Document:

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                                                                   Exhibit 4.1

                              WARRANT AGREEMENT

        THIS AGREEMENT is dated this ____ day of _______________, 2002, by and
among BIODELIVERY SCIENCES INTERNATIONAL, INC., a Delaware corporation, having
its offices at UMDNJ New Jersey Medical School, 185 Orange Avenue,
Administrative Building 4, Newark, New Jersey 07103 (the "Company"), American
Stock Transfer & Trust Company, a ______________ corporation, having its
offices at ______________________, as agent (the "Warrant Agent"), and
Roan/Meyers Associates, L.P., a New York limited partnership as representative
of the several Underwriters listed in the prospectus included in the
Registration Statement (as defined below) under the heading Underwriters,
having its offices at 17 State Street, New York, New York 10004.

        WHEREAS, pursuant to a Registration Statement on Form SB-2,
registration no. 333- ______ (the "Registration Statement") filed with the
Securities and Exchange Commission (the "Commission") and pursuant to an
underwriting agreement between the Company and the Underwriter dated
__________, 2001 (the "Underwriting Agreement") relating to the Company's
proposed public offering, the Company proposes to issue up to 2,300,000 units
(the "Units") (inclusive of 300,000 Units subject to the Representative's
overallotment option), each Unit consisting of one (1) share of the Company's
Common Stock, par value $0.01 per share (the "Common Stock"), one (1) Class A
Redeemable Common Stock Purchase Warrant (the "Class A Warrant"), and further
proposes to issue to the Representative or its designees an Option to purchase
200,000 additional Units (the "Representative's Purchase Option"); and

        WHEREAS, each Class A Warrant is redeemable by the Company for $0.10
per Warrant, upon 30 days' prior written notice, if the average closing sale
price of the Common Stock, as reported by the principal exchange on which the
Common Stock is traded, Nasdaq Stock Market, the OTC Bulletin Board or the
National Quotation Bureau Incorporated, as the case may be, equals or exceeds
One Hundred Fifty Percent (150%) of the then applicable Class A Warrant
Exercise Price for ten (10) consecutive trading days ending prior to the date
of the notice of redemption as provided herein; and

        WHEREAS, the Company desires the Warrant Agent, and the Warrant Agent
agrees, to act on behalf of the Company in connection with the issuance,
registration, exercise, division, transfer, exchange, replacement, redemption
and surrender of the Warrant Certificates for Class A Warrants and the rights
of the holders thereof;

        NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth, and for the purpose of defining the terms
and provisions of the Class A Warrants, the Class A Warrant Certificates, and
the respective rights and obligations thereunder of the Company, the
Registered Holders, the Representative on behalf of the Underwriters and the
Warrant Agent, the parties hereto agree as follows:

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        SECTION 1.  DEFINITIONS.  As used herein, the following terms shall
have the following meanings, unless the context shall otherwise require:

        (a)    "Business Office" shall mean the office of the Warrant Agent
               (or its successor) at which at any particular time its
               principal business shall be administered, which office is
               located on the date hereof at______________________________.

        (b)    "Change of Shares" shall have the meaning ascribed thereto in
               Section 8(a)(i) herein.

        (c)    "Class A Warrant" shall mean one (1) Class A Redeemable Common
               Stock Purchase Warrant of the Company.

        (d)    "Class A Warrant Certificates" shall mean certificates
               representing Class A Warrants.

        (e)    "Class A Warrant Exercise Price" shall mean the purchase price
               to be paid upon exercise of each Class A Warrant in accordance
               with the terms hereof, which price shall be $__ per share,
               subject to adjustment as provided in Section 8 herein.

        (f)    "Class A Warrant Redemption Date" shall mean that date, if any,
               upon thirty (30) days' prior written notice, provided that the
               average closing price or bid price of the Common Stock, as
               reported by the principal exchange on which the Common Stock is
               traded, Nasdaq Stock Market, the OTC Bulletin Board or the
               National Quotation Bureau Incorporated, as the case may be,
               equals or exceeds One Hundred Fifty Percent (150%) of the then
               applicable Class A Warrant Exercise Price for 10 consecutive
               trading days prior to the date of the notice of redemption.

        (g)    "Commission" shall mean the United States Securities and
               Exchange Commission or any other federal agency at the time
               administering the Securities Act.

        (h)    "Common Stock" shall mean stock of the Company of any class or
               series, whether now or hereafter authorized, which has the
               right to participate in the distribution of earnings and assets
               of the Company without limit as to amount or percentage, which
               at the date hereof is the __________ authorized shares of
               Common Stock, par value $0.01 per share, of the Company.

        (i)    "Company" shall mean Biodelivery Sciences International, Inc.,
               a [Delaware corporation].

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        (j)    "Effective Date" shall mean the date a registration statement
               relating to the Common Stock underlying the Warrants is
               declared effective by the Securities and Exchange Commission.

        (k)    "Exchange Act" shall mean the Securities Exchange Act of 1934,
               as amended, or any similar federal statute, and the rules and
               regulations of the Commission thereunder, all as the same shall
               be in effect at the time.

        (l)    "Exercise Date" shall have the meaning ascribed thereto in
               Section 4 herein.

        (m)    "Exercise Period" with respect to Class A Warrants shall mean
               the period commencing on their respective First Exercise Date
               and terminating on their respective Expiration Date.

        (n)    "Expiration Date" shall mean 5:00 p.m. (New York time) on the
               date which is the earlier of the fourth anniversary of the
               First Exercise Date or the last business day immediately
               preceding the Class A Redemption Date as applicable, provided
               however, that if any such date shall be in the State of New
               York a holiday or a day on which banks are authorized to close,
               then 5:00 p.m. (New York time) on the next following day which
               in the State of New York is not a holiday or a day on which
               banks are authorized to close, after which dates the respective
               Class A Warrants, as applicable, may not be exercised.

        (o)    "First Exercise Date" with respect to the Class A Warrants
               shall mean the first anniversary of the Effective Date.

        (p)    "Redemption Date" shall mean Class A Redemption Date.

        (q)    "Redemption Price" shall mean the price at which the Company
               may, at its option, redeem the Class A Warrants, in accordance
               with the terms hereof, which price shall be $0.10 per Warrant.

        (r)    "Registered Holders" shall mean the persons in whose names any
               Class A Warrant Certificates shall be registered on the books
               maintained by the Warrant Agent pursuant to Section 6 herein.

        (s)    "Registration Statement" shall have the meaning ascribed
               thereto in the Preamble.

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        (t)    "Restricted Stock" shall mean the Warrant Stock, excluding
               shares of Warrant Stock which have been (i) registered under
               the Securities Act pursuant to an effective registration
               statement filed thereunder and disposed of in accordance with
               the registration statement covering them, or (ii) publicly sold
               pursuant to Rule 144 under the Securities Act.

        (u)    "Securities Act" shall mean the Securities Act of 1933, as
               amended, or any similar federal statute, and the rules and
               regulations of the Commission thereunder, all as the same shall
               be in effect at the time.

        (v)    "Representative" shall mean Roan/Meyers Associates, L.P., a New
               York limited partnership.

        (aa)   "Underwriter's Purchase Option" shall have the meaning ascribed
               thereto in the Preamble.

        (bb)   "Underwriting Agreement" shall have the meaning ascribed
               thereto in the Preamble.

        (cc)   "Underwriters" shall be the underwriters listed in the
               Registration Statement in the Underwriter's section.

        (dd)   "Units" shall have the meaning ascribed thereto in the
               Preamble.

        (ee)   "Warrant Agent" shall mean American Stock Transfer and Trust
               Company (or its successor), as agent for the issuance,
               registration, transfer, and exchange of the Class A Warrant
               Certificates, exercise of the Class A Warrants and, thereupon,
               the issuance of the Warrant Stock.

        (ff)   "Warrant Certificates" shall mean, collectively, Class A
               Warrant Certificates.

        (gg)   "Warrant Stock" shall mean and include (i) up to 5,000,862
               shares of authorized and unissued Common Stock initially
               reserved for issuance upon exercise of the Class A Warrants;
               and (ii) any additional shares of Common Stock or other
               property which may hereafter become issuable or deliverable
               upon exercise of the Warrants pursuant to Section 8 herein.

        (hh)   "Warrants" shall mean, the Class A Warrants.

        SECTION 2.  WARRANTS AND ISSUANCE OF WARRANT CERTIFICATES.

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        2.1 Each Class A Warrant, when signed by the Chairman or President or
any Vice President and by the Secretary, Treasurer or Assistant Secretary of
the Company and counter-signed by the Warrant Agent, shall initially entitle
the Registered Holder of the Class A Warrant Certificate representing such
Class A Warrant to purchase one (1) share of Common Stock upon the exercise
thereof and payment of the Class A Warrant Exercise Price therefor, subject to
modification and adjustment as provided in Section 8 herein and redemption as
provided in Section 9 herein.

        2.2 Upon execution of this Agreement, Warrant Certificates
representing the number of Warrants sold pursuant to the Underwriting
Agreement shall be executed by the Company and delivered to the Warrant Agent.
Upon written order of the Company signed by its President or Chairman or a
Vice President and by its Secretary or an Assistant Secretary, the Warrant
Certificates shall be countersigned, issued and delivered by the Warrant Agent
as part of the Units.

        2.3 From time to time up to the Expiration Date, the Warrant Agent
shall countersign and deliver stock certificates in required whole number
denominations representing up to an aggregate of ___________ shares of Common
Stock, subject to adjustment as described herein, upon the exercise of
Warrants in accordance with this Agreement.

        2.4 From time to time, up to the Expiration Date of the Warrants, the
Warrant Agent shall countersign and deliver Warrant Certificates in required
whole number denominations to the persons entitled thereto in connection with
any transfer or exchange permitted under this Agreement; provided that no
Warrant Certificates shall be issued except (i) those initially issued
hereunder, (ii) those issued on or after the First Exercise Date upon the
exercise of fewer than all Warrants represented by any Warrant Certificate to
evidence any unexercised Warrants held by the exercising Registered Holder,
(iii) those issued upon any transfer or exchange pursuant to Section 6 herein;
(iv) those issued in replacement of lost, stolen, destroyed or mutilated
Warrant Certificates pursuant to Section 7 herein; (v) those issued pursuant
to the Representative's Purchase Option; and (vi) at the option of the
Company, in such form as may be approved by its Board of Directors, to reflect
any adjustment or change in the Class A Warrant Exercise Price, the number of
shares of Common Stock purchasable upon exercise of the Warrants or the
Redemption Price therefor pursuant to Section 8 herein.

        2.5 Pursuant to the terms of the Representative's Purchase Option, the
Representative may purchase up to 200,000 Units, which include up to 200,000
shares of Common Stock and 200,000 Class A Warrants. The Representative's
Purchase Option (i) shall be exercisable for a four-year period commencing on
the First Exercisable Date, (ii) shall not expire until the fourth anniversary
of the First Exercisable Date, (iii) shall be exercisable at exercise prices
equal to One Hundred Twenty Percent (120%) of the initial offering price of
the Units, as applicable, and (iv) shall not be subject to redemption by the
Company. Notwithstanding anything herein to the contrary, the

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Representative's Purchase Option shall not be transferable or assignable
without the prior written consent of the Company for a period of one (1) year
commencing the date hereof and then only to officers, directors and employees
of the Representative.

