Document:

Common Stock Purchase Warrant

 Exhibit 4.1 
  
 WARRANT 
  
 THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
APPLICABLE STATE SECURITIES LAWS, OR APPLICABLE LAWS OF ANY FOREIGN JURISDICTION. The securities represented hereby may not be transferred unless (i) such securities have been registered for sale pursuant to the Securities Act of 1933, as amended,
(ii) such securities may be sold pursuant to Rule 144(k), or (iii) the company has received an opinion of counsel reasonably satisfactory to it that such transfer may lawfully be made without registration under the Securities Act of 1933 or
qualification under applicable state securities laws. 
  
 THIS WARRANT SHALL BE
VOID AFTER THE EARLIER OF (I) 5:00 P.M. EASTERN TIME ON THE SECOND ANNIVERSARY OF THE APPROVAL OF THE FIRST NDA APPROVED BY FDA (the “EXPIRATION DATE”), AS SAID TERMS ARE DEFINED IN THAT CERTAIN CLINICAL DEVELOPMENT AND LICENSE AGREEMENT
DATED JULY 14, 2005 (THE “LICENSE AGREEMENT”) BY AND BETWEEN THE WARRANT HOLDER, COMPANY AND ARIUS PHARMACEUTICALS, INC., (II) THE CLOSING OF THE COMPANY’S SALE OF ALL OR SUBSTANTIALLY ALL OF ITS ASSETS OR THE ACQUISITION OF THE
COMPANY BY ANOTHER ENTITY BY MEANS OF MERGER OR OTHER TRANSACTION AS A RESULT OF WHICH STOCKHOLDERS OF THE COMPANY IMMEDIATELY PRIOR TO SUCH ACQUISITION POSSESS A MINORITY OF THE VOTING POWER OF THE ACQUIRING ENTITY IMMEDIATELY FOLLOWING SUCH
ACQUISITION (AN “ACQUISITION”), OR (III) ANY LIQUIDATION OR WINDING UP OF THE COMPANY (A “LIQUIDATION”). 
  
 BIODELIVERY SCIENCES INTERNATIONAL, INC. 
  
 WARRANT TO PURCHASE UP TO 500,000 SHARES OF 
 COMMON STOCK, PAR VALUE $0.001 PER SHARE 
 (subject to adjustment as set forth herein) 
  
 For VALUE RECEIVED, Clinical Development Capital LLC (“Warrantholder”), is entitled
to purchase, subject to the provisions of this Warrant, from BioDelivery Sciences International, Inc., a Delaware corporation (“Company”), at any time and from time to time not later than 5:00 P.M., Eastern time, on the Expiration Date (as
defined above), at an exercise price per share equal to $3.50 (the exercise price in effect being herein called the “Warrant Price”), up to 500,000 shares (“Warrant Shares”) of the Company’s Common Stock, par value $0.001
per share (“Common Stock”). The number of Warrant Shares purchasable upon exercise of this Warrant and the Warrant Price shall be subject to adjustment from time to time as described herein. Capitalized terms not otherwise defined herein
shall have the meaning set forth in the License Agreement. 

 Section 1. Registration. The Company shall maintain books for the transfer and registration of the
Warrant. Upon the initial issuance of this Warrant, the Company shall issue and register the Warrant in the name of the Warrantholder. 
  
 Section 2. Transfers. As provided herein, this Warrant may be transferred only pursuant to a registration statement filed under the Securities Act
of 1933, as amended (the “Securities Act”), or an exemption from such registration. Subject to such restrictions, the Company shall transfer this Warrant from time to time upon the books to be maintained by the Company for that purpose,
upon surrender thereof for transfer properly endorsed or accompanied by appropriate instructions for transfer and such other documents as may be reasonably required by the Company, including, if required by the Company, an opinion of its counsel to
the effect that such transfer is exempt from the registration requirements of the Securities Act, to establish that such transfer is being made in accordance with the terms hereof, and a new Warrant shall be issued to the transferee and the
surrendered Warrant shall be canceled by the Company. 
  
 Section
3. Exercise of Warrant. Subject to the provisions hereof, the Warrantholder may exercise this Warrant in whole or in part at any time prior to its expiration upon surrender of the Warrant, together with delivery of (i) duly executed Warrant
exercise form attached hereto as Appendix A (the “Exercise Agreement”) and (ii) payment by cash, certified check or wire transfer of funds to an account specified by the Company from time to time for the aggregate Warrant Price for that
number of Warrant Shares then being purchased, to the Company during normal business hours on any business day at the Company’s principal executive offices (or such other office or agency of the Company as it may designate by notice to the
Warrantholder). The Warrant Shares so purchased shall be deemed to be issued to the Warrantholder or such Warrantholder’s designee, as the record owner of such shares, as of the close of business on the date on which this Warrant shall have
been surrendered (or evidence of loss, theft or destruction thereof and security or indemnity satisfactory to the Company shall have been received by the Company), the Warrant Price shall have been paid and the completed Exercise Agreement shall
have been delivered. Warrant Shares so purchased, representing the aggregate number of shares specified in the Exercise Agreement, shall be delivered to the Warrantholder as promptly as practicable, not exceeding ten (10) business days after this
Warrant shall have been so exercised in the case of electronic delivery (if permitted by the Company’s transfer agent), or thirty (30) business days after this Warrant shall have been so exercised in the case of physical delivery, and, in the
case of physical delivery, shall mail the certificate(s) representing such shares to the Warrantholder at the address specified by the Warrantholder. Any certificates so delivered shall be in such denominations as may be reasonably requested by the
Warrantholder and shall be registered in the name of such Warrantholder or such other name as shall be designated by such Warrantholder. If this Warrant shall have been exercised only in part, then, unless this Warrant has expired, the Company
shall, at its expense, at the time of delivery of such Warrant Shares, deliver to the Warrantholder a new Warrant representing the number of shares with respect to which this Warrant shall not then have been exercised. As used herein, “business
day” means a day, other than a Saturday or Sunday, on which banks in New York City are open for the general transaction of business. 
  
 Section 4. Compliance with the Securities Act of 1933. Subject to the provisions of the Purchase Agreement (as defined below), the Company may
cause the legend set forth on the first page of this Warrant to be set forth on each Warrant or similar legend on any security issued or issuable upon exercise of this Warrant, unless counsel for the Company is of the opinion as to any such security
that such legend is unnecessary. 

 Section 5. Payment of Taxes. The Company will pay any documentary stamp taxes attributable to the
initial issuance of Warrant Shares issuable upon the exercise of the Warrant; provided, however, that the Company shall not be required to pay any tax or taxes which may be payable in respect of any transfer involved in the issuance or delivery of
any certificates for Warrant Shares in a name other than that of the Warrantholder in respect of which such shares are issued, and in such case, the Company shall not be required to issue or deliver any certificate for Warrant Shares or any Warrant
until the person requesting the same has paid to the Company the amount of such tax or has established to the Company’s reasonable satisfaction that such tax has been paid. 
  
 Section 6. Mutilated or Missing Warrants. In case this Warrant shall be mutilated, lost, stolen, or destroyed, the
Company shall issue in exchange and substitution of and upon cancellation of the mutilated Warrant, or in lieu of and substitution for the Warrant lost, stolen or destroyed, a new Warrant of like tenor and for the purchase of a like number of
Warrant Shares, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction of the Warrant, and with respect to a lost, stolen or destroyed Warrant, reasonable indemnity or bond with respect thereto,
if requested by the Company. 
  
 Section 7. Reservation of
Common Stock. The Company hereby represents and warrants that there have been reserved, and the Company shall at all applicable times keep reserved until issued (if necessary) as contemplated by this Section 7, out of the authorized and unissued
shares of Common Stock, sufficient shares to provide for the exercise of the rights of purchase represented by this Warrant. The Company agrees that all Warrant Shares issued upon due exercise of the Warrant shall be, at the time of delivery of the
certificates for such Warrant Shares, duly authorized, validly issued, fully paid and non-assessable shares of Common Stock of the Company. 
  
 Section 8. Adjustments. Subject and pursuant to the provisions of this Section 8, the Warrant Price and number of Warrant Shares subject to this
Warrant shall be subject to adjustment from time to time as set forth hereinafter. 
  
 (a) If the Company shall, at any time or from time to time while this Warrant is outstanding, pay a dividend or make a distribution on its Common Stock in shares of Common Stock, subdivide its outstanding shares of
Common Stock into a greater number of shares or combine its outstanding shares of Common Stock into a smaller number of shares or issue by reclassification of its outstanding shares of Common Stock any shares of its capital stock (including any such
reclassification in connection with a consolidation or merger in which the Company is the continuing corporation), then the number of Warrant Shares purchasable upon exercise of the Warrant and the Warrant Price in effect immediately prior to the
date upon which such change shall become effective, shall be adjusted by the Company so that the Warrantholder thereafter exercising the Warrant shall be entitled to receive the number of shares of Common Stock or other capital stock which the
Warrantholder would have received if the Warrant had been exercised immediately prior to such event upon payment of a Warrant Price that has been adjusted to reflect a fair allocation of the economics of such event to the Warrantholder. Such
adjustments shall be made successively whenever any event listed above shall occur. 

 (b) If any capital reorganization or reclassification of the capital stock of the Company, then, as a
condition of such reorganization or reclassification, lawful and adequate provision shall be made whereby each Warrantholder shall thereafter have the right to purchase and receive upon the basis and upon the terms and conditions herein specified
and in lieu of the Warrant Shares immediately theretofore issuable upon exercise of the Warrant, such shares of stock, securities or assets as would have been issuable or payable with respect to or in exchange for a number of Warrant Shares equal to
the number of Warrant Shares immediately theretofore issuable upon exercise of the Warrant, had such reorganization or reclassification not taken place, and in any such case appropriate provision shall be made with respect to the rights and
interests of each Warrantholder to the end that the provisions hereof (including, without limitation, provision for adjustment of the Warrant Price) shall thereafter be applicable, as nearly equivalent as may be practicable in relation to any shares
of stock, securities or assets thereafter deliverable upon the exercise hereof. The provisions of this paragraph (b) shall similarly apply to successive reorganizations or reclassifications. 
  
 (c) In case the Company shall fix a payment date for the making of a
distribution to all holders of Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness or assets (other than cash dividends or
cash distributions payable out of consolidated earnings or earned surplus or dividends or distributions referred to in Section 8(a)), or subscription rights or warrants, the Warrant Price to be in effect after such payment date shall be determined
by multiplying the Warrant Price in effect immediately prior to such payment date by a fraction, the numerator of which shall be the total number of shares of Common Stock then outstanding multiplied by the Market Price (as defined below) per share
of Common Stock immediately prior to such payment date, less the fair market value (as determined by the Company’s Board of Directors in good faith) of said assets or evidences of indebtedness so distributed, or of such subscription rights or
warrants, and the denominator of which shall be the total number of shares of Common Stock outstanding multiplied by such Market Price per share of Common Stock immediately prior to such payment date. “Market Price” as of a particular date
(the “Valuation Date”) shall mean the following: (a) if the Common Stock is then listed on a national stock exchange, the closing sale price of one share of Common Stock on such exchange on the last trading day prior to the Valuation Date;
(b) if the Common Stock is then quoted on The Nasdaq Stock Market, Inc. (“Nasdaq”), the National Association of Securities Dealers, Inc. OTC Bulletin Board (the “Bulletin Board”) or such similar exchange or association, the
closing sale price of one share of Common Stock on Nasdaq, the Bulletin Board or such other exchange or association on the last trading day prior to the Valuation Date or, if no such closing sale price is available, the average of the high bid and
the low asked price quoted thereon on the last trading day prior to the Valuation Date; or (c) if the Common Stock is not then listed on a national stock exchange or quoted on Nasdaq, the Bulletin Board or such other exchange or association, the
fair market value of one share of Common Stock as of the Valuation Date, shall be reasonably determined in good faith by the Board of Directors of the Company and the Warrantholder. 

 (d) An adjustment to the Warrant Price shall become effective immediately after the payment date in the
case of each dividend or distribution and immediately after the effective date of each other event which requires an adjustment. 
  
 (e) In the event that, as a result of an adjustment made pursuant to this Section 8, the Warrantholder shall become entitled to receive any shares of
capital stock of the Company other than shares of Common Stock, the number of such other shares so receivable upon exercise of this Warrant shall be subject thereafter to adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Warrant Shares contained in this Warrant. 
  
 (f) Except as provided in subsection (g) hereof, for the period beginning on the date of issuance of the Warrant and ending six (6) months thereafter, if and whenever the Company shall issue or sell, or is, in
accordance with any of subsections (f)(l) through (f)(7) hereof, deemed to have issued or sold, any shares of Common Stock for no consideration or for a consideration per share less than the Warrant Price in effect immediately prior to the time of
such issue or sale, then and in each such case (a “Trigger Issuance”) the then-existing Warrant Price, shall be reduced, as of the close of business on the effective date of the Trigger Issuance, to a price determined as follows:

  

					
	Adjusted Warrant Price	 	=	 	(A x B) + D
	 	 	 	 	      A+C

  
 where 
  
 “A” equals (i) the number of shares of Common Stock then
outstanding and (ii) any shares of Common Stock issuable upon exercise of any warrants or upon conversion of any convertible notes (subject, however, in each case, to any maximum limitations on the number of shares issuable upon exercise of such
warrants or conversion of such convertible notes, as set forth in such instruments), in each case solely to the extent held by Laurus Master Fund, Ltd. or its affiliates, immediately preceding such Trigger Issuance; 
  
 “B” equals the Warrant Price in effect immediately preceding such
Trigger Issuance; 
  
 “C” equals the number of
Additional Shares of Common Stock issued or deemed issued hereunder as a result of the Trigger Issuance; and 
  
 “D” equals the aggregate consideration, if any, received or deemed to be received by the Company upon such Trigger Issuance; provided, however,
that in no event shall the Warrant Price after giving effect to such Trigger Issuance be greater than the Warrant Price in effect prior to such Trigger Issuance. 
  
 For purposes of this subsection (f), “Additional Shares of Common Stock” shall mean all shares of Common Stock
issued by the Company or deemed to be issued pursuant to this subsection (f), other than Excluded Issuances (as defined in subsection (g) hereof). 

 For purposes of this subsection (f), the following subsections (f)(l) to (f)(7) shall also be
applicable: 
  
 (f)(1) Issuance of Rights or Options. In
case at any time the Company shall in any manner grant (directly and not by assumption in a merger or otherwise) any warrants or other rights to subscribe for or to purchase, or any options for the purchase of, Common Stock or any stock or security
convertible into or exchangeable for Common Stock (such warrants, rights or options being called “Options” and such convertible or exchangeable stock or securities being called “Convertible Securities”) whether or not such
Options or the right to convert or exchange any such Convertible Securities are immediately exercisable, and the price per share for which Common Stock is issuable upon the exercise of such Options or upon the conversion or exchange of such
Convertible Securities (determined by dividing (i) the sum (which sum shall constitute the applicable consideration) of (x) the total amount, if any, received or receivable by the Company as consideration for the granting of such Options, plus (y)
the aggregate amount of additional consideration payable to the Company upon the exercise of all such Options, plus (z), in the case of such Options which relate to Convertible Securities, the aggregate amount of additional consideration, if any,
payable upon the issue or sale of such Convertible Securities and upon the conversion or exchange thereof, by (ii) the total maximum number of shares of Common Stock issuable upon the exercise of such Options or upon the conversion or exchange of
all such Convertible Securities issuable upon the exercise of such Options) shall be less than the Warrant Price in effect immediately prior to the time of the granting of such Options, then the total number of shares of Common Stock issuable upon
the exercise of such Options or upon conversion or exchange of the total amount of such Convertible Securities issuable upon the exercise of such Options shall be deemed to have been issued for such price per share as of the date of granting of such
Options or the issuance of such Convertible Securities and thereafter shall be deemed to be outstanding for purposes of adjusting the Warrant Price. Except as otherwise provided in subsection 8(f)(3), no adjustment of the Warrant Price shall be made
upon the actual issue of such Common Stock or of such Convertible Securities upon exercise of such Options or upon the actual issue of such Common Stock upon conversion or exchange of such Convertible Securities. 
  
