Exhibit 10.1

SEPARATION AGREEMENT AND GENERAL CLAIMS RELEASE

This SEPARATION AGREEMENT AND GENERAL CLAIMS RELEASE (the “Agreement”) by and
between Dr. Raphael J. Mannino (the “Employee”) and BioDelivery Sciences
International, Inc., a Delaware corporation (the “Company”) is executed as of
October 21, 2009 and is effective as of Employee’s effective termination date
according to the Notice of Termination, dated September 1, 2009, delivered by
the Company to Employee (such termination date, the “Termination Date”).

WHEREAS, Employee and the Company are parties to that certain Employment
Agreement, dated February 22, 2007 (the “Employment Agreement”);

WHEREAS, Employee’s employment with the Company ended on the Termination Date
and Employee and the Company now desire to fully and finally settle and resolve
all matters arising, directly or indirectly, out of Employee’s employment or the
conclusion thereof according to the terms of this Agreement; and

WHEREAS, this Agreement provides Employee with valuable consideration to which
Employee is not otherwise entitled and as a partial inducement to the Company to
grant such consideration, Employee and the Company have agreed to enter into
this Agreement.

NOW, THEREFORE, in consideration of the mutual agreements made by Employee and
the Company and for other good and valuable consideration, the receipt and
sufficiency of which hereby expressly are acknowledged by Employee and the
Company, it is agreed that:

1. As of the Termination Date, Employee’s employment with the Company was
validly terminated by the Company pursuant to the terms of the Employment
Agreement.

2. The Company shall provide the following payments and benefits to Employee in
conjunction with his separation from employment (collectively the “Separation
Payment”):

(a) In consideration of the execution of this Agreement by Employee, the Company
will pay severance in cash to Employee in an amount equal to TWO HUNDRED EIGHTY
NINE THOUSAND NINE HUNDRED AND FOUR DOLLARS AND NO CENTS ($289,904.00)
(“Severance Payment”), paid as a single one-time cash payment subject to
required withholding to be paid in accordance with provisions set forth in
Section 6. Employee acknowledges and agrees that the Severance Payment
represents the entirety of all cash severance payments amount owed to Employee
under Employee’s Employment Agreement or otherwise;

(b) Employee will continue to receive coverage under BioDelivery Sciences
International, Inc. medical, dental and FSA plans at his current elections and
premium rates through November 30, 2009. After December 1, 2009, Employee will
be eligible to elect continued health care coverage under the Company’s group
medical and dental insurance plan pursuant to COBRA, notice of which will be
provided under separate cover. All other benefits not expressly mentioned
herein, including, but not limited to, disability and life insurance

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benefits, will end on the date of termination; provided, however, the Company
agrees to provide the necessary documentation under separate cover for Employee
to assume the Company-maintained life insurance policy currently in effect on
his life;

(c) Employee will receive any accrued, but unused vacation benefits as of
September 30, 2009 which are agreed to be five (5) days (less applicable
federal, state and other withholdings);

(d) Employee will receive payment for all approved and outstanding expense
reports owed in connection with appropriate business expenses through the
Termination Date, it being agreed that such amount is $469.76 as reflected on
Employee’s September 30, 2009 expense report; and

(e) Any vested 401(k) benefits in accordance with the terms and conditions of
those plans (please note that 401(k) deferrals and matching contributions will
end in accordance with the terms and conditions of those plans).

3. The Employee agrees that he has heretofore returned, and the Company
acknowledges that Employee has returned, all property of the Company wherever
located, including, without limitation, the Company’s files, data, documents,
materials, customer information, and all other correspondence, notes and other
documents pertaining to the Company’s products, customers and business. The
Company agrees that Employee may keep the Company’s cell phone and laptop
computer that Employee utilized during the term of his employment with the
Company. Employee and the Company each acknowledge that Employee has transferred
the cell phone account to his name and has assumed payment responsibility for
same as of September 29, 2009.