        SECTION 3.  FORM AND EXECUTION OF THE WARRANT CERTIFICATES.

        3.1 The Class A Warrant Certificates shall be substantially in the
form annexed hereto as Exhibit A (the provisions of which are hereby
incorporated herein) and may have such letters, numbers, or other marks of
identification or designation and such legends, summaries, or endorsements
printed, lithographed, or engraved thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this Agreement, or as may
be required to comply with any law, or with any rule or regulation made
pursuant thereto, or with any rule or regulation of any stock exchange on
which the Warrants may be listed, or to conform to custom or usage. The
Warrant Certificates shall bear the dates of issuance thereof, whether upon
initial issuance, transfer, or exchange or in lieu of mutilated, lost, stolen,
or destroyed Warrant Certificates. The Warrant Certificates initially shall be
issued only in a number equal to the number of certificates for shares of
Common Stock issuable upon exercise thereof. Such Class A Warrant Certificates
shall, be numbered serially with the letters "W-A" on Class A Warrants of all
denominations.

        3.2 The Warrant Certificates shall be executed on behalf of the
Company by its Chairman, President or any Vice President and by its Secretary
or an Assistant Secretary or Treasurer, by manual or facsimile signatures
printed thereon, and shall have imprinted thereon a facsimile of the Company's
seal. The Warrant Certificates shall be manually countersigned by the Warrant
Agent and shall not be valid for any purpose unless so countersigned. If any
officer of the Company who shall have signed any of the Warrant Certificates
shall cease to be such officer of the Company before the date of issuance of
the Warrant Certificates or before countersignature by the Warrant Agent and
issue and delivery thereof, such Warrant Certificates nevertheless may be
countersigned by the Warrant Agent, issued, and delivered with the same force
and effect as though the person who signed such Warrant Certificates had not
ceased to be such officer of the Company.

        SECTION 4.  EXERCISE OF WARRANTS.

        4.1 Each Warrant may be exercised at any time during its Exercise
Period, but not after its Expiration Date, upon the terms and subject to the
conditions set forth herein and in the Warrant Certificate representing such
Warrant. A Warrant shall be deemed to have been exercised immediately prior to
the close of business on the date of the surrender for exercise (the "Exercise
Date") of the Warrant Certificate representing such Warrant, with the exercise
form thereon duly executed by the Registered Holder thereof or his attorney
duly authorized in writing, with signatures guaranteed by a member firm of a
national securities exchange, a commercial bank (not a savings

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bank or a savings and loan association) or trust company located in the United
States or a member firm of the National Association of Securities Dealers,
Inc., together with payment made payable and sent to the Warrant Agent for the
account of the Company, in cash or by official bank, certified, or cashier's
check, or by money order or wire transfer of good funds, of an amount in
lawful money of the United States of America equal to the Class A Warrant
Exercise Price, as applicable, plus all applicable transfer fees or taxes, and
the person entitled to receive the Warrant Stock deliverable upon such
exercise shall be treated for all purposes as the holder thereof as of the
close of business on the Exercise Date, irrespective of the date of issuance
or delivery of such certificate for Warrant Stock; provided, however, that if,
at the date of the surrender of such Warrants and the payment of the Class A
Warrant Exercise Price, the transfer books for the Warrant Stock or other
class of stock purchasable upon the exercise of such Warrants shall be closed,
the certificates for the Warrant Stock or for shares of such other class of
stock in respect of which such Warrants are then exercised shall be issuable
as of the date on which such books shall next be opened (whether before or
after the Expiration Date) and until such date the Company shall be under no
duty to deliver any certificate for such Warrant Stock or for shares of such
other class of stock; provided further, that the transfer books of record,
unless otherwise required by law, shall not be closed at any time for a period
longer than 20 days. Except as otherwise provided herein, no Warrants
presented for exercise after their Expiration Date will be accepted for
exercise and all unexercised Warrants shall be void at their Expiration Date
and the rights of the holders thereof shall cease at such time. No
alternative, conditional, or contingent exercises or over-subscriptions shall
be accepted.

        4.2 Any transfer fees and taxes with respect to such exercises shall
be paid by the Company. Other expenses incurred by the Warrant Agent,
including expenses incurred to establish new accounts, to deliver share
certificates, and to reconcile accounts, shall be paid by the Company.

        4.3 If the number of shares of Common Stock purchasable upon the
exercise of each Warrant is adjusted pursuant to Section 8 herein, the Company
shall nevertheless not be required to issue fractions of shares upon exercise
of the Warrants or otherwise, or to distribute certificates that evidence
fractional shares. With respect to any fraction of a share called for upon any
exercise hereof, the Company shall pay to the Registered Holder an amount in
cash equal to such fraction multiplied by the current market value of such
fractional share, determined as follows: (1) if the Common Stock is listed on
a National Securities Exchange or admitted to unlisted trading privileges on
such exchange or listed for trading on the Nasdaq Stock Market Quotation
System or the OTC Bulletin Board, the current value shall be the last reported
sale price of the Common Stock on such exchange on the last business day prior
to the date of exercise of the Warrant or if no such sale is made on such day,
the average of the closing bid and asked prices for such day on such exchange;
or (2) if the Common Stock is not listed or admitted to unlisted trading
privileges, the current value shall be the mean of the last reported bid and
asked prices reported by the National Quotation Bureau, Inc. reported on the
last business day prior to the date of the exercise of the Warrant; or (3)

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if the Common Stock is not so listed or admitted to unlisted trading
privileges and bid and asked prices are not so reported, the current value
shall be an amount determined in such reasonable manner and sold in good faith
as may be prescribed by the Board of Directors of the Company.

        4.4 As soon as practicable on or after the Exercise Date and in no
event more than three business days thereafter, the Warrant Agent, on behalf
of the Company, shall cause to be issued to the person or persons entitled to
receive the same, a certificate or certificates for the Warrant Stock, and the
Warrant Agent shall deliver the same to the person or persons entitled
thereto. No adjustment shall be made in respect of dividends on Warrant Stock
delivered upon exercise of any Warrant.

        4.5 If on or before the Exercise Date of the Warrants, and in no event
more than three business days thereafter the Warrant Agent receives the full
exercise price for any Warrants together with a letter, telegraphic, or
facsimile guaranty from a commercial bank or trust company located in the
United States, a member firm of a national securities exchange, or a
registered broker-dealer, setting forth the Registered Holder's name, the
number of Warrants held by him, and the number of shares of Common Stock he
wishes to purchase pursuant to exercise of the Warrants, and stating that the
Warrant Certificate representing such Warrants will be delivered to the
Warrant Agent within eight (8) trading days after the date of such letter,
telegraphic, or facsimile guaranty, the Warrants will be accepted for exercise
subject to receipt of the duly executed Warrant Certificate within eight (8)
trading days.

        4.6 The Company reserves the absolute right to waive any defect or
irregularity, permit a defect or irregularity to be cured or corrected within
such time as it may determine, or reject any exercise of a Warrant which it
determines to have been made improperly or the acceptance of which would, in
the opinion of the Company's counsel, be unlawful. Any irregularities in
connection with presentments for exercise must be cured within such time as
the Company shall determine in its sole and absolute discretion unless waived.
The Company shall notify the Warrant Agent in writing of its waiver of any
defect or irregularity in presentment, its permission to cure or correct such
defect or irregularity and any subsequent cure or correction thereof. Neither
the Company nor the Warrant Agent shall be under any duty to give notification
of defects in presentments for exercise or incur any liability for failure to
give such notification. Any presentments for exercise as to which defects or
irregularities have not been cured or waived and as to which notice of cure or
waiver has not been given to the Warrant Agent as provided herein will be
returned to the Registered Holder by the Warrant Agent, as soon as
practicable, together with all funds held for the Registered Holder's account.
No interest shall be paid on any such funds so returned.

        4.7 Subject to the foregoing, once a Registered Holder has presented
his Warrant Certificate and payment for exercise, the exercise is irrevocable.

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        4.8 If less than all of the Warrants represented by a Warrant
Certificate are exercised, the Warrant Agent shall execute and mail, by
first-class mail, within three (3) business days of the date of exercise, to
the Holder of such Warrant Certificate, or such other person as shall be
designated in the election to purchase, a new Warrant Certificate representing
the number of full Warrants not exercised.

        4.9 Upon the exercise, or conversion as provided for in Section 8
herein, of any Warrant, the Warrant Agent shall promptly deposit the payment
therefor into an interest bearing escrow account established by mutual
agreement of the Company and the Warrant Agent at a federally insured
commercial bank. All funds from the exercise deposited in the escrow account
together with interest thereon, less expenses to be paid by the Company, will
be disbursed to the Company on a weekly basis once determined by the Warrant
Agent to be collected funds. An accounting relating to the number of Warrants
exercised and the net amount of exercise funds remitted will be made by the
Warrant Agent to the Company with each payment to the Company of exercise
funds, which will serve as an interim accounting during the period during
which the Warrants may be exercised. A complete accounting concerning all
exercises of Warrants will be made to the Company at the completion of the
period during which the Warrants may be exercised.

        SECTION 5.  RESERVATION OF SHARES; LISTING; PAYMENT OF TAXES; ETC.

        5.1 The Company covenants that it will at all times reserve and keep
available out of its authorized Common Stock, solely for the purpose of
issuance upon exercise of the Warrants as herein provided, such number of
shares of Common Stock as shall then be issuable upon the exercise of all
outstanding Warrants. The Company covenants that all shares of Warrant Stock
which shall be so issuable shall be duly authorized and validly issued and
upon full payment therefor be fully paid and non-assessable and free from all
pre-emptive rights, taxes, claims, liens, encumbrances and charges.

        5.2 No Warrants shall be issued to any Registered Holder in any state
in which such exercise would be unlawful.

        5.3 The Company shall pay all documentary, stamp, or similar taxes and
other governmental charges that may be imposed with respect of the issuance of
the Warrants, or the issuance, transfer, or delivery of any Warrant Stock upon
exercise of the Warrants; provided, however, that if a certificate for Warrant
Stock is to be delivered in a name other than the name of the Registered
Holder of the Warrant Certificate representing any Warrant being exercised,
then no such delivery shall be made unless the person requesting the same has
paid to the Warrant Agent the amount of any such taxes or charges incident
thereto, if any. Any transfer fees payable to the Warrant Agent

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for the transfer, exchange, or exercise of any certificate issued pursuant to
this Agreement shall be paid by the presenter of such certificate.

        5.4 The Warrant Agent is hereby irrevocably authorized to requisition
the Company's Transfer Agent from time to time for certificates representing
shares of Common Stock required upon exercise of the Warrants, and the Company
will authorize the Transfer Agent to comply with all such proper requisitions.
The Company will file with the Warrant Agent a statement setting forth the
name and address of the Transfer Agent of the Company for shares of Common
Stock issuable upon exercise of the Warrants.

        SECTION 6.  EXCHANGE AND REGISTRATION OR TRANSFER OF WARRANTS.

        6.1 The Warrant Certificates may be exchanged for other Warrant
Certificates representing an equal aggregate number of the same series of
Warrants or may be transferred in whole or in part. Warrant Certificates to be
so exchanged shall be surrendered to the Warrant Agent at its Business Office,
and the Company shall execute and the Warrant Agent shall countersign, issue,
and deliver in exchange therefor the Warrant Certificates which the Registered
Holder making the exchange shall be entitled to receive.