 (f)(2) Issuance of Convertible Securities. In case the Company shall
in any manner issue (directly and not by assumption in a merger or otherwise) or sell any Convertible Securities, whether or not the rights to exchange or convert any such Convertible Securities are immediately exercisable, and the price per share
for which Common Stock is issuable upon such conversion or exchange (determined by dividing (i) the sum (which sum shall constitute the applicable consideration) of (x) the total amount received or receivable by the Company as consideration for the
issue or sale of such Convertible Securities, plus (y) the aggregate amount of additional consideration, if any, payable to the Company upon the conversion or exchange thereof, by (ii) the total number of shares of Common Stock issuable upon the
conversion or exchange of all such Convertible Securities) shall be less than the Warrant Price in effect immediately prior to the time of such issue or sale, then the total maximum number of shares of Common Stock issuable upon conversion or
exchange of all such Convertible Securities shall be deemed to have been issued for such price per share as of the date of the issue or sale of such Convertible Securities and thereafter shall be deemed to be outstanding for purposes of adjusting
the Warrant Price, provided that (a) except as otherwise provided in subsection 8(f)(3), no adjustment of the Warrant Price shall be made upon the actual 

 issuance of such Common Stock upon conversion or exchange of such Convertible Securities and (b) no further adjustment of
the Warrant Price shall be made by reason of the issue or sale of Convertible Securities upon exercise of any Options to purchase any such Convertible Securities for which adjustments of the Warrant Price have been made pursuant to the other
provisions of subsection 8(f). 
  
 (f)(3) Change in Option
Price or Conversion Rate. Upon the happening of any of the following events, namely, if the purchase price provided for in any Option referred to in subsection 8(f)(l) hereof, the additional consideration, if any, payable upon the conversion or
exchange of any Convertible Securities referred to in subsections 8(f)(l) or 8(f)(2), or the rate at which Convertible Securities referred to in subsections 8(f)(l) or 8(f)(2) are convertible into or exchangeable for Common Stock shall change at any
time (including, but not limited to, changes under or by reason of provisions designed to protect against dilution), the Warrant Price in effect at the time of such event shall forthwith be readjusted to the Warrant Price which would have been in
effect at such time had such Options or Convertible Securities still outstanding provided for such changed purchase price, additional consideration or conversion rate, as the case may be, at the time initially granted, issued or sold. On the
termination of any Option for which any adjustment was made pursuant to this subsection 8(f) or any right to convert or exchange Convertible Securities for which any adjustment was made pursuant to this subsection 8(f) (including without limitation
upon the redemption or purchase for consideration of such Convertible Securities by the Company), the Warrant Price then in effect hereunder shall forthwith be changed to the Warrant Price which would have been in effect at the time of such
termination had such Option or Convertible Securities, to the extent outstanding immediately prior to such termination, never been issued. 
  
 (f)(4) Stock Dividends. Subject to the provisions of this Section 8(f), in case the Company shall declare a dividend or make any other
distribution upon any stock of the Company (other than the Common Stock) payable in Common Stock, Options or Convertible Securities, then any Common Stock, Options or Convertible Securities, as the case may be, issuable in payment of such dividend
or distribution shall be deemed to have been issued or sold without consideration. 
  
 (f)(5) Consideration for Stock. In case any shares of Common Stock, Options or Convertible Securities shall be issued or sold for cash, the consideration received therefor shall be deemed to be the net amount
received by the Company therefor, after deduction therefrom of any expenses incurred or any underwriting commissions or concessions paid or allowed by the Company in connection therewith. In case any shares of Common Stock, Options or Convertible
Securities shall be issued or sold for a consideration other than cash, the amount of the consideration other than cash received by the Company shall be deemed to be the fair value of such consideration as determined in good faith by the Board of
Directors of the Company, after deduction of any expenses incurred or any underwriting commissions or concessions paid or allowed by the Company in connection therewith. In case any Options shall be issued in connection with the issue and sale of
other securities of the Company, together comprising one integral transaction in which no specific consideration is allocated to such Options by the parties thereto, such Options shall be deemed to have been issued for such consideration as
determined in good faith by the Board of Directors of the Company. If Common Stock, Options or Convertible Securities shall be issued or sold by the 

 Company and, in connection therewith, other Options or Convertible Securities (the “Additional Rights”) are
issued, then the consideration received or deemed to be received by the Company shall be reduced by the fair market value of the Additional Rights (as determined using the Black-Scholes option pricing model or another method mutually agreed to by
the Company and the Warrantholder). The Board of Directors of the Company shall respond promptly, in writing, to an inquiry by the Warrantholder as to the fair market value of the Additional Rights. In the event that the Board of Directors of the
Company and the Warrantholder are unable to agree upon the fair market value of the Additional Rights, the Company and the Warrantholder shall jointly select an appraiser, who is experienced in such matters. The decision of such appraiser shall be
final and conclusive, and the cost of such appraiser shall be borne evenly by the Company and the Warrantholder. 
  
 (f)(6) Record Date. In case the Company shall take a record of the holders of its Common Stock for the purpose of entitling them (i) to receive a
dividend or other distribution payable in Common Stock, Options or Convertible Securities or (ii) to subscribe for or purchase Common Stock, Options or Convertible Securities, then such record date shall be deemed to be the date of the issue or sale
of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may be. 
  
 (f)(7) Treasury Shares. The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held by or for the account of the Company or any of its wholly-owned subsidiaries, and the disposition of any such shares (other than the cancellation or retirement thereof) shall be
considered an issue or sale of Common Stock for the purpose of this subsection (f). 
  
 (f)(8) Nasdaq Limitation. Notwithstanding any other provision in Section 8(f) to the contrary, if a reduction in the Warrant Price pursuant to Section 8(f) (other than as set forth in this clause (f)(8)) would
require the Company to obtain stockholder approval of the transactions contemplated by the Purchase Agreement (including the issuance of any Other Shares (as defined in the Purchase Agreement) and the payment of any related brokerage fees) pursuant
to Nasdaq Marketplace Rule 4350(i) and such stockholder approval has not been obtained, (i) the Warrant Price shall be reduced to the maximum extent that would not require stockholder approval under such Rule, and (ii) the Company shall use its
commercially reasonable efforts to obtain such stockholder approval as soon as reasonably practicable including submitting the Warrant Price adjustment to approval by the stockholders at the next meeting of stockholders. 
  
 (g) Anything herein to the contrary notwithstanding, the Company shall not be
required to make any adjustment of the Warrant Price in the case of the issuance of (A) capital stock, Options or Convertible Securities issued to directors, officers, employees or consultants of the Company in connection with their service as
directors of the Company, their employment by the Company or their retention as consultants by the Company pursuant to an equity compensation program approved by the Board of Directors of the Company or the compensation committee of the Board of
Directors of the Company, (B) shares of Common Stock issued upon the conversion or exercise of Options or Convertible Securities issued prior to the date hereof, 

 and (C) shares of Common Stock issued or issuable by reason of a dividend, stock split or other distribution on shares of
Common Stock (but only to the extent that such a dividend, split or distribution results in an adjustment in the Warrant Price pursuant to the other provisions of this Warrant) (collectively, “Excluded Issuances”). 
  
 (h) Upon any adjustment to the Warrant Price pursuant to Section 8(f) above,
the number of Warrant Shares purchasable hereunder shall be adjusted by multiplying such number by a fraction, the numerator of which shall be the Warrant Price in effect immediately prior to such adjustment and the denominator of which shall be the
Warrant Price in effect immediately thereafter. 
  
 Section 9.
Fractional Interest. The Company shall not be required to issue fractions of Warrant Shares upon the exercise of this Warrant. If any fractional share of Common Stock would, except for the provisions of the first sentence of this Section 9,
be deliverable upon such exercise, the Company, in lieu of delivering such fractional share, shall pay to the exercising Warrantholder an amount in cash equal to the Market Price of such fractional share of Common Stock on the date of exercise.

  
 Section 10. Extension of Expiration Date. If the
Company fails to cause any Registration Statement covering Registrable Securities (unless otherwise defined herein, capitalized terms are as defined in the Registration Rights Agreement relating to the Warrant Shares (the “Registration Rights
Agreement”)) to be declared effective prior to the applicable dates set forth therein, then the Expiration Date of this Warrant shall be extended to a date that is the later of the Expiration date or six (6) months after the effective date of
the Registration Statement. 
  
 Section 11. Benefits.
Nothing in this Warrant shall be construed to give any person, firm or corporation (other than the Company and the Warrantholder) any legal or equitable right, remedy or claim, it being agreed that this Warrant shall be for the sole and exclusive
benefit of the Company and the Warrantholder. 
  
 Section 12.
Notices to Warrantholder. Upon the happening of (i) any event requiring an adjustment of the Warrant Price or (ii) an Acquisition or Liquidation, the Company shall promptly give written notice thereof to the Warrantholder at the address
appearing in the records of the Company, provided that any such notice with respect to an Acquisition or Liquidation shall be given at least fifteen (15) days prior to the closing of such Acquisition or Liquidation. Any such notice regarding an
adjustment of the Warrant Price shall state the adjusted Warrant Price and the adjusted number of Warrant Shares resulting from such event and set forth in reasonable detail the method of calculation and the facts upon which such calculation is
based. Failure to give notice to the Warrantholder of any Warrant Price adjustment, or any defect therein, shall not affect the legality or validity of the subject adjustment. In addition, the Company shall promptly give written notice to the
Warrantholder as specified above in the event that the Company determines to make a rights offering to its stockholders. 
  
 Section 13. Identity of Transfer Agent. The Transfer Agent for the Common Stock is American Stock Transfer & Trust, 40 Wall Street, New York,
New York 10005. Upon the appointment of any subsequent transfer agent for the Common Stock or other shares of the 

 Company’s capital stock issuable upon the exercise of the rights of purchase represented by the Warrant, the Company
will mail to the Warrantholder a statement setting forth the name and address of such transfer agent. 
  
 Section 14. Notices. Unless otherwise provided, any notice required or permitted under this Warrant shall be given in writing and shall be deemed
effectively given as hereinafter described (i) if given by personal delivery, then such notice shall be deemed given upon such delivery, (ii) if given by telex or facsimile, then such notice shall be deemed given upon receipt of confirmation of
complete transmittal, (iii) if given by mail, then such notice shall be deemed given upon the earlier of (A) receipt of such notice by the recipient or (B) three days after such notice is deposited in first class mail, postage prepaid, and (iv) if
given by an internationally recognized overnight air courier, then such notice shall be deemed given one business day after delivery to such carrier. All notices shall be addressed as follows: if to the Warrantholder, at its address as set forth in
the Company’s books and records and, if to the Company, at the address as follows, or at such other address as the Warrantholder or the Company may designate by ten days’ advance written notice to the other: 
  
 If to the Company: 
  
 BioDelivery Sciences International, Inc. 
 2501 Aerial Center Parkway, Suite 205 
 Morrisville, NC 27560 
 Attention: Mark A. Sirgo, Pharm.D. 
 Fax: (919) 653-5161 
  
 With a copy to: 
  
 Wyrick Robbins Yates & Ponton LLP 
 4101 Lake Boone Trail 
 Suite 300 
 Raleigh, NC 27607 
 Attention: Larry E. Robbins 
 Fax: (919) 781-4865 
  
 Section 15. Registration Rights. The initial Warrantholder is entitled to the benefit of certain registration rights
with respect to the shares of Common Stock issuable upon the exercise of this Warrant as provided in the Registration Rights Agreement, and any subsequent Warrantholder may be entitled to such rights, provided such subsequent Warrantholder agrees in
writing to be bound by the terms of the Registration Rights Agreement. 
  
 Section 16. Successors. All the covenants and provisions hereof by or for the benefit of the Warrantholder shall bind and inure to the benefit of its respective successors and assigns hereunder. 
  
 Section 17. Governing Law; Consent to Jurisdiction. This Warrant shall
be governed by, and construed in accordance with, the internal laws of the State of New York, without reference to the choice of law provisions thereof. 

 Section 18. Partial Forfeiture. In the event that Warrantholder provides less than an amount equal
to the Development Funding Cap to Company under the License Agreement (which determination shall be made upon termination of the License Agreement), then the number of Warrant Shares exercisable under this Warrant shall be reduced by multiplying the
number of Warrant Shares then exercisable under this Warrant by a fraction, the numerator of which shall be the actual amount of funding provided by Warrantholder to Company under the License Agreement, and the denominator shall be the Development
Funding Cap. Notwithstanding the foregoing, the number of Warrant Shares exercisable hereunder shall not be reduced to less than 100,000 Warrant Shares (subject to adjustment as otherwise set forth in this Warrant). 
  
 Section 19. No Rights as Stockholder. Prior to the exercise of this
Warrant, the Warrantholder shall not have or exercise any rights as a stockholder of the Company by virtue of its ownership of this Warrant. 
  
 Section 20. Amendment; Waiver.. Any term of this Warrant may be amended or waived (including the adjustment provisions included in Section 8 of
this Warrant) upon the written consent of the Company and the Warrantholder. 
  
 Section 21. Section Headings. The section headings in this Warrant are for the convenience of the Company and the Warrantholder and in no way alter, modify, amend, limit or restrict the provisions hereof.

  
 [Signature Page to follow.] 

 IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed, as of the 14th day of July,
2005. 
  

			
	 BIODELIVERY SCIENCES INTERNATIONAL, INC.

		
	 By:
	 	 /s/ Mark A. Sirgo

	 Name:
	 	 Mark A. Sirgo

	 Title:
	 	 President and COO

  
 SIGNATURE PAGE TO
WARRANT 

 APPENDIX A 
 [COMPANY NAME]. 
 WARRANT EXERCISE FORM 
  
 To [COMPANY NAME]: 
  
 The undersigned hereby irrevocably elects to exercise the right of purchase represented by the within Warrant (“Warrant”) for, and to purchase
thereunder by the payment of the Warrant Price and surrender of the Warrant,                      shares of Common Stock (“Warrant
Shares”) provided for therein, and requests that certificates for the Warrant Shares be issued as follows: 
  

					
	 	 	Name	  	                                      
                                        
                                  
			
	 	 	Address	  	                                      
                                        
                                  
			
	 	 	 	  	                                      
                                        
                                  
		
	 	 	Federal Tax ID or Social Security No.
                                        
                         

  
 and delivered by
(certified mail to the above address, or (electronically (provide DWAC Instructions:
                            ), 
  
 or 
  
 (other (specify):
                                        
    ). 
  
 and, if the number of Warrant Shares shall not
be all the Warrant Shares purchasable upon exercise of the Warrant, that a new Warrant for the balance of the Warrant Shares purchasable upon exercise of this Warrant be registered in the name of the undersigned Warrantholder or the
undersigned’s Assignee as below indicated and delivered to the address stated below. 
  
 Dated:                     ,          
  

					
	Note: The signature must correspond with the name of the Warrantholder as written on the first page of the Warrant in every particular, without alteration or enlargement or any
change whatever unless the Warrant Name (please print) has been assigned.	 	Signature:	 	  

	 	 Name:

	 	 	 	                                       
     (please print)
	 	Address:	 	  

	 	 	  

		
	 	 	 Federal Identification or
 Social Security
No.

			
	 	 	Assignee:Clinical Development and License Agreement

 Exhibit 10.1 
  
 CONFIDENTIAL TREATMENT REQUESTED 
 WITH RESPECT TO CERTAIN PORTIONS HEREOF 
 DENOTED WITH “***” 

 
 EXECUTION COPY 
  
 CLINICAL DEVELOPMENT AND LICENSE AGREEMENT 
  
 THIS CLINICAL DEVELOPMENT AND LICENSE AGREEMENT dated as of July 14,
2005 (the “Effective Date”), among Clinical Development Capital LLC (“CDC”), a limited liability company organized under the laws of the State of Delaware, having a business address at 47 Hulfish Street, Suite 310,
Princeton, NJ 08542, BioDelivery Sciences International, Inc. (“BioDelivery”), a corporation organized under the laws of the State of Delaware, having a business address at 2501 Aerial Center Parkway, Suite 205, Morrisville, NC
27560, and Arius Pharmaceuticals, Inc., a Delaware corporation and wholly-owned subsidiary of BioDelivery (“Subsidiary”, and together with BioDelivery, the “Company”). CDC and Company are sometimes referred to
herein individually as a “Party” and collectively as “Parties”. 
  
