
apply to secured Indebtedness that becomes due as a result of the voluntary sale
or transfer of the property or assets securing such Material Indebtedness.

(h)    any Obligor:

(i)    becomes insolvent, or generally does not or becomes unable to pay its
debts or meet its liabilities as the same become due, or admits in writing its
inability to pay its debts generally, or declares any general moratorium on its
indebtedness, or proposes a compromise or arrangement or deed of company
arrangement between it and any class of its creditors;

(ii)    commits an act of bankruptcy or makes an assignment of its property for
the general benefit of its creditors or makes a proposal (or files a notice of
its intention to do so);

(iii)    institutes any proceeding seeking to adjudicate it an insolvent, or
seeking liquidation, dissolution, winding-up, reorganization, compromise,
arrangement, adjustment, protection, moratorium, relief, stay of proceedings of
creditors generally (or any class of creditors), or composition of it or its
debts or any other relief, under any federal, provincial or foreign Law now or
hereafter in effect relating to bankruptcy, winding-up, insolvency,
reorganization, receivership, plans of arrangement or relief or protection of
debtors or at common law or in equity, or files an answer admitting the material
allegations of a petition filed against it in any such proceeding;

(iv)    applies for the appointment of, or the taking of possession by, a
receiver, interim receiver, receiver/manager, sequestrator, conservator,
custodian, administrator, trustee, liquidator, voluntary administrator, receiver
and manager or other similar official for it or any substantial part of its
property; or

(v)    takes any action, corporate or otherwise, to approve, effect, consent to
or authorize any of the actions described in this Section 11.01(h) or (i), or
otherwise acts in furtherance thereof or fails to act in a timely and
appropriate manner in defense thereof;

(i)    any petition is filed, application made or other proceeding instituted
against or in respect of Borrower or any Subsidiary:

(i)    seeking to adjudicate it an insolvent;

(ii)    seeking a receiving order against it;

 

69

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

(iii)    seeking liquidation, dissolution, winding-up, reorganization,
compromise, arrangement, adjustment, protection, moratorium, relief, stay of
proceedings of creditors generally (or any class of creditors), deed of company
arrangement or composition of it or its debts or any other relief under any
federal, provincial or foreign law now or hereafter in effect relating to
bankruptcy, winding-up, insolvency, reorganization, receivership, plans of
arrangement or relief or protection of debtors or at common law or in equity; or

(iv)    seeking the entry of an order for relief or the appointment of, or the
taking of possession by, a receiver, interim receiver, receiver/manager,
sequestrator, conservator, custodian, administrator, trustee, liquidator,
voluntary administrator, receiver and manager or other similar official for it
or any substantial part of its property, and such petition, application or
proceeding continues undismissed, or unstayed and in effect, for a period of ***
after the institution thereof; provided that if an order, decree or judgment is
granted or entered (whether or not entered or subject to appeal) against
Borrower or such Subsidiary thereunder in the interim, such grace period will
cease to apply; provided further that if Borrower or such Subsidiary files an
answer admitting the material allegations of a petition filed against it in any
such proceeding, such grace period will cease to apply;

(j)    any other event occurs which, under the laws of any applicable
jurisdiction, has an effect equivalent to any of the events referred to in
either of Section 11.01(h) or (i);

(k)    one or more judgments or settlements (i) for the payment of money in an
aggregate amount in excess of $*** (or the Equivalent Amount in other
currencies) shall be rendered against any Obligor or any combination thereof and
the same shall remain undischarged for a period of *** during which execution
shall not be effectively stayed, or any action shall be legally taken by a
judgment or settlement creditor to attach or levy upon any assets of any Obligor
to enforce any such judgment or settlement or (ii) shall be rendered against or
entered into by any Obligor that could reasonably be expected to have a Material
Adverse Effect;

(l)    [reserved];

(m)    a Change of Control shall have occurred;

(n)    a Material Adverse Change shall have occurred;

(o)    the average Market Capitalization of Borrower for any consecutive ***
period falls below $*** as of any date;

(p)     (i) any Lien created by any of the Security Documents shall at any time
not constitute a valid and perfected Lien on the applicable Collateral in favor
of the Secured Parties, free and clear of all other Liens (other than Permitted
Liens), (ii) except for expiration in accordance with its terms, any of the
Security Documents or any Guarantee of any of the Obligations (including that
contained in Section 14) shall for whatever reason cease to be in full force and
effect, or (iii) any of the Security Documents or any Guarantee of any of the
Obligations (including that contained in Section 14), or the enforceability
thereof, shall be repudiated or contested by any Obligor; and

 

70

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

(q)    any injunction, whether temporary or permanent, shall be rendered against
any Obligor that prevents the Obligors from selling or manufacturing the Product
or its commercially available successors, or any of their other material and
commercially available products in the United States for more than ***;

11.02    Remedies. (a) Upon the occurrence of any Event of Default, then, and in
every such event (other than an Event of Default described in Section 11.01(h),
(i) or (j)), and at any time thereafter during the continuance of such event,
the Majority Lenders may, by notice to Borrower, take either or both of the
following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and
(ii) declare the Loans then outstanding to be due and payable in whole (or in
part, in which case any principal not so declared to be due and payable may
thereafter be declared to be due and payable), and thereupon the principal of
the Loans so declared to be due and payable, together with accrued interest
thereon and all fees and other Obligations (including fees specified in the Fee
Letter), shall become due and payable immediately (in the case of the Loans, at
the Redemption Price therefor), without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by each Obligor.

(b)    Upon the occurrence of any Event of Default described in Section
11.01(h), (i) or (j), the Commitments shall automatically terminate and the
principal of the Loans then outstanding, together with accrued interest thereon
and all fees and other Obligations (including fees specified in the Fee Letter),
shall automatically become due and payable immediately (in the case of the
Loans, at the Redemption Price therefor), without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by each Obligor.

(c)    Prepayment Premium and Redemption Price. (i) For the avoidance of doubt,
the Prepayment Premium (as a component of the Redemption Price) shall be due and
payable whenever so stated in this Agreement, or by any applicable operation of
law, regardless of the circumstances causing any related acceleration or payment
prior to the Stated Maturity Date, including without limitation any Event of
Default or other failure to comply with the terms of this Agreement, whether or
not notice thereof has been given, or any acceleration by, through, or on
account of any bankruptcy filing.

(ii)    For the avoidance of doubt, the Prepayment Premium (as a component of
the Redemption Price) and the fees specified in the Fee Letter that are payable
upon the repayment of the Loans shall be due and payable at any time the Loans
become due and payable prior to the Stated Maturity Date for any reason, whether
due to acceleration pursuant to the terms of this Agreement (in which case it
shall be due immediately, upon the giving of notice to Borrower in accordance
with Section 11.02(a), or automatically, in accordance with Section 11.02(b)),
by operation of law or otherwise (including, without limitation, where
bankruptcy filings or the exercise of any bankruptcy right or power, whether in
any plan of reorganization or otherwise, results or would result in a payment,
discharge, modification or other treatment of the Loans or Loan Documents that
would otherwise evade, avoid, or otherwise disappoint the expectations of
Lenders in receiving the full benefit of their bargained-for Prepayment Premium
or Redemption Price as provided herein). The Obligors and Lenders acknowledge
and agree that any Prepayment Premium and the fees specified in the Fee Letter
due and payable in accordance with this Agreement shall not constitute unmatured
interest, whether under section 502(b)(3) of the Bankruptcy Code or otherwise,
but instead is reasonably calculated to ensure that the Lenders receive the
benefit of their bargain under the terms of this Agreement.

 

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

(iii)    Each Obligor acknowledges and agrees that the Lenders shall be entitled
to recover the full amount of the Redemption Price and the fees specified in the
Fee Letter in each and every circumstance such amount is due pursuant to or in
connection with this Agreement and the Fee Letter, including without limitation
in the case of any Obligor’s bankruptcy filing, so that the Lenders shall
receive the benefit of their bargain hereunder and otherwise receive full
recovery as agreed under every possible circumstance, and Borrower hereby waives
any defense to payment, whether such defense may be based in public policy,
ambiguity, or otherwise. Each Obligor further acknowledges and agrees, and
waives any argument to the contrary, that payment of such amounts does not
constitute a penalty or an otherwise unenforceable or invalid obligation. Any
damages that the Lenders may suffer or incur resulting from or arising in
connection with any breach hereof or thereof by Borrower shall constitute
secured obligations owing to the Lenders.

SECTION 12

ADMINISTRATIVE AGENT

12.01    Appointment and Duties. (a) Appointment of Administrative Agent. Each
Lender hereby irrevocably appoints CRG Servicing (together with any successor
Administrative Agent pursuant to Section 12.09) as Administrative Agent
hereunder and authorizes Administrative Agent to (i) execute and deliver the
Loan Documents and accept delivery thereof on its behalf from any Obligor or any
of its Subsidiaries, (ii) take such action on its behalf and to exercise all
rights, powers and remedies and perform the duties as are expressly delegated to
Administrative Agent under such Loan Documents, (iii) act as agent of such
Lender for purposes of acquiring, holding, enforcing and perfecting all Liens
granted by the Obligors on the Collateral to secure any of the Obligations and
(iv) exercise such powers as are reasonably incidental thereto.

(b)    Duties as Collateral and Disbursing Agent. Without limiting the
generality of Section 12.01(a), Administrative Agent shall have the sole and
exclusive right and authority (to the exclusion of the Lenders), and is hereby
authorized, to (i) act as the disbursing and collecting agent for the Lenders
with respect to all payments and collections arising in connection with the Loan
Documents (including in any proceeding described in Section 11.01(h), (i) or
(j) or any other bankruptcy, insolvency or similar proceeding), and each Person
making any payment in connection with any Loan Document to any Secured Party is
hereby authorized to make such payment to Administrative Agent, (ii) file and
prove claims and file other documents necessary or desirable to allow the claims
of the Secured Parties with respect to any Obligation in any proceeding
described in Section 11.01(h), (i) or (j) or any other bankruptcy, insolvency or
similar proceeding (but not to vote, consent or otherwise act on behalf of such
Secured Party), (iii) act as collateral agent for each Secured Party for
purposes of acquiring, holding, enforcing and perfecting all Liens created by
the Loan Documents and all other purposes stated therein, (iv) manage, supervise
and otherwise deal with the Collateral, (v) take such other action as is
necessary or desirable to maintain the perfection and priority of the Liens
created or purported to be created by the Loan Documents, (vi) except as may be
otherwise specified in any Loan Document, exercise all remedies given to
Administrative Agent and the other Secured Parties with respect to the
Collateral, whether under the Loan Documents, applicable Requirements of

 

72

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

Law or otherwise, (vii) enter into subordination agreements with respect to
Permitted Cure Debt or any other subordination agreement or intercreditor
agreement with respect to Indebtedness of an Obligor, (viii) enter into
non-disturbance agreements and similar agreements and (ix) execute any
amendment, consent or waiver under the Loan Documents on behalf of any Lender
that has consented in writing to such amendment, consent or waiver; provided,
however, that Administrative Agent hereby appoints, authorizes and directs each
Lender to act as collateral sub-agent for Administrative Agent and the Secured
Parties for purposes of the perfection of all Liens with respect to the
Collateral, including any deposit account maintained by an Obligor with, and
cash and Permitted Cash Equivalent Investments held by, such Lender, and may
further authorize and direct any Lender to take further actions as collateral
sub-agents for purposes of enforcing such Liens or otherwise to transfer the
Collateral subject thereto to Administrative Agent, and each Lender hereby
agrees to take such further actions to the extent, and only to the extent, so
authorized and directed.

(c)    Limited Duties. Under the Loan Documents, Administrative Agent (i) is
acting solely on behalf of the Lenders (except to the limited extent provided in
Section 12.11), with duties that are entirely administrative in nature,
notwithstanding the use of the defined term “Administrative Agent”, the terms
“agent”, “administrative agent” and “collateral agent” and similar terms in any
Loan Document to refer to Administrative Agent, which terms are used for title
purposes only, (ii) is not assuming any obligation under any Loan Document other
than as expressly set forth therein or any role as agent, fiduciary or trustee
of or for any Lender or any other Secured Party and (iii) shall have no implied
functions, responsibilities, duties, obligations or other liabilities under any
Loan Document, and each Lender hereby waives and agrees not to assert any claim
against Administrative Agent based on the roles, duties and legal relationships
expressly disclaimed in the foregoing clauses (i) through (iii).

12.02    Binding Effect. Each Lender agrees that (i) any action taken by
Administrative Agent or the Majority Lenders (or, if expressly required hereby,
a greater proportion of the Lenders) in accordance with the provisions of the
Loan Documents, (ii) any action taken by Administrative Agent in reliance upon
the instructions of the Majority Lenders (or, where so required, such greater
proportion) and (iii) the exercise by Administrative Agent or the Majority
Lenders (or, where so required, such greater proportion) of the powers set forth
herein or therein, together with such other powers as are reasonably incidental
thereto, shall be authorized and binding upon all of the Secured Parties.

12.03    Use of Discretion. (a) No Action without Instructions. Administrative
Agent shall not be required to exercise any discretion or take, or to omit to
take, any action, including with respect to enforcement or collection, except
any action it is required to take or omit to take (i) under any Loan Document or
(ii) pursuant to instructions from the Majority Lenders (or, where expressly
required by the terms of this Agreement, a greater proportion of the Lenders).

(b)    Right Not to Follow Certain Instructions. Notwithstanding Section
12.03(a), Administrative Agent shall not be required to take, or to omit to
take, any action (i) unless, upon demand, Administrative Agent receives an
indemnification satisfactory to it from the Lenders (or, to the extent
applicable and acceptable to Administrative Agent, any other Secured Party)
against all liabilities that, by reason of such action or omission, may be
imposed on, incurred by or asserted against Administrative Agent or any Related
Person thereof or (ii) that is, in the opinion of Administrative Agent or its
counsel, contrary to any Loan Document or applicable Requirement of Law.

 

73

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

12.04    Delegation of Rights and Duties. Administrative Agent may, upon any
term or condition it specifies, delegate or exercise any of its rights, powers
and remedies under, and delegate or perform any of its duties or any other
action with respect to, any Loan Document by or through or to any trustee,
co-agent, sub-agent, employee, attorney-in-fact and any other Person (including
any other Secured Party). Any such Person shall benefit from this Section 12 to
the extent provided by Administrative Agent. Administrative Agent shall not be
responsible for the negligence or misconduct of any sub-agent except to the
extent that a court of competent jurisdiction determines in a final and
nonappealable judgment that Administrative Agent acted with gross negligence or
willful misconduct in the selection of such sub-agent.

