DEVELOPMENT AND LICENSE AGREEMENT
 BETWEEN
 DURECT CORPORATION
 AND
 ALPHARMA IRELAND LIMITED
 DATED AS OF
 SEPTEMBER 19, 2008




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DEVELOPMENT AND LICENSE AGREEMENT
 Agreement Execution Date Durect Alpharma
 PRELIMINARY STATEMENTS
     AGREEMENT
  1. DEFINITIONS.
   1




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ANDA
 Affiliate
 Applicable Laws
  Bupivacaine
 cGMP et seq.
 Change of Control
  2




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Clinical Trial
 Collaboration Inventions
 CMC
 CMC Data
 CMO
 Committee
 Commercialization Commercialize
  3




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Commercially Reasonable Efforts
 Competitive Product
 Control Controlled
   Cost
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Development Data
 Dollars
 Dosage Form Development in vitro
 Durect Development Costs
 Durect Trademark
 EMEA
 EU
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FDA
 FDC Act
 Field
 First Commercial Sale
 GAAP
 Generic Product
 Governmental Entity
 HSR
 ICH Guidelines
 IND
  6




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Intellectual Property Rights
 Jurisdiction
 Know-How
 Knowledge
 Manufacturing Technology
 MAA
 Marketing Authorization MA
 Marketing Exclusivity Right et seq.
  7




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NDA
 Non-Clinical
 Net Sales
   8




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Orphan Indication et seq
 PHN
 Party
 Patent Patents
 Person
 Preclinical
 Pricing Pricing Approval
 Product
  9




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Line Extension(s)
 Product Know-How
 Product Patents Rights
  Regulatory Approval
 Regulatory Approval Application
  10




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Regulatory Authority
 Regulatory Documentation
 Reimbursement Reimbursement Approval
 Royalty Term
  Specifications
 Sublicense Sublicensee
 Sublicense Fees
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Subterritory
 Subterritory A  The United States of America (including territories and
protectorates thereof)Subterritory B  EUSubterritory C  JapanSubterritory D  All Jurisdictions of the Territory excluding Jurisdictions
in Subterritories A, B and C
 Terminated Countries
 Territory
 Third Party
  Valid Claim
    12




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Other Definitions
  AAA
 Adverse Event
 Agreement
 Alliance Manager
 Alpharma
  Alpharma Post-Registration Study
 Alpharma Related Party
  Annual Net Sales Period
 Audited Party
 Auditing Party
 Confidential Information
 CRO
 Damages
  Designated Executives
 Development Plan
 Development Plan Budget
 Development Program
 Dispute
 Durect
  Durect Development Responsibilities
 Durect Related Party
 Effective Date
 Execution Date
  13




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First Major Market Jurisdiction
 First Refusal Notice
 Force Majeure
 Indemnified Party
 Indemnifying Party
 Joint Development Committee JDC
 Joint Executive Committee JEC
 Joint Invention
 Joint Patent Rights
 Know-How Royalty Term
 Line Extensions
 Major Market Jurisdiction
 Negotiation Period
 One-Time Payment
 Patent Litigation Losses
 Patent Royalty Term
 Patent Term Extensions
 Product Collaboration Inventions
 Product Material
 Product Trademarks
 Resolution Period
 Royalties
 Rules
 Second Major Market Jurisdiction
 Serious Adverse Drug Experience
 Sublicensee
 Technology Transfer Plan
 Term
 Third Party License Fees
 Interpretation
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provided
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Joint Executive Committee
 Members; Officers Joint Executive Committee JEC
  16




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Responsibilities
            Meetings
  17




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Decision-making Designated Executives Resolution Period
 Joint Development Committee
 Members; Officers Joint Development Committee JDC
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Responsibilities
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Meetings
 Decision-making
 Minutes of JEC and JDC Meetings
    20




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Duration of Committees
 Expenses
 Alliance Managers Alliance Manager
  21




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Scope of Committees
  Rights Granted to Alpharma
     22




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Sublicense Rights provided that
 Section 365(n) of the Bankruptcy Code
 Exclusivity
   23




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Trademarks; Logos
 Product Trademarks Product Trademarks
 License to Durect Trademark
 Durect Rights ®
  24




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Right of Regarding First Refusal Notice Negotiation Period provided that
  25




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Development Generally Development Program
 U.S. Development
 Development Plan Development Plan Development Plan Budget
 Trials and Regulatory
  26




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Development Diligence provided however provided further however
 Development and Commercialization Diligence Outside the U.S.
 Major Market Jurisdiction
  27




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First Major Market Jurisdiction Second Major Market Jurisdiction
  28




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provided however provided further however
   29




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Other Development Matters
 provided
  provided that
  30




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provided that
 Line Extensions
 Durect Development Responsibilities
 Durect Development
Responsibilities
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Development Data
 Reporting Adverse Events Adverse Event
 Permitted Development Personnel
  Generally
 Post-Registration Studies
  33




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Alpharma Post-Registration
Study provided
 Alpharma Responsibilities; Rights
 Annual Commercialization Reports
 Sales Forces
  34




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One-time Payments to Durect One-Time Payment
 Milestone
    
    
    
    One-Time Payments toNo.
    