        6.2 The Warrant Agent shall keep, at its business office, books in
which, subject to such reasonable regulations as it may prescribe, the Warrant
Agent shall register the Warrants and the transfer thereof. Upon due
presentment for registration or transfer of any Warrant Certificate at such
office, the Company shall execute and the Warrant Agent shall issue and
deliver to the transferee a new Warrant Certificate representing an equal
aggregate number of Warrants.

        6.3 All Warrant Certificates presented for registration or transfer or
for exchange or exercise, and the subscription form on the reverse thereof,
shall be duly endorsed or be accompanied by a written instrument of transfer
and subscription in form satisfactory to the Company and the Warrant Agent
duly executed by the Registered Holder thereof or his attorney duly authorized
in writing.

        6.4 A transfer fee shall be charged to the transferee for any exchange
or registration or transfer of a Warrant Certificate. In addition, the Company
may require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection therewith.

        6.5 All Warrant Certificates surrendered for transfer or exercise, or
for exchange in the case of mutilated Warrant Certificates, shall be promptly
canceled by the Warrant Agent and thereafter retained by the Warrant Agent for
the duration of the agency. From time to time at such times as the Company may
reasonably request, the Warrant Agent shall provide the Company with a list of
the Registered Holders of the Warrants.

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        6.6 Prior to due presentment for registration or transfer thereof, the
Company and the Warrant Agent may deem and treat the Registered Holder of any
Warrant Certificate as the absolute owner thereof and of each Warrant
represented thereby (notwithstanding any notations of ownership or writing
thereon made by anyone other than the Company or the Warrant Agent) for all
purposes, and shall not be affected by any notice to the contrary.

        SECTION 7.  LOSS OR MUTILATION.

        7.1 Upon receipt by the Company and the Warrant Agent of evidence
satisfactory to them of the ownership of and the loss, theft, destruction, or
mutilation of any Warrant Certificate and, in the case of loss, theft, or
destruction, an indemnity satisfactory to them, or, in the case of mutilation,
upon surrender and cancellation thereof, the Company shall execute and the
Warrant Agent shall countersign and deliver in lieu thereof a new Warrant
Certificate representing an equal aggregate number of Warrants. Applicants for
a substitute Warrant Certificate shall also comply with such other reasonable
regulations and pay such other reasonable charges as the Warrant Agent may
prescribe.

        SECTION 8.   ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES OF
COMMON STOCK OR WARRANTS.

        8.1 Subject to the exceptions referred to in Section 8(g) below, in
the event the Company shall, at any time or from time to time after the date
hereof, sell any shares of Common Stock for a consideration per share less
than the current exercise price of the Common Stock on the date of the sale or
issue any shares of Common Stock as a stock dividend to the holders of Common
Stock, or subdivide or combine the outstanding shares of Common Stock into a
greater or lesser number of shares (any such sale, issuance, subdivision or
combination being herein called a "Change of Shares"), then, and thereafter
upon each further Change of Shares, the Exercise Price in effect immediately
prior to such Change of Shares shall be changed to a price (including any
applicable fraction of a cent) determined by multiplying the Exercise Price in
effect immediately prior thereto by a fraction, the numerator of which shall
be the sum of (x) the number of shares of Common Stock outstanding immediately
prior to the issuance of such additional shares plus (y) the number of shares
of Common Stock which the aggregate consideration received (determined as
provided in subsection 8(f)(F) below) for the issuance of such additional
shares would purchase at such current market price per share of Common Stock,
and the denominator of which shall be the sum of the number of shares of
Common Stock outstanding immediately after the issuance of such additional
shares. Such adjustment shall be made successively whenever such an issuance
is made.

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        8.2 Upon each adjustment of the Exercise Price pursuant to this
Section 8, the total number of shares of Common Stock purchasable upon the
exercise of each Warrant shall (subject to the provisions contained in Section
8(b) hereof) be such number of shares (calculated to the nearest tenth)
purchasable at the Exercise Price immediately prior to such adjustment
multiplied by a fraction, the numerator of which shall be the Exercise Price
in effect immediately prior to such adjustment and the denominator of which
shall be the Exercise Price in effect immediately after such adjustment.

        8.3 The Company may elect, upon any adjustment of the Exercise Price
hereunder, to adjust the number of Warrants outstanding, in lieu of the
adjustment in the number of shares of Common Stock purchasable upon the
exercise of each Warrant as hereinabove provided, so that each Warrant
outstanding after such adjustment shall represent the right to purchase one
share of Common Stock. Each Warrant held of record prior to such adjustment of
the number of Warrants shall become that number of Warrants (calculated to the
nearest tenth) determined by multiplying the number one by a fraction, the
numerator of which shall be the Exercise Price in effect immediately prior to
such adjustment and the denominator of which shall be the Exercise Price in
effect immediately after such adjustment. Upon each adjustment of the number
of Warrants pursuant to this Section 8, the Company shall, as promptly as
practicable, cause to be distributed to each Registered Holder of Warrant
Certificates on the date of such adjustment Warrant Certificates evidencing,
subject to not issuing fractional shares, the number of additional Warrants to
which such Registered Holder shall be entitled as a result of such adjustment
or, at the option of the Company, cause to be distributed to such Registered
Holder in substitution and replacement for the Warrant Certificates held by
him prior to the date of adjustment (and upon surrender thereof, if required
by the Company) new Warrant Certificates evidencing the number of Warrants to
which such Registered Holder shall be entitled after such adjustment.

        8.4 In case of any reclassification, capital reorganization or other
change of outstanding shares of Common Stock, or in case of any consolidation
or merger of the Company with or into another corporation (other than a
consolidation or merger in which the Company is the continuing corporation and
which does not result in any reclassification, capital reorganization or other
change of outstanding shares of Common Stock), or in case of any sale or
conveyance to another corporation of the property of the Company as, or
substantially as, an entirety (other than a sale/leaseback, mortgage or other
financing transaction), the Company shall cause effective provision to be made
so that each holder of a Warrant then outstanding shall have the right
thereafter, by exercising such Warrant, to purchase the kind and number of
shares of stock or other securities or property (including cash) receivable
upon such reclassification, capital reorganization or other change,
consolidation, merger, sale or conveyance by a holder of the number of shares
of Common Stock that might have been purchased upon exercise of such Warrant
immediately prior to such reclassification, capital

                                      12
<PAGE>

reorganization or other change, consolidation, merger, sale or conveyance. Any
such provision shall include provision for adjustments that shall be as nearly
equivalent as may be practicable to the adjustments provided for in this
Section 8. The foregoing provisions shall similarly apply to successive
reclassifications, capital reorganizations and other changes of outstanding
shares of Common Stock and to successive consolidations, mergers, sales or
conveyances.

        8.5 Irrespective of any adjustments or changes in the Exercise Price
or the number of shares of Common Stock purchasable upon exercise of the
Warrants, the Warrant Certificates theretofore and thereafter issued shall,
unless the Company shall exercise its option to issue new Warrant
Certificates, continue to express the Exercise Price per share, the number of
shares purchasable thereunder and the Redemption Price therefor as the
Exercise Price per share, and the number of shares purchasable and the
Redemption Price therefore were expressed in the Warrant Certificates when the
same were originally issued.

        8.6 After each adjustment of the Exercise Price pursuant to this
Section 8, the Company will promptly prepare a certificate signed by the
Chairman or President, and by the Treasurer or an Assistant Treasurer or the
Secretary or an Assistant Secretary, of the Company setting forth: (i) the
Exercise Price as so adjusted, (ii) the number of shares of Common Stock
purchasable upon exercise of each Warrant after such adjustment, and, if the
Company shall have elected to adjust the number of Warrants, the number of
Warrants to which the Registered Holder of each Warrant shall then be
entitled, and the adjustment in Redemption Price resulting therefrom, and
(iii) a brief statement of the facts accounting for such adjustment. The
Company will promptly file such certificate with the Warrant Agent and cause a
brief summary thereof to be sent by ordinary first class mail to the
Representative and to each Registered Holder of Warrants at his last address
as it shall appear on the registry books of the Warrant Agent. No failure to
mail such notice nor any defect therein or in the mailing thereof shall affect
the validity thereof except as to the holder to whom the Company failed to
mail such notice, or except as to the holder whose notice was defective. The
affidavit of an officer of the Warrant Agent or the Secretary or an Assistant
Secretary of the Company that such notice has been mailed shall, in the
absence of fraud, be prima facie evidence of the facts stated therein.

        8.7 For purposes of Section 8(a) and 8(b) hereof, the following
provisions (A) to (F) shall also be applicable:

                  (A) The number of shares of Common Stock outstanding at any
given time shall include shares of Common Stock owned or held by or for the
account of the Company and the sale or issuance of such treasury shares or the
distribution of any such treasury shares shall not be considered a Change of
Shares for purposes of said sections.

                                      13
<PAGE>

                  (B) No adjustment of the Exercise Price shall be made unless
such adjustment would require an increase or decrease of at least $.10 in such
price; provided that any adjustments which by reason of this clause (B) are
not required to be made shall be carried forward and shall be made at the time
of and together with the next subsequent adjustment which, together with any
adjustment(s) so carried forward, shall require an increase or decrease of at
least $.10 in the Exercise Price then in effect hereunder.

                  (C) In case of (1) the sale by the Company for cash of any
rights or warrants to subscribe for or purchase, or any options for the
purchase of, Common Stock or any securities convertible into or exchangeable
for Common Stock without the payment of any further consideration other than
cash, if any (such convertible or exchangeable securities being herein called
"Convertible Securities"), or (2) the issuance by the Company, without the
receipt by the Company of any consideration therefor, of any rights or
warrants to subscribe for or purchase, or any options for the purchase of,
Common Stock or Convertible Securities, in each case, if (and only if) the
consideration payable to the Company upon the exercise of such rights,
warrants or options shall consist of cash, whether or not such rights,
warrants or options, or the right to convert or exchange such Convertible
Securities, are immediately exercisable, and the price per share for which
Common Stock is issuable upon the exercise of such rights, warrants or options
or upon the conversion or exchange of such Convertible Securities (determined
by dividing (x) the minimum aggregate consideration payable to the Company
upon the exercise of such rights, warrants or options, plus the consideration
received by the Company for the issuance or sale of such rights, warrants or
options, plus, in the case of such Convertible Securities, the minimum
aggregate amount of additional consideration, if any, other than such
Convertible Securities, payable upon the conversion or exchange thereof, by
(y) the total maximum number of shares of Common Stock issuable upon the
exercise of such rights, warrants or options or upon the conversion or
exchange of such Convertible Securities issuable upon the exercise of such
rights, warrants or options) is less than the closing price ("Fair Market
Value")of the Common Stock on the date prior to the date of the issuance or
sale of such rights, warrants or options, then the total maximum number of
shares of Common Stock issuable upon the exercise of such rights, warrants or
options or upon the conversion or exchange of such Convertible Securities (as
of the date of the issuance or sale of such rights, warrants or options) shall
be deemed to be outstanding shares of Common Stock for purposes of Sections
8(a) and 8(b) hereof and shall be deemed to have been sold for cash in an
amount equal to such price per share.

