BIODELIVERY SCIENCES INTERNATIONAL INC (Form: 8-K, Received: 05/17/2018 09:14:10)

May 17, 2018

BIODELIVERY SCIENCES INTERNATIONAL, INC.

/s/ Ernest R. De Paolantonio

Ernest R. De Paolantonio

Chief Financial Officer, Secretary and Treasurer

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or Section 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 17, 2018 (May 16, 2018)

BioDelivery Sciences International, Inc.

(Exact name of registrant as specified in its charter)


Delaware	001-31361	35-2089858
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

4131 ParkLake Ave., Suite #225 Raleigh, NC		27612
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: 919-582-9050

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation to the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01

Entry into a Material Definitive Agreement

Series B Preferred Stock Financing and Related Agreements

Overview and Placement Agency Agreement

On May 17, 2018, BioDelivery Sciences International, Inc. (the “Company”) entered into a placement agency agreement (the “Placement Agency Agreement”) with William Blair & Company, L.L.C., as placement agent (the “Placement Agent”), relating to the Company’s registered direct offering, issuance and sale (the “Offering”) of an aggregate of 5,000 shares (the “Shares”) of the Company’s authorized preferred stock that the Board of Directors of the Company (the “Board”) has designated as Series B Non-Voting Convertible Preferred Stock, par value $.001 per share (the “Series B Preferred Stock”). All of the Shares are being sold by the Company. The Placement Agency Agreement contains customary representations, warranties and covenants of the Company and the Placement Agent. The closing of the Offering (the “Closing”) is expected to take place on May 21, 2018, subject to the satisfaction of customary and other negotiated closing conditions described herein.

The Shares being sold in the Offering will be issued pursuant to a shelf registration statement, as amended, that the Company filed with the Securities and Exchange Commission (the “SEC”), which became effective on July 13, 2015 (File No. 333-205483). A prospectus supplement relating to the Offering will be filed with the Securities and Exchange Commission pursuant to Rule 424(b) of the Securities Act of 1933, as amended.

Securities Purchase Agreement

In connection with the Offering, on May 17, 2018, the Company also entered into a definitive securities purchase agreement (the “SPA”) with certain institutional and accredited investors, including existing stockholders of the Company (the “Investors”) relating to the Offering. The Investors have agreed to purchase the Shares for a price of $10,000 per share, which will result in gross proceeds to the Company of $50.0 million. The SPA contains customary representations, warranties and covenants of the Company and the Investors.

Terms of the Series B Preferred Stock

The powers, preferences, rights, qualifications, limitations and restrictions applicable to the Series B Preferred Stock are set forth in the Certificate of Designation of the Series B Preferred Stock (the “Certificate of Designation”), to be filed with the Secretary of State of the State of Delaware prior to the Closing. Pursuant to the Certificate of Designation, the Company is required to hold its 2018 Annual Meeting of Stockholders (the “2018 Meeting”) no later than seventy-five (75) days after the Closing and include on the agenda for that meeting proposals for the Stockholder Approval. As used herein, the term “Stockholder Approval” means approval by the Company’s stockholders of (i) for an increase in the Company’s authorized Common Stock and (ii) of the transactions contemplated by this Offering under applicable Nasdaq Stock Market rules.

Each share of Series B Preferred Stock is convertible into a number of shares of the Company’s common stock, par value $.001 per share (the “Common Stock”) determined by dividing $10,000 by a conversion price of $1.80 per share (subject to adjustment for stock splits and stock dividends as provided in the Certificate of Designation) at any time following Stockholder Approval. As of the Closing, the aggregate outstanding shares of Series B Preferred Stock will be convertible (upon Stockholder Approval) into an aggregate 27,777,778 shares of Common Stock. The Series B Preferred Stock does not contain any price-based anti-dilution protection. The Series B Preferred Stock is convertible at any time after

Stockholder Approval at the option of the holder, except that a holder will be prohibited from converting shares of Series B Preferred Stock into shares of Common Stock if, as a result of such conversion, such holder, together with its affiliates, would beneficially own more than 9.98% of the total number of shares of Common Stock then issued and outstanding, which percentage may be increased or decreased on sixty-one (61) days’ notice from the holder of Series B Preferred Stock to the Company provided that, until Stockholder Approval, such beneficial ownership limitation may only be increased to up to 19.99% of the total number of shares of Common Stock then issued and outstanding.