 WHEREAS, Company is developing the compound currently identified as fentanyl in conjunction with the BEMA Technology; 
  
 WHEREAS, Company and CDC would like to set forth the terms and conditions
pursuant to which CDC shall invest in the development of the Product and, in return, upon approval of the Product by the FDA and subsequent commercialization of the Product, Company shall pay to CDC a milestone and royalties on sales of the Product,
respectively; and 
  
 WHEREAS, simultaneously with entering into
this Agreement and as a condition of entering into this Agreement, BioDelivery shall grant CDC the Warrant. 
  
 NOW, THEREFORE, in consideration of the foregoing premises and the representations, covenants and agreements contained herein, the Parties, intending to
be legally bound, hereby agree as follows: 
  
 ARTICLE 1

 DEFINITIONS 
  
 The following terms, whether used in the singular or plural, shall have the following meanings: 
  
 1.1 “Act” means both the United States Food, Drug and
Cosmetic Act, as amended, and the regulations promulgated under the foregoing. 
  
 1.2 “Actual Trial Participants” has the meaning set forth in Section 6.4.1(a). 
  
 1.3 “Adverse Drug Experience” means any of: an “adverse drug experience,” a “life-threatening adverse drug
experience,” a “serious adverse drug experience,” or an “unexpected adverse drug experience,” as those terms are defined at either 21 C.F.R. § 312.32 or 21 C.F.R. § 314.80. 

 ***CONFIDENTIAL TREATMENT REQUESTED*** 
 Note: The portions hereof for which confidential 
 treatment are being requested are denoted with “*****”. 
  
  

 1.4 “Affiliate” means any Person directly or indirectly controlled by, controlling
or under common control with, a Party, but only for so long as such control shall continue. For purposes of this definition, “control” (including, with correlative meanings, “controlled by”, “controlling” and
“under common control with”) means, with respect to a Person, possession, direct or indirect, of (a) the power to direct or cause direction of the management and policies of such Person (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise), or (b) at least fifty percent (50%) of the voting securities (whether directly or pursuant to any option, warrant or other similar arrangement) or other comparable equity
interests. For the avoidance of doubt, neither of the Parties shall be deemed to be an “Affiliate” of the other. 
  
 1.5 “Approval” means the approval by the relevant Governmental Authority required for the initial launch, marketing and sale of the
Product. 
  
 1.6 “Atrix” means Atrix
Laboratories, Inc., a Delaware corporation. 
  
 1.7 “Atrix
License” means that certain License Agreement dated May 27, 2004 attached hereto as Schedule 1.7, as the same may be amended from time to time. 
  

1.8 “Average Selling Price” means, in any particular calendar year, the average “red book” list price of a pharmaceutical
product. 
  
 1.9 “BEMA” or “BEMA
Technology” means the Know-How and Patent Rights licensed to Company pursuant to the Atrix License. 
  
 1.10 “Business Day” means a day that is not a Saturday, Sunday or a day on which banking institutions in New York, New York are
authorized by Law to remain closed. 
  
 1.11 “CDC
Development Expenses” means all out of pocket costs incurred by CDC in connection with its participation in the Development Program or otherwise in carrying out its obligations under this Agreement, not to exceed Ten Thousand ($10,000.00)
Dollars in any twelve month period beginning with the Effective Date; but excluding all legal and other costs and expenses incurred under Section 11.8. 
  
 1.12 “CDC Indemnified Parties” has the meaning set forth in Section 9.1. 
  
 1.13 “cGMP” means the current Good Manufacturing Practices regulations promulgated by the FDA under the Act
as of the time of manufacture of the applicable Products, all as amended from time to time and subject to any arrangements, additions or clarifications agreed from time to time between the Parties. 
  
 1.14 “Change of Control” shall mean a (a) change in
ownership or control of a Party effected through any of the following transactions: (i) a merger, consolidation or other reorganization, unless securities representing more than fifty percent (50%) of the total combined 
  

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 ***CONFIDENTIAL TREATMENT REQUESTED*** 
 Note: The portions hereof for which confidential 
 treatment are being requested are denoted with “*****”. 
  

 voting power of the voting securities of the successor corporation are immediately thereafter beneficially owned,
directly or indirectly and in substantially the same proportion, by the persons who beneficially owned such Party’s outstanding voting securities immediately prior to such transaction, (ii) any transfer or other disposition of all or
substantially all of such Party’s assets, (iii) the acquisition, directly or indirectly by any person or related group of persons (other than such Party or a person that directly or indirectly controls, is controlled by, or is under common
control with, such Party), of beneficial ownership of securities possessing more than fifty percent (50%) of the total combined voting power of such Party’s outstanding securities or (b) a change in the power to direct or cause the direction of
the management and policies of a Party, directly or indirectly, whether through ownership of voting securities or by contract or otherwise. 
  
 1.15 “Claims” means all charges, complaints, actions, suits, proceedings, hearings, investigations, claims and demands, including any
losses incurred by a Party as a direct result of any such matters. 
  
 1.16 “Commercially Reasonable Efforts” means, with respect to a Party, the efforts which would be used by that Party consistent with its normal business practices, which in no event shall be less than the level of efforts
and resources expended by comparable small cap biotechnology companies with respect to a product or potential product at a similar stage in its development or product life, taking into account product labeling, market potential, medical and clinical
considerations, the regulatory environment, financing environment, patent and other proprietary position and competitive market conditions in the therapeutic area, all as measured by the facts and circumstances at the time such efforts are due.

  
 1.17 “Commitment” means the aggregate of the
Upfront Fees and Periodic Payments payable by CDC to Company pursuant to the terms hereof; provided, however, that in no event shall the Commitment exceed the aggregate Development Costs. 
  
 1.18 “Commitment Contingency” means: (i) the development of a final formulation of the Product with
acceptable pharmacokinetic and safety properties, in particular, low inter- patient variability and a profile indicating bioequivalence to ACTIQ® (generally determined by (A) meeting the FDA’s requirement for showing bioequivalence (i.e.,
80% to 125% of Cmax and AUC) and (B) showing no greater inter patient variability compared to Actiq by measurement of Cmax and AUC); (ii) the Company shall have delivered to the FDA and CDC (A) a report confirming acceptability of the synthesis
steps, physicochemical characteristics and impurity profile for each API selected by the Company, and (B) complete CMC documentation describing changes in the Product formulation and scientific justification for such changes in the formulation
components selected by the Company for its Phase III studies; (iii) the initiation (first patient treated) of a Phase III Clinical Trial by the Company on or prior to February 28, 2006; (iv) the Company shall have (A) obtained a binding and
enforceable license to any Patents and other related Know-How owned, Controlled by or licensed by any third party which may impact the method of making, use or sale of the Product, the terms and condition of which license (including the scope, term
and consideration with respect to such license) shall be in a form and substance satisfactory to CDC in its sole and absolute discretion; or (B) entered into a binding and enforceable agreement which would preclude any third party from enforcing
Patents against the Company or its successors, assigns and sublicensees in connection with the use, 
  

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 ***CONFIDENTIAL TREATMENT REQUESTED*** 
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 manufacture and sale of Product; (v) the Company shall have entered into supply agreements for both clinical and
commercial supply of the Product, pursuant to terms and conditions which shall be satisfactory in both form and substance to CDC, in its sole and absolute discretion, and (vi) the Company and Subsidiary shall have entered into a Security Agreement
substantially in the form attached hereto as Schedule 1.18, and CDC shall have obtained a valid and enforceable first priority lien on all assets related to the Product, and all third parties shall have released any and all liens on assets
related to the Product (provided, however, that the liens in favor of Laurus Master Fund, Ltd. shall only be required to be subordinated to the lien of CDC rather than released) in accordance with terms and conditions satisfactory to CDC, and CDC
shall have obtained a legal opinion from Company counsel to such effect. 
  
 1.19 “Company Agreements” has the meaning set forth in Section 8.2.16. 
  
 1.20 “Company Intellectual Property” means Company Know-How and Company Patent Rights, collectively. 
  
 1.21 “Company Know-How” means any Know-How with respect to
the Product that either (a) is Controlled by Company on the Effective Date, or (b) comes within Company’s Control during the term of this Agreement, including, without limitation, the BEMA Technology. 
  
 1.22 “Company Patent Rights” means the Patent Rights
Controlled by the Company to the extent that they cover Company Know-How, Compound or Product, including without limitation the Patent Rights set forth in Schedule 1.22. 
  
 1.23 “Competing Product” means any transmucosal formulation of fentanyl which has obtained Approval in an
indication for the treatment of break through cancer pain management; provided, however, that a Competing Product shall not include a generic formulation of ACTIQ®, sugar-free ACTIQ® or OraVescent®. 
  
 1.24 “Compound” means fentanyl including without limitation
metabolites or prodrugs thereof, and any hydrates, conjugates, salts, esters, isomers, polymorphs or analogues of any of the foregoing. 
  
 1.25 “Confidential Information” has the meaning set forth in Section 7.2. 
  
 1.26 “Control” means, when used in reference to intellectual property, the possession of the ability to
grant a license or sublicense as provided for herein without (i) requiring the consent of a third party or (ii) violating the terms of any agreement or other arrangement with any third party. 
  
 1.27 “Debarred Entity” has the meaning set forth in Section
8.2.14. 
  
 1.28 “Development Budget” means a
budget to complete the development activities set forth in the Development Program. 
  
 1.29 “Development Committee” has the meaning set forth in Section 2.1. 
  

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 ***CONFIDENTIAL TREATMENT REQUESTED*** 
 Note: The portions hereof for which confidential 
 treatment are being requested are denoted with “*****”. 
  
  

 1.30 “Development Costs” means the costs set forth in the Development Budget in
relation to the development of Products in order to obtain Approval of the NDA, or other costs incurred by Company in connection with obtaining Approval of the NDA, including without limitation, direct and indirect Out-of-Pocket Costs and direct and
indirect internal costs and capital expenditures related to clinical trial requirements, including without limitation such costs associated with manufacturing clinical drug substances, process development, project management, data analysis,
preparation and filing of an NDA for the Product and studies needed to obtain Approval of the NDA. The term “Development Costs” shall also include all CDC Development Expenses. 
  
 1.31 “Development Program” means the clinical program and studies and associated support activities to be
conducted by or on behalf of Company to obtain and/or maintain Approval, including, without limitation, Approval from the FDA, such program, studies and activities being more fully described in the Development Program. The Development Program shall
be set forth in Schedule 1.31 and contain a list and description of clinical studies activities, timelines for the performance of Product studies in support of the development activities for Product and the Development Budget. 
  
 1.32 “Development Program Termination” has the meaning set
forth in Section 10.4.1. 
  
 1.33 “Development
Term” means the period of time from the commencement of the Development Program until the earlier of (a) the payment by Company of the Approval Milestone, or (b) the Trigger Date. 
  
 1.34 “FDA” means the United States Food and Drug
Administration and any successor agency thereto. 
  
 1.35
“First Tier Royalty” has the meaning set forth in Section 1.35. 
  
 1.36 “Funding Termination Event” shall mean the occurrence of any of the following: 
  
 (a) a drug safety monitoring board or safety officer of the Company recommends stopping a clinical trial or the Development Program, including, without
limitation as a result of the occurrence of an Adverse Drug Experience with respect to the Product; 
  
 (b) If the Company does an interim analysis of the Phase III Clinical Trial, then either (i) it is determined in good faith by a drug safety monitoring
board that in order to achieve statistical significance for the planned endpoints of such clinical trial, the clinical trial will require an increase in the patient pool participating in such clinical trial by ten percent (10%) or more over the
number of patients originally projected to take part in such clinical trial (as set forth in the Development Program), and the resulting increase in the patient pool is reasonably likely to extend the planned completion of the clinical trial by more
than six (6) months; or (ii) CDC reasonably determines that the data generated to date under such Phase III Clinical Trial would not support approval of an NDA for the Product; 
  

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 ***CONFIDENTIAL TREATMENT REQUESTED*** 
 Note: The portions hereof for which confidential 
 treatment are being requested are denoted with “*****”. 
  

 (c) the FDA or other Governmental Authority recommends stopping a clinical trial or the Development
Program or otherwise places a clinical hold or prohibition on a clinical trial or the Development Program; or 
  
 (d) Company becomes insolvent or it is reasonably determined by CDC that the Company does not have sufficient funds to continue the planned Development
Program despite the financing provided by CDC hereunder. 
  
 1.37
“GAAP” means US generally accepted accounting principles. 
  
 1.38 “GCP” means the scientifically recognized Good Clinical Practice standards for the design, conduct, performance, monitoring, auditing, recording, analyses, and reporting of clinical trials,
including the requirements in 21 C.F.R. Parts 11, 50, 54, 56, 312, and 314, that provide assurance that the data and reported results are credible and accurate, and that the rights, integrity, and confidentiality of trial subjects are protected.

  
 1.39 “Governmental Authority” means any
court, tribunal, arbitrator, agency, department, legislative body, commission or other instrumentality of (a) any government of any country, (b) any foreign, federal, state, county, city or other political subdivision thereof or (c) any
supranational body. 
  
 1.40 “Know-How” means any
information and materials, whether proprietary or not and whether patentable or not, including without limitation ideas, concepts, formulas, methods, procedures, designs, compositions, plans, documents, data (including all pre-clinical and clinical
data), inventions, discoveries, works of authorship, compounds and biological materials. 
  
 1.41 “Laws” means all laws, statutes, rules, codes, regulations, orders, judgments and/or ordinances of any Governmental Authority. 
  
 1.42 “Litigation Conditions” has the meaning set forth in Section 9.2.2. 
  
 1.43 “Milestone” has the meaning set forth in Section 6.5.

  
 1.44 “Minimum Royalty Commencement Date”
means the earlier of (i) the first full calendar quarter following the one year anniversary of the first commercial sale of the Product anywhere in the world; and (ii) the first full calendar quarter following the eighteen (18) month anniversary of
the Approval of the NDA. 
  
 1.45 “NDA” means a
New Drug Application with respect to a Product filed with and accepted by the FDA including any supplements or amendments thereto. 
  
 1.46 “Net Sales” means the gross amounts billed or invoiced by Company and its Affiliates, sublicensees and distributors, and each of
their successors and assigns, for sales of the Products throughout the world, less the following deductions to the extent included in the gross invoiced sales price: 
  

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 ***CONFIDENTIAL TREATMENT REQUESTED*** 
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 (a) bona fide discounts (including but not limited to cash discounts, trade discounts, quantity
discounts, and prompt payment discounts), credits, rebates, refunds, allowances, cost of free goods, adjustments, rejections, recalls and returns, including rebates, refunds, allowances, or credits granted with respect thereto, and charge-back
payments granted to managed health care organizations or to Governmental Authorities, their agencies, and purchasers and reimbursers or to trade customers, including but not limited to wholesalers and chain and pharmacy buying groups, provided that
such items relate to the Product and only the portion of such items related to the Product shall be deducted; and 
  
 (b) taxes, tariffs and similar obligations, duties or other governmental charges (other than income or corporation taxes) levied on, absorbed or
otherwise imposed on sales of the Product; 
  
 If any such sales
to third parties are made in transactions that are not at arm’s length between the buyer and the seller, then the gross amount to be included in the calculation of Net Sales shall be the amount that would have been invoiced had the transaction
been conducted at arm’s length, subject to deductions set forth in subparagraphs (a) and (b) above. Such amount that would have been invoiced shall be determined, wherever possible, by reference to the average selling price of the relevant
Product in arm’s-length transactions in such country. Notwithstanding the foregoing, amounts received by Company or its Affiliates, sublicensees or distributors for the sale of Products among Company and its Affiliates, sublicensees or
distributors for resale shall not be included in the computation of Net Sales hereunder. Net Sales shall be determined from books and records maintained in accordance with GAAP, consistently applied throughout the organization and across all
products of the entity whose sales of Product are giving rise to Net Sales. 
  
 Net Sales of a Combination Product (as defined below) shall be calculated as if the invoiced sales price for a Product included within the Combination Product is (i) the average sales price at which Company, its
Affiliate, or a sublicensee or distributor thereof sells, in the calendar quarter of the applicable sale, the Product alone and not as a part of the Combination Product in the applicable country or, if the Product is not offered in a country except
as part of the Combination Product, the average sales price at which the Product is sold alone across all countries in which such Product is sold, or (ii) to the extent the applicable Product has not been sold other than in a Combination Product,
the amount reasonably specified between Company or its Affiliate, sublicensee, or distributor and any other party to an agreement regarding that Combination Product as the portion of the sales price attributable to the Product. In the event that
Company includes a Product as part of a single bundled sale of separate products with separately stated prices, the Net Sales attributable to such Product shall be the higher of (i) the separately stated price stated for such Product sold in such
bundled sale or (ii) the average price at which such Product is sold in the applicable country in a non-bundled sale or, if not sold in the applicable country in a non-bundled sale, the average price at which such Product is sold in a non-bundled
sale across all countries in which such Product is sold. For purposes of this paragraph, “Combination Product” means a Product that is sold together with any other products and/or services at a unit price, whether packaged together or
separately with another pharmaceutical product or other device, equipment, instrumentation, or other components (other than solely containers or packaging exclusively for the Product). 
  