                  (D) In case of the sale by the Company for cash of any
Convertible Securities, whether or not the right of conversion or exchange
thereunder is immediately exercisable, and the price per share for which
Common Stock is issuable upon the conversion or exchange of such Convertible
Securities (determined by dividing (x) the total amount of consideration
received by the

                                      14
<PAGE>

Company for the sale of such Convertible Securities, plus the minimum
aggregate amount of additional consideration, if any, other than such
Convertible Securities, payable upon the conversion or exchange thereof, by
(y) the total maximum number of shares of Common Stock issuable upon the
conversion or exchange of such Convertible Securities) is less than the Fair
Market Value or the Common Stock on the date of the sale of such Convertible
Securities, then the total maximum number of shares of Common Stock issuable
upon the conversion or exchange of such Convertible Securities (as of the date
of the sale of such Convertible Securities) shall be deemed to be outstanding
shares of Common Stock for purposes of Sections 8(a) and 8(b) hereof and shall
be deemed to have been sold for cash in an amount equal to such price per
share.

                  (E) If the exercise or Exercise Price provided for in any
right, warrant or option referred to in (C) above, or the rate at which any
Convertible Securities referred to in (C) or (D) above are convertible into or
exchangeable for Common Stock, shall change at any time (other than under or
by reason of provisions designed to protect against dilution), the Exercise
Price then in effect hereunder shall forthwith be readjusted to such Exercise
Price as would have obtained (1) had the adjustments made upon the issuance or
sale of such rights, warrants, options or Convertible Securities been made
upon the basis of the issuance of only the number of shares of Common Stock
theretofore actually delivered (and the total consideration received therefor)
upon the exercise of such rights, warrants or options or upon the conversion
or exchange of such Convertible Securities, (2) had adjustments been made on
the basis of the Exercise Price as adjusted under clause (1) for all
transactions (which would have affected such adjusted Exercise Price) made
after the issuance or sale of such rights, warrants, options or Convertible
Securities, and (3) had any such rights, warrants, options or Convertible
Securities then still outstanding been originally issued or sold at the time
of such change. On the expiration of any such right, warrant or option or the
termination of any such right to convert or exchange any such Convertible
Securities, the Exercise Price then in effect hereunder shall forthwith be
readjusted to such Exercise Price as would have obtained (a) had the
adjustments made upon the issuance or sale of such rights, warrants, options
or Convertible Securities been made upon the basis of the issuance of only the
number of shares of Common Stock theretofore actually delivered (and the total
consideration received therefor) upon the exercise of such rights, warrants or
options or upon the conversion or exchange of such Convertible Securities and
(b) had adjustments been made on the basis of the Exercise Price as adjusted
under clause (a) for all transactions (which would have affected such adjusted
Exercise Price) made after the issuance or sale of such rights, warrants,
options or Convertible Securities.

                  (F) In case of the sale for cash of any shares of Common
Stock, any Convertible Securities, any rights or warrants to subscribe for or
purchase, or any options for the purchase of, Common Stock or Convertible
Securities, the consideration received by the Company therefore shall be
deemed to be the gross sales price therefor without deducting therefrom any
expense paid or

                                      15
<PAGE>

incurred by the Company or any underwriting discounts or commissions or
concessions paid or allowed by the Company in connection therewith.

                  (G)  No adjustment to the Exercise Price of the Warrants or
to the number of shares of Common Stock purchasable upon the exercise of each
Warrant will be made, however,

                      (i)    upon the exercise of any of the options presently
                      outstanding under the Company's Stock Option Plan  (the
                      "Plan"); or

                      (ii)   upon the grant or exercise or any other options
                      which may hereafter be granted or exercised under the
                      Plan or under any other employee benefit plan of the
                      Company; or

                      (iii)  upon the sale or exercise of the Warrants,
                      including without limitation the sale or exercise of any
                      of the Warrants comprising the Representative's Purchase
                      Option; or

                      (iv)   upon the sale of any shares of Common Stock in
                      the public offering represented by the Registration
                      Statement, including, without limitation, shares sold
                      upon the exercise of any overallotment option granted to
                      the Underwriters in connection with such offering; or

                      (v)    upon the issuance or sale of Common Stock upon
                      conversion or exchange of any Convertible Securities,
                      whether or not any adjustment in the Exercise Price was
                      made or required to be made upon the issuance or sale of
                      such Convertible Securities and whether or not such
                      Convertible Securities were outstanding on the date of
                      the original sale of the Warrants or were thereafter
                      issued or sold; or

                      (vi)   upon any amendment to or change in the terms of
                      any rights or warrants to subscribe for or purchase, or
                      options for the purchase of, Common Stock or convertible
                      securities or in the terms of any convertible
                      securities, including, but not limited to, any extension
                      of any expiration date of any such right, warrant or
                      option, any change in any exercise or Exercise Price
                      provided for in any such right, warrant or option, any
                      extension of any date through which any Convertible
                      Securities are convertible into or exchangeable for
                      Common Stock or any change in the rate at which any
                      Convertible Securities are convertible into or
                      exchangeable for Common

                                      16
<PAGE>

                      Stock (other than rights, warrants, options or
                      Convertible Securities issued or sold after the close of
                      business on the date of the original issuance of the
                      Units (i) for which an adjustment in the Exercise Price
                      then in effect was theretofore made or required to be
                      made, upon the issuance or sale thereof, or (ii) for
                      which such an adjustment would have been required had
                      the exercise or Exercise Price of such rights, warrants
                      or options at the time of the issuance or sale thereof
                      or the rate of conversion or exchange of such
                      Convertible Securities, at the time of the sale of such
                      Convertible Securities, or the issuance or sale of
                      rights or warrants to subscribe for or purchase, or
                      options for the purchase of, such Convertible
                      Securities, been the price or rate as changed, in which
                      case the provisions of Section 8(f)(E) hereof shall be
                      applicable if, but only if, the exercise or Exercise
                      Price thereof, as changed, or the rate of conversion or
                      exchange thereof, as changed, consists of cash or
                      requires the payment of additional consideration, if
                      any, consisting of cash and the Company did not receive
                      any consideration other than cash, if any, in connection
                      with such change).

               (H)As used in this Section 8, the term "Common Stock" shall
mean and include the Company's Common Stock authorized on the date of the
original issue of the Units and shall also include any capital stock of any
class of the Company thereafter authorized which shall not be limited to a
fixed sum or percentage in respect of the rights of the holders thereof to
participate in dividends and in the distribution of assets upon the voluntary
liquidation, dissolution or winding up of the Company; provided, however, that
the shares issuable upon exercise of the Warrants shall include only shares of
such class designated in the Company's Certificate of Incorporation as Common
Stock on the date of the original issue of the Units or (i), in the case of
any reclassification, change, consolidation, merger, sale or conveyance of the
character referred to in Section 8(c) hereof, the stock, securities or
property provided for in such section or (ii), in the case of any
reclassification or change in the outstanding shares of Common Stock issuable
upon exercise of the Warrants as a result of a subdivision or combination or
consisting or a change in par value, or from par value to no par value, or
from no par value to par value, such shares of Common Stock as so reclassified
or changed.

               (I) Any determination as to whether an adjustment in the
Exercise Price in effect hereunder is required pursuant to Section 8, or as to
the amount of any such adjustment, if required, shall be binding upon the
holders of the Warrants and the Company if made in good faith by the Board of
Directors of the Company.

                                      17

<PAGE>

               (J) If and whenever the Company shall grant to the holders of
Common Stock, as such, rights or warrants to subscribe for or to purchase, or
any options for the purchase of, Common Stock or securities convertible into
or exchangeable for or carrying a right, warrant or option to purchase Common
Stock, the Company shall concurrently therewith grant to each of the then
Registered Holders of the Warrants all of such rights, warrants or options to
which each such holder would have been entitled if, on the date of
determination of stockholders entitled to the rights, warrants or options
being granted by the Company, such holder were the holder of record of the
number of whole shares of Common Stock then issuable upon exercise (assuming,
for purposes of this section 8(j), that exercise of Warrants is permissable
during periods prior to the First Exercise Date) of his Warrants. Such grant
by the Company to the holders of the Warrants shall be in lieu of any
adjustment which otherwise might be called for pursuant to this Section 8.

        SECTION 9.  REDEMPTION.

        9.1 Provided that adequate provision has been made therefor and except
with respect to the Warrants forming a part of the Representative's Purchase
Option, upon the resolution of its Board of Directors, the Company may, but
shall not be required to, call for redemption all or less than all of the
Class A Warrants at any time, provided: (i) it provides to each Registered
Holder of Warrants to be redeemed thirty (30) days' prior written notice, (ii)
if the average closing price or bid price of the Common Stock, as reported by
the principal exchange on which the Common Stock is traded, Nasdaq Stock
Market, the OTC Bulletin Board or the National Quotation Bureau Incorporated,
as the case may be, equals or exceeds One Hundred Fifty Percent (150%) of the
then applicable Class A Warrant Exercise Price for 10 consecutive trading days
prior to the date of delivery of the notice of redemption and (iii) there is
then a current registration statement and prospectus allowing the resale of
the Warrant shares for not less than 180 days. In such an event, the Company
shall cause to be filed with the Warrant Agent a certified copy of such
resolution and a form of notice of redemption and the Warrant Agent shall mail
to each of the Registered Holders of the Warrant Certificates to be redeemed,
by first class mail, postage prepaid, to his last address appearing on the
records of the Warrant Agent, such written notice of such redemption. Such
notice shall identify the Warrants to be redeemed, state the Redemption Date,
the Redemption Price, and the date upon which the Registered Holder's right to
exercise the Warrants will terminate, and describe the manner in which Warrant
Certificates are to be surrendered. Any notice mailed in the manner provided
herein shall be conclusively presumed to have been duly given whether or not
the Registered Holder receives such notice. Failure to mail notice to any
Registered Holder, shall not affect the validity of any other redemptions for
which notice had been duly provided, only redemptions of persons lacking
notice.

                                      18

<PAGE>

        9.2 On or before the Redemption Date, each Registered Holder of
Warrants to be redeemed, unless he has previously exercised or will exercise
such Warrants on or before the Redemption Date, shall surrender the Warrant
Certificate or Certificates representing such Warrants to the Warrant Agent.
The Warrants to be redeemed shall be exercisable up to and including the date
immediately preceding the Redemption Date. Upon receipt of such Warrant
Certificates, the Warrant Agent, as paying agent, shall pay the Redemption
Price for such Warrants to the order of the Registered Holders thereof. Any
Warrants so redeemed will be canceled by the Warrant Agent upon receipt. After
the Redemption Date, all rights with respect to such Warrants shall cease,
except for the right to receive the Redemption Price of the Warrants. If less
than all of the Warrants are to be redeemed, the Warrants to be redeemed shall
be chosen, pro rata, from among all Registered Holders in a proportion to the
amount owned by each.

        9.3 Upon or prior to the Redemption Date, the Company shall deposit in
trust with the Warrant Agent a sum equal to the Redemption Price of all
Warrants called for redemption, with irrevocable instructions and authority to
the Warrant Agent to pay, on and after the Redemption Date, the Redemption
Price to the Registered Holders upon the surrender of the Warrant
Certificates. The deposit shall constitute full payment of the Warrants to the
Registered Holders, and from and after the date of the deposit, the Warrants
shall be deemed to be no longer outstanding. The balance of the deposit
remaining unclaimed at the end of one year from the Redemption Date shall be
released to the Company, after which the holders of Warrants called for
redemption shall be entitled to receive payment of the redemption price only
from the Company.

        SECTION 10.  CONCERNING THE WARRANT AGENT.