4. Employee understands and agrees that his receipt of the Separation Payment is
expressly conditioned upon Employee’s compliance with the terms of this
Agreement, and that any breach of this Agreement by Employee shall result, in
addition to any other remedies available to the Company, in a forfeiture of all
paid and unpaid amounts of the Separation Payment.

5. (a) In consideration of the payments and benefits to be received by Employee
hereunder, and as a material inducement for both parties entering into this
Agreement, Employee, for himself, his heirs, executors, administrators,
trustees, legal representatives, successors and assigns (hereinafter
collectively referred to for purposes of this Section 5 as “Employee”) hereby
releases and forever discharges the Company, its past, present and future
stockholders, agents, advisors, directors, officers, employees, affiliates,
predecessors, successors, attorneys, contract parties, lessors, lessees,
licensors and licensees (collectively referred to as “Releasees”) from any and
all charges, complaints, claims, liabilities, obligations, promises, agreements,
controversies, damages, actions, causes of action, rights, demands, losses,
debts, expenses, and attorney fees and costs of any nature whatsoever, known or
unknown, with regard to any transaction or event occurring in connection with
Employee’s employment or prior service as a director or other association with
the Company or its predecessors and the termination of that employment or
association prior to the date of this Agreement. Employee

 

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agrees and understands that this release includes any causes of action or claims
of any kind or nature arising under the Employment Agreement, Employees
association with the Company or otherwise, from the beginning of the world
through the date of this Agreement, including, without limitation claims or
actions arising under: (i) the Age Discrimination in Employment Act, 29 U.S.C. §
621 et seq.; (ii) Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e
et seq.; (iii) the Americans with Disabilities Act of 1990, 42 U.S.C. § 12101 et
seq.; (iv) the Family and Medical Leave Act of 1993, 29 U.S.C. § 2601 et seq.;
(v) the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et
seq.; (vi) the Equal Pay Act of 1963, 29 U.S.C. § 206(d); (vii) Section 806 of
the Corporate and Criminal Fraud Accountability Act of 2002, 18 U.S.C. § 1681 et
seq.; (viii) the Fair Credit Reporting Act, 15 U.S.C. §1681 et seq.; (ix) any
other federal, state or local statutory laws including, but not limited to, the
New Jersey Law Against Discrimination, the Conscientious Employee Protection
Act, the New Jersey Wage Payment Law, the New Jersey Family Leave Act, all as
amended; (x) the common law of the State of New Jersey; (xi) any claim under any
local ordinance, including, but not limited to, any ordinance addressing fair
employment practices; (xii) any common law claims, including but not limited to
actions in tort, defamation and breach of contract; (xiii) any claim or damage
arising out of Employee’s employment or association with or separation from the
Company under any common law theory or any federal, state or local statute or
ordinance not expressly referenced above; and (xiv) any and all claims for
counsel fees and costs.

(b) It is expressly agreed and understood that the release contained herein is a
GENERAL RELEASE in favor of all past, present and future Releasees; provided,
however, that the release does not apply to any claims for enforcement of the
terms of this Agreement by Employee nor to any claims or rights that cannot be
waived by law, including but not limited to Employee Retirement Income Security
Act of 1974, as amended.

(c) Employee further agrees that he will not file, commence, prosecute or
participate in any charge, claim or lawsuit against the Company or any of the
Releasees based on or arising from the matters released herein; provided,
however, that the Company agrees not to object to any claim for unemployment
benefits that Employee may file.

(d) Employee also agrees to indemnify and hold the Company harmless from any
claims and expenses the Company may incur as a result of any failure by Employee
to pay any taxes which may be due as a result of the payments by the Company
herein; provided, however, that the Company agrees to indemnify and hold the
Employee harmless from any, taxes, penalties, claims and expenses the Employee
may incur as a result of a determination by the Internal Revenue Service that
this Agreement and the payment structure contemplated hereby does not comply
with the requirements of Internal Revenue Code Section 409A, or any successor
statute, regulation and guidance promulgated by the Internal Revenue Service
thereto.