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 1.47 “Out-of-Pocket Costs” means costs and expenses paid to third parties by either
Party. 
  
 1.48 “Patent Rights” means patents and
patent applications and all substitutions, divisions, continuations, continuations-in-part, any patent issued with respect to any such patent applications, any reissue, reexamination, renewal or extension (including any supplemental patent
certificate) of any such patent, and any confirmation patent or registration patent or patent of addition based on any such patent, and all counterparts thereof in any country. 
  
 1.49 “Periodic Payments” has the meaning set forth in Section 6.4.1. 
  
 1.50 “Person” means any natural person or any corporation,
company, partnership, joint venture, firm or other entity, including without limitation a Party. 
  
 1.51 “Phase III Clinical Trial” means a clinical trial conducted in accordance with the specifications determined in connection with the
preparation of the Development Program and whose primary objective is to obtain a definitive evaluation of the therapeutic efficacy and safety of the Product in patients for the particular indication in question that is needed to evaluate the
overall risk-benefit relationship of Product and to provide adequate basis for obtaining requisite regulatory approval(s) and product labeling, as more fully defined in 21 C.F.R. § 312.21(c). 
  
 1.52 Intentionally omitted. 
  
 1.53 “Product” means any product that contains the Compound
either alone or in combination with one or more other substances. 
  
 1.54 “Program Data” has the meaning set forth in Section 5.1. 
  
 1.55 “Projected Trial Participants” has the meaning set forth in Section 6.4.1(a). 
  
 1.56 “Qualified Collaboration Partner” means a company which (i) has its own or controls a marketing and sales organization for
pharmaceutical products or devices and (ii) has annual revenues from sales of pharmaceutical products similar to or related in any manner to the Product in the United States of at least One Hundred Million Dollars ($100,000,000) in the calendar year
immediately preceding the year in which the transaction or event necessitating the determination is consummated. 
  
 1.57 “Second Tier Royalty” has the meaning set forth in Section 6.6.1(b). 
  
 1.58 “Shortfall Amount” has the meaning set forth in Section 6.6.1. 
  
 1.59 “Third Party Claim” has the meaning set forth in
Section 9.2.1. 
  
 1.60 “Transaction Expenses”
means any and all costs and expenses incurred by CDC in connection with: (i) the preparation of this Agreement and related documents; (ii) any and all due diligence related to this transaction; and (iii) all other costs and expenses incurred by CDC
in 
  

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 connection with consummating the transactions contemplated herein; provided, however, such costs and expenses shall
not exceed one hundred seventeen thousand five hundred dollars ($117,500) Dollars. 
  
 1.61 “Trigger Date” means the date of the earlier to occur of (i) a Development Program Termination or (ii) a Funding Termination Event. 
  
 1.62 “Upfront Amount” has the meaning set forth in Section 6.3. 
  
 1.63 “Warrant” means that certain Warrant, the form of which
is attached hereto as Schedule 1.63, granted by BioDelivery to CDC for the purchase of Five Hundred Thousand (500,000) shares of Company’s common stock. 
  
 ARTICLE 2 
 DEVELOPMENT COMMITTEE 
  
 2.1 Committee.
Within thirty (30) days following the Effective Date, CDC shall appoint one person and BioDelivery shall appoint one or more persons from their respective organizations to serve on a development committee (“Development Committee”).
Each of CDC and BioDelivery may replace any or all of its representatives on the Development Committee at any time upon written notice to the other Party. The purpose of the Development Committee will be to facilitate an effective exchange of
information from Company to CDC with respect to the development of the Product, filing of the NDA, the launch of the Product and such other purposes as agreed upon between the Parties, as well as to make decisions with respect to the Product and
have overall responsibility for the matters set forth in Section 2.3. All decisions or other determinations of the Development Committee shall be made with the approval from at least one representative of each Party on the Development Committee,
provided, however, in the event that the Parties are unable to agree on any decision or other determination, the Development Committee shall promptly refer the matter to the Chief Executive Officer of each Party for resolution. Each CEO shall
exercise good faith efforts and the Parties shall work diligently to reach a mutually agreeable resolution of such issue. If for any reason, however, the Chief Executive Officers are unable to resolve the decision or other determination within ten
(10) Business Days after notification of such issue, then neither Party shall have the sole right to make the final decision, and no action shall be taken with respect to such issue or other determination except as and to the extent agreed upon by
the Parties or as specifically set forth in the Agreement or the Development Plan. Notwithstanding the foregoing, to the extent the parties are deadlocked for more than thirty (30) days following notification of each CEO of such issue (the
“Resolution Period”), then: (i) to the extent such unresolved issue directly impacts the timing of the filing and Approval of the NDA, and (ii) provided Company is acting in good faith in resolving such issue, the April 30, 2008
deadline set forth in Section 6.6.2 shall be extended by the number of days such issue remains deadlocked beyond the Resolution Period. CDC shall be permitted to have observers attend each Development Committee meeting whether by phone or person.

  
 2.2 Development Efforts. The Company will use
Commercially Reasonable Efforts to execute the development of the Product in accordance with the Development Plan, as 
  

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 amended from time to time. Unanimous consent of the Parties (with consent of a Party’s designees to the
Development Committee constituting consent by such Party) shall be required for any decision to (a) continue the Development Program in the event that a drug safety monitoring board or safety officer of the Company recommends stopping a clinical
trial or the Development Program or (b) amend or modify the Development Plan (including, without limitation an amendment or modification which may reasonably be expected to materially impair, delay, result in the cessation of or otherwise materially
effect, the development of the Product). 
  
 2.3
Responsibilities. The Development Committee shall be responsible for: 
  
 2.3.1 Managing, making decisions with respect to, and overseeing the development of the Products in accordance with the Development Program; 
  
 2.3.2 Decisions related to the life cycle management of, and intellectual property protection for, the Products; 

 
 2.3.3 Monitoring progress of all Product and associated support studies in
accordance with the Development Program (including reviewing costs and activities against the Development Budget); 
  
 2.3.4 Facilitating the exchange of all development and regulatory information and data relating to all Product studies; 
  
 2.3.5 Proposing and overseeing a regulatory strategy and plan for obtaining
Approvals for the Products; and 
  
 2.3.6 Have such other
responsibilities as may be assigned to the Development Committee pursuant to this Agreement or as may be mutually agreed upon by the Parties from time to time. 
  

The obligation of the Parties to maintain a Development Committee shall terminate simultaneously with the expiration of the Development Term. 
  
 2.4 Meetings. During the Development Term, the Development Committee
shall call meetings as reasonably requested by one of the Parties, but in no event less than quarterly. Meetings may be held in person, by telephone, or by video conference call, and the location of each meeting shall be held at the corporate
offices of the Company or such other location as may be mutually agreed upon. Each Party may permit such visitors to such meetings as the Parties mutually agree; provided, however, that any such visitors (to the extent they are not employees of CDC)
shall have executed confidentiality agreements, reasonably acceptable to Company. 
  
 2.5 Meeting Minutes. Minutes of all Development Committee meetings shall be prepared by Company and circulated to the Development Committee members no later than ten (10) Business Days after the meeting to
which the minutes pertain by the secretary of the meeting. Such minutes shall include a brief summary of key discussion points, decisions made and a record of the rationale for the Parties’ positions on issues and provide a list of any issues

  

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 yet to be resolved. The secretary of the meeting and chairperson of the Development Committee shall each sign and
date the final minutes after incorporating any comments from the Development Committee members and after the minutes have been approved by a representative of each Party on the Development Committee. 
  
 ARTICLE 3 
 PRODUCT DEVELOPMENT; INTELLECTUAL PROPERTY 
  
 3.1 Development Diligence. Company shall use Commercially Reasonable Efforts to develop the Product in accordance with the terms of this Agreement
and the Development Program, as amended from time to time in accordance with this Agreement. Company believes that the Development Budget shall be sufficient to fund all necessary studies and related activities necessary to obtain Approval.

  
 3.2 Right to Observe Development Activities.
Representatives from CDC shall be entitled to attend, on an observer basis, meetings of Company’s internal working groups responsible for the development of the Products. Company shall ensure that CDC’s authorized representatives may,
during regular business hours, (a) examine and inspect Company’s facilities or, subject to any third party confidentiality restrictions or obligations, the facilities of any subcontractor or any investigator site used by Company in the
performance of development of a Product, and (b) inspect and copy all data, documentation and work products relating to the Product activities performed by it or, subject to any third party confidentiality restrictions or obligations, the
subcontractor or investigator site related to the Product, including, without limitation, the medical records of any patient participating in any clinical study related to the Product. This right to inspect and copy all data, documentation, and work
products relating to a Product may be exercised at any time during the term of this Agreement (subject to each Party’s record retention policies then in effect), or such longer period as shall be required by applicable Law. Notwithstanding the
foregoing, nothing herein shall be construed to grant CDC the right to access any data or information the disclosure of, or access to which would violate applicable Laws protecting the privacy of study subjects or confidentiality of study subject
data or information or other third party confidential matters to which Company may not have access. 
  
 3.3 Right to Information Regarding Development Activities. Company shall periodically, and at least quarterly, provide CDC with comprehensive and
complete reports regarding activities undertaken by or on behalf of Company with respect to the development of the Product, and specifically on activities and studies/trials undertaken by Company pursuant to the Development Program, including their
progress, status and outcome as well as major findings and major decision points, as applicable, so as to keep CDC fully advised of Company’s development activities with respect to the Product. In addition to the quarterly reports, Company
shall provide CDC with a monthly report as to the progress and status of the Development Program, including any reports produced by Company regarding the level of patient recruitment in the clinical trials conducted pursuant to the Development
Program. In addition to the foregoing, Company shall provide CDC with monthly and quarterly financial and operational reports with respect to the development of the Product (including, without limitation, an analysis of any variances from the
Development Budget). 
  

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 treatment are being requested are denoted with “*****”. 
  
  

 3.4 Intellectual Property. Company shall prepare, file, prosecute and maintain Patent Rights
to cover Company inventions and Company Intellectual Property where such Patent Rights, Company inventions and Company Intellectual Property are owned by Company. Where such Patent Rights, Company inventions and Company Intellectual Property are not
owned by Company, Company shall enforce its intellectual property rights in accordance with the terms of the instrument or agreement granting Company such rights. Company shall keep CDC informed of the status of each such Patent Right. Company shall
give reasonable consideration to any suggestions or recommendations of CDC concerning the preparation, filing, prosecution and maintenance of any Company inventions. Although the Parties do not expect to generate intellectual property in connection
with the Development Program, to the extent that intellectual property is generated, and the Development Committee, in its reasonable discretion determines that a formal patent filing is necessary or desirable to protect commercialization of the
Product, Company shall prosecute and file patent claims to protect such intellectual property in accordance with its standard procedures. At the request of CDC, Company shall provide CDC with copies of the file histories of all Company Patent Rights
and shall update such file histories promptly upon receipt of any additional communications from any patent offices and patent counsel or agents pertaining thereto. Company shall also provide CDC with copies of any material communications from any
patent offices and patent counsel or agents pertaining to any Company Patent Rights. Company, at CDC’s request, shall file patent claims related to the Products or Compound proposed by CDC. The Parties shall cooperate reasonably in the
prosecution of all Patent Rights under this Section 3.4 and shall share all material information relating thereto promptly after receipt of such information. If, during the term of this Agreement, Company intends to allow any Company Patent Rights
owned by Company to expire or intends to otherwise abandon any Company Patent Rights owned by Company, Company shall notify CDC of such intention at least sixty (60) days prior to the date upon which such Company Patent Rights shall expire or be
abandoned, and CDC shall thereupon have the right, but not the obligation, to assume responsibility for the preparation, filing, prosecution or maintenance thereof. 
  
 3.5 Collaboration with Qualified Collaboration Partner. Company shall have the right to enter into a partnership,
collaboration, licensing agreement or other arrangement with a Qualified Collaboration Partner with respect to the development of the Product hereunder, provided, however, that (i) prior to a Change of Control of either BioDelivery or Subsidiary,
such Qualified Collaboration Partner shall be subject to the prior written approval of CDC which approval shall not be unreasonably withheld and (ii) from and after a Change of Control of either BioDelivery or Subsidiary, such Qualified
Collaboration Partner shall be subject to the prior written approval of CDC in its sole discretion. Company shall provide a complete and un-redacted copy of any agreements or other understandings entered into with such Collaboration Partner promptly
following the execution thereof. Notwithstanding the foregoing, as a condition to entering into such partnership, collaboration, licensing agreement or other arrangement with a Qualified Collaboration Partner, the Qualified Collaboration Partner
shall expressly acknowledge to CDC than any such agreement shall be subject to the rights of CDC hereunder. In addition to the foregoing, CDC shall have access to all information and documentation that is generated or otherwise resides with the
Collaboration Partner to the same extent Company would have access to such information or documentation under any such agreement. 
  

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 ***CONFIDENTIAL TREATMENT REQUESTED*** 
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 treatment are being requested are denoted with “*****”. 
  
  

 ARTICLE 4 
 CLINICAL AND REGULATORY MATTERS; 
 REPORTING AND INFORMATION SHARING 
  
 4.1 Regulatory Matters. 
  
 4.1.1 Executionary Lead. Company shall be responsible for ensuring
compliance with all applicable Laws and regulatory requirements relating to the Product including, without limitation, (a) filing all NDAs and applications for Approvals and supporting documentation; (b) conducting clinical trials in accordance with
GCP standards; (c) serving as the designated regulatory official for purposes of receiving communications from the FDA and other Governmental Authorities and responding thereto; (d) reporting any Adverse Drug Experiences to the appropriate
Government Authority and (e) advertising, labeling, supplying and handling of the Product in accordance with all cGMP requirements and GCP standards. 
  
 4.1.2 Ownership. All NDAs and Approvals relating to the Products shall be the property of Company and held in the name of Company or its designated
Affiliates or Qualified Collaboration Partner, subject to the terms and conditions set forth in the Atrix License. 
  
 4.2 Advice of Counsel. If a Party is advised by its counsel that it must communicate with any Governmental Authority relating to a matter under the
Development Program, then such Party shall promptly, but in no event more than two (2) Business Days, advise the other Party of the same. With respect to communications that are not time sensitive or related to Product emergencies, Company shall
provide CDC in advance with a copy of any proposed written communication with such Governmental Authority and comply with any and all reasonable requests of CDC concerning any meeting or written or oral communication with such Governmental
Authority. 
  
 4.3 Meetings with Governmental Authority.
Company shall notify CDC of any meetings, conferences and discussions scheduled with or requested by a Governmental Authority relating to a Product at least five (5) Business Days prior to the event (or such lesser time if an emergent meeting has
been scheduled with less than five (5) Business Days’ notice). At all such meetings, conferences or discussions, CDC shall have the right to attend and participate either in person or by telephone to the extent permitted by the Governmental
Authority. Through the Development Committee, whenever possible under the circumstances, Company and CDC shall agree in advance on the attendance list and objectives to be accomplished at such meetings, conferences and discussions and the agenda for
the meetings, conferences, and discussions with any Governmental Authority. 
  
 4.4 Inspections. Company shall promptly, but in no event more than two (2) Business Days after receipt of any inspections, proposed regulatory actions, investigations or requests by any Governmental Authority
with respect to the Products, as well as any corrective actions initiated by Company with respect thereto, notify CDC in detail with respect thereto and will provide CDC with copies of all material related documentation. The parties shall cooperate
to provide Governmental Authorities with access to, and copies of, any Program Data requested by such Governmental Authority. 
  

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 ***CONFIDENTIAL TREATMENT REQUESTED*** 
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 treatment are being requested are denoted with “*****”. 
  