        10.1 The Warrant Agent acts hereunder as agent and in a ministerial
capacity for the Company, and its duties shall be determined solely by the
provisions hereof. The Warrant Agent shall not, by issuing and delivering
Warrant Certificates or by any other act hereunder, be deemed to make any
representations as to the validity or value or authorization of the Warrant
Certificates or the Warrants represented thereby or of any stock or other
property delivered upon exercise of the Warrants or whether any such stock is
fully paid and non-assessable. The Warrant Agent shall not at any time be
under any duty or responsibility to the holders of the Warrant Certificates to
make or cause to be made any adjustment of the Class A Warrant Exercise Price
provided in this Agreement, or to determine whether any fact exists which may
require any such adjustments, or with respect to the nature or extent of any
such adjustment, when made, or with respect to the method employed in making
the same. It shall not (i) be liable for any recital or statement of fact
contained herein or for any action taken, suffered, or omitted by it in
reliance on any Warrant Certificate or other document or instrument believed
by it in good faith to be genuine and to have been signed or presented by the
proper party or parties, (ii) be responsible for any failure on the part of
the Company to comply with

                                      19
<PAGE>

any of its covenants and obligations contained in this Agreement or the
Warrant Certificates, or (iii) be liable for any act or omission in connection
with this Agreement except for its own negligence or willful misconduct.

        10.2 The Warrant Agent may at any time consult with counsel
satisfactory to it (who may be counsel for the Company) and shall incur no
liability or responsibility for any action taken, suffered, or omitted by it
in good faith in accordance with the opinion or advice of such counsel, other
than as specified in clause (iii) of the preceding paragraph.

        10.3 Any notice, statement, instruction, request, direction, order, or
demand of the Company to the Warrant Agent hereunder shall be sufficiently
evidenced by an instrument signed by the President, a Vice President, the
Secretary, an Assistant Secretary, the Treasurer, or an Assistant Treasurer
(unless other evidence in respect thereof is herein specifically prescribed).
The Warrant Agent shall not be liable for any action taken, suffered, or
omitted by it in accordance with such notice, statement, instruction, request,
direction, order or demand reasonably believed by the Warrant Agent to be
genuine and to have been signed, sent or presented by the proper parties or
party.

        10.4 The Company agrees to pay the Warrant Agent reasonable
compensation for its services hereunder and to reimburse it for its reasonable
expenses hereunder. The Company further agrees to indemnify the Warrant Agent
and save it harmless against any and all losses, expenses, and liabilities,
including judgments, costs, and reasonable counsel fees, for anything done or
omitted by the Warrant Agent in the execution of its duties and powers
hereunder except losses, expenses, and liabilities arising as a result of the
Warrant Agent's own negligence or willful misconduct.

        10.5 The Warrant Agent may resign its duties and be discharged from
all further duties and liabilities hereunder (except liabilities arising as a
result of the Warrant Agent's own negligence or willful misconduct), after
giving 30 days' prior written notice to the Company. At least 15 days prior to
the date such resignation is to become effective, the Warrant Agent shall
cause a copy of such notice of resignation to be mailed, at the Company's
expense, to the Registered Holder of each Warrant Certificate then
outstanding. Upon comparable notice to the Warrant Agent, the Company may
remove the Warrant Agent; provided, however, that in such event the Company
shall appoint a new warrant agent (the "New Warrant Agent"), as hereinafter
provided, the removal of the Warrant Agent shall not be effective until a New
Warrant Agent has been appointed and has accepted such appointment. If the
office of Warrant Agent becomes vacant by resignation or incapacity to act or
otherwise, the Company shall appoint in writing a New Warrant Agent. If the
Company shall fail to make an appointment within a period of 30 days after it
has been notified in writing of such resignation or after such removal by the
resigning Warrant Agent, then the Registered Holder of any Warrant Certificate
may apply to any court of competent jurisdiction for the appointment of a new
warrant agent. Any New Warrant Agent, whether appointed by the Company or by
such a court, shall be a bank or trust company having a capital and surplus,
as shown by its last published report

                                      20
<PAGE>

to its stockholders, of not less that $10,000,000, or shall be a stock
transfer company. Any New Warrant Agent appointed hereunder shall execute,
acknowledge and deliver to the former Warrant Agent last in office, and to the
Company, an instrument accepting such appointment under substantially the same
terms and conditions as are contained herein. After acceptance in writing of
such appointment by the New Warrant Agent is received by the Company, such New
Warrant Agent shall be vested with the same powers, rights, duties, and
responsibilities as if it originally had been named herein as the Warrant
Agent, without any further assurance, conveyance, act, or deed; but if for any
reason it shall be necessary or expedient for the former Warrant Agent to
execute and deliver any further assurance, conveyance, act, or deed the same
shall be done at the expense of the Company and shall be legally and validly
executed and delivered by the resigning Warrant Agent. Not later than the
effective date of any such appointment, the Company shall file notice thereof
with the resigning Warrant Agent and shall forthwith cause a copy of such
notice to be mailed to the Registered Holder of each Warrant Certificate then
outstanding. Failure to mail such notice, or any defect contained therein,
shall not affect the legality or validity of the appointment of the New
Warrant Agent.

        10.6 Any corporation into which the Warrant Agent or any New Warrant
Agent may be converted or merged, or any corporation resulting from any
consolidation to which the Warrant Agent or any New Warrant Agent shall be a
party, or any corporation succeeding to the corporate trust business of the
Warrant Agent shall be a successor warrant agent under this Agreement without
any further act, provided that such corporation is eligible for appointment as
successor to the Warrant Agent under the provisions of the preceding
paragraph. Any such successor Warrant Agent promptly shall cause notice of its
succession as Warrant Agent to be mailed to the Company and to the Registered
Holder of each Warrant Certificate then outstanding.

        10.7 The Warrant Agent, its subsidiaries and affiliates, and any of
its or their officers or directors, may buy and hold or sell the Warrants or
other securities of the Company and otherwise deal with the Company in the
same manner and to the same extent and with like effect as though it were not
Warrant Agent. Nothing herein shall preclude the Warrant Agent from acting in
any other capacity for the Company or for any other legal entity.

        10.8 The Company shall have the right, except as limited by law,
other agreement or herein, to purchase or otherwise acquire Warrants at such
times, in such manner and for such consideration as it may deem appropriate.

                     SECTION 11.    WARRANT HOLDERS NOT DEEMED STOCKHOLDERS.

        11.1 No holder of Warrants shall, as such, be entitled to vote or to
receive dividends or be deemed the holder of Common Stock that may at any time
be issuable upon exercise of such

                                      21
<PAGE>

Warrants for any purpose whatsoever, nor shall anything contained herein be
construed to confer upon the holder of Warrants, as such, any of the rights of
a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action (whether upon any
recapitalization, issue or reclassification of stock, change of par value or
change of stock to no par value, consolidation, merger or conveyance or
otherwise), or to receive notice of meetings, or to receive dividends or
subscription rights, until such Holder shall have exercised such Warrants and
been issued shares of Common Stock in accordance with the provisions hereof.

        SECTION 12.   RIGHTS OF ACTION.

        All rights of action with respect to this Agreement are vested in the
respective Registered Holders of the Warrants, and any Registered Holder of a
Warrant, without consent of the Warrant Agent or of the holder of any other
Warrant, may, in his own behalf and for his own benefit, enforce against the
Company his right to exercise his Warrants for the purchase of shares of
Common Stock in the manner provided in the Warrant Certificate and this
Agreement.

        SECTION 13.   AGREEMENT OF WARRANT HOLDERS.

        13.1 Every holder of a Warrant, by his acceptance thereof, consents
and agrees with the Company, the Warrant Agent and every other holder of a
Warrant that:

        13.2 The Warrants are transferable only on the registry books of the
Warrant Agent by the Registered Holder thereof in person or by his attorney
duly authorized in writing and only if the Warrant Certificates representing
such Warrants are surrendered at the office of the Warrant Agent, duly
endorsed or accompanied by a proper instrument of transfer satisfactory to the
Warrant Agent and the Company in their sole discretion, together with payment
of any applicable transfer taxes; and

        13.3 The Company and the Warrant Agent may deem and treat the person
in whose name the Warrant Certificate is registered as the Registered Holder
and as the absolute, true and lawful owner of the Warrants represented thereby
for all purposes, and neither the Company nor the Warrant Agent shall be
affected by any notice or knowledge to the contrary, except as otherwise
expressly provided in Section 7 herein.

                   SECTION 14.  MODIFICATION OF AGREEMENT.

        The Warrant Agent, the Underwriter and the Company by supplemental
agreement may make any changes or corrections in this Agreement, without the
consent of any Registered Holder, (i) that they shall deem appropriate to cure
any ambiguity or to correct any defective or inconsistent provision or
manifest mistake or error herein contained; or (ii) that they may deem
necessary or desirable and which shall not adversely affect the interest of
the Registered Holders of Warrant Certificates; provided, however, that this
Agreement shall not otherwise be modified, supplemented,

                                      22
<PAGE>

or altered in any respect except with the consent in writing of the Registered
Holders of Warrant Certificates representing not less than a majority of the
Warrants then outstanding.

        SECTION 15.  NOTICES.

        15.1 All notices, requests, consents, and other communications
hereunder shall be in writing and shall be deemed to have been made when
delivered or mailed first class, postage prepaid, or delivered to a telegraph
office for transmission:

                  (i) if to the Registered Holder of a Warrant Certificate, at
the address of such Registered Holder as shown on the registry books
maintained by the Warrant Agent; or

                  (ii)  if to the Company, at UMDNJ New Jersey Medical School,
185 Orange Avenue, Administrative Building 4, Newark, New Jersey 07103 to the
attention of the President, or at such other address as may have been
furnished to the other parties hereto in writing by the Company, with a copy
to Barry I. Grossman, Esq., Ellenoff Grossman Schole & Cyruli, LLP, 370
Lexington Avenue, New York, New York 10017; or

                  (iii)  if to the Warrant Agent, at its Business Office; or

                  (iv) if to the Representative, at Roan Meyers Associates,
L.P., 17 State Street, New York, New York 10004, or at such other address as
may have been furnished to the other parties hereto in writing by the
Underwriter, with a copy to ___________________________.

            15.2 All written notices required or desired to be given to the
Registered Holders by the Company pursuant to this Agreement shall be effected
by the Company providing to the Warrant Agent a copy of the written notice
which the Company is desirous of giving to the Registered Holders and the
Warrant Agent shall cause same to be delivered to such Registered Holders. The
Company hereby agrees that the Warrant Agent shall not have any liability for,
and agrees to indemnify the Warrant Agent with respect to, any written notice
provided by the Company to the Warrant Agent for delivery to Registered
Holders, except with respect to the Warrant Agent's negligence for failing to
deliver said notices.

           SECTION 16.  GOVERNING LAW.

           This Agreement shall be construed in accordance with and governed
by the laws of the State of Delaware.

            SECTION 17.  BINDING EFFECT.

           This Agreement shall be binding upon and inure to the benefit of
the Company, the Warrant Agent, the Underwriter, and their respective
successors, and the Registered Holders from time to time of the Warrant
Certificates, or any of them. Nothing in this Agreement is intended or shall
be

                                      23
<PAGE>

construed to confer upon any other person any right, remedy, or claim or to
impose upon any other person any duty, liability, or obligation.

           SECTION 18.   TERMINATION.