12.05    Reliance and Liability. (a) Administrative Agent may, without incurring
any liability hereunder, (i) consult with any of its Related Persons and,
whether or not selected by it, any other advisors, accountants and other experts
(including advisors to, and accountants and experts engaged by, any Obligor) and
(ii) rely and act upon any document and information and any telephone message or
conversation, in each case believed by it to be genuine and transmitted, signed
or otherwise authenticated by the appropriate parties.

(b)    None of Administrative Agent and its Related Persons shall be liable for
any action taken or omitted to be taken by any of them under or in connection
with any Loan Document, and each Lender and each Obligor hereby waives and shall
not assert any right, claim or cause of action based thereon, except to the
extent of liabilities resulting primarily from the gross negligence or willful
misconduct of Administrative Agent or, as the case may be, such Related Person
(each as determined in a final, non-appealable judgment by a court of competent
jurisdiction) in connection with the duties expressly set forth herein. Without
limiting the foregoing, Administrative Agent:

(i)    shall not be responsible or otherwise incur liability for any action or
omission taken in reliance upon the instructions of the Majority Lenders or for
the actions or omissions of any of its Related Persons selected with reasonable
care (other than employees, officers and directors of Administrative Agent, when
acting on behalf of Administrative Agent);

(ii)    shall not be responsible to any Secured Party for the due execution,
legality, validity, enforceability, effectiveness, genuineness, sufficiency or
value of, or the attachment, perfection or priority of any Lien created or
purported to be created under or in connection with, any Loan Document;

(iii)    makes no warranty or representation, and shall not be responsible, to
any Secured Party for any statement, document, information, representation or
warranty made or furnished by or on behalf of any Related Person, in or in
connection with any Loan Document or any transaction contemplated therein,
whether or not transmitted by Administrative Agent, including as to
completeness, accuracy, scope or adequacy thereof, or for the scope, nature or
results of any due diligence performed by Administrative Agent in connection
with the Loan Documents; and

 

74

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

(iv)    shall not have any duty to ascertain or to inquire as to the performance
or observance of any provision of any Loan Document, whether any condition set
forth in any Loan Document is satisfied or waived, as to the financial condition
of any Obligor or as to the existence or continuation or possible occurrence or
continuation of any Default or Event of Default and shall not be deemed to have
notice or knowledge of such occurrence or continuation unless it has received a
notice from Borrower or any Lender describing such Default or Event of Default
clearly labeled “notice of default” (in which case Administrative Agent shall
promptly give notice of such receipt to all Lenders);

and, for each of the items set forth in clauses (i) through (iv) above, each
Lender and each Obligor hereby waives and agrees not to assert any right, claim
or cause of action it might have against Administrative Agent based thereon.

12.06    Administrative Agent Individually. Administrative Agent and its
Affiliates may make loans and other extensions of credit to, acquire Equity
Interests of, engage in any kind of business with, any Obligor or Affiliate
thereof as though it were not acting Administrative Agent and may receive
separate fees and other payments therefor. To the extent Administrative Agent or
any of its Affiliates makes any Loan or otherwise becomes a Lender hereunder, it
shall have and may exercise the same rights and powers hereunder and shall be
subject to the same obligations and liabilities as any other Lender and the
terms “Lender”, “Majority Lender”, and any similar terms shall, except where
otherwise expressly provided in any Loan Document, include, without limitation,
Administrative Agent or such Affiliate, as the case may be, in its individual
capacity as Lender or as one of the Majority Lenders, respectively.

12.07    Lender Credit Decision. Each Lender acknowledges that it shall,
independently and without reliance upon Administrative Agent, any Lender or any
of their Related Persons or upon any document solely or in part because such
document was transmitted by Administrative Agent or any of its Related Persons,
conduct its own independent investigation of the financial condition and affairs
of each Obligor and make and continue to make its own credit decisions in
connection with entering into, and taking or not taking any action under, any
Loan Document or with respect to any transaction contemplated in any Loan
Document, in each case based on such documents and information as it shall deem
appropriate.

12.08    Expenses; Indemnities. (a) Each Lender agrees to reimburse
Administrative Agent and each of its Related Persons (to the extent not
reimbursed by any Obligor) promptly upon demand for such Lender’s Proportionate
Share of any costs and expenses (including fees, charges and disbursements of
financial, legal and other advisors and Other Taxes paid in the name of, or on
behalf of, any Obligor) that may be incurred by Administrative Agent or any of
its Related Persons in connection with the preparation, syndication, execution,
delivery, administration, modification, consent, waiver or enforcement (whether
through negotiations, through any work-out, bankruptcy, restructuring or other
legal or other proceeding or otherwise) of, or legal advice in respect of its
rights or responsibilities under, any Loan Document.

(b)    Each Lender further agrees to indemnify Administrative Agent and each of
its Related Persons (to the extent not reimbursed by any Obligor), from and
against such Lender’s aggregate Proportionate Share of the liabilities
(including Taxes, interests and penalties imposed for not properly withholding
or backup withholding on payments made to on or for the account

 

75

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

of any Lender) that may be imposed on, incurred by or asserted against
Administrative Agent or any of its Related Persons in any matter relating to or
arising out of, in connection with or as a result of any Loan Document, any
Related Document or any other act, event or transaction related, contemplated in
or attendant to any such document, or, in each case, any action taken or omitted
to be taken by Administrative Agent or any of its Related Persons under or with
respect to any of the foregoing; provided, however, that no Lender shall be
liable to Administrative Agent or any of its Related Persons to the extent such
liability is found in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from such Administrative Agent’s or such Related
Person’s gross negligence or willful misconduct.

12.09    Resignation of Administrative Agent. (a) Administrative Agent may
resign at any time by delivering notice of such resignation to the Lenders and
Borrower, effective on the date set forth in such notice or, if not such date is
set forth therein, upon the date such notice shall be effective. If
Administrative Agent delivers any such notice, the Majority Lenders shall have
the right to appoint a successor Administrative Agent. If, within 30 days after
the retiring Administrative Agent having given notice of resignation, no
successor Administrative Agent has been appointed by the Majority Lenders that
has accepted such appointment, then the retiring Administrative Agent may, on
behalf of the Lenders, appoint a successor Administrative Agent from among the
Lenders. Each appointment under this Section 12.09(a) shall be subject to the
prior consent of Borrower, which may not be unreasonably withheld but shall not
be required during the continuance of an Event of Default.

(b)    Effective immediately upon its resignation, (i) the retiring
Administrative Agent shall be discharged from its duties and obligations under
the Loan Documents, (ii) the Lenders shall assume and perform all of the duties
of Administrative Agent until a successor Administrative Agent shall have
accepted a valid appointment hereunder, (iii) the retiring Administrative Agent
and its Related Persons shall no longer have the benefit of any provision of any
Loan Document other than with respect to any actions taken or omitted to be
taken while such retiring Administrative Agent was, or because such
Administrative Agent had been, validly acting as Administrative Agent under the
Loan Documents and (iv) subject to its rights under Section 12.03, the retiring
Administrative Agent shall take such action as may be reasonably necessary to
assign to the successor Administrative Agent its rights as Administrative Agent
under the Loan Documents. Effective immediately upon its acceptance of a valid
appointment as Administrative Agent, a successor Administrative Agent shall
succeed to, and become vested with, all the rights, powers, privileges and
duties of the retiring Administrative Agent under the Loan Documents.

12.10    Release of Collateral or Guarantors. Each Lender hereby consents to the
release and hereby directs Administrative Agent to release (or, in the case of
Section 12.10(b)(ii), release or subordinate) the following:

(a)    any Subsidiary of Borrower from its guaranty of any Obligation of any
Obligor if all of the Equity Interests in such Subsidiary owned by any Obligor
or any of its Subsidiaries are disposed of in an Asset Sale permitted under the
Loan Documents (including pursuant to a waiver or consent), to the extent that,
after giving effect to such Asset Sale, such Subsidiary would not be required to
guaranty any Obligations pursuant to Section 8.12; and

 

76

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

(b)    any Lien held by Administrative Agent for the benefit of the Secured
Parties against (i) any Collateral that is disposed of by an Obligor in an Asset
Sale permitted by the Loan Documents (including pursuant to a valid waiver or
consent), to the extent all Liens required to be granted in any Collateral
pursuant to Section 8.12 after giving effect to such Asset Sale have been
granted, (ii) any property subject to a Lien described in Section 9.02(d) and
(iii) all of the Collateral and all Obligors, upon (A) termination of the
Commitments, (B) payment and satisfaction in full of all Loans and all other
Obligations that Administrative Agent has been notified in writing are then due
and payable, (C) deposit of cash collateral with respect to all contingent
Obligations, in amounts and on terms and conditions and with parties
satisfactory to the Majority Lenders and each Indemnitee that is owed such
Obligations and (D) to the extent requested by Administrative Agent, receipt by
the Secured Parties of liability releases from the Obligors each in form and
substance acceptable to Administrative Agent.

Each Lender hereby directs Administrative Agent, and Administrative Agent hereby
agrees, upon receipt of reasonable advance notice from Borrower, to execute and
deliver or file such documents and to perform other actions reasonably necessary
to release the guaranties and Liens when and as directed in this Section 12.10.

12.11    Additional Secured Parties. The benefit of the provisions of the Loan
Documents directly relating to the Collateral or any Lien granted thereunder
shall extend to and be available to any Secured Party that is not a Lender as
long as, by accepting such benefits, such Secured Party agrees, as among
Administrative Agent and all other Secured Parties, that such Secured Party is
bound by (and, if requested by Administrative Agent, shall confirm such
agreement in a writing in form and substance acceptable to Administrative Agent)
this Section 12 and the decisions and actions of Administrative Agent and the
Majority Lenders (or, where expressly required by the terms of this Agreement, a
greater proportion of the Lenders) to the same extent a Lender is bound;
provided, however, that, notwithstanding the foregoing, (a) such Secured Party
shall be bound by Section 12.08 only to the extent of liabilities, costs and
expenses with respect to or otherwise relating to the Collateral held for the
benefit of such Secured Party, in which case the obligations of such Secured
Party thereunder shall not be limited by any concept of Proportionate Share or
similar concept, (b) each of Administrative Agent and each Lender shall be
entitled to act at its sole discretion, without regard to the interest of such
Secured Party, regardless of whether any Obligation to such Secured Party
thereafter remains outstanding, is deprived of the benefit of the Collateral,
becomes unsecured or is otherwise affected or put in jeopardy thereby, and
without any duty or liability to such Secured Party or any such Obligation and
(c) such Secured Party shall not have any right to be notified of, consent to,
direct, require or be heard with respect to, any action taken or omitted in
respect of the Collateral or under any Loan Document.

12.12    Use of Certain Information. Administrative Agent acknowledges that
(a) Borrower’s common stock is listed for trading on the Nasdaq Capital Market
and is subject to the reporting requirements of the Exchange Act and (b) prior
to the Closing Date (as a result of its due diligence investigation of Borrower)
and following the Closing Date (due to Borrower’s requirement to provide
information to Administrative Agent as provided for herein), it has and may in
the future come into possession of information which may be deemed “material
non-public information” (“MNPI”) within the meaning of the U.S. federal
securities laws regarding Borrower and its Business. At the request of
Administrative Agent, Borrower agrees to label and identify MNPI as such and
provide disclosure information that does not include such MNPI for Lenders that
have indicated in writing that they do not wish to receive such MNPI.

 

77

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

SECTION 13

MISCELLANEOUS

13.01    No Waiver. No failure on the part of Administrative Agent or any Lender
to exercise and no delay in exercising, and no course of dealing with respect
to, any right, power or privilege under any Loan Document shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, power or
privilege under any Loan Document preclude any other or further exercise thereof
or the exercise of any other right, power or privilege. The remedies provided
herein are cumulative and not exclusive of any remedies provided by law.

13.02    Notices. All notices, requests, instructions, directions and other
communications provided for herein (including any modifications of, or waivers,
requests or consents under, this Agreement) shall be given or made in writing
(including by fax or e-mail transmission) delivered, if to Borrower, another
Obligor, Administrative Agent or any Lender, to its address (including e-mail
and fax number) specified on the signature pages hereto or its Guarantee
Assumption Agreement, as the case may be, or at such other address (including
e-mail and fax number) as shall be designated by such party in a notice to the
other parties. Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given upon receipt of a legible
copy thereof, in each case given or addressed as aforesaid.

13.03    Expenses, Indemnification, Etc.

(a)    Expenses. Borrower agrees to pay or reimburse (i) Administrative Agent
and the Lenders for all of their reasonable out of pocket costs and expenses
(including the reasonable fees and expenses of Cooley LLP, special counsel to
Administrative Agent and the Lenders, and any sales, goods and services or other
similar Taxes applicable thereto, and printing, reproduction, document delivery,
communication and travel costs) in connection with (x) the negotiation,
preparation, execution and delivery of this Agreement and the other Loan
Documents and the making of the Loans (exclusive of post-closing costs), (y)
post-closing costs and (z) the negotiation or preparation of any modification,
supplement or waiver of any of the terms of this Agreement or any of the other
Loan Documents (whether or not consummated) and (ii) Administrative Agent and
the Lenders for all of their out of pocket costs and expenses (including the
fees and expenses of legal counsel) in connection with any enforcement or
collection proceedings resulting from the occurrence of an Event of Default;
provided, however, that Borrower shall not be required to pay or reimburse any
amounts pursuant to Section 13.03(a)(i)(x) in excess of the Expense Cap.

(b)    Indemnification. Borrower hereby indemnifies Administrative Agent, each
Lender, their respective Affiliates, and their respective directors, officers,
employees, attorneys, agents, advisors and controlling parties (each, an
“Indemnified Party”) from and against, and agrees to hold them harmless against,
any and all Claims and Losses of any kind (including reasonable fees and
disbursements of counsel), joint or several, that may be incurred by or asserted
or awarded against any Indemnified Party, in each case arising out of or in
connection with or relating to this Agreement or any of the other Loan Documents
or the transactions

 

78

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

contemplated hereby or thereby or any use made or proposed to be made with the
proceeds of the Loans, and any claim, investigation, litigation or proceeding or
the preparation of any defense with respect thereto arising out of or in
connection with or relating to any of the foregoing, whether or not any
Indemnified Party is a party to an actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based in
contract, tort or any other theory, and whether or not such investigation,
litigation or proceeding is brought by Borrower, any of its shareholders or
creditors, and whether or not the conditions precedent set forth in Section 6
are satisfied or the other transactions contemplated by this Agreement are
consummated, except to the extent such Claim or Loss is found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party’s gross negligence or willful misconduct. No Obligor
shall assert any claim against any Indemnified Party, on any theory of
liability, for consequential, indirect, special or punitive damages arising out
of or otherwise relating to this Agreement or any of the other Loan Documents or
any of the transactions contemplated hereby or thereby or the actual or proposed
use of the proceeds of the Loans. Borrower, its Subsidiaries and Affiliates and
their respective directors, officers, employees, attorneys, agents, advisors and
controlling parties are each sometimes referred to in this Agreement as a
“Borrower Party.” No Lender shall assert any claim against any Borrower Party,
on any theory of liability, for consequential, indirect, special or punitive
damages arising out of or otherwise relating to this Agreement or any of the
other Loan Documents or any of the transactions contemplated hereby or thereby
or the actual or proposed use of the proceeds of the Loans.