  

 4.5 Government Communications. 
  
 4.5.1 Receipt of Correspondence. Company shall promptly and in accordance with applicable Law provide to CDC copies
of any documents or correspondence received from any Governmental Authority, but in no event more than two (2) Business Days after such receipt, that pertains to the Products (including without limitation any minutes from a meeting with respect
thereto). In addition, Company shall provide CDC with any documents or correspondence to be submitted to any Governmental Authority that relate to the Products in time sufficient to allow for a reasonable time to comment. Company will consult in
advance with, and consider in good faith any comments of, CDC with respect to any filings made or other actions taken, including without limitation any such filings or actions with respect to any changes or modification to labeling for or the
indications of the Products. 
  
 4.5.2 Regulatory
Information. Company shall provide CDC with notice, in a sufficiently timely basis, of notification or other information which it receives (directly or indirectly) from, any Governmental Authority (and providing, as soon as reasonably possible,
copies of any associated written requests) or from other persons that (i) may reflect or indicate any concerns regarding the safety or efficacy of a Product, (ii) indicates or suggests a Claim of a third party arising in connection with a Product,
or (iii) may lead to a recall or market withdrawal of a Product. Information that shall be disclosed pursuant to this Section 4.5 shall include, but not be limited to: 
  
 (a) Inspections by a Governmental Authority of manufacturing, distribution or other related facilities concerning a
Product; 
  
 (b) Inquiries by a Governmental Authority concerning
clinical investigation activities (including without limitation inquiries regarding investigators, clinical monitoring organizations and other related parties) with respect to a Product; 
  
 (c) Any communication from a Governmental Authority involving the manufacture, sale, promotion or distribution of a
Product, or any other Governmental Authority reviews or inquiries relating to a any event set forth in this Section 4.5; 
  
 (d) An initiation of any Governmental Authority investigation, detention, seizure or injunction concerning a Product; 
  
 (e) Any other regulatory action (e.g., proposed labeling or other
registrational dossier changes and recalls) which would affect a Product in any country; and 
  
 (f) Any communication from a potential plaintiff or counsel thereof related to a potential Claim in connection with the Product. 
  

4.6 Reporting and Information Sharing. 
  
 4.6.1 Inquiries, Adverse Events. Company shall submit reports of all Adverse Drug Experiences associated with the use of the approved Product(s)
and other required safety information (e.g., PSUR’s and annual safety reports) to the FDA and other Governmental Authorities, in accordance with applicable Law. Company shall submit a copy of each such report to CDC in advance of such
submission to comment on such reports. 
  

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 4.6.2 Recalls and Withdrawals. Company shall immediately notify CDC of any decision to
initiate a recall or withdrawal of Product. Any and all costs and expenses of in connection with such recall, market withdrawal or other corrective action shall be borne by Company. 
  
 ARTICLE 5 
 OWNERSHIP AND LICENSE 
  
 5.1 Program Data.
Company shall timely communicate in full detail and disclose all data, information, reports, results and other work product collected, generated, prepared or derived during the course of, or as a result of, the Development Program (“Program
Data”); provided, however, that any such disclosure shall be conducted in a manner and shall be to the extent permitted under applicable Laws in order to protect the privacy of study subjects and confidentiality of study subject data and
information. All Program Data shall be the sole and exclusive property of CDC with full right, title, and interest thereto, and shall be treated as the Confidential Information of CDC and in furtherance of the foregoing, Company hereby assigns and
transfers to CDC all of its right, title and interest in and to such Program Data. 
  
 5.2 Grant of License by Company. Company shall grant, and hereby grants to CDC, a worldwide, royalty free, exclusive right and license, with the right and license to sublicense under the ***** to conduct the
***** (including, without limitation, obtaining an NDA). 
  
 5.3
Grant of License by CDC. 
  
 5.3.1 License to Program
Data During the Development Term. Subject to the terms and conditions of this Agreement, CDC hereby grants to Company during the Development Term a worldwide, exclusive right and license, with the right to sublicense to a Qualified Collaboration
Partner pursuant to the terms of this Agreement, to use the ***** to conduct the *****, including, without limitation, the submission of an NDA for the Product. 
  

5.3.2 License to Program Data After Payment of Milestone and Product Approval. CDC hereby grants to Company a worldwide, exclusive right and
license, with the right to sublicense, to use the ***** to make, have made, use, have used, import, export, offer to sell, sell and have sold Products; provided, however that such license shall only become effective (and the Company shall only be
permitted to exercise its rights under the license) upon: (i) the Company obtaining Approval of the Product by the FDA; and (ii) payment to CDC by Company of the Milestone. 
  
 5.3.3 License to Company Intellectual Property. Subject to the terms and conditions of this Agreement, CDC hereby
grants to Company a worldwide, exclusive right and sublicense, with the right to further sublicense to a Qualified Collaboration Partner pursuant to the terms of this Agreement, under its rights in the ***** to conduct the ***** on behalf of CDC.

  

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 ***CONFIDENTIAL TREATMENT REQUESTED*** 
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 treatment are being requested are denoted with “*****”. 
  
  

 5.3.4 Sublicenses. In the event Company grants a sublicense of its rights in accordance with
the terms of this Agreement, each and every such sublicense shall be subject in all respects to the same terms, conditions and provisions contained in this Agreement, and Company shall be responsible for ensuring that any sub-licensee complies with
such terms and conditions. 
  
 ARTICLE 6 
 COMMERCIALIZATION AND FINANCIAL PROVISIONS 
  
 6.1 Commercialization Efforts. Company shall use Commercially Reasonable Efforts to market, distribute, sell and otherwise commercialize the
Product. 
  
 6.2 Marketing Plan Company shall be
responsible for developing an annual marketing plan for each Product. Each marketing plan developed by Company shall be prepared in good faith in accordance with Company’s standard practices with the overall objective of achieving the maximum
commercial potential of such Product. 
  
 6.2.1 Preparation of
Initial Marketing Plan. Beginning one year subsequent to the Effective Date, Company will begin preparation of an initial three (3) year marketing plan for the Product for review and approval by the Development Committee, and Company shall
complete such marketing plan sufficiently in advance of the commercial launch of the Product for adequate review by the Development Committee, but not later than one year prior to the anticipated date of the commercial launch of the Product. Company
shall regularly, but not less than annually, amend and update the marketing plan for submission and approval to CDC. 
  
 6.2.2 Contents of Initial Marketing Plan. The initial marketing plan for the Product shall set forth the strategy for the commercial launch of such
Product in the US territory in a comprehensive plan that describes the commercialization activities for such Product (including advertising, education, planning, marketing, sales force training and allocation). Each initial draft marketing plan will
contain such information as Company believes necessary for the successful commercial launch of such Product in the US territory. 
  
 6.2.3 Updates. Company shall provide CDC with quarterly written reports of Company’s commercialization efforts and activities for such quarter
and a description of its plans for future commercialization efforts and activities. In addition, Company shall provide such other information, financial or otherwise, CDC may reasonable request relating to the manufacture, marketing, sale or
distribution of the Product. After receipt of such reports, CDC shall be entitled to request a meeting with Company to discuss such reports and the Parties shall meet on dates, at times and in locations as agreed upon by the Parties. 
  
 6.3 Upfront License Fees. Subject to the satisfaction and/or waiver by
CDC of the Commitment Contingency, CDC shall pay to Company within five (5) Business Days after the satisfaction of all conditions set forth in the Commitment Contingency an upfront payment amount of Two Million Dollars ($2,000,000) as partial
consideration of the grant of the licenses from Company to CDC (as the “Upfront Amount”) which Upfront Amount shall be used by the Company to pay for Development Costs, less the Transaction Expenses. 
  

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 treatment are being requested are denoted with “*****”. 
  
  

 6.4 Development Costs. 
  
 6.4.1 Payments by CDC in Respect of Development Costs. Provided a Phase III Clinical Trial has been initiated and
patients have been enrolled, and subject to the satisfaction and/or waiver by CDC of the Commitment Contingency, on the tenth (10th) day of each calendar month beginning on February 10, 2006 and terminating on January 10, 2007 (i.e., a maximum of
twelve payments, and subject to adjustment for actual dates based upon satisfaction of the Commitment Contingency and adjustments in the number of payments if for Actual Trial Participants fall below 90% of Projected Trial Participants), CDC shall
pay to Company an amount equal to Four Hundred Sixteen Thousand Six Hundred Sixty Six and 67/100 Dollars ($416,666.67) (the “Periodic Payments”) which Periodic Payments shall be used by Company to pay for Development Costs.

  
 (a) Commencing at the end of the third full calendar month
following the first patient enrollment with respect to such Phase III Clinical Trial (e.g. if the first patient is enrolled on April 15th, then commencing July 31st) within five (5) days of the end of such calendar month and each subsequent month
during which a Periodic Payment is due, Company shall deliver to CDC a written notice indicating the actual level of patient recruitment on a cumulative basis participating in such clinical trial as part of the Development Program (the
“Actual Trial Participants”). In the event the level of Actual Trial Participants falls below ninety percent (90%) of the projected cumulative level of patient recruitment for such clinical trial (as set forth in the Development
Program) (the “Projected Trial Participants”) in any calendar months, then the amount of all future Periodic Payment shall be reduced proportionately from the original $416,666.67 to reflect the shortfall in the level of Actual
Trial Participants from the level of Projected Trial Participants (e.g., if the level of Actual Trial Participants is 85% of the Projected Trial Participants, then the monthly Periodic Payment shall be reduced by 15%); provided, however, that in
such event, if the Company increases the next month’s participation in excess of 90% of projected enrollment for such month, the subsequent monthly payments shall be increased to an amount equal to the Periodic Payment. The last Periodic
Payment shall be increased to an amount such that the aggregate of all Periodic Payments paid to Company hereunder equals Five Million Dollars ($5,000,000). 
  
 (b) Notwithstanding anything to the contrary contained herein, it is expressly understood and agreed to by the Parties that in no event shall CDC be
obligated to pay Company amounts pursuant to Section 6.3 and this Section 6.4 in excess of the lesser of (i) Seven Million Dollars ($7,000,000), less the Transaction Expenses, or (ii) the actual amount of the Development Costs (the
“Development Funding Cap”). 
  
 6.4.2 Payments
by Company in Respect of Development Costs. Company shall solely liable for, and shall timely pay, any and all Development Costs. 
  
 6.4.3 Project Budgets. Following the Effective Date, Company shall, at least thirty (30) days prior to the commencement of each quarter in which
Company anticipates incurring Development Costs, prepare and deliver to CDC a statement of Development Costs projected to be incurred by Company during such quarter in accordance with the annual Development Budget applicable to such quarter. Company
shall include in such statement an 
  

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 adjustment for variances between projected Development Costs included in prior such statements delivered by Company
and actual Development Costs incurred by Company in the periods covered by such prior statements. Company shall charge all such expenses so incurred to a separate account created by it on its books and records solely for the purpose of tracking
Development Costs, identifying all Development Costs by Product being developed. 
  
 6.4.4 Actual Development Cost Reports. Within fifteen (15) days after the end of each month, Company shall prepare a report detailing the actual Development Costs incurred by a Party in such month. 

 
 6.4.5 Expense Offset. Subject to the terms of this Agreement, CDC
shall be entitled to deduct any and all CDC Development Expenses from the amounts to be paid by CDC to Company for the Commitment. 
  
 6.4.6 Termination of Funding by CDC. Notwithstanding anything to the contrary contained herein, CDC shall have the right, in its sole and absolute
discretion, to immediately cease the payment of any Upfront Payment and/or Periodic Payment due hereunder in the event of a Development Program Termination or a Funding Termination Event. 
  
 6.5 Milestone. 
  
 6.5.1 Within sixty (60) days after the Approval by the FDA of the NDA, Company shall pay to CDC an amount equal to the lesser of Seven Million Dollars
($7,000,000) or the Development Funding Cap (the “Milestone”). 
  
 6.5.2 Notwithstanding Section 6.5.1 above, in the event that Company receives any “consideration” prior to Approval by the FDA of the NDA in connection with entering into any partnership, collaboration,
licensing agreement or other arrangement with a Qualified Collaboration Partner with respect to the development or commercialization of the Product, then ***** of such “consideration” shall be to paid to CDC within five (5) days after the
later of: (i) receipt by Company of such consideration, and (ii) filing of the NDA with the FDA, up to a maximum limit of Seven Million Dollars ($7,000,000), which amount shall offset the Milestone payments due under Section 6.5.1. For purposes
hereof, “consideration” shall mean and include any payments received by Company in connection with entering into transaction with a Collaboration Partner, including up-front signing or licensing fees, milestones, loan proceeds, or payments
for equity made to Company in connection with entering into such transaction, but excluding any amounts paid by such Qualified Collaboration Partner for equipment or other designated purchases, or for actual products or services rendered or to be
rendered by Company to the Collaboration Partner. 
  
 6.6
Royalties. 
  
 6.6.1 Royalty on Net Sales.
Commencing in the calendar year in which the Product is sold, and subject to the adjustments set forth in this Section 6.6, Company will pay to CDC, on a quarterly basis, a royalty on worldwide annual Net Sales of Products as follows: 
  
 (a) a ***** royalty (the “First Tier Royalty”) on the
first ***** of worldwide annual Net Sales of Products. 
  

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 (b) a ***** royalty (the “Second Tier Royalty”) on the worldwide annual Net Sales
of Products exceeding the first ***** of worldwide annual Net Sales of Products. 
  
 Notwithstanding the foregoing, commencing on the Minimum Royalty Commencement Date, the royalty payments made by Company to CDC pursuant to this Section 6.6.1 in any given calendar quarter shall not be less than *****
and in the event that the aggregate royalty payments in any given calendar quarter as calculated pursuant to Sections 6.6.1(a) and (b) are less than ***** Company shall pay to CDC an amount equal to the difference between ***** and the aggregate
royalty payments previously paid to CDC for such calendar quarter (the “Shortfall Amount”), which Shortfall Amount payment shall be made to CDC at the time the royalty payment for such calendar quarter is paid to CDC pursuant to the
terms of Section 6.6.2. 
  
 6.6.2 Increase of Royalty if Delay
in NDA Approval. In the event Approval of the NDA by the FDA is received after *****, the First Tier Royalty and Second Tier Royalty shall be increased by ***** for each thirty (30) day period in which the Product is approved after ***** (and
pro rated for any period less than thirty (30) days). 
  
 6.6.3
Increase of Royalty Due to Competitive Entry. In the event the first commercial sale of the Product in the United States occurs more than ***** days after the first commercial sale of a Competing Product in the United States, the First Tier
Royalty shall be increased by ***** to ***** and the Second Tier Royalty shall be increased by ***** to *****. Such ***** and ***** adjustment shall be incremental to each commercial launch in the United States of a Competing Product that occurs
more than ***** days prior to the first commercial sale of the Product in the United States. 
  
 6.6.4 Increase in Royalty due to Reduced Selling Price. In the event that the Average Selling Price of a Product in the United States is less than the Average Selling Price of any Competing Product in any
calendar year, then commencing January 1 of the following year, the First Tier Royalty and Second Tier Royalty shall be increased by an amount equal to the product of (a) the respective Royalty and (b) a fraction, the numerator of which is the *****
of such Competing Product, and the denominator of which is *****. If there are multiple Competing Products that have an ***** than the Average Selling Price of a Product, then the Competing Product with the ***** shall be used for purposes of this
adjustment. 
  
 6.6.5 Incremental Adjustments. The
adjustments to the royalties set forth in Sections 6.6.2 through 6.6.4 shall be incremental and not in lieu of any such adjustment. 
  
 6.6.6 Timing of Payments. All amounts due CDC pursuant to this Section 6.6.6 shall be payable quarterly in arrears (annualizing each quarterly
sales to determine whether a First Tier Royalty or Second Tier Royalty is required to be paid) and such payments shall be made by Company to CDC within sixty (60) days after March 31, June 30, September 30 and December 31 of each year. Each
quarterly payment shall be accompanied by a written statement of royalties as described in Section 6.6.7. 
  

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 6.6.7 Written Statement. Along with each remittance of payments pursuant to Section 6.6.2 to
CDC, Company shall include a report covering: (i) the gross sales of all Products sold by Company, its Affiliates and sublicensees, (ii) the Net Sales of all Products sold by Company, its Affiliates and its sublicensees, during the calendar quarter
and the detailed calculation of the reconciliation between gross sales and Net Sales showing those items allowed to be deducted from gross sales pursuant to the definition of Net Sales; (iii) the royalties payable in US Dollars with respect to Net
Sales; (iv) the exchange rates used in determining the amount of Dollars. If no sales of Products or have been made during any reporting period, Company will provide a statement to this effect to CDC. 
  