           This Agreement shall terminate at the close of business on the
Expiration Date of all the Warrants or such earlier date upon which all
Warrants have been exercised, except that the Warrant Agent shall account to
the Company for cash held by it and the indemnity provisions of Section 10(e)
and Section 10 herein shall survive such termination.

           SECTION 19.  EXECUTION.

           This Agreement may be executed in several counterparts which taken
together shall constitute a single document.

           SECTION 20.  AVAILABILITY OF THE AGREEMENT.

           The Warrant Agent shall keep copies of this Agreement available for
inspection by Registered Holders during normal business hours at its Stock
Transfer Department. Copies of this Agreement may be obtained upon written
request addressed to the Company at UMDNJ New Jersey Medical School, 185
Orange Avenue, Administrative Building 4, Newark, New Jersey 07103

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

                                    BIODELIVERY SCIENCES INTERNATIONAL, INC.

                                    By:_____________________________________

                                    American Stock Transfer & Trust Co.

                                    By:______________________________________

                                    ROAN/MEYERS ASSOCIATES, L.P.

                                    By:______________________________________

                                      24<PAGE>
                                                                     EXHIBIT 4.2

                    BIODELIVERY SCIENCES INTERNATIONAL, INC.

                                       AND

                          ROAN-MEYERS ASSOCIATES, L.P.

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

                                     FORM OF

                    UNDERWRITER'S OPTION AGREEMENT FOR UNITS

                               Dated as of _________, 2002

<PAGE>

        UNDERWRITER'S OPTION AGREEMENT FOR UNITS dated as of _________, 2001
among BIODELIVERY SCIENCES INTERNATIONAL, INC., a Delaware corporation (the
"Company") and ROAN-MEYERS ASSOCIATES, L.P., the underwriter, a Delaware
corporation (hereinafter referred to variously as the "Holder" or the
"Underwriter").

                              W I T N E S S E T H :

        WHEREAS, the Underwriter has agreed pursuant to the underwriting
agreement (the "Underwriting Agreement") dated as of the date hereof between the
Underwriter and the Company, to underwrite, on a firm commitment basis, the
Company's proposed public offering ("Public Offering") of up to [2,300,000]
units (inclusive of 300,000 over allotment units) ("Units") at a public offering
price of $[___] per Unit, each Unit consisting of one (1) share of the Company's
common stock par value $___ per share ("Common Stock") and one (1) Class A
Redeemable Common Stock Purchase Warrant ("Class A Warrant"); and

        WHEREAS, the Company proposes to issue to the Underwriter warrants
("Underwriter's Unit Option Warrant") to purchase up to an aggregate of
[230,000] Units (the "UW Units") of the Company at a purchase price of $.001 per
Unit Option Warrant, (exercisable at 150% of the public offering price of the
Units); and

        WHEREAS, the UW Units shall be substantially the same as the Public
Units and shall entitle the Underwriter to purchase (i) one share of Common
Stock ("Unit Share") and (ii) one Class A Warrant ("Unit Warrants"); and

        WHEREAS, the Underwriter's Unit Option Warrant to be issued pursuant to
this Agreement will be issued on the Closing Date (as such term is defined in
the Underwriting Agreement) by the Company to the Underwriter in consideration
for, and as part of the compensation in connection with the Public Offering;

        NOW, THEREFORE, in consideration of the premises, the payment by the
Underwriter to the Company of an aggregate of Two Hundred Dollars ($200.00), the
agreements herein set forth and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

        l.     Grant. The Holder is hereby granted the right to purchase, at any
time from _________ 2003 [one year from the Effective Date] until 5:30 P.M., New
York time, on _________, 2007, up to an

<PAGE>

aggregate of ______ UW Units at an initial exercise price (subject to adjustment
as provided in Section 8 hereof) of 150% of the Public Offering Price (the
"Exercise Price").

        2.     Underwriter's Unit Option Warrant Certificates. The Underwriter's
warrant certificates (the "Underwriter's Unit Option Warrant Certificates")
delivered and to be delivered pursuant to this Agreement shall be in the form
set forth in Exhibit A, attached hereto and made a part hereof, with such
appropriate insertions, omissions, substitutions, and other variations as
required or permitted by this Agreement.

        3.     Exercise of Underwriter's Unit Option Warrants. The Underwriter's
Unit Option Warrants initially are exercisable at an aggregate initial exercise
price (subject to adjustment as provided in Section 8 hereof) per Unit, as set
forth in Section 6 hereof payable by certified or official bank check in New
York Clearing House funds, subject to adjustment as provided in Section 8
hereof. Upon surrender at the Company's principal offices in New Jersey
(presently located at ____________ _________________), of an Underwriter's Unit
Option Warrant with the annexed Form of Election to Purchase duly executed,
together with payment of the Purchase Price (as hereinafter defined) for the UW
Units purchased, the registered holder of an Underwriter's Unit Option Warrant
("Holder" or "Holders") shall be entitled to receive a certificate or
certificates for the UW Units so purchased. The purchase rights represented by
each Underwriter's Unit Option Warrant are exercisable at the option of the
Holder thereof, in whole or in part (but not as to fractional shares of Common
Stock underlying the Underwriter's UW Units). In the case of the purchase of
less than all the UW Units purchasable under any Underwriter's Unit Option
Warrant, the Company shall cancel the Underwriter's Unit Option Warrant upon the
surrender thereof and shall execute and deliver a new Underwriter's Unit Option
Warrant of like tenor for the balance of the UW Units purchasable thereunder.

        4.     Issuance of Certificates. Upon the exercise of the Underwriter's
Unit Option Warrant, the issuance of certificates for the Unit Warrants and Unit
Shares or other securities, properties or rights underlying such Underwriter's
Unit Option Warrant, shall be made forthwith (and in any event within five (5)
business days thereafter) without charge to the Holder thereof including,
without limitation, any tax which may be payable in respect of the issuance
thereof, and such certificates shall (subject to the provisions of Sections 5
and 7 hereof) be issued in the name of, or in such names as may be directed by,
the Holder thereof; provided, however, that the Company shall not be required to
pay any tax which may be payable in respect of any transfer involved in the
issuance and delivery

                                       2

<PAGE>

of any such certificates in a name other than that of the Underwriter and the
Company shall not be required to issue or deliver such certificates unless or
until the person or persons requesting the issuance thereof shall have paid to
the Company the amount of such tax or shall have established to the satisfaction
of the Company that such tax has been paid.

        The Underwriter's Unit Option Warrants and the certificates representing
the Unit Warrants and Unit Shares issuable upon exercise of the Underwriter's
Unit Option Warrant shall be executed on behalf of the Company by the manual or
facsimile signature of the Chairman or Vice Chairman of the Board of Directors
or President or Vice President of the Company under its corporate seal
reproduced thereon, attested to by the manual or facsimile signature of the then
present Secretary or Assistant Secretary of the Company. The Underwriter's Unit
Option Warrants shall be dated the date of the execution by the Company upon
initial issuance, division, exchange, substitution or transfer. The certificates
representing the Unit Warrants and Unit Shares issuable upon exercise of the
Underwriter's Unit Option Warrants shall be identical in form to those issued in
connection with the Public Offering.

        5.     Restriction On Transfer of Underwriter's Unit Option Warrant. The
Holder of a Underwriter's Unit Option Warrant, by its acceptance thereof,
covenants and agrees that the Underwriter's Unit Option Warrant are being
acquired as an investment and not with a view to the distribution thereof; and
that the Underwriter's Unit Option Warrant may not be sold, transferred,
assigned, hypothecated or otherwise disposed of, in whole or in part, for a
period of one (1) year from the date hereof, except to officers of partners of
the Underwriter or members of the Selling Group.

        6.     Exercise Price.

        Section 6.1 Initial and Adjusted Exercise Price. Except as otherwise
provided in Section 8 hereof, the initial exercise price of each Underwriter's
Warrant shall be $[150% of Unit Offering Price] per Unit. The exercise price
shall be adjusted from time to time in accordance with the provisions of Section
8 hereof.

        Section 6.2 Exercise Price. The term "Exercise Price" herein shall mean
the initial exercise prices or the adjusted exercise price, depending upon the
context of the Underwriter's Unit Option Warrant.

        7.     Registration Rights.

        Section 7.1   Demand Registration Under the Securities Act of 1933.

                                       3

<PAGE>

               At any time commencing after ______, ______2003 [one (1) year
from the Effective Date] through and including , 2007 (five (5) years from the
Effective Date), the Holders of the Underwriter's Unit Option Warrant, Unit
Warrants and Unit Shares, representing a "Majority" of the shares of Common
Stock issuable upon the exercise of the Underwriter's UW Units (assuming the
exercise of all of the Underwriter's Unit Option Warrant) shall have the right
(which right is in addition to the registration rights under Section 7.2
hereof), exercisable by written notice to the Company, to have the Company
prepare and file with the Commission, on one occasion, a registration statement
and such other documents, including a prospectus, as may be necessary in the
opinion of both counsel for the Company and counsel for the Underwriter and
Holders, in order to comply with the provisions of the Act, so as to permit a
public offering and sale of their respective Unit Warrants and Unit Shares
during a period equal to the longer of: (i) nine (9) months or (ii) the
unexpired term of the Unit Warrants by such Holders and any other Holders of the
Underwriter's Unit Option Warrant, UW Units and the Units who shall notify the
Company within ten (10) days after receiving notice from the Company of such
request.

        Section 7.2 Piggyback Registration. If, at any time commencing after
______, 2002, through and including ______, 2007 (five (5) years from the
Effective Date), the Company proposes to register any of its securities under
the Act (other than in connection with a merger or pursuant to Form S-8 or
similar form) it will give written notice by registered or certified mail, at
least thirty (30) days prior to the filing of each such registration statement,
to the Underwriter and to all other Holders of the Underwriter's Unit Option
Warrant, UW Units, Unit Warrants or Unit Shares underlying the Underwriter's UW
Units, of its intention to do so. If any of the Underwriters or other Holders of
the Underwriter's Unit Option Warrant, Unit Warrants or Unit Shares underlying
the Underwriter's Unit Option Warrant, notify the Company within twenty (20)
days after receipt of any such notice of its or their desire to include any such
securities in such proposed registration statement, the Company shall afford
each of the Underwriter and such Holders of the Underwriter's Unit Option
Warrant, UW Units and/or Units underlying the Underwriter's Unit Option Warrant,
the opportunity to have any of such securities registered under such
registration statement.

        Notwithstanding the provisions of this Section 7.2, the Company shall
have the right at any time after it shall have given written notice pursuant to
this Section 7.2 (irrespective of whether a written request for inclusion of any
such securities shall have been made) to elect not to file any such

                                       4

<PAGE>

proposed registration statement, or to withdraw the same after the filing but
prior to the Effective Date thereof.

        (b)    The Company covenants and agrees to give written notice of any
registration request under this Section 7.3 by any Holder or Holders to all
other registered Holders of the Underwriter's Unit Option Warrant, UW Units Unit
Shares and Unit Warrants within ten (10) days from the date of the receipt of
any such registration request.