13.04    Amendments, Etc. Except as otherwise expressly provided in this
Agreement, any provision of this Agreement may be modified or supplemented only
by an instrument in writing signed by Borrower and the Majority Lenders (or
Administrative Agent on behalf of such Majority Lenders); provided however,
that:

(a)    the consent of all of the Lenders shall be required to:

(i)    amend, modify, discharge, terminate or waive any of the terms of this
Agreement if such amendment, modification, discharge, termination or waiver
would increase the amount of the Loans, reduce the fees payable hereunder,
reduce interest rates or other amounts payable with respect to the Loans, extend
any date fixed for payment of principal, interest or other amounts payable
relating to the Loans or extend the repayment dates of the Loans;

(ii)    amend the provisions of Section 6;

(iii)    amend, modify, discharge, terminate or waive any Security Document if
the effect is to release a material part of the Collateral subject thereto other
than pursuant to the terms hereof or thereof; or

(iv)    amend this Section 13.04; and

(b)    no amendment, waiver or consent shall affect the rights or duties under
any Loan Document of, or any payment to, Administrative Agent (or otherwise
modify any provision of Section 12 or the application thereof) unless in writing
and signed by Administrative Agent in addition to any signature otherwise
required.

 

79

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

Notwithstanding anything to the contrary herein, a Defaulting Lender shall not
have any right to approve or disapprove any amendment, waiver or consent
hereunder (and any amendment, waiver or consent which by its terms requires the
consent of all Lenders or each affected Lender may be effected with the consent
of the applicable Lenders other than Defaulting Lenders), except that (x) the
Commitment of any Defaulting Lender may not be increased or extended without the
consent of such Lender and (y) any waiver, amendment or modification requiring
the consent of all Lenders or each affected Lender that by its terms affects any
Defaulting Lender more adversely than other affected Lenders shall require the
consent of such Defaulting Lender.

13.05    Successors and Assigns.

(a)    General. The provisions of this Agreement and the other Loan Documents
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that Borrower may not
assign or otherwise transfer any of its rights or obligations hereunder or under
any of the other Loan Documents without the prior written consent of the
Lenders. Any of the Lenders may assign or otherwise transfer any of their rights
or obligations hereunder or under any of the other Loan Documents to an assignee
(i) in accordance with the provisions of Section 13.05(b), (ii) by way of
participation in accordance with the provisions of Section 13.05(e) or (iii) by
way of pledge or assignment of a security interest subject to the restrictions
of Section 13.05(g). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby, Participants to the extent
provided in Section 13.05(e) and, to the extent expressly contemplated hereby,
the Indemnified Parties) any legal or equitable right, remedy or claim under or
by reason of this Agreement.

(b)    Assignments by Lenders. Any of the Lenders may at any time assign to one
or more Eligible Transferees (or, if an Event of Default has occurred and is
continuing, to any Person) all or a portion of their rights and obligations
under this Agreement (including all or a portion of the Commitment and the Loans
at the time owing to it); provided, however, that no such assignment shall be
made to Borrower, an Affiliate of Borrower, or any employees or directors of
Borrower at any time. Subject to the recording thereof by Administrative Agent
pursuant to Section 13.05(d), from and after the effective date specified in
each Assignment and Assumption, the assignee thereunder shall be a party to this
Agreement and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of the Lenders under this Agreement
and the other Loan Documents, and correspondingly the assigning Lender shall, to
the extent of the interest assigned by such Assignment and Assumption, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Assumption covering all of a Lender’s rights and obligations
under this Agreement, such Lender shall cease to be a party hereto) and the
other Loan Documents but shall continue to be entitled to the benefits of
Section 5 and Section 13.03. Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 13.05(b)
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with Section
13.05(e).

 

80

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

(c)    Amendments to Loan Documents. Each of Administrative Agent, the Lenders
and the Obligors agrees to enter into such amendments to the Loan Documents, and
such additional Security Documents and other instruments and agreements, in each
case in form and substance reasonably acceptable to Administrative Agent, the
Lenders and the Obligors, as shall reasonably be necessary to implement and give
effect to any assignment made under this Section 13.05.

(d)    Register. Administrative Agent, acting solely for this purpose as an
agent of Borrower, shall maintain at one of its offices a register for the
recordation of the name and address of any assignee of the Lenders and the
Commitment and outstanding principal amount of the Loans owing thereto (the
“Register”). The entries in the Register shall be conclusive, absent manifest
error, and Borrower shall treat each Person whose name is recorded in the
Register pursuant to the terms hereof as the “Lender” hereunder for all purposes
of this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by Borrower, at any reasonable time and from time to
time upon reasonable prior notice. This Section 13.05 shall be construed so that
the Obligations are at all times maintained in “registered form” within the
meaning of Section 871(h)(2) and 881(c)(2) of the Code.

(e)    Participations. Any of the Lenders may at any time, without the consent
of, or notice to, Borrower, sell participations to any Person (other than a
natural person or Borrower or any of Borrower’s Affiliates or Subsidiaries)
(each, a “Participant”) in all or a portion of such Lender’s rights and/or
obligations under this Agreement (including all or a portion of the Commitment
and/or the Loans owing to it); provided that (i) such Lender’s obligations under
this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) Borrower shall continue to deal solely and directly with the Lenders
in connection therewith.

Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver that would (i) increase or extend the
term of such Lender’s Commitment, (ii) extend the date fixed for the payment of
principal of or interest on the Loans or any portion of any fee hereunder
payable to the Participant, (iii) reduce the amount of any such payment of
principal, or (iv) reduce the rate at which interest is payable thereon to a
level below the rate at which the Participant is entitled to receive such
interest. Subject to Section 13.05(f), Borrower agrees that each Participant
shall be entitled to the benefits of Section 5 to the same extent as if it were
a Lender and had acquired its interest by assignment pursuant to Section
13.05(b). To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 4.04(a) as though it were the Lender.

(f)    Limitations on Rights of Participants. A Participant shall not be
entitled to receive any greater payment under Section 5.01 or 5.03 than a Lender
would have been entitled to receive with respect to the participation sold to
such Participant, unless the sale of the participation to such Participant is
made with Borrower’s prior written consent. Each Lender that sells a
participation shall, acting solely for this purpose as a non-fiduciary agent of
Borrower, maintain a register on which it enters the name and address of each
Participant and the

 

81

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

principal amounts (and stated interest) of each Participant’s interest in the
Loans or other obligations under the Loan Documents (the “Participant
Register”); provided that no Lender shall have any obligation to disclose all or
any portion of the Participant Register (including the identity of any
Participant or any information relating to a Participant’s interest in any
commitments, loans, letter of credit or its other obligations under any Loan
Document) to any Person except to the extent that such disclosure is necessary
to establish that such commitment, loan, letters of credit or its other
obligation is in registered form under Section 5f.103-1(c) of the United States
Treasury Regulations. The entries in the Participant Register shall be
conclusive absent manifest error, and such Lender shall treat each Person whose
name is recorded in the Participant Register as the owner of such participation
for all purposes of this Agreement notwithstanding any notice to the contrary.
For the avoidance of doubt, Administrative Agent (in its capacity as
Administrative Agent) shall have no responsibility for maintaining a Participant
Register.

(g)    Certain Pledges. The Lenders may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement and any other
Loan Document to secure obligations of the Lenders, including any pledge or
assignment to secure obligations to a Federal Reserve Bank; provided that no
such pledge or assignment shall release the Lenders from any of their
obligations hereunder or substitute any such pledgee or assignee for the Lenders
as a party hereto.

13.06    Survival. The obligations of the Obligors under Sections 5.01, 5.02,
5.03, 13.03, 13.05, 13.09, 13.10, 13.11, 13.12, 13.13, 13.14, 13.20 and
Section 14 (solely to the extent guaranteeing any of the obligations under the
foregoing Sections) shall survive the repayment of the Obligations and the
termination of the Commitment and, in the case of the Lenders’ assignment of any
interest in the Commitment or the Loans hereunder, shall survive, in the case of
any event or circumstance that occurred prior to the effective date of such
assignment, the making of such assignment, notwithstanding that the Lenders may
cease to be “Lenders” hereunder. In addition, each representation and warranty
made, or deemed to be made by a Notice of Borrowing, herein or pursuant hereto
shall survive the making of such representation and warranty.

13.07    Captions. The table of contents and captions and section headings
appearing herein are included solely for convenience of reference and are not
intended to affect the interpretation of any provision of this Agreement.

13.08    Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart. Signatures to this Agreement transmitted by facsimile
transmission, by electronic mail in “portable document format” (.pdf) form, or
by any other electronic means intended to preserve the original graphic and
pictorial appearance of a document, will have the same effect as physical
delivery of the paper document bearing the original signature.

13.09    Governing Law. This Agreement and the rights and obligations of the
parties hereunder shall be governed by, and construed in accordance with, the
law of the State of New York, without regard to principles of conflicts of laws
that would result in the application of the laws of any other jurisdiction;
provided that Section 5-1401 of the New York General Obligations Law shall
apply.

 

82

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

13.10    Jurisdiction, Service of Process and Venue.

(a)    Submission to Jurisdiction. Each Obligor agrees that any suit, action or
proceeding with respect to this Agreement or any other Loan Document to which it
is a party or any judgment entered by any court in respect thereof may be
brought initially in the federal or state courts in Houston, Texas or in the
courts of its own corporate domicile and irrevocably submits to the
non-exclusive jurisdiction of each such court for the purpose of any such suit,
action, proceeding or judgment. This Section 13.10(a) is for the benefit of
Administrative Agent and the Lenders only and, as a result, neither
Administrative Agent nor any Lender shall be prevented from taking proceedings
in any other courts with jurisdiction. To the extent allowed by applicable Laws,
Administrative Agent and the Lenders may take concurrent proceedings in any
number of jurisdictions.

(b)    Alternative Process. Nothing herein shall in any way be deemed to limit
the ability of Administrative Agent or the Lenders to serve any such process or
summonses in any other manner permitted by applicable law.

(c)    Waiver of Venue, Etc. Each Obligor irrevocably waives to the fullest
extent permitted by law any objection that it may now or hereafter have to the
laying of the venue of any suit, action or proceeding arising out of or relating
to this Agreement or any other Loan Document and hereby further irrevocably
waives to the fullest extent permitted by law any claim that any such suit,
action or proceeding brought in any such court has been brought in an
inconvenient forum. A final judgment (in respect of which time for all appeals
has elapsed) in any such suit, action or proceeding shall be conclusive and may
be enforced in any court to the jurisdiction of which such Obligor is or may be
subject, by suit upon judgment.

13.11    Waiver of Jury Trial. EACH OBLIGOR, ADMINISTRATIVE AGENT AND EACH
LENDER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

13.12    Waiver of Immunity. To the extent that any Obligor may be or become
entitled to claim for itself or its Property or revenues any immunity on the
ground of sovereignty or the like from suit, court jurisdiction, attachment
prior to judgment, attachment in aid of execution of a judgment or execution of
a judgment, and to the extent that in any such jurisdiction there may be
attributed such an immunity (whether or not claimed), such Obligor hereby
irrevocably agrees not to claim and hereby irrevocably waives such immunity with
respect to its obligations under this Agreement and the other Loan Documents.

13.13    Entire Agreement. This Agreement and the other Loan Documents
constitute the entire agreement among the parties with respect to the subject
matter hereof and thereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject

 

83

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BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

matter hereof. EACH OBLIGOR ACKNOWLEDGES, REPRESENTS AND WARRANTS THAT IN
DECIDING TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS OR IN TAKING
OR NOT TAKING ANY ACTION HEREUNDER OR THEREUNDER, IT HAS NOT RELIED, AND WILL
NOT RELY, ON ANY STATEMENT, REPRESENTATION, WARRANTY, COVENANT, AGREEMENT OR
UNDERSTANDING, WHETHER WRITTEN OR ORAL, OF OR WITH ADMINISTRATIVE AGENT OR THE
LENDERS OTHER THAN THOSE EXPRESSLY SET FORTH IN THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS.

13.14    Severability. If any provision hereof is found by a court to be invalid
or unenforceable, to the fullest extent permitted by applicable law the parties
agree that such invalidity or unenforceability shall not impair the validity or
enforceability of any other provision hereof.

13.15    No Fiduciary Relationship. Each Obligor acknowledges that
Administrative Agent and the Lenders have no fiduciary relationship with, or
fiduciary duty to, Borrower arising out of or in connection with this Agreement
or the other Loan Documents, and the relationship between the Lenders and
Borrower is solely that of creditor and debtor. This Agreement and the other
Loan Documents do not create a joint venture among the parties.

13.16    Confidentiality. Administrative Agent and the Lenders agree to maintain
the confidentiality of the Confidential Information (as defined in the
Non-Disclosure Agreement (defined below)) in accordance with the terms of that
certain confidentiality agreement dated November 21, 2016 between Borrower and
CRG L.P. (the “Non-Disclosure Agreement”). Any new Lender that becomes party to
this Agreement hereby agrees to be bound by the terms of the Non-Disclosure
Agreement. The parties to this Agreement shall prepare a mutually agreeable
press release announcing the completion of this transaction on the first
Borrowing Date.

13.17    USA PATRIOT Act. Administrative Agent and the Lenders hereby notify the
Obligors that pursuant to the requirements of the USA PATRIOT Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”) or any Anti-Money
Laundering Laws, they are required to obtain, verify and record information that
identifies such Obligor, which information includes the name and address of such
Obligor and other information that will allow such Lender to identify such
Obligor in accordance with the Act or other Anti-Money Laundering Laws.

13.18    Maximum Rate of Interest. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (in each case, the “Maximum Rate”). If the Lenders
shall receive interest in an amount that exceeds the Maximum Rate, the excess
interest shall be applied to the principal of the Loans, and not to the payment
of interest, or, if the excessive interest exceeds such unpaid principal, the
amount exceeding the unpaid balance shall be refunded to the applicable Obligor.
In determining whether the interest contracted for, charged, or received by the
Lenders exceeds the Maximum Rate, the Lenders may, to the extent permitted by
applicable Law, (a) characterize any payment that is not principal as an
expense, fee, or premium rather than interest, (b) exclude voluntary prepayments
and the effects thereof, (c) amortize, prorate, allocate, and spread in equal or
unequal parts the total amount of interest throughout the contemplated term of
the Indebtedness and other obligations of any Obligor hereunder, or (d) allocate
interest between portions of such Indebtedness and other obligations under the
Loan Documents to the end that no such portion shall bear interest at a rate
greater than that permitted by applicable Law.