 6.6.8 Royalty Term. On a country-by-country basis, the royalty
obligation of the Company under this Agreement shall expire on the later of: (i) expiration of the last applicable BEMA Technology Patent Right in such country; or (ii) the first full calendar year following the entry of a generic version of the
Product in a particular country which has prescriptions written on it that exceed the number of prescriptions written for the Product in the same calendar year and country. 
  
 6.7 Payment Currency. All amounts due under this Agreement shall be paid to the designated Party in United States
dollars. The US dollar equivalent of Net Sales incurred in a currency other than U.S. Dollars shall be calculated using the methodology set forth in any license, strategic or collaborative partnership agreement with a third party generating such
sales, or otherwise using the average of the spot rate (the “Closing mid-point rates” found in the “Dollar spot forward against the Dollar” table published by The Financial Times, or any other publication agreed to by the
Parties) prevailing during the calendar quarter of the applicable royalty payment. 
  
 6.8 Payments. All payments under this Agreement shall be made on or before the due date by electronic transfer in immediately available funds to the respective account designated in writing by Company at least
two (2) Business Days before the payment is due. Company shall notify CDC’s treasurer, or such other CDC representative as CDC’s treasurer shall designate in writing, by facsimile transmission as to the date and amount of any payment that
Company shall make at least two (2) Business Days prior to such transfer. All payments under this Agreement shall bear interest from the date due until paid at a rate equal to the lesser of (a) one percent (1%) per month or (b) the highest rate
permitted by applicable Law, calculated on the number of days such payments are paid after the date such payments are due. 
  
 6.9 Books and Records. Company shall keep comprehensive books and records relating to this Agreement in accordance with GAAP. Such books and
records shall document all gross sales, Net Sales, authorized expenses incurred or paid and any other costs incurred (including Development Costs) or revenues earned relating to this Agreement and include all information subject to audit pursuant to
Section 6.10. All such books and records shall be maintained for three (3) years following the relevant year or such longer period as is required by Law. 
  

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 6.10 Audits. These audit and adjustment provisions apply with respect to all payments due or
owing pursuant to this Agreement. CDC shall have the right to have the applicable books and records of Company audited under appropriate confidentiality provisions for the sole purpose of verifying the accuracy of all financial, accounting and
numerical information and calculations under this Agreement. Any such audit shall be conducted no more than once each year, and upon at least twenty (20) Business Days’ advance notice during normal business hours and in a manner that does not
interfere unreasonably with the business of Company. The results of any such audit shall be delivered in writing to each Party. Any underpayment or overbilling determined by such audit shall promptly be paid or refunded by Company. If Company has
underpaid or overbilled amounts due under this Agreement by more than five percent (5%) over any reporting period, Company shall also reimburse CDC for the cost of such audit (with the cost of the audit to be paid by CDC in all other cases), plus
interest in accordance with Section 6.8, from the date of any such underpayment or overpayment. 
  
 6.11 Consistent Treatment of Transaction by the Parties. It is the intent of the Parties that, for federal, state and local tax (including sales
and use taxes) purposes and commercial and bankruptcy law purposes, that *****. Nevertheless, Company acknowledges and agrees that CDC has not made any representations or warranties concerning the tax, financial, accounting or legal characteristics
or treatment of this Agreement, and that Company has obtained and relied solely upon the advice of its own tax, accounting and legal advisors concerning this Agreement and the accounting, tax, financial and legal consequences of the transactions
contemplated herein. 
  
 6.12 Non-Compete. During the term
of this Agreement, Company agrees that it will not, and will cause its Affiliates to not, develop, manufacture, market or sell a Competing Product throughout the world. 
  
 ARTICLE 7 
 CONFIDENTIAL INFORMATION 
  
 7.1 Treatment of
Confidential Information. During the term of this Agreement and for five (5) years thereafter, each Party shall maintain Confidential Information (as defined in Section 7.2) of the other Party in confidence, and shall not disclose, divulge or
otherwise communicate such Confidential Information to others (except for employees, agents and advisors under obligations of confidentiality) or use it for any purpose other than in connection with the development, manufacture, marketing,
promotion, distribution or sale of the Products as provided in this Agreement or for tax or accounting purposes, and each Party agrees to exercise reasonable efforts to prevent and restrain the unauthorized disclosure of such Confidential
Information by any of its directors, officers, employees, consultants, subcontractors, licensees, auditors or agents, which reasonable efforts shall be at least as diligent as those generally used by such Party in protecting its own confidential and
proprietary information. 
  
 7.2 Confidential Information.
“Confidential Information” means all trade secrets or other proprietary information, including without limitation any proprietary data and materials (whether or not patentable or protectable as a trade secret), regarding a
Party’s technology, products, business or objectives or regarding the Products, which is disclosed by a Party to the 
  

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 other Party. Notwithstanding the foregoing, there shall be excluded from the foregoing definition of Confidential
Information any of the foregoing that: 
  
 7.2.1 was known by the
receiving Party prior to its date of disclosure to the receiving Party as shown by the receiving Party’s written records; or 
 7.2.2
either before or after the date of the disclosure to the receiving Party is lawfully disclosed to the receiving Party, with no obligation of confidentiality, by third parties not in violation of any obligation to the other Party; or 
  
 7.2.3 either before or after the date of the disclosure to the receiving
Party becomes published or generally known to the public through no fault or omission on the part of the receiving Party or its Affiliates; or 
  
 7.2.4 is independently developed by or for the receiving Party without reference to, reliance upon or benefit of the Confidential Information as
demonstrated by contemporaneous written records of the receiving Party; or 
  
 7.2.5 is required to be disclosed by the receiving Party to comply with applicable securities and other Laws, to defend or prosecute litigation or to comply with governmental regulations or the regulations or
requirements of any stock exchange, provided that the receiving Party provides prior notice of such disclosure to the other Party and takes reasonable and lawful actions to avoid and/or minimize the degree of such disclosure. 
  
 7.3 Confidentiality of this Agreement. The material financial terms of
this Agreement shall be Confidential Information of each Party and, as such, shall be subject to the provisions of this Article 7. 
  
 7.4 Registration and Filing of the Agreement. To the extent, if any, that a Party concludes in good faith that it is required to file or register
this Agreement or a notification thereof with any Governmental Authority, including without limitation the US Securities and Exchange Commission, or the US Federal Trade Commission, in accordance with applicable Laws, such Party shall inform the
other Party thereof. Should either Party be required to submit or obtain any such filing, registration or notification, they shall cooperate, each at its own expense, in such filing, registration or notification and shall execute all documents
reasonably required in connection therewith. In such filing, registration or notification, the Parties shall agree in advance on which provisions of this Agreement they will request confidential treatment of. The Parties shall promptly inform each
other as to the activities or inquiries of any such Governmental Authority relating to this Agreement, and shall reasonably cooperate to respond to any request for further information therefrom on a timely basis. 
  
 7.5 Press Releases and Other Disclosures. No press release or other
public announcement concerning the existence or terms of this Agreement shall be made, either directly or indirectly, by either Party hereto, without first obtaining the written approval of the other Party. Once any public announcement or disclosure
has been approved in accordance with this Section, then either Party may appropriately communicate information contained in such permitted announcement or disclosure. Notwithstanding the foregoing provisions of this Article 
  

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 ***CONFIDENTIAL TREATMENT REQUESTED*** 
 Note: The portions hereof for which confidential 
 treatment are being requested are denoted with “*****”. 
  
  

 7, Company may (a) disclose the existence and terms of this Agreement where required, as reasonably determined by
Company, by applicable Law, by applicable stock exchange or Nasdaq regulation or by order or other ruling of a competent court and (b) disclose the existence and terms of this Agreement under obligations of confidentiality to auditors, legal counsel
and investment bankers in connection with exploring the issuance of securities in a public transaction; provided, however, that before making any such disclosure, prior written notice is given to CDC together with a description of the disclosure
that is intended to be made and the party or parties to whom such disclosure shall be made. Notwithstanding the foregoing provisions of this Section Article 7, CDC may (a) disclose the existence and terms of this Agreement where required, as
reasonably determined by the CDC, by applicable Law, by applicable stock exchange or Nasdaq regulation or by order or other ruling of a competent court and (b) disclose the existence and terms of this Agreement under obligations of confidentiality
to agents, auditors, advisors, contractors and investors and to potential agents, auditors, advisors, contractors and investors in connection with such CDC’s activities hereunder and in connection with such Party’s financing activities.

  
 ARTICLE 8 
 REPRESENTATIONS, WARRANTIES AND COVENANTS 
  
 8.1 Mutual Representations and Warranties. Company and CDC each represents and warrants that: 
  
 8.1.1 Such Party (a) is duly organized, validly existing, and in good
standing under the Laws of its incorporation; (b) is duly qualified and in good standing under the Laws of each jurisdiction where its ownership or lease of property or the conduct of its business requires such qualification, where the failure to be
so qualified would have a material adverse effect on its financial condition or its ability to perform its obligations hereunder; (c) has the requisite corporate power and authority and the legal right to conduct its business as now conducted and
hereafter contemplated to be conducted; (d) has or will obtain all necessary licenses, permits, consents, or approvals from or by, and has made or will make all necessary notices to, all Governmental Authorities having jurisdiction over such Party,
to the extent required for the ownership and operation of its business, where the failure to obtain such licenses, permits, consents or approvals, or to make such notices, would have a material adverse effect on its financial condition or its
ability to perform its obligations hereunder; and (e) is in compliance with its charter documents; 
  
 8.1.2 The execution, delivery and performance of this Agreement by such Party and all instruments and documents to be delivered by such Party hereunder
(a) are within the corporate power of such Party; (b) have been duly authorized by all necessary or proper corporate action; (c) do not conflict with any provision of the charter documents of such Party; (d) will not, to the best of such
Party’s knowledge, violate any law or regulation or any order or decree of any court of governmental instrumentality; (e) will not violate or conflict with any terms of any indenture, mortgage, deed of trust, lease, agreement, or other
instrument to which such Party is a party, or by which such Party or any of its property is bound; 
  

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 ***CONFIDENTIAL TREATMENT REQUESTED*** 
 Note: The portions hereof for which confidential 
 treatment are being requested are denoted with “*****”. 
  
  

 8.1.3 This Agreement has been duly executed and delivered by such Party and constitutes a legal,
valid and binding obligation of such Party, enforceable against such Party in accordance with its terms, except as such enforceability may be limited by applicable insolvency and other Laws affecting creditors’ rights generally, or by the
availability of equitable remedies; and 
  
 8.1.4 All of its
employees, officers, and consultants have executed agreements or have existing obligations under law requiring assignment to such Party of all inventions made by such individuals during the course of and as the result of their association with such
Party, and obligating such individuals to maintain as confidential such Party’s Confidential Information, as well as the Confidential Information of Persons doing business with such Party that such individuals may receive during the course of
and as the result of their association with such Party, to the extent required to support such Party’s obligations under this Agreement. 
  
 8.2 Company’s Representations. Company hereby represents, warrants and covenants as follows: 
  
 8.2.1 There is no claim or demand of any person or entity pertaining to, or
any proceeding which is pending or, to the knowledge of Company, threatened, that would have a material adverse effect on the ability of Company to carry out its obligations under this Agreement; and 
  
 8.2.2 Company has the full right, power and authority to grant, and is not
prohibited by the terms of any agreement to which it is a party from granting, the licenses granted to CDC under Article 5 hereof; 
  
 8.2.3 Company has not previously granted and will not grant any rights inconsistent with the rights and licenses granted herein; 
  
 8.2.4 as of the Effective Date, Company has provided to CDC all requested
documents in its files for, as well as all other information, to its knowledge, that is material to, the Company Intellectual Property, the Compound, Product and the BEMA Technology, including without limitation, any information that relates to the
patentability or validity of the Company Patent Rights; 
  
 8.2.5
to the best of Company’s knowledge, as of the Effective Date, the Company Patent Rights are valid and enforceable, and there are no Patent Rights or similar intellectual property rights of a third party that the manufacture, use or sale of
Product would infringe; 
  
 8.2.6 as of the Effective Date,
Company holds good title to and is the legal and beneficial owner of the Company Patent Rights, free and clear of all liens, security interests, charges and other encumbrances of any kind (other than unilateral creditor filings with respect to which
this representation shall be made to the best of Company’s knowledge), and no third party has any right, title or interest in the Company Patent Rights; 
  

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 ***CONFIDENTIAL TREATMENT REQUESTED*** 
 Note: The portions hereof for which confidential 
 treatment are being requested are denoted with “*****”. 
  
  

 8.2.7 as of the Effective Date, there are no pending claims, judgments or settlements against or owed
by Company pending with respect to the Company Intellectual Property, and, Company has not received written notice of any threatened claims or litigation seeking to invalidate the Company Patent Rights. During the term of this Agreement, Company
shall promptly notify CDC in writing upon learning of any such actual or threatened claim, judgment or settlement; 
  
 8.2.8 as of the Effective Date, there are no inquiries, actions or other proceedings pending before or, to the best of Company’s knowledge,
threatened by any Governmental Authority or other government agency with respect to Product or any facility where Product is manufactured, and Company has not received written notice threatening any such inquiry, action or other proceeding. As of
the Effective Date, there are no investigations pending before or, to the best of Company’s knowledge, threatened by any Governmental Authority or other government agency with respect to Product or any facility where Product is manufactured,
and Company has not received written notice threatening any such investigation. During the term of this Agreement, Company shall promptly notify CDC in writing upon learning of any such actual or threatened investigation, inquiry or proceeding;

  
 8.2.9 to the best of Company’s knowledge, the making,
using or selling of Product would not infringe the Patent Rights of any third party, and Company has no knowledge that any third party is infringing any of the Company Patent Rights; 
  
 8.2.10 as of the Effective Date, the development and manufacture of Product has been conducted by Company and its Affiliates
and subcontractors in compliance in all material respects with all applicable Laws and, as of the Effective Date, neither Company nor its Affiliates nor subcontractors have received any notice in writing, or otherwise has knowledge of any facts,
which have, or reasonably should have, led Company to believe that any of the INDs relating to Product are not currently in good standing with, the FDA; 
  
 8.2.11 Company has conducted all aspects of its drug research and development activities relating to the Compound and/or Product and/or BEMA Technology in
compliance with all applicable Laws, including, but not limited to, the provisions of the Act, including the regulations issued thereunder, and applicable cGMPs as they relate to processing or preparation of clinical trial materials. To the
Company’s knowledge, it is not the subject of any investigation by a Governmental Authority, nor has any investigation, prosecution, or other enforcement action been threatened by a Governmental Authority. The Company has not received from a
Governmental Authority any letter or other document asserting that the Company has violated any statute or regulation enforced by such agency; 
  
 8.2.12 To the Company’s knowledge, research involving human subjects conducted by or for the Company has (i) been conducted in compliance with all
applicable federal, state, and foreign statutes and regulations governing the protection of human subjects and (ii) not involved any investigator who has been disqualified as a clinical investigator by the FDA or any other agency or has been found
by any agency with jurisdiction to have engaged in scientific misconduct. The Company has conducted its clinical investigations in accordance with relevant study protocols and Institutional Review Board approvals and requirements, if 
  

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 ***CONFIDENTIAL TREATMENT REQUESTED*** 
 Note: The portions hereof for which confidential 
 treatment are being requested are denoted with “*****”. 
  