    Timing
    
    Durect (U.S. Dollars)1
    
    The Effective Date of this Agreement
    
    Twenty Million Dollars
($20,000,000)
   Royalties
  35




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Royalties
 Patent Royalties Patent Royalty Term
 For Sales in Subterritory A
 Aggregate Annual Net Sales inSubterritory A
    
    Royalty to Durect (percent of Net Sales)Up to $[**] annual sales:
    
    [**] %>$[**] annual sales:
    
    [**] %>$[**] annual sales:
    
    [**] %>$[**] annual sales:
    
    [**] %>$[**] annual sales:
    
    [**] %
 For Sales in Subterritory B, Subterritory C and Subterritory D in the aggregate
 Aggregate Annual Net Sales inSubterritory B, Subterritory C andSubterritory D
    
    Royalty to Durect (percent of Net Sales)Up to $[**] annual sales:
    
    [**] %>$[**] annual sales:
    
    [**] %>$[**] annual sales:
    
    [**] %>$[**] annual sales:
    
    [**] %
  36




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Annual Net Sales Period st
 Know-How Royalties Know-How Royalty Term st
 Sublicense Income
 Existing Third Party Royalties
  Payments of Royalties
  37




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Mode of Payment for One-Time Payments and Royalties
 Currency Conversion Wall Street
Journal
 Records Retention
 Audit Request Auditing Party Audited Party
  38




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Cost of Audit
 No Non-Monetary Consideration for Sale
  Responsibility
  39




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Technology Transfer Technology Transfer Plan
 Commercial Supply in Territory
  Ownership of Collaboration Inventions
 inter alia Product
Collaboration Invention
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Joint Invention
    41




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provided however
 Prosecution of Patents
 Durect Controlled Patents
    42




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provided
 Joint Patents Joint Patent Rights provided
  43




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provided further provided
 Alpharma Patents
  Patent Certifications
   44




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provided that
 provided
that
  45




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Enforcement of Patent Rights
   46




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Defense of Patents
    48




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Patent Infringement Claims
   Patent Litigation Losses provided
  50




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Third Party License Fees provided
  51




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Patent Term Extensions Patent Term Extensions
 Prosecution of Durect Trademark provided provided that
 Enforcement of Durect and Product Trademarks
  52




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provided
 Maintenance of Agreements
  53




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Notification
 Review
  54




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Publicity
 Confidentiality
  55




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Confidential
Information
 Exceptions to Obligation provided
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Limitations on Use
 Remedies
  Representations and Warranties of the Parties
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Additional Representations and Warranties of Durect
   58




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Disclaimer of Other Warranties EXCEPT AS SET FORTH IN THIS AGREEMENT, THE
PARTIES MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED,
INCLUDING WARRANTIES OF QUALITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR
NON-INFRINGEMENT.
 Survival of Representations
  Indemnification by Durect Alpharma Related Party Damages
  60




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Indemnification by Alpharma Durect Related Party
 Shared Liability.
 Indemnification Procedure Indemnified Party Indemnifying Party provided provided,
  61




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Cost of Enforcement
 LIMITATION ON DAMAGES PROVIDED,
 Insurance
      62




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Term of Agreement Term
 Condition Precedent
 HSR Compliance Effective Date
 Cooperation
 Termination Right
  63




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Termination by Alpharma
 Without Cause provided that
 Safety Serious Adverse Drug
Experience
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Termination for Material Breach
 Termination for Patent Challenge
 Termination for Bankruptcy
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Effect of Termination
   Product Material
 CROs
   66




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Post-Termination
 Surviving Provisions
    67




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Relationship of Parties
 Assignment.
 Books and Records
 Further Actions
 Notice
 
  68




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provided
 Use of Name
 Waiver
  69




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Counterparts
 Severability
 Amendment
 Governing Law
 Dispute Resolution
     70




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Dispute AAA Rules
  71




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Compliance with Laws
 Force Majeure Force Majeure
 Entire Agreement
  72




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Parties in Interest
 No Third Party Beneficiaries
 Descriptive Headings; Certain Terms
 Fees and Payments
 No Implied Licenses
 Information for Financial Reporting
  73




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Durect CorporationBy:
    /s/ James E. BrownName:
    James E. BrownTitle:
    President and Chief Executive OfficerAlpharma Ireland LimitedBy:
    /s/ Keith BerniusName:
    Keith BerniusTitle:
    Director  75




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GUARANTEE
 Durect Agreement Alpharma Parent Alpharma
 provided that
   Alpharma Inc.By:
    
    /s/ Jeff CampbellIts:
    
    Jeff Campbell, Executive Vice President and Chief Financial OfficerDate:
    
    September 19, 2008




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