 

84

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

13.19    Certain Waivers.

(a)    Real Property Security Waivers.

(i)    Each Obligor acknowledges that all or any portion of the Obligations may
now or hereafter be secured by a Lien or Liens upon real property evidenced by
certain documents including, without limitation, deeds of trust and assignments
of rents. The Secured Parties may, pursuant to the terms of said real property
security documents and applicable law, foreclose under all or any portion of one
or more of said Liens by means of judicial or nonjudicial sale or sales. Each
Obligor agrees that the Secured Parties may exercise whatever rights and
remedies they may have with respect to said real property security, all without
affecting the liability of any Obligor under the Loan Documents, except to the
extent the Secured Parties realize payment by such action or proceeding. No
election to proceed in one form of action or against any party, or on any
obligation shall constitute a waiver of any Secured Party’s rights to proceed in
any other form of action or against any Obligor or any other Person, or diminish
the liability of any Obligor, or affect the right of the Secured Parties to
proceed against any Obligor for any deficiency, except to the extent the Secured
Parties realize payment by such action, notwithstanding the effect of such
action upon any Obligor’s rights of subrogation, reimbursement or indemnity, if
any, against Obligor or any other Person.

(ii)    To the extent permitted under applicable law, each Obligor hereby waives
any rights and defenses that are or may become available to such Obligor by
reason of Sections 2787 to 2855, inclusive, of the California Civil Code.

(iii)    To the extent permitted under applicable law, each Obligor hereby
waives all rights and defenses that such Obligor may have because the
Obligations are or may be secured by real property. This means, among other
things:

(A)    the Secured Parties may collect from any Obligor without first
foreclosing on any real or personal property collateral pledged by any other
Obligor;

(B)    If the Secured Parties foreclose on any real property collateral pledged
by any Obligor:

(1)    The amount of the Loans may be reduced only by the price for which that
collateral is sold at the foreclosure sale, even if the collateral is worth more
than the sale price; and

(2)    the Secured Parties may collect from each Obligor even if the Secured
Parties, by foreclosing on the real property collateral, have destroyed any
right that such Obligor may have to collect from any other Obligor.

(3)    To the extent permitted under applicable law, this is an unconditional
and irrevocable waiver of any rights and defenses each Obligor may have because
the Obligations are or may be secured by real property. These rights and
defenses include, but are not limited to, any rights or defenses based upon
Section 580a, 580b, 580d or 726 of the California Code of Civil Procedure.

 

85

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

(iv)    To the extent permitted under applicable law, each Obligor waives all
rights and defenses arising out of an election of remedies by the Secured
Parties, even though that election of remedies, such as a nonjudicial
foreclosure with respect to security for a guaranteed obligation, has destroyed
such Obligor’s rights of subrogation and reimbursement against the principal by
the operation of Section 580d of the California Code of Civil Procedure or
otherwise.

(b)    Waiver of Marshaling. WITHOUT LIMITING THE FOREGOING IN ANY WAY, EACH
OBLIGOR HEREBY IRREVOCABLY WAIVES AND RELEASES, TO THE EXTENT PERMITTED BY LAW,
ANY AND ALL RIGHTS IT MAY HAVE AT ANY TIME (WHETHER ARISING DIRECTLY OR
INDIRECTLY, BY OPERATION OF LAW, CONTRACT OR OTHERWISE) TO REQUIRE THE
MARSHALING OF ANY ASSETS OF ANY OBLIGOR, WHICH RIGHT OF MARSHALING MIGHT
OTHERWISE ARISE FROM ANY PAYMENTS MADE OR OBLIGATIONS PERFORMED.

13.20    Tax Treatment. The parties hereto agree (a) that any contingency
associated with the Loans is described in Treasury Regulations Section
1.1272-1(c) and/or Treasury Regulations Section 1.1275-2(h), and therefore no
Loan is governed by the rules set out in Treasury Regulations Section 1.1275-4,
(b) except for a Lender described in Sections 871(h)(3) or 881(c)(3) of the
Code, all interest on the Loans is “portfolio interest” within the meaning of
Sections 871(h) or 881(c) of the Code, and therefore is exempt from withholding
tax under Sections 1441(c)(9) or 1442(a) of the Code, and (c) to adhere to this
Section 13.20 for federal income and any other applicable tax purposes and not
to take any action or file any Tax Return, report or declaration inconsistent
herewith.

13.21    Original Issue Discount. For purposes of Sections 1272, 1273 and 1275
of the Code, each Loan is being issued with original issue discount; please
contact Ernest R. DePaolantonio, Chief Financial Officer, 4131 ParkLake Avenue,
Suite 225, Raleigh, NC 27612, telephone: (919) 582-9050 to obtain information
regarding the issue price, the amount of original issue discount and the yield
to maturity.

SECTION 14

GUARANTEE

14.01    The Guarantee. The Subsidiary Guarantors hereby jointly and severally
guarantee to the Secured Parties and their respective successors and assigns the
prompt payment in full when due (whether at stated maturity, by acceleration or
otherwise) of the principal of and interest on the Loans and all fees and other
amounts from time to time owing to the Secured Parties by Borrower under this
Agreement or under any other Loan Document and by any other Obligor under any of
the Loan Documents, in each case strictly in accordance with the terms thereof
(such obligations being herein collectively called the “Guaranteed
Obligations”). The Subsidiary Guarantors hereby further jointly and severally
agree that if Borrower shall fail to pay in full when due (whether at stated
maturity, by acceleration or otherwise) any of the Guaranteed Obligations, the
Subsidiary Guarantors will promptly pay the same, without any demand or notice
whatsoever, and that in the case of any extension of time of payment or renewal
of any of the Guaranteed Obligations, the same will be promptly paid in full
when due (whether at extended maturity, by acceleration or otherwise) in
accordance with the terms of such extension or renewal.

 

86

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

14.02    Obligations Unconditional. The obligations of the Subsidiary Guarantors
under Section 14.01 are absolute and unconditional, joint and several,
irrespective of the value, genuineness, validity, regularity or enforceability
of the obligations of Borrower under this Agreement or any other agreement or
instrument referred to herein, or any substitution, release or exchange of any
other guarantee of or security for any of the Guaranteed Obligations, and, to
the fullest extent permitted by applicable law, irrespective of any other
circumstance whatsoever that might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor, it being the intent of this
Section 14.02 that the obligations of the Subsidiary Guarantors hereunder shall
be absolute and unconditional, joint and several, under any and all
circumstances. Without limiting the generality of the foregoing, it is agreed
that the occurrence of any one or more of the following shall not alter or
impair the liability of the Subsidiary Guarantors hereunder, which shall remain
absolute and unconditional as described above:

(a)    at any time or from time to time, without notice to the Subsidiary
Guarantors, the time for any performance of or compliance with any of the
Guaranteed Obligations shall be extended, or such performance or compliance
shall be waived;

(b)    any of the acts mentioned in any of the provisions of this Agreement or
any other agreement or instrument referred to herein shall be done or omitted;

(c)    the maturity of any of the Guaranteed Obligations shall be accelerated,
or any of the Guaranteed Obligations shall be modified, supplemented or amended
in any respect, or any right under this Agreement or any other agreement or
instrument referred to herein shall be waived or any other guarantee of any of
the Guaranteed Obligations or any security therefor shall be released or
exchanged in whole or in part or otherwise dealt with; or

(d)    any lien or security interest granted to, or in favor of, the Secured
Parties as security for any of the Guaranteed Obligations shall fail to be
perfected.

The Subsidiary Guarantors hereby expressly waive diligence, presentment, demand
of payment, protest and all notices whatsoever, and any requirement that any
Secured Party exhaust any right, power or remedy or proceed against Borrower
under this Agreement or any other agreement or instrument referred to herein, or
against any other Person under any other guarantee of, or security for, any of
the Guaranteed Obligations.

14.03    Reinstatement. The obligations of the Subsidiary Guarantors under this
Section 14 shall be automatically reinstated if and to the extent that for any
reason any payment by or on behalf of Borrower in respect of the Guaranteed
Obligations is rescinded or must be otherwise restored by any holder of any of
the Guaranteed Obligations, whether as a result of any proceedings in bankruptcy
or reorganization or otherwise, and the Subsidiary Guarantors jointly and
severally agree that they will indemnify the Secured Parties on demand for all
reasonable costs and expenses (including fees of counsel) incurred by the
Lenders in connection with such rescission or restoration, including any such
costs and expenses incurred in defending against any claim alleging that such
payment constituted a preference, fraudulent transfer or similar payment under
any bankruptcy, insolvency or similar law.

 

87

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

14.04    Subrogation. The Subsidiary Guarantors hereby jointly and severally
agree that until the payment and satisfaction in full of all Guaranteed
Obligations (other than Warrant Obligations) and the expiration and termination
of the Commitments under this Agreement, they shall not exercise any right or
remedy arising by reason of any performance by them of their guarantee in
Section 14.01, whether by subrogation or otherwise, against Borrower or any
other guarantor of any of the Guaranteed Obligations or any security for any of
the Guaranteed Obligations.

14.05    Remedies. The Subsidiary Guarantors jointly and severally agree that,
as between the Subsidiary Guarantors and the Secured Parties, the obligations of
Borrower under this Agreement and under the other Loan Documents may be declared
to be forthwith due and payable as provided in Section 11 (and shall be deemed
to have become automatically due and payable in the circumstances provided in
Section 11) for purposes of Section 14.01 notwithstanding any stay, injunction
or other prohibition preventing such declaration (or such obligations from
becoming automatically due and payable) as against Borrower and that, in the
event of such declaration (or such obligations being deemed to have become
automatically due and payable), such obligations (whether or not due and payable
by Borrower) shall forthwith become due and payable by the Subsidiary Guarantors
for purposes of Section 14.01.

14.06    Instrument for the Payment of Money. Each Subsidiary Guarantor hereby
acknowledges that the guarantee in this Section 14 constitutes an instrument for
the payment of money, and consents and agrees that the Secured Parties, at their
sole option, in the event of a dispute by such Subsidiary Guarantor in the
payment of any moneys due hereunder, shall have the right to proceed by motion
for summary judgment in lieu of complaint pursuant to N.Y. Civ. Prac. L&R §
3213.

14.07    Continuing Guarantee. The guarantee in this Section 14 is a continuing
guarantee, and shall apply to all Guaranteed Obligations whenever arising.

14.08    Rights of Contribution. The Subsidiary Guarantors hereby agree, as
between themselves, that if any Subsidiary Guarantor shall become an Excess
Funding Guarantor (as defined below) by reason of the payment by such Subsidiary
Guarantor of any Guaranteed Obligations, each other Subsidiary Guarantor shall,
on demand of such Excess Funding Guarantor (but subject to the next sentence),
pay to such Excess Funding Guarantor an amount equal to such Subsidiary
Guarantor’s Pro rata Share (as defined below and determined, for this purpose,
without reference to the properties, debts and liabilities of such Excess
Funding Guarantor) of the Excess Payment (as defined below) in respect of such
Guaranteed Obligations. The payment obligation of a Subsidiary Guarantor to any
Excess Funding Guarantor under this Section 14.08 shall be subordinate and
subject in right of payment to the prior payment in full of the obligations of
such Subsidiary Guarantor under the other provisions of this Section 14 and such
Excess Funding Guarantor shall not exercise any right or remedy with respect to
such excess until payment and satisfaction in full of all of such obligations.

For purposes of this Section 14.08, (i) “Excess Funding Guarantor” means, in
respect of any Guaranteed Obligations, a Subsidiary Guarantor that has paid an
amount in excess of its Pro

 

88

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BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

rata Share of such Guaranteed Obligations, (ii) “Excess Payment” means, in
respect of any Guaranteed Obligations, the amount paid by an Excess Funding
Guarantor in excess of its Pro rata Share of such Guaranteed Obligations and
(iii) “Pro Rata Share” means, for any Subsidiary Guarantor, the ratio (expressed
as a percentage) of (x) the amount by which the aggregate present fair saleable
value of all properties of such Subsidiary Guarantor (excluding any shares of
stock of any other Subsidiary Guarantor) exceeds the amount of all the debts and
liabilities of such Subsidiary Guarantor (including contingent, subordinated,
unmatured and unliquidated liabilities, but excluding the obligations of such
Subsidiary Guarantor hereunder and any obligations of any other Subsidiary
Guarantor that have been Guaranteed by such Subsidiary Guarantor) to (y) the
amount by which the aggregate fair saleable value of all properties of all of
the Subsidiary Guarantors exceeds the amount of all the debts and liabilities
(including contingent, subordinated, unmatured and unliquidated liabilities, but
excluding the obligations of Borrower and the Subsidiary Guarantors hereunder
and under the other Loan Documents) of all of the Subsidiary Guarantors,
determined (A) with respect to any Subsidiary Guarantor that is a party hereto
on the first Borrowing Date, as of such Borrowing Date, and (B) with respect to
any other Subsidiary Guarantor, as of the date such Subsidiary Guarantor becomes
a Subsidiary Guarantor hereunder.

14.09    General Limitation on Guarantee Obligations. In any action or
proceeding involving any provincial, territorial or state corporate law, or any
state or federal bankruptcy, insolvency, reorganization or other law affecting
the rights of creditors generally, if the obligations of any Subsidiary
Guarantor under Section 14.01 would otherwise, taking into account the
provisions of Section 14.08, be held or determined to be void, invalid or
unenforceable, or subordinated to the claims of any other creditors, on account
of the amount of its liability under Section 14.01, then, notwithstanding any
other provision hereof to the contrary, the amount of such liability shall,
without any further action by such Subsidiary Guarantor, any Secured Party or
any other Person, be automatically limited and reduced to the highest amount
that is valid and enforceable and not subordinated to the claims of other
creditors as determined in such action or proceeding.

[Signature Pages Follow]

 

89

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the day and year first above written.