(d) In waiving and releasing any and all waivable claims whether or not now
known, Employee understands that this means that, if he later discovers facts
different from or in addition to those facts currently known by him, or believed
by him to be true, the waivers and releases of this Agreement will remain
effective in all respects, despite such different or additional facts and his
later discovery of such facts, even if he would not have agreed to this
Agreement if he had prior knowledge of such facts.

 

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6. The Company hereby advises Employee to consult with an attorney prior to
executing this Agreement. If Employee elects to return this Agreement, Employee
must execute and return it to the Company on or before October 21, 2009. The
Separation Payment will be made in accordance with Section 2(a) hereof via the
Company’s regular payroll on the first unprocessed payday after the Employee
returns an executed version of this Agreement to the Company subsequent to the
Effective Date. Employee is entitled to revoke this Agreement if done in writing
at anytime during the seven (7) days following his execution of it by hand
delivery or faxing notice of revocation to the Company, attention: Michelle
Brown at (813) 321-7273. Upon expiration of the aforementioned 7-day period and
provided that the Company has not provided a notice of revocation, this
Agreement shall become effective (such date to be referred to herein as the
“Effective Date”).

7. Service of all notice under this Agreement shall be sufficient if made by
registered or certified mail, hand delivery or by fax to the other party.
Service on Employee shall be made to the most recent address contained in the
Company’s personnel files. Service to the Company shall be made to the
following:

 

For the Company:    Michelle Brown    BioDelivery Sciences International, Inc.
   324 South Hyde Park Avenue, Suite 350    Tampa, Florida 33606    Fax Number:
(813) 321-7273

8. Employee agrees that the only consideration for signing this Agreement are
the terms stated herein and that no other promises or assurances of any kind
have been made to him by the Company, its attorneys or any other person as
inducement to sign this Agreement. Therefore, this Agreement and that certain
Confidentiality and Intellectual Property Agreement entered into by Employee at
concurrently with the Employment Agreement (the “Confidentiality Agreement”)
constitute the entire understanding of the parties hereto, and no
representation, promise or inducement not included herein shall be binding upon
the parties, except for any issued and outstanding stock option agreements
between the Company and Employee. Employee acknowledges and agrees that the
Confidentiality Agreement remains in full force and effect and that Employee
remains bound by the Confidentiality Agreement in accordance with its terms.

9. Employee agrees that he will not disclose matters relating to the contents of
this Agreement, including the amount of monetary payments and other benefits, to
anyone other than Employee’s spouse, attorneys, and accountants or financial
advisors for professional counseling. Employee also agrees that he will take
every precaution to ensure that Employee’s spouse, attorneys, accountants or
financial advisors maintain the confidentiality of this Agreement. The Company
agrees not to disclose matters as described hereinabove, except as required for
filings with governmental or self-regulatory authorities.

10. Employee and the Company agree that neither this Agreement nor any of its
terms shall be used or construed as any admission of wrongdoing by either party,
and no past or present wrongdoing on the part of either party shall be implied
by the payments specified herein. This Agreement may not be offered or received
as evidence in any action or proceeding as an admission or concession of
liability or wrongdoing on the part of any party.

 

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11. Employee understands and agrees that the Company’s obligation to perform
under this Agreement is conditioned upon Employee’s performance of all
agreements, releases, and covenants to the Company as set forth herein. Employee
acknowledges and recognizes that his violation of this Agreement and its
releases or covenants will cause the Company irreparable damage and the Company
will have no adequate remedy at law for such violation. Accordingly, Employee
agrees that the Company shall be entitled as a matter of right to an injunction
out of any court of competent jurisdiction, restraining any further violation of
any such agreement or covenant. Such right to injunctive relief shall be
cumulative and in addition to any other remedies the Company may have at law,
including the right of the Company to recover from Employee the entire amount
paid by the Company to Employee hereunder. Nothing in this Agreement shall be
construed to abridge or limit in any way Employee’s ability to enjoy the
benefits of this Agreement, nor shall any terms in this Agreement be construed
to limit any resource, right or remedy at law or in equity which Employee may
have for the breach thereof. Further, Employee hereby agrees to indemnify and
hold the Company and each of the Releasees harmless from and against any and all
loss, damage or expenses, including without limitation attorney’s fees and costs
incurred by the Company, or any Releasee, arising out of any breach of this
Agreement and his related, agreements, acknowledgments, releases and covenants.