        Section 7.4 Covenants of the Company With Respect to Registration. In
connection with any registration under Section 7.2 or 7.3 hereof, the Company
covenants and agrees as follows:

        (a)    The Company shall use its best efforts to file a registration
statement within forty-five (45) days of receipt of any demand therefor in
accordance with Section 7.1, shall use its best efforts to have any registration
statement declared effective at the earliest possible time, and shall furnish
each Holder desiring to sell the Units underlying the Underwriter's Unit Option
Warrant and UW Units such number of prospectuses as shall reasonably be
requested. Notwithstanding the foregoing sentence, the Company shall be entitled
to postpone the filing of any registration statement otherwise required to be
prepared and filed by it pursuant to this Section 7.4(a) if (i) the Company is
under contract or other binding legal obligation for a material acquisition,
reorganization or divestiture, or (ii) the Company is publically committed to a
self-tender or exchange offer and the filing of a registration statement would
cause a violation of Rule 10b-6 under the Securities Exchange Act of 1934. In
the event of such postponement, the Company shall be required to file the
registration statement pursuant to this Section 7.4(a) upon the earlier of (i)
the consummation or termination, as applicable, of the event requiring such
postponement or (ii) 90 days after the receipt of the initial demand for such
registration.

        (b)    The Company shall pay all costs (excluding fees and expenses of
Holder(s) counsel and any underwriting or selling commissions), fees and
expenses in connection with all registration statements filed pursuant to
Sections 7.2 and 7.3(a) hereof including, without limitation, the Company's
legal and accounting fees, printing expenses, and blue sky fees and expenses.
The Holder(s) will pay all costs, fees and expenses in connection with any
registration statement filed pursuant to Section 7.3(c). If the Company shall
fail to comply with the provisions of Section 7.4(a), the Company shall, in
addition to any other equitable or other relief available to the Holder(s), be
liable for any or all incidental, special and consequential damages and damages
due to loss of profit

                                       5

<PAGE>

sustained by the Holder(s) requesting registration of their Underwriter's Unit
Option Warrant, UW Units Unit Shares and Unit Warrants underlying the
Underwriter's Unit Option Warrant.

        (c)    The Company will take all necessary action which may be required
in qualifying or registering the Underwriter's Unit Option Warrant, UW Units,
Unit Shares and Unit Warrants and underlying the Underwriter's Unit Option
Warrant included in a registration statement for offering and sale under the
securities or blue sky laws of such states as reasonably are requested by the
Holder(s), provided that the Company shall not be obligated to execute or file
any general consent to service of process or to qualify as a foreign corporation
to do business under the laws of any such jurisdiction.

        (d)    The Company shall indemnify the Holder(s) of the Underwriter's
Unit Option Warrant, UW Units Unit Shares and Unit Warrants to be sold pursuant
to any registration statement and each person, if any, who controls such Holders
within the meaning of Section 15 of the Act or Section 20(a) of the Securities
Exchange Act of 1934, as amended ("Exchange Act"), against all loss, claim,
damage, expense or liability (including all expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever) to which any
of them may become subject under the Act, the Exchange Act or otherwise, arising
from such registration statement but only to the same extent and with the same
effect as the provisions pursuant to which the Company has agreed to indemnify
the Underwriter contained in Section 7 of the Underwriting Agreement.

        (e)    The Holder(s) of the Underwriter's Unit Option Warrant, UW Units
Unit Shares and Unit Warrants underlying the Underwriter's Unit Option Warrant
to be sold pursuant to a registration statement, and their successors and
assigns, shall severally, and not jointly, indemnify the Company, its officers
and directors and each person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, against
all loss, claim, damage or expense or liability (including all expenses
reasonably incurred in investigating, preparing or defending against any claim
whatsoever) to which they may become subject under the Act, the Exchange Act or
otherwise, arising from information furnished by or on behalf of such Holders,
or their successors or assigns, for specific inclusion in such registration
statement to the same extent and with the same effect as the provisions
contained in Section 7 of the Underwriting Agreement pursuant to which the
Underwriter has agreed to indemnify the Company.

                                       6

<PAGE>

        (f)    Nothing contained in this Agreement shall be construed as
requiring the Holder(s) to exercise their Underwriter's Unit Option Warrant or
the UW Units prior to the initial filing of any registration statement or the
effectiveness thereof.

        (g)    If the Underwriters' Warrants, UW Units Unit Shares and Unit
Warrants underlying the UW Units are to be sold in an underwritten public
offering, the Company shall use its best efforts to furnish to each Holder
participating in the offering and to each such underwriter, a signed
counterpart, addressed to such underwriter, of (i) an opinion of counsel to the
Company dated the date of the closing under the underwriting agreement, and (ii)
a "cold comfort" letter dated the date of the closing under the underwriting
agreement signed by the independent public accountants who have issued a report
on the Company's financial statements included in such registration statement,
in each case covering substantially the same matters with respect to such
registration statement (and the prospectus included therein) and, in the case of
such accountants' letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions of issuer's counsel
and in accountants' letters delivered to underwriters in underwritten public
offerings of securities.

        (h)    The Company shall as soon as practicable after the Effective
Date of the registration statement, and in any event within 15 months
thereafter, have made "generally available to its security holders" (within the
meaning of Rule 158 under the Act) an earnings statement (which need not be
audited) complying with Section 11(a) of the Act and covering a period of at
least 12 consecutive months beginning after the Effective Date of the
registration statement.

        (i)    The Company shall deliver promptly to each Holder participating
in the offering requesting the correspondence and memoranda described below, and
the managing underwriters, copies of all correspondence between the Commission
and the Company, its counsel or auditors and all memoranda relating to
discussions with the Commission or its staff with respect to the registration
statement and permit each Holder and underwriter to do such investigation, upon
reasonable advance notice, with respect to information contained in or omitted
from the registration statement as it deems reasonably necessary to comply with
applicable securities laws or rules of the National Association of Securities
Dealers, Inc. ("NASD"). Such investigation shall include access to books,
records and properties and opportunities to discuss the business of the Company
with its officers and independent auditors, all to such reasonable extent and at
such reasonable times and as often as any such Holder shall reasonably request.

                                       7

<PAGE>

        (j)    The Company shall enter into an underwriting agreement with the
managing underwriter(s) selected for such underwriting, if any, by Holders
holding a Majority of the Underwriter's Unit Option Warrant, UW Units Unit
Shares and Unit Warrants underlying the Underwriter's Unit Option Warrant
requested to be included in such underwriting. Such underwriting agreement shall
be satisfactory in form and substance to the Company, each Holder and such
managing underwriters, and shall contain such representations, warranties and
covenants by the Company and such other terms as are customarily contained in
agreements of that type used by the managing underwriter(s).

        The Holders shall be parties to any underwriting agreement relating to
an underwritten sale of their Underwriter's Unit Option Warrant, UW Units and
the Units underlying the Underwriter's Unit Option Warrant and may, at their
option, require that any or all the representations, warranties and covenants of
the Company to or for the benefit of such underwriter(s) shall also be made to
and for the benefit of such Holders. Such Holders shall not be required to make
any representations or warranties to or agreements with the Company or the
underwriter(s) except as they may relate to such Holders, their intended methods
of distribution, and except for matters related to disclosures with respect to
such Holders, contained or required to be contained, in such registration
statement under the Act and the rules and regulations thereunder.

        (k)    For purposes of this Agreement, the term "Majority" in reference
to the Holders of Underwriter's Unit Option Warrant, UW Units Unit Shares and
Unit Warrants, shall mean in excess of fifty percent (50%) of the then
outstanding Units, assuming the full exercise of all Underwriter's Unit Option
Warrant and UW Units that (i) are not held by the Company, an affiliate,
officer, creditor, employee or agent thereof or any of their respective
affiliates, members of their families, persons acting as nominees or in
conjunction therewith or (ii) have not been resold to the public pursuant to
Rule 144 under the Act or a registration statement filed with the Commission
under the Act.

        8.     Adjustments to Exercise Price and Number of Securities.

               The Exercise Price and number of securities issuable with respect
to the Unit Warrants shall be adjusted on the same terms and conditions, and at
the same time, as any adjustments in the Exercise Price and number of shares
issuable with respect to the Public Warrants required by the terms of the Public
Warrants.

                                       8

<PAGE>

        9.     Exchange and Replacement of Underwriter's Unit Option Warrants.
Each Underwriter's Unit Option Warrant is exchangeable without expense, upon the
surrender thereof by the registered Holder at the principal executive office of
the Company, for a new Underwriter's Unit Option Warrant of like tenor and date
representing in the aggregate the right to purchase the same number of Units as
provided in the original Underwriter's Unit Option Warrant in such denominations
as shall be designated by the Holder thereof at the time of such surrender.

        Upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of any Underwriter's Unit Option
Warrant, and, in case of loss, theft or destruction, of indemnity or security
reasonably satisfactory to it, and reimbursement to the Company of all
reasonable expenses incidental thereto, and upon surrender and cancellation of
the Underwriter's Unit Option Warrant, if mutilated, the Company will make and
deliver a new Underwriter's Unit Option Warrant of like tenor, in lieu thereof.

        10.    Elimination of Fractional Interests. The Company shall not be
required to issue certificates representing fractions of shares of Common Stock
upon the exercise of the Underwriter's Unit Option Warrant, nor shall it be
required to issue scrip or pay cash in lieu of fractional interests, it being
the intent of the parties that all fractional interests shall be eliminated by
rounding any fraction up to the nearest whole number of shares of Common Stock
or other securities, properties or rights.

        11.    Reservation and Listing of Securities. The Company shall at all
times reserve and keep available out of its authorized shares of Common Stock,
solely for the purpose of issuance upon the exercise of the Underwriter's Unit
Option Warrant and the UW Units, such number of shares of Common Stock or other
securities, properties or rights as shall be issuable upon the exercise thereof.
The Company covenants and agrees that, upon exercise of the Underwriter's Unit
Option Warrant and/or the UW Units and payment of the Exercise Price therefor,
all UW Units and/or Unit Shares or Unit Warrants and other securities issuable
upon such exercise shall be duly and validly issued, fully paid, non-assessable
and not subject to the preemptive rights of any stockholder. As long as the
Underwriter's Unit Option Warrant and/or UW Units shall be outstanding, the
Company shall use its best efforts to cause all Unit Shares and Unit Warrants
issuable upon the exercise of the Underwriter's Unit Option Warrant and UW Units
to be listed (subject to official notice of issuance) on all securities
exchanges on which the Common Stock issued to the public in connection herewith
may then be listed and/or quoted on NASDAQ.

                                       9

<PAGE>

        12.    Notices to Underwriter's Warrant Holders. Nothing contained in
this Agreement shall be construed as conferring upon the Holders the right to
vote or to consent or to receive notice as a stockholder in respect of any
meetings of stockholders for the election of directors or any other matter, or
as having any rights whatsoever as a stockholder of the Company. If, however, at
any time prior to the expiration of the Underwriter's Unit Option Warrant or UW
Units and their exercise, any of the following events shall occur:

               (a)    the Company shall take a record of the holders of its
        shares of Common Stock for the purpose of entitling them to receive a
        dividend or distribution payable otherwise than in cash, or a cash
        dividend or distribution payable otherwise than out of current or
        retained earnings, as indicated by the accounting treatment of such
        dividend or distribution on the books of the Company; or

               (b)    the Company shall offer to all the holders of its Common
        Stock any additional shares of capital stock of the Company or
        securities convertible into or exchangeable for shares of capital stock
        of the Company, or any option, right or warrant to subscribe therefor;
        or

               (c)    a dissolution, liquidation or winding up of the Company
        (other than in connection with a consolidation or merger) or a sale of
        all or substantially all of its property assets and business as an
        entirety shall be proposed; then, in any one or more of such events the
        Company shall give written notice of such event at least fifteen (15)
        days prior to the date fixed as a record date or the date of closing the
        transfer books for the determination of the stockholders entitled to
        such dividend, distribution, convertible or exchangeable securities or
        subscription rights, or entitled to vote on such proposed dissolution,
        liquidation, winding up or sale. Such notice shall specify such record
        date or the date of closing the transfer books, as the case may be.
        Failure to give such notice or any defect therein shall not affect the
        validity of any action taken in connection with the declaration or
        payment of any such dividend, or the issuance of any convertible or
        exchangeable securities, or subscription rights, options or warrants, or
        any proposed dissolution, liquidation, winding up or sale.