 

BORROWER: BIODELIVERY SCIENCES INTERNATIONAL, INC. By  

/s/ Mark A. Sirgo

Name:   Mark A. Sirgo Title:   Vice Chairman, President and Chief Executive
Officer Address for Notices: 4131 ParkLake Avenue, Suite 225 Raleigh, NC 27612
Attn:   President Tel.:   (919) 582-9050 Fax:   (919) 582-9051 Email:  
msirgo@bdsi.com and ernied@bdsi.com With a copy (which shall not constitute
notice) to: Ellenoff Grossman & Schole LLP 1345 Avenue of the Americas, 11th
Floor New York, NY 10105 Attention: Barry I. Grossman, Esq. Tel:   (212)
370-1300 Fax:   (212) 370-7889 Email:   bigrossman@egsllp.com

 

[Signature to Term Loan Agreement]

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

SUBSIDIARY GUARANTORS: ARIUS PHARMACEUTICALS, INC. By  

/s/ Mark A. Sirgo

Name:   Mark A. Sirgo Title:   President and Chief Executive Officer Address for
Notices: 4131 ParkLake Avenue, Suite 225 Raleigh, NC 27612 Attn:   President
Tel.:   (919) 582-9050 Fax:   (919) 582-9051 Email:   msirgo@bdsi.com and
ernied@bdsi.com With a copy (which shall not constitute notice) to: Ellenoff
Grossman & Schole LLP 1345 Avenue of the Americas, 11th Floor New York, NY 10105
Attention: Barry I. Grossman, Esq. Tel:   (212) 370-1300 Fax:   (212) 370-7889
Email:   bigrossman@egsllp.com ARIUS TWO, INC. By  

/s/ Mark A. Sirgo

Name:   Mark A. Sirgo Title:   President and Chief Executive Officer Address for
Notices: 4131 ParkLake Avenue, Suite 225 Raleigh, NC 27612 Attn:   President
Tel.:   (919) 582-9050 Fax:   (919) 582-9051 Email:   msirgo@bdsi.com and
ernied@bdsi.com With a copy (which shall not constitute notice) to: Ellenoff
Grossman & Schole LLP 1345 Avenue of the Americas, 11th Floor New York, NY 10105
Attention: Barry I. Grossman, Esq. Tel:   (212) 370-1300 Fax:   (212) 370-7889
Email:   bigrossman@egsllp.com

 

[Signature to Term Loan Agreement]

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

ADMINISTRATIVE AGENT: CRG SERVICING LLC By  

/s/ Nathan Hukill

Name:   Nathan Hukill Title:   Authorized Signatory Address for Notices: 1000
Main Street, Suite 2500 Houston, TX 77002 Attn:   General Counsel Tel.:  
713.209.7350 Fax:   713.209.7351 Email:   adorenbaum@crglp.com

 

[Signature to Term Loan Agreement]

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
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Schedule 1

to Term Loan Agreement

COMMITMENTS

 

Lender

   Commitments      Proportionate Share  

CRG Partners III - Parallel Fund “A” L.P.

   $ 6,402,750.00        8.54 % 

CRG Partners III Parallel Fund “B” (Cayman) L.P.

   $ 28,290,000.00        37.72 % 

CRG Partners III L.P.

   $ 13,004,250.00        17.34 % 

CRG Partners III (Cayman) Lev AIV I L.P.

   $ 25,255,500.00        33.67 % 

CRG Partners III (Cayman) Unlev AIV I L.P.

   $ 2,047,500.00        2.73 %    

 

 

    

 

 

 

Total:

   $ 75,000,000.00        100.00 %    

 

 

    

 

 

 

WARRANT SHARES

 

Lender

   Number of Shares of Common Stock
subject to Warrants as of Closing
Date1

CRG Partners III – Parallel Fund “A” L.P.

   [                    ]

CRG Partners III Parallel Fund “B” (Cayman) L.P.

   [                    ]

CRG Partners III L.P.

   [                    ]

CRG Partners III (Cayman) LEV AIV I L.P.

   [                    ]

CRG Partners III (Cayman) UNLEV AIV I L.P.

   [                    ]

TOTAL

  

 

 

1  Warrants will be issued on the Second Borrowing Date and Third Borrowing Date
in accordance with Section 6.02 and 6.03, respectively.

 

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

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are denoted with “***”

 

Exhibit A

to Term Loan Agreement

FORM OF GUARANTEE ASSUMPTION AGREEMENT

GUARANTEE ASSUMPTION AGREEMENT dated as of [DATE] by [NAME OF ADDITIONAL
SUBSIDIARY GUARANTOR], a                      [corporation][limited liability
company] (the “Additional Subsidiary Guarantor”), in favor of CRG SERVICING LLC,
as administrative agent and collateral agent (the “Administrative Agent”) for
the benefit of the Secured Parties under that certain Term Loan Agreement, dated
as of February [●], 2017 (as amended, restated, supplemented or otherwise
modified, renewed, refinanced or replaced, the “Loan Agreement”), among
BioDelivery Sciences International, Inc., a Delaware corporation (“Borrower”),
Administrative Agent, the lenders from time to time party thereto and the
Subsidiary Guarantors from time to time party thereto. The terms defined in the
Loan Agreement are herein used as therein defined.

Pursuant to Section 8.12(a) of the Loan Agreement, the Additional Subsidiary
Guarantor hereby agrees to become a “Subsidiary Guarantor” for all purposes of
the Loan Agreement, and a “Grantor” for all purposes of the Security Agreement.
Without limiting the foregoing, the Additional Subsidiary Guarantor hereby,
jointly and severally with the other Subsidiary Guarantors, guarantees to the
Lenders and their successors and assigns the prompt payment in full when due
(whether at stated maturity, by acceleration or otherwise) of all Guaranteed
Obligations (as defined in Section 14.01 of the Loan Agreement) in the same
manner and to the same extent as is provided in Section 14 of the Loan
Agreement. In addition, as of the date hereof, the Additional Subsidiary
Guarantor hereby makes the representations and warranties set forth in Sections
7.01, 7.02, 7.03, 7.05(a), 7.06, 7.07, 7.08 and 7.18 of the Loan Agreement, and
in Section 2 of the Security Agreement, with respect to itself and its
obligations under this Agreement and the other Loan Documents, as if each
reference in such Sections to the Loan Documents included reference to this
Agreement, such representations and warranties to be made as of the date hereof.

The Additional Subsidiary Guarantor hereby instructs its counsel to deliver the
opinions referred to in Section 8.12(a) of the Loan Agreement to Administrative
Agent.

IN WITNESS WHEREOF, the Additional Subsidiary Guarantor has caused this
Guarantee Assumption Agreement to be duly executed and delivered as of the day
and year first above written.

 

[ADDITIONAL SUBSIDIARY GUARANTOR] By  

 

Name:   Title:  

 

Exhibit A-1

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

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IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

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Exhibit B

to Term Loan Agreement

FORM OF NOTICE OF BORROWING

Date: [                    ]

 

To: CRG Servicing LLC and the Lenders referred to below

1000 Main Street, Suite 2500

Houston, TX 77002

Attn:    General Counsel

 

  Re: Borrowing under Term Loan Agreement

Ladies and Gentlemen:

The undersigned, BioDelivery Sciences International, Inc., a Delaware
corporation (“Borrower”), refers to the Term Loan Agreement, dated as of
February [●], 2017 (as the same may be amended, restated, supplemented or
otherwise modified from time to time, the “Loan Agreement”), among Borrower, CRG
Servicing LLC, as administrative agent and collateral agent (in such capacities,
the “Administrative Agent”), and the lenders from time to time party thereto and
the subsidiary guarantors from time to time party thereto. The terms defined in
the Loan Agreement are herein used as therein defined.

Borrower hereby gives you notice irrevocably, pursuant to Section 2.02 of the
Loan Agreement, of the borrowing of the Loan specified herein:

1.    The proposed Borrowing Date is [                    ].

2.    The amount of the proposed Borrowing is $[        ].

3.    The payment instructions with respect to the funds to be made available to
Borrower are as follows:

 

Bank name:

  

[                     ]

Bank Address:

  

[                     ]

Routing Number:

  

[                     ]

Account Number:

  

[                     ]

Swift Code:

  

[                     ]

Borrower hereby certifies that the following statements are true on the date
hereof, and will be true on the date of the proposed borrowing of the Loan,
before and after giving effect thereto and to the application of the proceeds
therefrom:

a)    the representations and warranties made by Borrower in Section 7 of the
Loan Agreement shall be true on and as of the Borrowing Date and immediately
after giving effect to the application of the proceeds of the Borrowing with the
same force and effect as if made on and as of such date except that the
representation regarding representations and warranties that refer to a specific
earlier date shall be that they were true on such earlier date;

 

Exhibit B-1

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

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IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

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b)    on and as of the Borrowing Date, there shall have occurred no Material
Adverse Change since [                    ]; and

c)    no Default exists or would result from such proposed Borrowing or the
application of the proceeds thereof.

IN WITNESS WHEREOF, Borrower has caused this Notice of Borrowing to be duly
executed and delivered as of the day and year first above written.

 

BORROWER: BIODELIVERY SCIENCES INTERNATIONAL, INC. By  

 

Name:   Title:  

 

Exhibit B-2

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

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IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

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Exhibit C-1

to Term Loan Agreement

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

Reference is made to the Term Loan Agreement, dated as of February [●], 2017 (as
the same may be amended, restated, supplemented or otherwise modified from time
to time, the “Loan Agreement”), among Borrower, CRG Servicing LLC, as
administrative agent and collateral agent (in such capacities, the
“Administrative Agent”), and the lenders and the subsidiary guarantors from time
to time party thereto. [                                ] (the “Foreign Lender”)
is providing this certificate pursuant to Section 5.03(e)(ii)(B) of the Loan
Agreement. The Foreign Lender hereby represents and warrants that:

1.    The Foreign Lender is the sole record owner of the Loans in respect of
which it is providing this certificate;

2.    The Foreign Lender is not a “bank” for purposes of Section 881(c)(3)(A) of
the Internal Revenue Code of 1986, as amended (the “Code”). In this regard, the
Foreign Lender further represents and warrants that:

(a)    The Foreign Lender is not subject to regulatory or other legal
requirements as a bank in any jurisdiction; and

(b)    The Foreign Lender has not been treated as a bank for purposes of any
tax, securities law or other filing or submission made to any Governmental
Authority, any application made to a rating agency or qualification for any
exemption from tax, securities law or other legal requirements;

3.    The Foreign Lender is not a 10-percent shareholder of Borrower within the
meaning of Section 881(c)(3)(B) of the Code; and

4.    The Foreign Lender is not a controlled foreign corporation receiving
interest from a related person within the meaning of Section 881(c)(3)(C) of the
Code.

5.     The undersigned has furnished Administrative Agent and Borrower with a
certificate of its non-U.S. Person status on IRS Form W-8BEN or W-8BEN-E, as
applicable.

Unless otherwise defined herein, terms defined in the Loan Agreement and used
herein shall have the meanings given to them in the Loan Agreement.

[Signature follows]

 

Exhibit C-1-1

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

IN WITNESS WHEREOF, the undersigned has caused this certificate to be duly
executed and delivered as of the date indicated below.

 

[NAME OF NON-U.S. LENDER] By  

 

Name:   Title:   Date:  

 

 

Exhibit C-1-2

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

Exhibit C-2

to Term Loan Agreement

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax
Purposes)

Reference is made to the Term Loan Agreement, dated as of February [●], 2017 (as
the same may be amended, restated, supplemented or otherwise modified from time
to time, the “Loan Agreement”), among Borrower, CRG Servicing LLC, as
administrative agent and collateral agent (in such capacities, the
“Administrative Agent”), and the lenders and the subsidiary guarantors from time
to time party thereto. [                                ] (the “Foreign
Participant”) is providing this certificate pursuant to Section 5.03(e)(ii)(B)
of the Loan Agreement. The Foreign Participant hereby represents and warrants
that:

1.    The Foreign Participant is the sole record and beneficial owner of the
participation in respect of which it is providing this certificate;

2.    The Foreign Participant is not a “bank” for purposes of Section
881(c)(3)(A) of the Internal Revenue Code of 1986, as amended (the “Code”). In
this regard, the Foreign Participant further represents and warrants that:

(a)    The Foreign Participant is not subject to regulatory or other legal
requirements as a bank in any jurisdiction; and

(b)    The Foreign Participant has not been treated as a bank for purposes of
any tax, securities law or other filing or submission made to any Governmental
Authority, any application made to a rating agency or qualification for any
exemption from tax, securities law or other legal requirements;

3.    The Foreign Participant is not a 10-percent shareholder of Borrower within
the meaning of Section 881(c)(3)(B) of the Code; and

4.    The Foreign Participant is not a controlled foreign corporation receiving
interest from a related person within the meaning of Section 881(c)(3)(C) of the
Code.

5.     The undersigned has furnished its participating Lender with a certificate
of its non-U.S. Person status on IRS Form W-8BEN or W-8BEN-E, as applicable.

Unless otherwise defined herein, terms defined in the Loan Agreement and used
herein shall have the meanings given to them in the Loan Agreement.

[Signature follows]

 

Exhibit C-2-1

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FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

IN WITNESS WHEREOF, the undersigned has caused this certificate to be duly
executed and delivered as of the date indicated below.

 

[NAME OF NON-U.S. PARTICIPANT] By  

 

Name:   Title:   Date:  

 

 

Exhibit C-2-2

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IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

Exhibit C-3

to Term Loan Agreement

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax
Purposes)

Reference is made to the Term Loan Agreement, dated as of February [●], 2017 (as
the same may be amended, restated, supplemented or otherwise modified from time
to time, the “Loan Agreement”), among Borrower, CRG Servicing LLC, as
administrative agent and collateral agent (in such capacities, the
“Administrative Agent”), and the lenders and the subsidiary guarantors from time
to time party thereto. [                                ] (the “Foreign
Participant”) is providing this certificate pursuant to Section 5.03(e)(ii)(B)
of the Loan Agreement. The Foreign Participant hereby represents and warrants
that:

1.    The Foreign Participant is the sole record owner of the participation in
respect of which it is providing this certificate;

2.     The Foreign Participant’s direct or indirect partners/members are the
sole beneficial owners of the participation in respect of which it is providing
this certificate;

3.    Neither the Foreign Participant nor its direct or indirect
partners/members is a “bank” for purposes of Section 881(c)(3)(A) of the
Internal Revenue Code of 1986, as amended (the “Code”). In this regard, the
Foreign Participant further represents and warrants that:

(a)    neither the Foreign Participant nor its direct or indirect
partners/members is subject to regulatory or other legal requirements as a bank
in any jurisdiction; and

(b)    neither the Foreign Participant nor its direct or indirect
partners/members has been treated as a bank for purposes of any tax, securities
law or other filing or submission made to any Governmental Authority, any
application made to a rating agency or qualification for any exemption from tax,
securities law or other legal requirements;

4.    Neither the Foreign Participant nor its direct or indirect
partners/members is a 10-percent shareholder of Borrower within the meaning of
Section 881(c)(3)(B) of the Code; and

5.    Neither the Foreign Participant nor its direct or indirect
partners/members is a controlled foreign corporation receiving interest from a
related person within the meaning of Section 881(c)(3)(C) of the Code.