  

 applicable, has properly supervised use of the treatment drugs throughout the course of all studies, and has ensured
that informed patient consent is obtained where appropriate, consistent with the applicable requirements of 21 C.F.R. Part 50 and any state law requirements; 
  
 8.2.13 The Company has provided complete and accurate information concerning costs and expenses of its clinical trials in connection with any claims for
federal, state, or private third party reimbursement associated with such clinical trials; 
  
 8.2.14 Company has never been and is not currently debarred by the FDA pursuant to 21 U.S.C. §335(a) or (b) (“Debarred Entity”) and Company agrees that it will not obtain advice or assistance
from any individual debarred pursuant to 21 U.S.C. §335(a) or (b) Company has no knowledge of any circumstances that may affect the accuracy of the foregoing warranties and representations, including, but not limited to, FDA investigations of,
or debarment proceedings against, it or any person or entity with which it is associated or that provides services to Company, and Company will immediately notify CDC if it becomes aware of any such circumstances during the term of this Agreement;

  
 8.2.15 Company has, up to and including the Effective Date,
endeavored in good faith to furnish CDC with all material information concerning the quality, toxicity, safety and/or efficacy concerns that may materially impair the utility and/or safety of Products or any other information received from or
provided to a Governmental Authority with respect to the Products; 
  
 8.2.16 The Atrix License and each other agreement with a third party under which either (a) rights with respect to the Company Intellectual Property or other assets are or have been assigned, pledged or otherwise granted a lien under, or
licensed or sublicensed to or from Company, (b) activities with respect to the Compound and/or Product and/or BEMA Technology are or have been performed, or (c) which restrict or otherwise materially effect the Product or the Compound (collectively
the “Company Agreements”) are in full force and effect, and no party (including Company) to those Company Agreements is in breach or default thereunder. Company has provided a true and complete copy of each Company Agreement to CDC.
Company shall devote commercially reasonable best efforts to maintain in full force and effect and to fully perform its obligations thereunder and to keep CDC fully informed of any material development pertaining thereto that would have an adverse
effect on CDC’s rights under this Agreement. Company shall not, without the prior written approval of CDC: (i) amend any provision of an Company Agreement that would have an adverse effect on CDC’s rights under this Agreement or (ii) make
any election or exercise any right or option to terminate in whole or in part any Company Agreement. 
  
 8.2.17 The Warrant being issued to CDC has been duly authorized, and the shares of common stock to be issued upon exercise of the Warrant will, upon
issuance pursuant to the terms thereof, be duly authorized and validly issued, fully paid and nonassessable 
  
 8.2.18 Company has the lawful right and license, pursuant to the Atrix License, to use the BEMA Technology, including, without limitation, in connection
with the development, manufacture, marketing, distribution, sale and commercialization of the Product. 
  

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 ***CONFIDENTIAL TREATMENT REQUESTED*** 
 Note: The portions hereof for which confidential 
 treatment are being requested are denoted with “*****”. 
  
  

 8.2.19 On or prior to the Effective Date, to the extent not owned by Subsidiary as of the Effective
Date, BioDelivery shall assign, convey and transfer all assets related to the Product to Subsidiary. During the term of this Agreement, all rights, licenses and assets related to the Product shall continue to be held, owned or licensed to
Subsidiary. 
  
 8.3 CDC’s Representations. CDC hereby
represents and warrants that there is no claim or demand of any person or entity pertaining to, or any proceeding which is pending or, to the knowledge of CDC, threatened, that would have a material adverse effect on the ability of CDC to carry out
its obligations under this Agreement. 
  
 8.4 Covenants of
CDC. Subject to Section 11.9, during the term of this Agreement, CDC, without the prior written consent of Company, such consent not to be unreasonably withheld, shall not sell, license, encumber or otherwise transfer to a third party any of
CDC’s assets related to Company, Product or the Program Data. 
  
 8.5 Covenants of Company. 
  
 8.5.1 Except with
respect to sublicenses granted by Company in accordance with the provisions of this Agreement, during the term of this Agreement, Company, without the prior written consent of CDC, shall not sell, license, encumber or otherwise transfer to a third
party any of the Company Intellectual Property, the NDA for the Product, or Company’s ownership or other proprietary rights in the Product, or otherwise grant any third party any rights to market, sell, develop or otherwise commercialize the
Product. 
  
 8.5.2 During the period commencing on the date of
this Agreement and continuing until Approval of the NDA, Company shall not, without the prior written consent of CDC, which consent shall not be unreasonably withheld, make capital expenditures, purchase any assets, enter into any in-licensing
arrangement or enter into any leasing arrangement involving payments in excess of one million dollars ($1,000,000) in any calendar year; provided, however, that if the Company receives net proceeds of more than four million dollars ($4,000,000) in
connection with the issuance and sale of its securities or the funding of any of its development programs, following the date hereof, then the Company shall be permitted to make additional expenditures in excess in excess of one million dollars for
any particular calendar year in an amount equal to the net proceeds or funding raised in excess of four million dollars ($4,000,000). 
  
 8.6 Legal Opinion. At the Effective Date, Company shall cause to be delivered to CDC a legal opinion from counsel to the Company, in a form
reasonably satisfactory to CDC. 
  
 8.7 Accounting. The
Company shall account for the transactions contemplated herein as a ******** transaction. 
  
 ARTICLE 9 
 Indemnification 
  
 9.1 Indemnification by Company. Company agrees to defend CDC and its Affiliates at Company’s cost and expense,
and will indemnify and hold CDC and its Affiliates and their 
  

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 ***CONFIDENTIAL TREATMENT REQUESTED*** 
 Note: The portions hereof for which confidential 
 treatment are being requested are denoted with “*****”. 
  
  

 respective directors, officers, employees and agents, including, without limitation, CDC’s representatives on
the Development Committee (the “CDC Indemnified Parties”) harmless from and against all Claims of third parties, and all associated Losses, based on or relating to (i) any breach by Company of any of its representations, warranties
or obligations pursuant to this Agreement, (ii) Company’s negligence or misconduct in performing any of its obligations under this Agreement, or (iii) the development (including, without limitation, CDC’s participation in the Development
Program and representation on the Development Committee), manufacture, use, sale or other disposition of Compound and/or Product and/or BEMA Technology; provided, however, that Company shall not be responsible for the indemnification or defense of
any CDC Indemnified Party arising from any gross negligence or willful misconduct by any CDC Indemnified Party. 
  
 9.2 Procedure for Indemnification. 
  
 9.2.1 Notice. CDC will notify promptly Company if it becomes aware of a Claim (actual or potential) by any third party (a “Third Party
Claim”) for which indemnification may be sought by CDC and will give such information with respect thereto as Company shall reasonably request. If any proceeding (including any governmental investigation) is instituted involving any Party
for which a CDC Indemnified Party may seek an indemnity under Section 9.1, the CDC Indemnified Party shall not make any admission or statement concerning such Third Party Claim, but shall promptly notify Company orally and in writing and Company and
CDC Indemnified Party shall meet to discuss how to respond to any Third Party Claims that are the subject matter of such proceeding. Company shall not be obligated to indemnify the CDC Indemnified Party to the extent any admission or statement made
by the CDC Indemnified Party or any failure by such CDC Indemnified Party to notify Company of the claim materially prejudices the defense of such claim. 
  
 9.2.2 Defense of Claim. If Company elects to defend or, if local procedural rules or laws do not permit the same, elects to control the defense of
a Third Party Claim, it shall be entitled to do so provided (i) it gives notice to the CDC Indemnified Party of its intention to do so within forty-five (45) days after the receipt of the written notice from the CDC Indemnified Party of the
potentially indemnifiable Third Party Claim; (ii) the defense of such Third Party Claim by Company will not, in the reasonable judgment of the CDC Indemnified Party, have an adverse effect on the CDC Indemnified Party; (iii) Company has sufficient
financial resources, in the reasonable judgment of the CDC Indemnified Party, to satisfy the amount of any adverse monetary judgment that is reasonably likely to result; (iv) the Third Party Claim solely seeks (and continues to seek) monetary
damages; and (v) Company expressly agrees in writing that as between Company and the CDC Indemnified Party, Company may only satisfy and discharge the Third Party Claim in accordance with the provisions set forth in this Agreement (the conditions
set forth in clauses (i) through (v) are collectively referred to as the “Litigation Conditions”); and provided further, that Company expressly agrees Company shall be responsible for satisfying and discharging any award made to the
Third Party as a result of such proceedings or settlement amount agreed with the Third Party in respect of the Third Party Claim. Subject to compliance with the Litigation Conditions, Company shall retain counsel reasonably acceptable to the CDC
Indemnified Party (such acceptance not to be unreasonably withheld) to represent the CDC Indemnified Party and shall pay the fees and expenses of such counsel related to such 
  

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 ***CONFIDENTIAL TREATMENT REQUESTED*** 
 Note: The portions hereof for which confidential 
 treatment are being requested are denoted with “*****”. 
  
  

 proceeding. In any such proceeding, the CDC Indemnified Party shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of the CDC Indemnified Party. The CDC Indemnified Party shall not settle any claim for which it is seeking indemnification without the prior consent of Company which consent shall not be
unreasonably withheld. The CDC Indemnified Party shall, if requested by Company, cooperate in all reasonable respects in the defense of such claim that is being managed and/or controlled by Company at the sole cost and expense of Company. Company
shall not, without the written consent of the CDC Indemnified Party (which consent shall not be unreasonably withheld), effect any settlement of, or the entry of any judgment arising from, any pending or threatened proceeding in which the CDC
Indemnified Party is, or based on the same set of facts could have been, a party and indemnity could have been sought hereunder by the CDC Indemnified Party, which (1) does not include as an unconditional term thereof the giving by the claimant or
the plaintiff to the CDC Indemnified Party a complete release from all liability in respect of such claims that are the subject matter of such proceeding, or (2) grants any injunctive or equitable relief, or (3) may reasonably be expected to have an
adverse effect on the business of the CDC Indemnified Party. If the Litigation Conditions are not met, then neither Party shall have the right to control the defense of such Third Party Claim and the Parties shall cooperate in and be consulted on
the material aspects of such defense at the each Party’s own expense. In the event that at any time (A) the Litigation Conditions cease to be met or (B) Company fails to take reasonable steps necessary to defend diligently such Third Party
Claim, the CDC Indemnified Party may assume its own defense, and Company shall be liable for all reasonable costs or expenses paid or incurred by the CDC Indemnified Party in connection with such defense. 
  
 9.3 Assumption of Defense. Notwithstanding anything to the contrary
contained herein, a CDC Indemnified Party shall be entitled to assume the defense of any Third Party Claim with respect to the CDC Indemnified Party, upon written notice to Company pursuant to this Section 9.3, in which case Company shall be
relieved of liability under Section 9.1, as applicable, solely for such Third Party Claim and related Losses. 
  
 9.4 No Consequential or Punitive Damages. NEITHER PARTY HERETO WILL BE LIABLE FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, EXEMPLARY OR
PUNITIVE DAMAGES ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT, OR FOR LOST PROFITS ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT, REGARDLESS OF ANY NOTICE OF SUCH DAMAGES. NOTHING IN THIS SECTION 9.4 IS INTENDED TO LIMIT OR
RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS UNDER THIS AGREEMENT WITH RESPECT TO THIRD PARTY CLAIMS. 
  
 9.5 Insurance. Company agrees to maintain insurance coverage or self-insure in commercially reasonable amounts for compensation for subjects
sustaining any injury resulting from enrollment in the clinical trials conducted under the Development Program and use of the Product. 
  
 9.6 Third Party Indemnification. In the event that Company receives compensation from a third party to compensate Company for lost Net Sales of the
Product, Company shall pay CDC a royalty calculated in accordance with the applicable royalty rate provided under 
  

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 ***CONFIDENTIAL TREATMENT REQUESTED*** 
 Note: The portions hereof for which confidential 
 treatment are being requested are denoted with “*****”. 
  
  

 Section 6.6 multiplied by the amount of the compensation received from such third party to compensate Company for the
lost Net Sales, less the expenses incurred by Company in connection with the enforcement of its Claims. 
  
 ARTICLE 10 
 TERM AND TERMINATION 
  
 10.1 Term. This Agreement shall be effective as of the Effective Date
and shall continue in force until terminated as provided herein. 
  
 10.2 Termination for Breach. A non-breaching Party may terminate this Agreement by notice to the other Party if the breaching Party is in default of any of its obligations hereunder, which default or defaults, in the aggregate, are
material with respect to the transactions contemplated by this Agreement and (if susceptible of cure) fails to remedy such default(s) within thirty (30) days after notice thereof by the non-breaching Party in the case of payment default(s) or sixty
(60) days after notice thereof by the non-breaching Party in the case of all other default(s), such notice in either case specifying in reasonable detail the nature of such default(s); provided that in no event shall Company be entitled to terminate
this Agreement after CDC has paid the Commitment. 
  
 10.3
Termination for Reasons of Insolvency or Termination of Business Activities. Either Party shall be entitled to terminate this Agreement if the other Party becomes insolvent or is the subject of a petition in bankruptcy whether voluntary or
involuntary or of any other proceeding under bankruptcy, insolvency or similar laws, makes an assignment for the benefit of creditors, is named in such a petition, or its property is subject to a suit for the appointment of a receiver, or is
dissolved or liquidated. Such termination right may be exercised within sixty (60) days following the date as of which the Party entitled to terminate receives knowledge of such insolvency or termination of business activities by the other Party, by
giving the terminated Party written notice, if such petition or proceeding is not dismissed within such sixty (60) day period; provided that in no event shall Company be entitled to terminate this Agreement after CDC has paid the Commitment.

  
 10.4 CDC’s Right to Terminate for Discontinuance of
the Development Program or Funding Termination Event; Unsatisfied Commitment Contingency; Other Events. 
  
 10.4.1 Company shall immediately (but in no event later than two (2) Business Days after occurrence of a Development Program Termination) provide to CDC
written notice in the event Company decides to discontinue the Development Program; provided, however that Company shall be deemed to have provided such notice if, in the reasonable opinion of CDC, Company is no longer actively engaged in the
development of Product (a “Development Program Termination”). If Company provides, or is deemed to have provided, notice of a Development Program Termination, CDC shall have the right, at any time, to terminate this Agreement upon
thirty (30) days’ written notice. 
  
 10.4.2 Company shall
immediately (but in no event later than two (2) Business Days after occurrence of a Funding Termination Event) provide to CDC written notice of any 
  

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 ***CONFIDENTIAL TREATMENT REQUESTED*** 
 Note: The portions hereof for which confidential 
 treatment are being requested are denoted with “*****”. 
  
  

 Funding Termination Event; provided, however that Company shall be deemed to have provided such notice if, in the
reasonable opinion of CDC, a Funding Termination Event has occurred. If Company provides, or is deemed to have provided, notice of a Funding Termination Event, CDC shall have the right, at any time, to terminate this Agreement upon thirty (30)
days’ written notice. 
  
 10.4.3 CDC shall have the right to
terminate this Agreement at any time on or after February 28, 2007 immediately upon written notice if the Commitment Contingency has not been satisfied by February 28, 2007. 
  
 10.4.4 CDC shall have the right to terminate this Agreement at any time after: (i) Company is in default under any
agreement, document or instrument relating to any indebtedness in excess of $1,000,000, and the holder of such indebtedness has accelerated or otherwise demand payment for such indebtedness, which default is not waived or cured during any applicable
cure period set forth in any agreement or instrument underlying such indebtedness; (ii) a money judgement, writ of attachment or similar process if filed against the Company or its assets in excess of $500,000, whether individually or in the
aggregate, which such judgment, attachment or similar process is not stayed or otherwise unsatisfied for a period of sixty (60) days. 
  
 10.4.5 CDC shall have the right to terminate this Agreement at any time following a breach or alleged breach by the Company of the Atrix License.

  
 10.5 Effect of Termination by CDC. Except as set forth
in Section 10.7, in the event that this Agreement is terminated by CDC pursuant to Sections 10.2, 10.3 or 10.4 (other than a termination under Section 10.4.3, in which case only 10.5.8 shall apply), the following shall occur: 
  
 10.5.1 Return of Materials. Company shall, at its sole expense,
promptly transfer to CDC copies of all data, reports, records and materials in its possession or control that relate to the Product and return to CDC, or destroy at CDC’s request, all relevant records and materials in its possession or control
containing Confidential Information of CDC (provided that Company may keep one copy of such Confidential Information of CDC for archival purposes only); 
  
 10.5.2 Transfer of Regulatory Filings and Company Know-How. Company shall, at its sole expense, transfer to CDC, or shall cause its designee(s) to
transfer to CDC, ownership of all regulatory filings made or filed for Product, including, without limitation, any and all NDAs and related to the Product. Company shall transfer to CDC the physical embodiment of Company Know-How; 
  
 10.5.3 License Rights. Company shall grant to CDC an exclusive (even
as to Company and its Affiliates) worldwide right and license, with the right to sublicense, under the Company Intellectual Property to make, have made, develop, manufacture, use, sell, offer for sale, and have sold Compound and/or Product on an
exclusive, royalty-free basis (subject to the terms and conditions and payment obligations under the Atrix License); provided, however that no assignment, license or transfer to CDC under this Section 10.5.3 shall be required of the 
  

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 ***CONFIDENTIAL TREATMENT REQUESTED*** 
 Note: The portions hereof for which confidential 
 treatment are being requested are denoted with “*****”. 
  