        13.    Notices

               All notices requests, consents and other communications hereunder
shall be in writing and shall be deemed to have been duly made when delivered,
or mailed by registered or certified mail, return receipt requested:

                                       10

<PAGE>

               (a)    If to the registered Holder of the Underwriter's Unit
        Option Warrant, to the address of such Holder as shown on the books of
        the Company; or

               (b)    If to the Company, to the address set forth in Section 3
        hereof or to such other address as the Company may designate by notice
        to the Holders.

        14.    Supplements and Amendments. The Company and the Underwriter may
from time to time supplement or amend this Agreement without the approval of any
holders of Underwriter's Unit Option Warrants (other than the Underwriter) in
order to cure any ambiguity, to correct or supplement any provision contained
herein which may be defective or inconsistent with any provisions herein or to
make any other provisions in regard to matters or questions arising hereunder
which the Company and the Underwriter may deem necessary or desirable and which
the Company and the Underwriter deem shall not adversely affect the interests of
the Holders of Underwriter's Unit Option Warrants.

        15.    Successors.  All the covenants and provisions of this Agreement
shall be binding upon and inure to the benefit of the Company, the Holders and
their respective successors and assigns hereunder.

        16.    Termination.  This Agreement shall terminate at the close of
business on ______________, 2007. Notwithstanding the foregoing, the
indemnification provisions of Section 7 shall survive such termination until the
close of business on        , 2010.

        17.    Governing Law: Submission to Jurisdiction.

               (a)    This Agreement and each Underwriter's Unit Option Warrant
issued hereunder shall be deemed to be a contract made under the laws of the
State of New York and for all purposes shall be construed in accordance with the
laws of such State without giving effect to the rules of said State governing
the conflicts of laws.

               (b)    The Company, the Underwriter and the Holders hereby agree
that any action, proceeding or claim against it arising out of, or relating in
any way to, this Agreement shall be brought and enforced in the courts of the
State of New York or of the United States of America for the Southern District
of New York, and irrevocably submits to such jurisdiction, which jurisdiction
shall be exclusive. The Company, the Underwriter and the Holders hereby
irrevocably waive any objection to such exclusive jurisdiction or inconvenient
forum. Any such process or summons to be served upon any of the Company, the
Underwriter and the Holders (at the option of the party bringing such action,
proceeding or claim) may be served by transmitting a copy thereof, by

                                       11

<PAGE>

registered or certified mail, return receipt requested, postage prepaid,
addressed to it at the address set forth in Section 13 hereof. Such mailing
shall be deemed personal service and shall be legal and binding upon the party
so served in any action, proceeding or claim. The Company, the Underwriter and
the Holders agree that the prevailing party(ies) in any such action or
proceeding shall be entitled to recover from the other party(ies) all of
its/their reasonable legal costs and expenses relating to such action or
proceeding and/or incurred in connection with the preparation therefor.

        18.    Entire Agreement: Modification. This Agreement (including the
Underwriting Agreement to the extent portions thereof are referred to herein)
contains the entire understanding between the parties hereto with respect to the
subject matter hereof and, except as provided in Section 14 hereof, may not be
modified or amended except by a writing duly signed by the party against whom
enforcement of the modification or amendment is sought.

        19.    Severability. If any provision of this Agreement shall be held to
be invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provision of this Agreement.

        20.    Captions.  The caption headings of the Sections of this Agreement
are for convenience of reference only and are not intended, nor should they be
construed as, a part of this Agreement and shall be given no substantive effect.

        21.    Benefits or this Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company and the
Underwriter and any other registered Holder(s) of the Underwriter's Unit Option
Warrants or Shares underlying the Underwriter's Unit Option Warrant any legal or
equitable right, remedy or claim under this Agreement; and this Agreement shall
be for the sole and exclusive benefit of the Company and the Underwriter and any
other Holder(s) of the Underwriter's Unit Option Warrants or Units.

        22.    Counterparts.  This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and such counterparts shall together constitute but one and the
same instrument.

                                       12

<PAGE>

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

 [SEAL]                      BIODELIVERY SCIENCES INTERNATIONAL, INC.

                                    By:
                                       -----------------------------------
                                        Name:
                                        Title:

Attest:

-------------------------
Secretary

                                    ROAN/MEYERS ASSOCIATES, L.P.
                                    BY: MEYERS/JANSSEN SECURITIES CORP.
                                            General Partner

                                    By
                                      --------------------------------
                                        Bruce Meyers
                                        President

                                       13

<PAGE>

                                    EXHIBIT A

            [FORM OF UNDERWRITER'S UNIT OPTION WARRANT CERTIFICATE]

THE UNDERWRITER'S UNIT OPTION WARRANT REPRESENTED BY THIS CERTIFICATE AND THE
OTHER SECURITIES ISSUABLE UPON EXERCISE THEREOF MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO (i) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933, (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER SUCH ACT (OR ANY
SIMILAR RULE UNDER SUCH ACT RELATING TO THE DISPOSITION OF SECURITIES), OR (iii)
AN OPINION OF COUNSEL, IF SUCH OPINION SHALL BE REASONABLY SATISFACTORY TO
COUNSEL FOR THE ISSUER, THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS
AVAILABLE.

THE TRANSFER OR EXCHANGE OF THE UNDERWRITER'S UNIT OPTION WARRANT REPRESENTED BY
THIS CERTIFICATE IS RESTRICTED IN ACCORDANCE WITH THE UNDERWRITER'S WARRANT
AGREEMENT FOR UNITS REFERRED TO HEREIN.

                            EXERCISABLE ON OR BEFORE
                   5:30 P.M., NEW YORK TIME, ___________, 2007

No. W-                ______ Underwriter's Unit Option Warrant

                        Underwriter's Unit Option Warrant

        This Underwriter's Unit Option Warrant certifies that Roan/Meyers
Associates, LP, or registered assigns, is the registered holder of _____
[230,000] Underwriter's Unit Option Warrants to purchase initially, at any time
from , 1998 until 5:30 p.m. New York time on ________ , 2003 ("Expiration
Date"), up to _______ [230,000] Class UW Units (the "Warrants") of BioDelivery
Sciences International, Inc,. a Delaware corporation (the "Company"), at an
initial exercise price, subject to adjustment in certain events (the "Exercise
Price"), of $____ [150% of the public offering price of the Units] upon
surrender of this Underwriter's Unit Option Warrant and payment of the Exercise
Price at an office or agency of the Company, but subject to the conditions set
forth herein and in the Underwriter's Warrant Agreement for Units dated as of
________, 2002 between the Company and Roan/Meyers Associates, LP (the
"Underwriter's Warrant Agreement"). Payment of the Exercise Price shall be made
by certified or official bank check in New York Clearing House funds payable to
the order of the Company.

        No Underwriter's Unit Option Warrant may be exercised after 5:30 p.m.,
New York time, on the Expiration Date, at which time all Underwriter's Unit
Option Warrant evidenced hereby, unless exercised prior thereto, shall
thereafter be void.

        The Underwriter's Unit Option Warrant evidenced by this Underwriter's
Unit Option Warrant Certificate are part of a duly authorized issue of Units
pursuant to the Underwriter's Warrant Agreement, which Underwriter's Warrant
Agreement is hereby incorporated by reference in and

<PAGE>

made a part of this instrument and is hereby referred to for a description of
the rights, limitation of rights, obligations, duties and immunities thereunder
of the Company and the holders (the words "holders" or "holder" meaning the
registered holders or registered holder) of the Underwriter's Unit Option
Warrant.

        The Underwriter's Warrant Agreement provides that upon the occurrence of
certain events the exercise prices and/or number of the Company's securities
issuable thereupon may, subject to certain conditions, be adjusted. In such
event, the Company will, at the request of the holder, issue a new Underwriter's
Unit Option Warrant Certificate evidencing the adjustment in the exercise price
and the number and/or type of securities issuable upon the exercise of the
Underwriter's Unit Option Warrant; provided, however, that the failure of the
Company to issue such new Underwriter's Unit Option Warrants shall not in any
way change, alter or otherwise impair, the rights of the holder as set forth in
the Underwriter's Warrant Agreement.

        Upon due presentment for registration of transfer of this Underwriter's
Unit Option Warrant at an office or agency of the Company, a new Underwriter's
Unit Option Warrant or Underwriter's Unit Option Warrants of like tenor and
evidencing in the aggregate a like number of Underwriter's Unit Option Warrants
shall be issued to the transferee(s) in exchange for this Underwriter's Unit
Option Warrant, subject to the limitations provided herein and in the
Underwriter's Warrant Agreement, without any charge except for any tax or other
governmental charge imposed in connection with such transfer.

        Upon the exercise of less than all of the Underwriter's Unit Option
Warrants evidenced by this Certificate, the Company shall forthwith issue to the
holder hereof a new Underwriter's Unit Option Warrant Certificate representing
such number of unexercised Underwriter's Unit Option Warrants.

        The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Underwriter's Unit Option Warrant (notwithstanding any
notation of ownership or other writing hereon made by anyone), for the purpose
of any exercise hereof, and of any distribution to the holder(s) hereof, and for
all other purposes, and the Company shall not be affected by any notice to the
contrary.

        All terms used in this Underwriter's Unit Option Warrant which are
defined in the Underwriter's Warrant Agreement shall have the meanings assigned
to them in the Underwriter's Warrant Agreement.

                                       2

<PAGE>

        IN WITNESS WHEREOF, the Company has caused this Underwriter's Unit
Option Warrant to be duly executed under its corporate seal.

Dated as of __________________, 2002

                                    BIODELIVERY SCIENCES INTERNATIONAL, INC.

[SEAL]                              By
                                      ----------------------------
                                      Name:
                                      Title:

Attest:

-----------------------
Secretary

                                       3
<PAGE>

                         [FORM OF ELECTION TO PURCHASE]

        The undersigned hereby irrevocably elects to exercise the right,
represented by this Underwriter's Unit Option Warrant, to purchase ________
Class UW Units and herewith tenders in payment for such securities a certified
or official bank check payable in New York Clearing House Funds to the order of
BioDelivery Sciences International, Inc. in the amount of $________, all in
accordance with the terms hereof. The undersigned requests that a certificate
for such securities be registered in the name of __________________ whose
address is ______________________ and that such ___________________ Certificate
be delivered to _______________________ whose address is ________________. .

Dated:

                                    Signature
                                              --------------------------------
                                    (Signature must conform in all respects to
                                    name of holder as specified on the face of
                                    the Underwriter's Unit Option Warrant.)

                                    ----------------------------------
                                    Insert Social Security or Other
                                    Identifying Number of Holder)

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