6.     The undersigned has furnished its participating Lender with IRS Form
W-8IMY accompanied by one of the following forms for each of its
partners/members that is claiming the portfolio interest exemption : (i) an IRS
Form W-8BEN or W-8BEN-E, as applicable, or (ii) an IRS Form W-8IMY accompanied
by an IRS Form W-8BEN or W-8BEN-E, as applicable, from each such
partner’s/member’s beneficial owners that is claiming the portfolio interest
exemption.

Unless otherwise defined herein, terms defined in the Loan Agreement and used
herein shall have the meanings given to them in the Loan Agreement.

[Signature follows]

 

Exhibit C-3-1

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

IN WITNESS WHEREOF, the undersigned has caused this certificate to be duly
executed and delivered as of the date indicated below.

 

[NAME OF NON-U.S. PARTICIPANT] By  

 

Name:   Title:   Date:  

 

 

Exhibit C-3-2

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

Exhibit C-4

to Term Loan Agreement

FORM OF U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

Reference is made to the Term Loan Agreement, dated as of February [●], 2017 (as
the same may be amended, restated, supplemented or otherwise modified from time
to time, the “Loan Agreement”), among Borrower, CRG Servicing LLC, as
administrative agent and collateral agent (in such capacities, the
“Administrative Agent”), and the lenders and the subsidiary guarantors from time
to time party thereto. [                                ] (the “Foreign Lender”)
is providing this certificate pursuant to Section 5.03(e)(ii)(B) of the Loan
Agreement. The Foreign Lender hereby represents and warrants that:

1.    The Foreign Lender is the sole record owner of the Loans in respect of
which it is providing this certificate;

2.     The Foreign Lender’s direct or indirect partners/members are the sole
beneficial owners of the Loans in respect of which it is providing this
certificate;

3.    Neither the Foreign Lender nor its direct or indirect partners/members is
a “bank” for purposes of Section 881(c)(3)(A) of the Internal Revenue Code of
1986, as amended (the “Code”). In this regard, the Foreign Lender further
represents and warrants that:

(a)    neither the Foreign Lender nor its direct or indirect partners/members is
subject to regulatory or other legal requirements as a bank in any jurisdiction;
and

(b)    neither the Foreign Lender nor its direct or indirect partners/members
has been treated as a bank for purposes of any tax, securities law or other
filing or submission made to any Governmental Authority, any application made to
a rating agency or qualification for any exemption from tax, securities law or
other legal requirements;

4.    Neither the Foreign Lender nor its direct or indirect partners/members is
a 10-percent shareholder of Borrower within the meaning of Section 881(c)(3)(B)
of the Code; and

5.    Neither the Foreign Lender nor its direct or indirect partners/members is
a controlled foreign corporation receiving interest from a related person within
the meaning of Section 881(c)(3)(C) of the Code.

6.     The undersigned has made available to Borrower (directly or through
Administrative Agent) an IRS Form W-8IMY accompanied by one of the following
forms for each of its partners/members that is claiming the portfolio interest
exemption: (i) an IRS Form W-8BEN or W-8BEN-E, as applicable, or (ii) an IRS
Form W-8IMY accompanied by an IRS Form W-8BEN or W-8BEN-E, as applicable, from
each such partner’s/member’s beneficial owners that is claiming the portfolio
interest exemption.

Unless otherwise defined herein, terms defined in the Loan Agreement and used
herein shall have the meanings given to them in the Loan Agreement.

 

Exhibit C-4-1

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

IN WITNESS WHEREOF, the undersigned has caused this certificate to be duly
executed and delivered as of the date indicated below.

 

[NAME OF NON-U.S. LENDER] By  

 

Name:   Title:   Date:  

 

 

Exhibit C-4-2

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

Exhibit D

to Term Loan Agreement

FORM OF COMPLIANCE CERTIFICATE

[DATE]

This certificate is delivered pursuant to Section 8.01(d) of, and in connection
with the consummation of the transactions contemplated in, the Term Loan
Agreement, dated as of February [●], 2017 (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the “Loan Agreement”),
among Borrower, CRG Servicing LLC, as administrative agent and collateral agent
(in such capacities, the “Administrative Agent”), and the lenders and the
subsidiary guarantors from time to time party thereto. Capitalized terms used
herein and not otherwise defined herein are used herein as defined in the Loan
Agreement.

The undersigned, a duly authorized Responsible Officer of Borrower having the
name and title set forth below under his signature, hereby certifies, on behalf
of Borrower for the benefit of the Secured Parties and pursuant to Section
8.01(d) of the Loan Agreement that such Responsible Officer of Borrower is
familiar with the Loan Agreement and that, in accordance with each of the
following sections of the Loan Agreement, each of the following is true on the
date hereof, both before and after giving effect to any Loan to be made on or
before the date hereof:

In accordance with Section 8.01[(a)/(b)] of the Loan Agreement, attached hereto
as Annex A are the financial statements for the [fiscal quarter/fiscal year]
ended [                    ] required to be delivered pursuant to Section
8.01[(a)/(b)] of the Loan Agreement. Such financial statements fairly present in
all material respects the consolidated financial position, results of operations
and cash flow of Borrower and its Subsidiaries as at the dates indicated therein
and for the periods indicated therein in accordance with GAAP [(subject to the
absence of footnote disclosure and normal year-end audit adjustments)]2 [The
examination by such auditors in connection with such financial statements has
been made in accordance with the standards of the United States’ Public Company
accounting Oversight Board (or any successor entity).]3

Attached hereto as Annex B are the calculations used to determine compliance
with each financial covenant contained in Section 10 of the Loan Agreement.

No Default or Event of Default is continuing as of the date hereof[, except as
provided for on Annex C attached hereto, with respect to each of which Borrower
proposes to take the actions set forth on Annex C].

As of the date hereof, the representations and warranties made by Borrower in
Section 7 of the Loan Agreement (A) in the case of representations and
warranties qualified by “materiality”, “Material Adverse Effect” or “knowledge”,
are true and correct in all respects and (B) in the case of all other
representations and warranties, are true and correct in all material

 

2  Insert language in brackets only for quarterly certifications.

3 

Insert language in brackets only for annual certifications.

 

Exhibit D-1

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

respects, with the same force and effect as if made on and as of the date hereof
(except that the representation regarding representations and warranties that
refer to a specific earlier date shall be that they were true on such earlier
date)[, except as provided for on Annex D attached hereto, with respect to each
of which Borrower proposes to take the actions set forth on Annex D].

IN WITNESS WHEREOF, the undersigned has executed this certificate on the date
first written above.

 

BIODELIVERY SCIENCES INTERNATIONAL, INC. By  

 

Name:   Title:  

 

Exhibit D-2

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

Exhibit E

to Term Loan Agreement

OPINION REQUEST

The opinion of legal counsel to Borrower and each other Obligor should address
the following matters (capitalized terms used but not defined herein have the
meanings given to them in the Agreement):4

 

1. Power and authority (Section 7.01)

 

2. Due organization/good standing (Section 7.01)

 

3. Due authorization (Section 7.02)

 

4. Due execution & delivery (Section 7.02)

 

5. Enforceability (Section 7.02)

 

6. No consents/conflicts (Section 7.03)

 

7. Investment company (Section 7.10(a))

 

8. Legal, valid and enforceable security interest (Section 7.18)

 

9. Perfection of security interest (UCC and Control Agreements) (Section 7.18)

 

 

4  The section numbers relate to those sections that are relevant to the
particular opinion.

 

Exhibit E-1

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

Exhibit F

to Term Loan Agreement

FORM OF LANDLORD CONSENT

THIS LANDLORD CONSENT (the “Agreement”) is made and entered into as of [INSERT
DATE] by and among CRG Servicing LLC, as administrative agent and collateral
agent for the “Secured Parties” as defined in the Loan Agreement referred to
below (in such capacities, “Administrative Agent”), [INSERT NAME OF BORROWER or
GUARANTOR], a [Delaware] [corporation] (“Debtor”), and [INSERT NAME OF
LANDLORD], a [Delaware] [limited liability company] (“Landlord”).

WHEREAS, Debtor has entered into a Term Loan Agreement, dated as of February
[●], 2017 (as the same may be amended, restated, supplemented or otherwise
modified from time to time, the “Loan Agreement”), among Borrower,
Administrative Agent, and the lenders from time to time party thereto and the
subsidiary guarantors from time to time party thereto, pursuant to which the
Secured Parties have been granted a security interest in all of Debtor’s
personal property, including, but not limited to, inventory, equipment and trade
fixtures (hereinafter “Personal Property”); and

WHEREAS, Landlord is the owner of the real property located at
[                    ] (the “Premises”); and

WHEREAS, Landlord and Debtor have entered into that certain Lease dated
[                    ][, as amended by [                    ] dated
[                    ]] ([collectively,] the “Lease”); and

WHEREAS, certain of the Personal Property has or may become affixed to or be
located on, wholly or in part, the Premises.

NOW, THEREFORE, in consideration of any loans or other financial accommodation
extended by the Secured Parties to Debtor at any time, and other good and
valuable consideration, the parties agree as follows:

1.    Landlord subordinates to Administrative Agent (for the benefit of the
Secured Parties) all security interests or other interests or rights Landlord
may now or hereafter have in, or to any of the Personal Property, whether for
rent or otherwise, while Debtor is indebted to the Secured Parties.

2.    The Personal Property may be installed in or located on the Premises and
is not and shall not be deemed a fixture or part of the real estate and shall at
all times be considered personal property.

3.    Administrative Agent or its representatives may enter upon the Premises
during normal business hours, and upon not less than 24 hours’ advance notice,
to inspect the Personal Property.

 

Exhibit F-1

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

4.    Upon and during the continuance of an Event of Default under the
Agreements, Administrative Agent or its representatives, at Administrative
Agent’s option, upon written notice delivered to Landlord not less than ten
(10) business days in advance, may enter the Premises during normal business
hours for the purpose of repossessing, removing or otherwise dealing with said
Personal Property; provided that neither Administrative Agent nor Secured
Parties shall be permitted to operate the business of Debtor on the Premises or
sell, auction or otherwise dispose of any Personal Property at the Premises or
advertise any of the foregoing; and such license shall continue, from the date
Administrative Agent enters the Premises for as long as Administrative Agent
reasonably deems necessary but not to exceed a period of ninety (90) days.
During the period Administrative Agent occupies the Premises, it shall pay to
Landlord the rent provided under the Lease relating to the Premises, prorated on
a per diem basis to be determined on a thirty (30) day month, without incurring
any other obligations of Debtor.

5.    Administrative Agent shall pay to Landlord any costs for damage to the
Premises or the building in which the Premises is located in removing or
otherwise dealing with said Personal Property pursuant to paragraph 4 above, and
shall indemnify and hold harmless Landlord from and against (i) all claims,
disputes and expenses, including reasonable attorneys’ fees, suffered or
incurred by Landlord arising from Administrative Agent’s exercise of any of its
rights hereunder, and (ii) any injury to third persons, caused by actions of
Administrative Agent pursuant to this consent.

6.    Landlord agrees to give notice to Administrative Agent in writing by
certified mail or facsimile of Landlord’s intent to exercise its remedies in
response to any default by Debtor of any of the provisions of the Lease, to:

CRG Servicing LLC

1000 Main Street, Suite 2500

Houston, TX 77002

Attention: General Counsel

Fax: 713.209.7351

7.    Landlord shall have no obligation to preserve or protect the Personal
Property or take any action in connection therewith, and Administrative Agent
waives all claims they may now or hereafter have against Landlord in connection
with the Personal Property.

8.    This consent shall terminate and be of no further force or effect upon the
earlier of (i) the date on which all indebtedness secured by the Personal
Property indefeasibly is paid in full in cash and (ii) the date on which the
Lease is terminated or expires.

9.    Nothing contained herein shall be construed to amend the Lease, and the
Lease remains unchanged and in full force and effect.

This consent shall be construed and interpreted in accordance with and governed
by the laws of the State of [                    ].

This consent may not be changed or terminated orally and is binding upon and
shall inure to the benefit of Landlord, Administrative Agent, Secured Parties
and Debtor and the heirs, personal representatives, successors and assigns of
Landlord, Administrative Agent, Secured Parties and Debtor.

 

Exhibit F-2

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

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

 

LANDLORD: [                    ] By  

 

Name:   Title:  

 

ADMINISTRATIVE AGENT: CRG SERVICING LLC

By

 

 

Name:

 

Title:

 

Address for Notices:

1000 Main Street, Suite 2500

Houston, TX 77002

Attn:      General Counsel

Tel.:       713.209.7350

Fax:       713.209.7351

Email:    adorenbaum@crglp.com

 

Acknowledged and Agreed: [INSERT NAME OF BORROWER OR GUARANTOR] By  

 

Name:   Title:  

 

 

Exhibit F-3

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

Exhibit G

to Term Loan Agreement

FORM OF SUBORDINATION AGREEMENT

This Subordination Agreement is made as of [                    ] (this
“Agreement”) among CRG Servicing LLC, a Delaware limited liability company
(“Senior Agent”), and [                    ], a [                    ]
[corporation] (“Subordinated Creditor”).

RECITALS:

A.    BioDelivery Sciences International, Inc., a Delaware corporation
(“Borrower”), will, as of the date hereof, issue in favor of Subordinated
Creditor the Subordinated Note (as defined below).

B.    Senior Creditors, Borrower and certain of its subsidiaries have entered
into the Senior Loan Agreement (as defined below), and Senior Agent, Borrower
and certain of its subsidiaries have entered into the Senior Security Agreement
(as defined below) under which Borrower and such subsidiaries have granted a
security interest in the Collateral (as defined below) in favor of the Senior
Creditors as security for the payment of Borrower’s obligations under the Senior
Loan Agreement.

C.    To induce the Lenders under and as defined in the Senior Loan Agreement
referred to below to make and maintain the credit extensions to Borrower under
the Senior Loan Agreement, Subordinated Creditor is willing to subordinate the
Subordinated Debt (as defined below) to the Senior Debt (as defined below) on
the terms and conditions herein set forth.

NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:

1.    Definitions. As used herein, the following terms have the following
meanings:

“Bankruptcy Code” means title 11 of the United States Code, 11 U.S.C. §§ 101 et
seq.

“Collateral” has the meaning set forth in the Senior Security Agreement.