12. Except as required by law, neither Employee nor the Company will not do or
say anything that a reasonable person would expect at the time would have the
effect of diminishing, constraining or disparaging the goodwill and good
reputation of the Company and its officers, directors, employees and business or
the Employee, as the case may be.

13. Employee agrees that at the reasonable request of the Company, to cooperate
with the Company in connection with any investigation or legal action against
the Company or any of its affiliates; provided that the Company shall promptly
reimburse Employee for any reasonable out of pocket expenses that Employee shall
incur in the course of such cooperation. In the event the Company reasonably
requests Employee’s cooperation before the U.S. Patent and Trademark Office or
any other governmental authority or agency, the Company shall pay Employee for
his time at the rate of $500 per hour in addition to reimbursement for his
reasonable out of pocket expenses incurred in connection therewith.

14. This Agreement shall inure to and be binding upon the parties hereto, the
respective heirs, legal representatives, successors, and assigns.

15. This Agreement is made and entered into in accordance with the laws of the
State of Delaware and shall in all respects be construed, enforced, and governed
in accordance with the laws of that state, except with regard to conflict of
laws provisions of such state.

16. In the event that one or more of the provisions, or portions thereof, of
this Agreement is determined to be illegal or unenforceable, the remainder of
this release shall not be affected thereby, and each remaining provision or
portion thereof shall continue to be valid and effective and shall be
enforceable to the fullest extent permitted by law.

 

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17. Employee hereby acknowledges that he has carefully read the foregoing
Agreement, that the terms are fully understood, and that he voluntarily accepts
these terms and signs the same as his own free act.

18. Employee acknowledges and warrants that:

(a) he has received this Agreement on or before the 2nd day of September 2009.

(b) he has read the terms of this Agreement and that he understands its terms
and effects, including the fact that he has agreed to release and forever
discharge the Company or any Release from any legal action arising out of his
employment relationship or other association with the Company, the terms and
conditions of that employment relationship or association, and the termination
of that employment relationship or association;

(c) he has signed this Agreement voluntarily and knowingly in exchange for the
consideration described and referenced herein, which he acknowledges as adequate
and satisfactory to him;

(d) he has been informed that he has the right to consider this Agreement for a
period of twenty-one (21) days from receipt prior to entering into this
Agreement and he has signed on the date indicated below after concluding that
this Agreement is satisfactory;

(e) he has been informed that he has the right to revoke this Agreement for a
period of seven (7) days following his execution of this Agreement by giving
written notice to the Company as provided for in Section 6 hereof and this
Agreement shall not be effective or enforceable until Employee’s right to revoke
this Agreement has lapsed;

(f) he has been and is hereby advised in writing by Company to consult with an
attorney prior to signing this Agreement and he has consulted with his attorney
and fully discussed and reviewed the terms of this Agreement with his attorney;
and

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(g) neither the Company, nor any of its agents, representatives or attorneys
have made any representations to Employee concerning the terms or effects of
this Agreement other than those contained and referenced herein.

IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby,
have executed this Agreement freely and with full authority duly given, on this
21st day of October, 2009.

 

/s/ Raphael J. Mannino

Raphael J. Mannino BIODELIVERY SCIENCES INTERNATIONAL, INC. By:  

/s/ Mark A. Sirgo

  Name:   Mark A. Sirgo   Title:   President and CEO

 

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