  

 Company with respect to intellectual property or related assets to the extent that Atrix has terminated the right of
the Company to such intellectual property or related assets. Any licenses granted by CDC to Company hereunder shall terminate, including, without limitation, licenses and rights to the Program Data, and Company shall have no further rights to use or
reference in any way such Program Data; 
  
 10.5.4 Assignment
of Rights in the Trademark and Promotional Material. To the extent there are any trademarks or promotional materials associated with the Product, Company shall, at its own expense, assign to CDC any rights it may have in such trademark and/or
promotional materials, and the trademark and rights in the promotional materials shall be owned by CDC; 
  
 10.5.5 Manufacturing. For Product then being manufactured by or on behalf of Company, if any, the Parties shall, at CDC’s sole discretion, (a)
negotiate, in good faith, a supply agreement for Product on commercially reasonable terms, or (b) transfer any required technology to CDC or its designee to enable CDC or such designee to manufacture Product; provided that, in any event, Company
shall ensure, for up to two (2) years, that CDC has a continuous and uninterrupted supply of Product until such supply agreement or transition is accomplished; 
  

10.5.6 Clinical Supplies. Company shall transfer to CDC all clinical supplies of Product in Company’s inventory; 
  
 10.5.7 Transition During Notice Period. During the notice periods
required pursuant to Sections 10.2, 10.3 or 10.4, Company shall be obligated to maintain its Commercially Reasonable Efforts to develop and undertake all reasonable efforts to transition any such activities to CDC to enable CDC to continue the
development of Product after such applicable notice period. Additionally, Company shall make its personnel available to CDC to answer any questions regarding Product or the clinical trials and to otherwise assist with the transition; and 

 
 10.5.8 No Further Payments. CDC shall have no further obligations
to pay any amounts to Company pursuant to Article 6. 
  
 10.6
Effect of Termination for CDC’s Breach or Insolvency. In the event that this Agreement is terminated by Company pursuant to Sections 10.2 or 10.3 prior to CDC paying the Commitment, the following shall occur: 
  
 10.6.1 Return of Materials. CDC shall, at its sole expense, promptly
transfer to Company copies of all data, reports, records and materials in its possession or control that relate to Product and return to Company, or destroy at Company’s request, all relevant records and materials in its possession or control
containing Confidential Information of Company (provided that CDC may keep one copy of such Confidential Information of Company for archival purposes only); 
  
 10.6.2 Transfer and Assignment of Program Data. CDC shall, at its sole expense, transfer to Company, or shall cause its designee(s) to transfer to
Company, ownership of all Program Data; and 
  

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 treatment are being requested are denoted with “*****”. 
  
  

 10.6.3 License Rights. All licenses granted by Company to CDC under this Agreement shall be
terminated. 
  
 10.6.4 No Further Payments. CDC shall have
no further obligations to pay any amounts to Company pursuant to Article 6. 
  
 10.7 Termination in the Event That Company Continues Development Program. In the event that this Agreement is terminated by CDC pursuant to Sections 10.4.2 or 10.4.4, and the Company provides written notice to
CDC (the “Continuation Notice”) that it intends to continue the Development Program within ten (10) days after CDC provides notice to terminate, then to the extent: (i) the Company repays to CDC any and all Upfront Payments and
Periodic Payments made by CDC, together with any and all other costs and expenses owed by Company to CDC under this Agreement within thirty (30) days after delivery of the Continuation Notice; and (ii) within thirty (30) days after delivery of the
Continuation Notice, Company acknowledges in writing, in form and substance to be satisfactory to CDC, to continue to pay all royalties and otherwise comply with the provisions of Sections 6.6. 6.7, 6.8, 6.9 and 6.10 contained herein (provided,
however, that the royalty obligation shall be prorated and the amounts due shall be based upon the royalty rates set forth in Sections 6.6.1 (a) and 6.6.1 (b) multiplied by the fraction calculated as follows: the numerator shall be the aggregate
Upfront Payment and Periodic Payments advanced CDC to Company and the denominator shall be $7,000,000), then the provisions of Sections 10.5.1 through 10.5.7 shall not apply. 
  
 10.8 Accrued Rights; Surviving Obligations. Notwithstanding any termination or expiration of this Agreement, neither
Party shall be relieved of any obligations incurred prior to such termination or expiration, including without limitation payment obligations accrued prior to such termination. The following provisions will survive termination or expiration of this
Agreement: Section 6.9, Section 6.10, Article 7, Section 8.1, Section 8.2, Section 8.3, Section 8.6, Article 9, Section 10.5, Section 10.6, this Section 10.8 and Article 11. Upon any termination or expiration of this Agreement each Party shall
promptly return to the other Party all written Confidential Information, and all copies thereof, of such other Party. 
  
 ARTICLE 11 
 MISCELLANEOUS

  
 11.1 Governing Law. This Agreement shall be
governed by and interpreted in accordance with the internal laws of the State of New York, without regard to its conflicts of laws rules. 
  
 11.2 Dispute Resolution. 
  
 11.2.1 Dispute Resolution Process. The Parties understand and appreciate that their long term mutual interest will be best served by affecting a
rapid and fair resolution of any claims or disputes which may arise out of this Agreement. Therefore, the Parties agree to use their best efforts to resolve all such disputes as rapidly as possible on a fair and equitable basis that takes into
account the precise subject and nature of the dispute. If the Parties have a dispute or claim arising under this Agreement, the matter shall be referred to the Development 
  

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 Committee. If the Development Committee cannot readily resolve such matter within fifteen (15) days after such matter
has been referred to the Development Committee, then the matter shall be referred to the senior officers or their designees for review and an attempted resolution. The officers shall confer and attempt to reach a mutual resolution of the issue.

  
 11.2.2 Agreement to Settle Disputes by Arbitration. If
the dispute cannot be resolved by the Parties’ respective senior officers (or their designees) pursuant Section 11.2.1 within fifteen (15) days after the dispute has been so referred, then, at the request through notice of either Company or
CDC, any controversy or claim arising between the Parties and related to or arising out of the construction, interpretation, or enforcement of any term or condition of this Agreement or any transaction hereunder (including the decision to enter into
this Agreement), shall be submitted to arbitration. Such arbitration shall be conducted in New York, New York, and in either case shall be conducted in accordance with the applicable Rules of the American Arbitration Association in effect on the
date of such controversy or claim. 
  
 11.2.3 Appointment of
Arbitrators. Within thirty (30) days after the delivery pursuant to Section 11.2.2 of a notice of request for arbitration, Company and CDC shall each appoint one independent person as an arbitrator to hear and determine the dispute. The two
persons so chosen shall by agreement select a third, impartial arbitrator, which selection shall be final and conclusive upon both Parties. Each arbitrator shall be experienced in international and domestic manufacturing and distribution of products
similar to Product. If either Party fails to designate its arbitrator within sixty (60) days after the notice of arbitration is received, then the arbitrator designated by the one Party shall act as the sole arbitrator and shall be deemed to be the
single, mutually approved arbitrator to resolve the dispute. 
  
 11.2.4 Arbitrators’ Powers. The arbitrators shall have all the powers of a State or Federal Court located at the site of the arbitration, including the power to order specific enforcement of this Agreement and to order the
production of relevant and non-privileged documents by one Party for inspection and duplication by the other Party prior to the arbitration hearing; provided that notwithstanding the foregoing, the arbitrators shall be bound by this Agreement with
regard to the restriction on consequential, incidental, and punitive damages as set forth in this Agreement. 
  
 11.2.5 Discovery. The arbitrators prior to the hearing shall grant discovery pursuant to the intendment of the Federal Rules of Civil Procedure,
and as the arbitrators determine to be appropriate under the circumstances. 
  
 11.2.6 Protective Order. In the event of arbitration and at the request of either Company or CDC, in order to protect Confidential Information and any other matter that either Party would normally not reveal to
third parties, the arbitrators shall enter a protective order in such form as the Parties shall stipulate or as the arbitrators shall determine is suitable. Among other things, the protective order shall stipulate that the arbitrators themselves
shall receive any information designated by either Party as “confidential” solely for purposes of assessing the facts and law for purposes of the arbitration, and shall not otherwise use or disclose such matter. At the request of either
Party, the protective order shall be entered as an award of the arbitration panel and shall enable either Party to obtain the assistance of a court of competent jurisdiction to enter equitable decrees or other relief to enforce the provisions of the
order as if it had been entered by that court. 
  

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 11.2.7 Effect of Decision. The decision of the arbitrators shall state the reason for the
award and shall be final, binding and conclusive upon the Parties. The Parties shall comply with such decision in good faith as if it were a final decision of a court. Judgment upon the award shall be entered in any court of competent jurisdiction.
Any award made in connection with any arbitration shall be made in United States Dollars. 
  
 11.2.8 Rights of Third Parties. Notwithstanding the agreement to arbitrate any dispute between Company and CDC, in the event that a controversy or claim between Company and CDC involves an adjudication of the
rights of a third party, and that third party does not agree to submit to arbitration and would under Rule 19(a) of the Federal Rules of Civil Procedure, if feasible, be joined as an indispensable party, then the dispute shall be brought to, and
determined by, a court of the competent jurisdiction. 
  
 11.2.9
Interim Relief. Upon the application of either Party to this Agreement, regardless of whether the time periods have been exhausted in Section 11.2.1 and 11.2.2 and whether or not an arbitration, mediation or attempt to settle amicably has yet
been initiated, all courts having jurisdiction over one or more of the Parties are authorized to: (a) issue and enforce in any lawful manner such temporary restraining orders, preliminary injunctions and other interim measures of relief as may be
necessary to prevent harm to a Party’s interests or as otherwise may be appropriate pending the conclusion of arbitration proceedings pursuant to this Agreement; and (b) enter and enforce in any lawful manner such judgments for permanent
equitable relief as may be necessary to prevent harm to a Party’s interests or as otherwise may be appropriate following the issuance of arbitral awards pursuant to this Agreement. 
  
 11.3 Waiver. Waiver by a Party of a breach hereunder by the other Party shall not be construed as a waiver of any
succeeding breach of the same or any other provision. No delay or omission by a Party to exercise or avail itself of any right, power or privilege that it has or may have hereunder shall operate as a waiver of any right, power or privilege by such
Party. No waiver shall be effective unless made in writing with specific reference to the relevant provision(s) of this Agreement and signed by a duly authorized representative of the Party granting the waiver. 
  
 11.4 Notices. All notices, instructions and other communications
hereunder or in connection herewith shall be in writing, shall be sent to the address below and shall be: (a) delivered personally; (b) sent by registered or certified mail, return receipt requested, postage prepaid; (c) sent via a reputable
nationwide overnight courier service; or (d) sent by facsimile transmission. Any such notice, instruction or communication shall be deemed to have been delivered upon receipt if delivered by hand, three (3) Business Days after it is sent by
registered or certified mail, return receipt requested, postage prepaid, one (1) Business Day after it is sent via a reputable nationwide overnight courier service, or when transmitted with electronic confirmation of receipt, if transmitted by
facsimile (if such transmission is on a Business Day; otherwise, on the next Business Day following such transmission). 
  

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	 Notices to Company shall be addressed to:

	
	 BioDelivery Sciences International, Inc.

	 2501 Aerial Center Parkway, Suite 205

	 Morrisville, NC 27560

	 Facsimile: 919-653-5161

	 Attention: Mark A. Sirgo, Pharm.D.

	
	 with a copy to:

	
	 Wyrick Robbins Yates & Ponton LLP

	 4101 Lake Boone Trail

	 Suite 300

	 Raleigh, NC 27607

	 Attention: Larry E. Robbins

	
	 Notices to CDC shall be addressed to:

	
	 Clinical Development Capital LLC

	 47 Hulfish Street, Suite 310

	 Princeton, NJ 08542

	 Facsimile: 609-683-5787

	 Attention: Chief Financial Officer, and David R. Ramsay

	
	 with a copy to:

	
	 Morgan, Lewis & Bockius LLP

	 502 Carnegie Center

	 Princeton, NJ 08540

	 Facsimile: 609.919.6701

	 Attention: Denis Segota, Esq.

  
 Either Party may change its address by
giving notice to the other Party in the manner provided above. 
  
 11.5 Entire Agreement. This Agreement (including Schedules) and the Warrant contains the complete understanding of the Parties with respect to the subject matter herein and supersedes all prior understandings and writings relating to
such subject matter. This Agreement may be altered, amended or changed only by a writing making specific reference to this Agreement and signed by duly authorized representatives of Company and CDC. 
  
 11.6 Headings. Headings in this Agreement are for convenience of
reference only and shall not be considered in construing this Agreement. 
  

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 11.7 Severability. If any provision of this Agreement is held unenforceable by a court or
tribunal of competent jurisdiction because it is invalid or conflicts with any Law of any relevant jurisdiction, the validity of the remaining provisions shall not be affected. In such event, the Parties shall negotiate a substitute provision that,
to the extent possible, accomplishes the original business purpose. 
  
 11.8 Expenses. Subject to the limitations contained in this Agreement, the Company shall pay, and save CDC harmless from all liability for the payment of: (i) Transaction Expenses (which amount shall be deducted from the Upfront
Fee); (ii) all costs and other expenses incurred in connection with the Company’s performance of, and compliance with the terms and conditions of this Agreement, and the documents entered into in connection herewith and any and all amendments
thereto; and (iii) all costs incurred by CDC in enforcing its rights hereunder. 
  
 11.9 Assignment. Except as otherwise provided herein, neither this Agreement nor any of the rights or obligations hereunder (including, without limitation, with respect to the Development Program) or to Product
may be assigned by either Party without the prior consent of the other Party, such consent not to be unreasonably withheld; provided, however, that: (i) either Party may assign this Agreement upon a Change of Control of such Party without the
consent of the other Party; and (ii) CDC may provide a security interest in CDC’s interest in Product, Program Data and/or Company Intellectual Property to its lenders and may, subject to the terms and conditions of this Agreement, assign this
Agreement, whether in whole or in part, in connection with the sale or other transfer of its right to receive payments under this Agreement without any further required consent. Any attempted assignment in violation hereof shall be void. 

 
 11.10 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the Parties hereto and their respective successors and permitted assigns, including without limitation, any successor or assignee of the Company Intellectual Property, who shall be bound by the obligations of Company in
this Agreement. 
  
 11.11 Counterparts; Facsimile
Signatures. This Agreement may be executed in two counterparts, each of which shall be deemed an original, but both of which together shall constitute one and the same instrument. Signatures provided by facsimile transmission shall be deemed to
be original signatures. 
  
 11.12 Third-Party
Beneficiaries. None of the provisions of this Agreement shall be for the benefit of or enforceable by any third party, including, without limitation, any creditor of either Party. No such third party shall obtain any right under any provision of
this Agreement or shall by reason of any such provision make any claim in respect of any debt, liability or obligation (or otherwise) against either Party. 
  
 11.13 Relationship of the Parties. Each Party shall bear its own costs incurred in the performance of its obligations hereunder without charge or
expense to the other, except as expressly provided in this Agreement. Neither Party shall have any responsibility for the hiring, termination or compensation of the other Party’s employees or for any employee compensation or benefits of the
other Party’s employees. No employee or representative of a Party shall have 
  

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 any authority to bind or obligate the other Party to this Agreement for any sum or in any manner whatsoever, or to
create or impose any contractual or other liability on the other Party without said other Party’s approval. Nothing in this Agreement shall be construed to establish a relationship of partners or joint venturers between the Parties. 

 
 [SIGNATURE PAGE FOLLOWS] 
  

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 ***CONFIDENTIAL TREATMENT REQUESTED*** 
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 treatment are being requested are denoted with “*****”. 
  
  

 IN WITNESS WHEREOF, the Parties have signed this Agreement as of the Effective Date. 
  

			
	BIODELIVERY SCIENCES INTERNATIONAL, INC.
		
	By:	 	 /s/ Mark A. Sirgo

	Name:	 	Mark A. Sirgo
	Title:	 	President and COO
	
	ARIUS PHARMACEUTICALS, INC.
		
	By:	 	 /s/ Mark A. Sirgo

	Name:	 	Mark A. Sirgo
	Title:	 	President
	
	CLINICAL DEVELOPMENT CAPITAL LLC
		
	By:	 	 /s/ David R. Ramsay

	Name:	 	David R. Ramsay
	Title:	 	Authorized Signatory

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