“Enforcement Action” means, with respect to any indebtedness, obligation
(contingent or otherwise) or Collateral at any time held by any lender or
noteholder, (i) commencing, by judicial or non-judicial means, the enforcement
of, or otherwise attempting to enforce, such indebtedness, obligation or
Collateral of any of the default remedies under any of the applicable agreements
or documents of such lender or noteholder, the UCC or other applicable law
(other than the mere issuance of a notice of default or notice of the right by
such lender or noteholder to seek specific performance with respect to any
covenants in favor of such lender or noteholder), (ii) repossessing, selling,
leasing or otherwise disposing of all or any part of such Collateral, including
without limitation causing any attachment of, levy upon, execution against,
foreclosure upon or the taking of other action against or institution of other
proceedings with respect to any Collateral, or exercising account debtor or
obligor notification or collection rights with respect to all or any portion
thereof, or attempting or agreeing to do so, (iii) appropriating, setting off or
applying to such lender or noteholder’s claim any part or all of such Collateral
or other property

 

Exhibit G-1

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

in the possession of, or coming into the possession of, such lender or
noteholder or its agent, trustee or bailee, (iv) asserting any claim or interest
in any insurance with respect to such indebtedness, obligation or Collateral,
(v) instituting or commencing, or joining with any Person in commencing, any
action or proceeding with respect to any of the foregoing rights or remedies
(including any action of foreclosure, enforcement, collection or execution and
any Insolvency Event involving any Obligor), (vi) exercising any rights under
any lockbox agreement, account control agreement, landlord waiver or bailee’s
letter or similar agreement or arrangement to which the Subordinated Creditor is
a party, or (vii) otherwise enforcing, or attempting to enforce, any other
rights or remedies under or with respect to any such indebtedness, obligation or
Collateral.

“Insolvency Event” means that any Obligor or any of its subsidiaries shall have
(i) applied for, consented to or acquiesced in the appointment of a trustee,
receiver or other custodian for it or any of its property, or (ii) made a
general assignment for the benefit of creditors or similar arrangement in
respect of such Obligor’s or subsidiary’s creditors generally or any substantial
portion thereof, or (iii) permitted, consented to, or suffered to exist the
appointment of a trustee, receiver or other custodian for it or for a
substantial part of its property, or (iv) commenced any case, action or
proceeding before any court or other governmental agency or authority relating
to bankruptcy, reorganization, insolvency, debt arrangement or relief or other
case, action or proceeding under any bankruptcy or insolvency law, or any
dissolution, winding up or liquidation case, action or proceeding, including
without limitation any case under the Bankruptcy Code, in respect of it, or
(v) (A) permitted, consented to, or suffered to exist the commencement of any
case, action or proceeding before any court or other governmental agency or
authority relating to bankruptcy, reorganization, insolvency, debt arrangement
or relief or other case, action or proceeding under any bankruptcy or insolvency
law, or any dissolution, winding up or liquidation case, action or proceeding,
including without limitation any case under the Bankruptcy Code, in respect of
it, or (B) any such case, action or proceeding shall have resulted in the entry
of an order for relief or shall have remained for sixty (60) days undismissed.

“Obligor” has the meaning set forth in the Senior Loan Agreement.

“Person” has the meaning set forth in the Senior Loan Agreement.

“Senior Creditors” means Senior Agent and the Lenders under and as defined in
the Senior Loan Agreement.

“Senior Debt” means the Obligations (as defined in the Senior Loan Agreement).

“Senior Discharge Date” means the first date on which all of the Senior Debt
(other than contingent indemnification obligations and any Warrant Obligations
(as defined in the Senior Loan Agreement)) has been paid indefeasibly in full in
cash and all commitments of Senior Lenders under the Senior Loan Documents have
been terminated.

“Senior Loan Agreement” means that certain Term Loan Agreement, dated as of
February [●], 2017, by and among Borrower, the subsidiary guarantors from time
to time party thereto, and the Senior Creditors from time to time party thereto,
as amended, restated, supplemented or otherwise modified from time to time.

 

Exhibit G-2

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

“Senior Loan Documents” means, collectively, the Loan Documents (as defined in
the Senior Loan Agreement), in each case as amended, restated, supplemented or
otherwise modified from time to time.

“Senior Security Agreement” means that certain Security Agreement, dated as of
February [●], 2017, among Borrower, the other Obligors party thereto, and Senior
Agent, as amended, restated, supplemented or otherwise modified from time to
time.

“Subordinated Debt” means and includes all obligations, liabilities and
indebtedness of Borrower owed to Subordinated Creditor, whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, including without limitation, principal, premium (if any),
interest, fees, charges, expenses, costs, professional fees and expenses, and
reimbursement obligations.

“Subordinated Debt Documents” means, collectively, the Subordinated Note and
each other loan document or agreement entered into by Borrower in connection
with the Subordinated Note, as amended, restated, supplemented or otherwise
modified from time to time.

“Subordinated Note” means that certain $[        ] subordinated promissory note,
dated [                    ], issued by Borrower to Subordinated Creditor, as
amended, restated, supplemented or otherwise modified from time to time.

“UCC” means the Uniform Commercial Code of any applicable jurisdiction and, if
the applicable jurisdiction shall not have any Uniform Commercial Code, the
Uniform Commercial Code as in effect in the State of New York.

2.    Liens. (a) Subordinated Creditor represents and warrants that the
Subordinated Debt is unsecured. Subordinated Creditor agrees that it will not
request or accept any security interest in any Collateral to secure the
Subordinated Debt; provided that, should Subordinated Creditor obtain a lien or
security interest on any asset or Collateral to secure all or any portion of the
Subordinated Debt for any reason (which action shall be in violation of this
Agreement), notwithstanding the respective dates of attachment and perfection of
the security interests in the Collateral in favor of the Senior Creditors or
Subordinated Creditor, or any contrary provision of the UCC, or any applicable
law or decision to the contrary, or the provisions of the Senior Loan Documents
or the Subordinated Debt Documents, and irrespective of whether Subordinated
Creditor or the Senior Creditors hold possession of any or all part of the
Collateral, all now existing or hereafter arising security interests in the
Collateral in favor of Subordinated Creditor in respect of the Subordinated Debt
Documents shall at all times be subordinate to the security interest in such
Collateral in favor of the Senior Creditors in respect of the Senior Loan
Documents.

(b)    Subordinated Creditor acknowledges that the Senior Creditors have been
granted liens upon the Collateral, and Subordinated Creditor hereby consents
thereto and to the incurrence of the Senior Debt.

(c)    Until the Senior Discharge Date, in the event of any private or public
sale or other disposition of all or any portion of the Collateral, Subordinated
Creditor agrees that such Collateral shall be sold or otherwise disposed of free
and clear of any liens in favor of

 

Exhibit G-3

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

Subordinated Creditor. Subordinated Creditor agrees that any such sale or
disposition of Collateral shall not require any consent from Subordinated
Creditor, and Subordinated Creditor hereby waives any right it may have to
object to such sale or disposition.

(d)    Subordinated Creditor agrees that it will not request or accept any
guaranty of the Subordinated Debt.

3.    Payment Subordination. (a) Notwithstanding the terms of the Subordinated
Debt Documents, until the Senior Discharge Date, (i) all payments and
distributions of any kind or character, whether in cash, property or securities,
in respect of the Subordinated Debt are subordinated in right and time of
payment to all payments in respect of the Senior Debt, and (ii) Subordinated
Creditor will not demand, sue for or receive from Borrower (and Borrower will
not pay) any part of the Subordinated Debt, whether by payment, prepayment,
distribution, setoff, or otherwise, or accelerate the Subordinated Debt.

(b)    Subordinated Creditor must deliver to the Senior Agent in the form
received (except for endorsement or assignment by Subordinated Creditor) any
payment, distribution, security or proceeds it receives on the Subordinated Debt
other than according to this Agreement.

4.    Subordination of Remedies. Until the Senior Discharge Date, and whether or
not any Insolvency Event has occurred, Subordinated Creditor will not accelerate
the maturity of all or any portion of the Subordinated Debt, enforce, attempt to
enforce, or exercise any right or remedy with respect to any Collateral or the
Subordinated Debt, or take any other Enforcement Action with respect to the
Subordinated Debt.

5.    Payments Over. All payments and distributions of any kind, whether in
cash, property or securities, in respect of the Subordinated Debt to which
Subordinated Creditor would be entitled if the Subordinated Debt were not
subordinated pursuant to this Agreement, shall be paid to the Senior Creditors
in respect of the Senior Debt, regardless of whether such Senior Debt, or any
portion thereof, is reduced, expunged, disallowed, subordinated or
recharacterized. Notwithstanding the foregoing, if any payment or distribution
of any kind, whether in cash, property or securities, shall be received by
Subordinated Creditor on account of the Subordinated Debt before Senior
Discharge Date (whether or not expressly characterized as such), then such
payment or distribution shall be segregated by Subordinated Creditor and held in
trust for, and shall be promptly paid over to, the Senior Creditors in the same
form as received, with any necessary endorsements or as a court of competent
jurisdiction may otherwise direct, in respect of the Senior Debt, regardless of
whether such Senior Debt, or any portion thereof, is reduced, expunged,
disallowed, subordinated or recharacterized. Subordinated Creditor irrevocably
appoints the Senior Agent as Subordinated Creditor’s attorney-in-fact, and
grants to the Senior Creditors a power of attorney with full power of
substitution (which power of attorney is coupled with an interest), in the name
of Subordinated Creditor or in the name of the Senior Agent, for the use and
benefit of the Senior Creditors, without notice to Subordinated Creditor, to
make any such endorsements. This Section 5 shall be enforceable even if the
Senior Creditors’ liens on the Collateral are alleged, determined, or held to
constitute fraudulent transfers (whether constructive or actual), preferential
transfers, or otherwise avoided or voidable, set aside, recharacterized or
equitably subordinated.

 

Exhibit G-4

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

6.    Insolvency Proceedings. (a) This Agreement is intended to constitute and
shall be deemed to constitute a “subordination agreement” within the meaning of
Section 510(a) of the Bankruptcy Code and is intended to be and shall be
interpreted to be enforceable to the maximum extent permitted pursuant to
applicable nonbankruptcy law. All references to Borrower or any other Obligor
shall include Borrower or such Obligor as debtor and debtor-in-possession and
any receiver or trustee for Borrower or any other Obligor (as the case may be)
in connection with any case under the Bankruptcy Code or in connection with any
other Insolvency Event.

(b)    Without limiting the generality of the other provisions of this
Agreement, until the Senior Discharge Date, without the express written consent
of the Senior Agent, Subordinated Creditor shall not institute or commence (nor
shall it join with or support any third party instituting, commencing, opposing,
objecting or contesting, as the case may be, or otherwise suffer to exist), any
Insolvency Event involving Borrower or any other Obligor.

(c)    The Senior Creditors shall have the right to enforce rights, exercise
remedies (including set-off and the right to credit bid its debt) and make
determinations regarding the release, disposition, or restrictions with respect
to the Collateral without any consultation with or consent of Subordinated
Creditor.

(d)    Subordinated Creditor will not, and hereby waives any right to bring,
join in, or otherwise support or take any action to (i) contest the validity,
legality, enforceability, perfection, priority or avoidability of any of the
Senior Debt, any of the Senior Loan Documents or any security interests and/or
liens of the Senior Creditors on or in any property or assets of Borrower or any
other Obligor, including without limitation, the Collateral; (ii) interfere with
or in any manner oppose or support any other Person in opposing any foreclosure
on or other disposition of any Collateral by the Senior Creditors in accordance
with applicable law, or otherwise to contest, protest, object to or interfere
with the manner in which the Senior Creditors may seek to enforce the Liens on
any Collateral; (iii) provide a debtor-in-possession facility (including on a
priming basis) to Borrower or any other Obligor, under Section 362, 363 or 364
of the Bankruptcy Code or any other applicable law, without the consent, in
their sole discretion, of the Senior Creditors; or (iv) exercise any rights
against the Senior Creditors or the Collateral under Section 506(c) of the
Bankruptcy Code.

(e)    Subordinated Creditor will not, and hereby waives any right to, oppose,
contest, object to, join in, or otherwise support any opposition to or objection
with respect to, (i) any request or motion of the Senior Creditors seeking,
pursuant to Section 362(d) of the Bankruptcy Code or otherwise, the
modification, lifting or vacating of the automatic stay of Section 362(a) of the
Bankruptcy Code or from any other stay in connection with any Insolvency Event
or seeking adequate protection of the Senior Creditors’ interests in the
Collateral or with respect to the Senior Debt (whether under Sections 362, 363,
and/or 364 of the Bankruptcy Code or other applicable law), and, until Senior
Discharge Date, Subordinated Creditor agrees that it shall not seek relief from
such automatic stay without the prior written consent of the Senior Agent;
(ii) any debtor-in-possession financing (including on a priming basis) or use of
cash collateral (as defined in Section 363(a) of the Bankruptcy Code or other
applicable law) arrangement by Borrower, whether from the Senior Creditors or
any other third party under Section 362, 363 or 364 of the Bankruptcy Code or
any other applicable law, if the Senior Creditors, in their sole

 

Exhibit G-5

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

discretion, consent to such debtor-in-possession financing or cash collateral
arrangement, and Subordinated Creditor shall not request adequate protection
(whether under Sections 362, 363, and/or 364 of the Bankruptcy Code or other
applicable law) or any other relief in connection therewith; (iii) any sale or
other disposition of the Collateral or substantially all of the assets of
Borrower or any other Obligor (include any such sale free and clear of liens or
other claims) under Section 363 of the Bankruptcy Code or other applicable law
if the Senior Creditors, in their sole discretion, consent to such sale or
disposition; (vii) the Senior Creditors’ exercise or enforcement of its right to
make an election under Section 1111(b) of the Bankruptcy Code, and Subordinated
Creditor hereby waives any claim it may hereafter have against the Senior
Creditors arising out of such election; (viii) the Senior Creditors’ exercise or
enforcement of its right to credit bid any or all of its debt claims against
Borrower or any other Obligor, including, without limitation, the Senior Debt;
or (ix) any plan of reorganization or liquidation if the Senior Creditors, in
their sole discretion, consent to, vote in favor of, or otherwise do not oppose
such plan of reorganization or liquidation, and, in furtherance thereof,
Subordinated Creditor hereby grants to the Senior Creditors the right to vote
Subordinated Creditor’s claim or claims (as such term is defined in the
Bankruptcy Code) arising on account of or in connection with the Subordinated
Debt, as Subordinated Creditor’s agent, with respect to any plan of
reorganization or liquidation to which Subordinated Creditor may be entitled to
vote in any bankruptcy or liquidation proceeding or in connection with any other
Insolvency Event of Borrower or any other Obligor.

7.    Distributions of Proceeds of Collateral. All realizations upon any
Collateral pursuant to or in connection with an Enforcement Action, an
Insolvency Event or otherwise shall be paid or delivered to the Senior Agent in
respect of the Senior Debt until the Senior Discharge Date before any payment
may be made to Subordinated Creditor.

8.    Release of Liens. In the event of any private or public sale or other
disposition, by or with the consent of the Senior Agent, of all or any portion
of the Collateral, Subordinated Creditor agrees that such sale or disposition
shall be free and clear of any liens Subordinated Creditor may have on such
Collateral. Subordinated Creditor agrees that, in connection with any such sale
or other disposition, (i) the Senior Creditors are authorized to file any and
all UCC and other applicable lien releases and/or terminations in respect of any
liens held by Subordinated Creditor in connection with such a sale or other
disposition, and (ii) it shall execute any and all lien releases or other
documents reasonably requested by the Senior Agent in connection therewith. In
furtherance of the foregoing, Subordinated Creditor hereby appoints the Senior
Agent as its attorney-in-fact, with full authority in the place and stead of
Subordinated Creditor and full power of substitution and in the name of
Subordinated Creditor or otherwise, to execute and deliver any document or
instrument which Subordinated Creditor is required to deliver pursuant to this
Section 8, such appointment being coupled with an interest and irrevocable.
Subordinated Creditor agrees that the Senior Creditors may release or refrain
from enforcing their security interest in any Collateral, or permit the use or
consumption of such Collateral by Borrower free of any Subordinated Creditor
security interest, without incurring any liability to Subordinated Creditor.

9.    Attorney-In-Fact. Until the Senior Discharge Date, Subordinated Creditor
irrevocably appoints the Senior Agent as its attorney-in-fact, with power of
attorney with power of substitution, in Subordinated Creditor’s name or in any
Senior Creditor’s name, for the Senior

 

Exhibit G-6

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

Creditors’ use and benefit without notice to Subordinated Creditor, to do the
following during an Insolvency Event:

(a)    file any claims in respect of the Subordinated Debt on behalf of
Subordinated Creditor if Subordinated Creditor does not do so at least 30 days
before the time to file claims expires; and

(b)    vote Subordinated Creditor’s claim or claims (as such term is defined in
the Bankruptcy Code) arising on account of or in connection with the
Subordinated Debt, as Subordinated Creditor’s agent, with respect to any plan of
reorganization or liquidation to which Subordinated Creditor may be entitled to
vote in any bankruptcy or liquidation proceeding or in connection with any other
Insolvency Event of Borrower or any other Obligor.

Such power of attorney is irrevocable and coupled with an interest.

10.    Legend; Amendment of Debt. (a) Subordinated Creditor will immediately put
a legend on or otherwise indicate on the Subordinated Note that the Subordinated
Note is subject to this Agreement.

(b)    Until the Senior Discharge Date, Subordinated Creditor shall not, without
prior written consent of the Senior Agent, agree to any amendment, modification
or waiver of any provision of the Subordinated Debt Documents, if the effect of
such amendment, modification or waiver is to: (i) terminate or impair the
subordination of the Subordinated Debt in favor of the Senior Creditors;
(ii) increase the interest rate on the Subordinated Debt or change (to earlier
dates) the dates upon which principal, interest and other sums are due under the
Subordinated Note; (iii) alter the redemption, prepayment or subordination
provisions of the Subordinated Debt; (iv) impose on Borrower or any other
Obligor any new or additional prepayment charges, premiums, reimbursement
obligations, reimbursable costs or expenses, fees or other payment obligations;
(v) alter the representations, warranties, covenants, events of default,
remedies and other provisions in a manner which would make such provisions
materially more onerous, restrictive or burdensome to Borrower or any other
Obligor; (vi) grant a lien or security interest in favor of any holder of the
Subordinated Debt on any asset or Collateral to secure all or any portion of the
Subordinated Debt; or (vii) otherwise increase the obligations, liabilities and
indebtedness in respect of the Subordinated Debt or confer additional rights
upon Subordinated Creditor, which individually or in the aggregate would be
materially adverse to Borrower, any other Obligor or the Senior Creditors. Any
such amendment, modification or waiver made in violation of this Section 10(b)
shall be void.

(c)    At any time without notice to Subordinated Creditor, the Senior Creditors
may take such action with respect to the Senior Debt as the Senior Creditors, in
their sole discretion, may deem appropriate, including, without limitation,
terminating advances, increasing the principal, extending the time of payment,
increasing interest rates, renewing, compromising or otherwise amending any
documents affecting the Senior Debt and any Collateral securing the Senior Debt,
and enforcing or failing to enforce any rights against Borrower or any other
person. No action or inaction will impair or otherwise affect any Senior
Creditor’s rights under this Agreement.

 

Exhibit G-7

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

11.    Certain Waivers. (a) Subordinated Creditor hereby (i) waives any and all
notice of the incurrence of the Senior Debt or any part thereof; (ii) waives any
and all rights it may have to require the Senior Creditors to marshal assets, to
exercise rights or remedies in a particular manner, to forbear from exercising
such rights and remedies in any particular manner or order, or to claim the
benefit of any appraisal, valuation or other similar right that may otherwise be
available under applicable law, regardless of whether any action or failure to
act by or on behalf of the Senior Creditors is adverse to the interest of
Subordinated Creditor; (iii) agrees that the Senior Creditors shall have no
liability to Subordinated Creditor, and Subordinated Creditor hereby waives any
claim against the Senior Creditors arising out of any and all actions not in
breach of this Agreement which the Senior Creditors may take or permit or omit
to take with respect to the Senior Loan Documents (including any failure to
perfect or obtain perfected security interests in the Collateral), the
collection of the Senior Debt or the foreclosure upon, or sale, liquidation or
other disposition of, any Collateral; and (iv) agrees that the Senior Creditors
have no duty, express or implied, fiduciary or otherwise, to them in respect of
the maintenance or preservation of the Collateral, the Senior Debt or otherwise.
Without limiting the foregoing, Subordinated Creditor agrees that the Senior
Creditors shall have no duty or obligation to maximize the return to any class
of creditors holding indebtedness of any type (whether Senior Debt or
Subordinated Debt), notwithstanding that the order and timing of any
realization, sale, disposition or liquidation of the Collateral may affect the
amount of proceeds actually received by such class of creditors from such
realization, sale, disposition or liquidation.

(b)    Subordinated Creditor confirms that this Agreement shall govern as
between the Senior Creditors and the Subordinated Creditor irrespective of:
(i) any lack of validity or enforceability of any Senior Loan Document or any
Subordinated Debt Document; (ii) the occurrence of any Insolvency Event in
respect of any Obligor; (iii) whether the Senior Debt, or the liens or security
interests securing the Senior Debt, shall be held to be unperfected, deficient,
invalid, void, voidable, voided, unenforceable, subordinated, reduced,
discharged or are set aside by a court of competent jurisdiction, including
pursuant or in connection with any Insolvency Event; (iv) any change in the
time, manner or place of payment of, or in any other terms of, all or any of the
Senior Debt or the Subordinated Debt, or any amendment or waiver or other
modification, including any increase in the amount thereof, whether by course of
conduct or otherwise, of the terms of any Senior Loan Document or any
Subordinated Debt Document or any guarantee thereof; or (v) any other
circumstances which otherwise might constitute a defense available to, or a
discharge of, any Obligor in respect of the Senior Debt or the Subordinated
Debt.

12.    Representations and Warranties. Subordinated Creditor represents and
warrants to the Senior Creditors that:

(a)    all action on the part of Subordinated Creditor, its officers, directors,
partners, members and shareholders, as applicable, necessary for the
authorization of this Agreement and the performance of all obligations of
Subordinated Creditor hereunder has been taken;

(b)    this Agreement constitutes the legal, valid and binding obligation of
Subordinated Creditor, enforceable against Subordinated Creditor in accordance
with its terms;

 

Exhibit G-8

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

(c)    the execution, delivery and performance of and compliance with this
Agreement by Subordinated Creditor will not (i) result in any material violation
or default of any term of any of Subordinated Creditor’s charter, formation or
other organizational documents (such as Articles or Certificate of
Incorporation, bylaws, partnership agreement, operating agreement, etc.) or
(ii) violate any material applicable law, rule or regulation; and

(d)     Subordinated Creditor has not previously assigned any interest in the
Subordinated Debt, and no Person other than the Subordinated Creditor owns an
interest in the Subordinated Debt.

13.    Term; Reinstatement. This Agreement shall remain in full force and effect
until the Senior Discharge Date, notwithstanding the occurrence of an Insolvency
Event. If, after the Senior Discharge Date, the Senior Creditors must disgorge
any payments made on the Senior Debt for any reason (including, without
limitation, in connection with the bankruptcy of Borrower or in connection with
any other Insolvency Event), this Agreement and the relative rights and
priorities provided in it, will be reinstated as to all disgorged payments as
though such payments had not been made, and Subordinated Creditor will
immediately pay the Senior Agent all payments received in respect of the
Subordinated Debt to the extent such payments or retention thereof would have
been prohibited under this Agreement.

14.    Successors and Assigns. This Agreement binds Subordinated Creditor, its
successors or assigns, and benefits the Senior Creditors’ successors or assigns.
This Agreement is for Subordinated Creditor’s and the Senior Creditors’ benefit
and not for the benefit of Borrower or any other party. Subordinated Creditor
shall not sell, assign, pledge, dispose of or otherwise transfer all or any
portion of the Subordinated Debt or any related document or any interest in any
Collateral therefor unless prior to the consummation of any such action, the
transferee thereof shall execute and deliver to the Senior Agent an agreement of
such transferee to be bound hereby, or an agreement substantially identical to
this Agreement providing for the continued subjection of the Subordinated Debt,
the interests of the transferee in the Collateral and the remedies of the
transferee with respect thereto as provided herein with respect to Subordinated
Creditor and for the continued effectiveness of all of the other rights of the
Senior Creditors arising under this Agreement, in each case in form satisfactory
to the Senior Creditors. Any such sale, assignment, pledge, disposition or
transfer not made in compliance with the terms of this Section 14 shall be void.

15.    Further Assurances. Subordinated Creditor hereby agrees to execute such
documents and/or take such further action as the Senior Agent may at any time or
times reasonably request in order to carry out the provisions and intent of this
Agreement, including, without limitation, ratifications and confirmations of
this Agreement from time to time hereafter, as and when requested by the Senior
Agent.

16.    Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original and all of which together shall
constitute one instrument. Executed counterparts may be delivered by facsimile.

17.    Governing Law; Waiver of Jury Trial. (a) This Agreement and the rights
and obligations of the parties hereunder shall be governed by, and construed in
accordance with, the law of the State of New York, without regard to principles
of conflicts of laws that would result in the application of the laws of any
other jurisdiction; provided that Section 5-1401 of the New York General
Obligations Law shall apply.

 

Exhibit G-9

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

(b)    EACH PARTY HERETO WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREIN.

18.    Entire Agreement; Waivers and Amendments. This Agreement represents the
entire agreement with respect to the subject matter hereof, and supersedes all
prior negotiations, agreements and commitments. The Senior Creditors and
Subordinated Creditor are not relying on any representations by the other
creditor party or Borrower in entering into this Agreement, and each of the
Senior Creditors and Subordinated Creditor has kept and will continue to keep
itself fully apprised of the financial and other condition of Borrower. No
amendment, modification, supplement, termination, consent or waiver of or to any
provision of this Agreement, nor any consent to any departure therefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Senior Agent and Subordinated Creditor. Any waiver of any provision of this
Agreement, or any consent to any departure from the terms of any provision of
this Agreement, shall be effective only in the specific instance and for the
specific purpose for which given.

19.    No Waiver. No failure or delay on the part of any Senior Creditor or
Subordinated Creditor in the exercise of any power, right, remedy or privilege
under this Agreement shall impair such power, right, remedy or privilege or
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power, right or privilege preclude any other or further exercise of any
other power, right or privilege. The rights and remedies under this Agreement
are cumulative and not exclusive of any rights, remedies, powers and privileges
that may otherwise be available to any Senior Creditor.

20.    Legal Fees. In the event of any legal action to enforce the rights of a
party under this Agreement, the party prevailing in such action shall be
entitled, in addition to such other relief as may be granted, all reasonable,
invoiced and out-of-pocket costs and expenses, including reasonable attorneys’
fees, incurred in such action.

21.    Severability. Any provision of this Agreement which is illegal, invalid,
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent such illegality, invalidity, prohibition or
unenforceability without invalidating or impairing the remaining provisions
hereof or affecting the validity or enforceability of such provision in any
other jurisdiction.

22.    Notices. All notices, demands, instructions and other communications
required or permitted to be given to or made upon any party hereto shall be in
writing and shall be delivered or sent by first-class mail, postage prepaid, or
by overnight courier or messenger service or by facsimile or electronic mail,
message confirmed, and shall be deemed to be effective for purposes of this
Agreement on the day that delivery is made or refused. Unless otherwise
specified in a notice mailed or delivered in accordance with the foregoing
sentence, notices, demands, instructions and other communications in writing
shall be given to or made upon the respective parties hereto at their respective
addresses and facsimile numbers indicated on the signature pages hereto.

 

Exhibit G-10

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

23.    No Third-Party Beneficiaries; Other Benefits. The terms and provisions of
this Agreement are intended solely for the benefit of each party hereto and
their respective successors and permitted assigns, and the parties do not intend
to confer third party beneficiary rights upon any other person. Subordinated
Creditor understands that there may be various agreements between the Senior
Creditors and Borrower or the other Obligors evidencing and governing the Senior
Debt, and Subordinated Creditor acknowledges and agrees that such agreements are
not intended to confer any benefits on Subordinated Creditor and that the Senior
Creditors shall have no obligation to Subordinated Creditor or any other Person
to exercise any rights, enforce any remedies, or take any actions which may be
available to it under such agreements.

[Signature pages follow]

 

Exhibit G-11

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

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

 

SUBORDINATED CREDITOR: [                    ] By  

 

Name:   Title:  

Address for Notices:

 

SENIOR AGENT (on behalf of the SENIOR CREDITORS): CRG SERVICING LLC

By

 

 

Name:

 

Title:

  Address for Notices: 1000 Main Street, Suite 2500 Houston, TX 77002 Attn:
  General Counsel Tel.:    713.209.7350 Fax:    713.209.7351 Email:
adorenbaum@crglp.com

 

Exhibit G-12

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

FOIA CONFIDENTIAL TREATMENT REQUEST BY

BIODELIVERY SCIENCES INTERNATIONAL, INC.

IRS EMPLOYER IDENTIFICATION NUMBER 35-2089858

 

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential treatment is being requested
are denoted with “***”

 

BIODELIVERY SCIENCES INTERNATIONAL, INC. By  

 

Name:   Title:   Address for Notices: [                    ]
[                    ] [                    ] Attn:   [                    ]
Tel.:   [                    ] Fax:   [                    ] Email:  
[                    ]

 

Exhibit G-13