Within ten (10) days following the date of Stockholder Approval, the Company has the right to deliver a notice to the holders of the Series B Preferred Stock to require conversion of the Series B Preferred Stock into Common Stock, provided that certain conditions with respect to the Common Stock are satisfied. Such forced conversion shall be subject to a holder’s beneficial ownership limitation of 9.0% of the total number of shares of Common Stock then issued and outstanding. Following an initial forced conversion of the Series B Preferred Stock, every ninety (90) days thereafter, the Company has the right to require the forced conversion of the still outstanding shares of Series B Preferred Stock up to the beneficial ownership limitation of 9.0% of the total number of shares of Common Stock then issued and outstanding.

In the event of the Company’s liquidation, dissolution or winding up, holders of the Series B Preferred Stock will receive a payment equal to $0.001 per share of Series B Preferred Stock before any proceeds are distributed to the holders of Common Stock and in parity with the Company’s outstanding Series A Non-Voting Convertible Preferred Stock (the “Series A Preferred Stock”). After the payment of this preferential amount, and subject to the rights of holders of any class or series of capital stock hereafter created specifically ranking by its terms senior to the Series B Preferred Stock, holders of Series B Preferred Stock (and the holders of the Series A Preferred Stock) will participate ratably in the distribution of any remaining assets with the Common Stock and any other class or series of our capital stock hereafter created that participates with the Common Stock in such distributions.

The shares of Series B Preferred Stock will generally have no voting rights, except as required by law and except that the consent of holders of 80% of the outstanding Series B Preferred Stock will be required to amend the terms of the Series B Preferred Stock or the Certificate of Designation, to authorize any class of securities that is senior to the Series B Preferred Stock with respect to distribution of assets upon liquidation, the payment of dividends or rights of redemption.

The Series B Preferred Stock will not be entitled to receive any dividends, unless and until specifically declared by the Board. The Company is not obligated to redeem or repurchase any shares of Series B Preferred Stock. Shares of Series B Preferred Stock are not otherwise entitled to any redemption rights, or mandatory sinking fund or analogous fund provisions. If, at any time that shares of Series B Preferred Stock are outstanding, the Company effects a merger or other change of control transaction, as described in the Certificate of Designation and referred to as a fundamental transaction, then a holder will have the right to receive, upon any subsequent conversion of a share of Series B Preferred Stock (in lieu of conversion shares) for each issuable conversion share, the same kind and amount of securities, cash or property as such holder would have been entitled to receive upon the occurrence of such fundamental transaction if such holder had been, immediately prior to such fundamental transaction, the holder of one share of Common Stock.

Registration Rights Agreement

In connection with the Offering, the Company entered into a registration rights agreement (the “RRA”) with Broadfin Healthcare Master Fund, Ltd., a Cayman Islands exempted company (“Broadfin Healthcare”), granting to Broadfin Healthcare certain demand and piggyback registration rights with respect to “control securities” (within the meaning of Rule 144 promulgated by the SEC) held by Broadfin Healthcare.

The foregoing descriptions of the Placement Agent Agreement, the SPA, the Certificate of Designation and the RRA do not purport to be complete and are qualified in its entirety by reference to the full text of such documents, copies of which are filed as Exhibits 1.1, 10.1, 4.1 and 10.2 hereto, respectively, which text is hereby incorporated into this report by reference.

Agreement with Broadfin Regarding Board Composition and Related Matters

As previously reported, on May 1, 2018, Broadfin Healthcare filed a Schedule 13D amendment with the SEC disclosing that it had nominated three individuals for election to the Board at the 2018 Annual Meeting. The date of the 2018 Annual Meeting has not been scheduled as of the date of this report. Prior to and subsequent to such filing, the Company and Broadfin Healthcare have engaged in discussions regarding the financing and governance of the Company.

As a condition to the Closing, on May 17 , 2018, Company entered into an agreement with Broadfin Healthcare, on behalf of itself and its affiliates (the “Broadfin Agreement”) that provides for the following, all to occur at the Closing: (i) three new directors identified by Broadfin Healthcare, Kevin Kotler (the Director of Broadfin Healthcare), Todd C. Davis and Peter S. Greenleaf (the “New Directors”), will be appointed to the Board; (ii) four current directors, Thomas W. D’Alonzo, Barry I. Feinberg, Samuel P. Sears, Jr. and Timothy C. Tyson (the “Retiring Directors”), will voluntarily resign from the Board; and (iii) Broadfin Healthcare will withdraw its director nominations for the 2018 Annual Meeting. The Broadfin Agreement will be effective as of the Closing.

In addition, the Broadfin Agreement will provide that: (i) the Company will be required to hold the 2018 Annual Meeting no later than seventy-five (75) days after the Closing and place on the agenda for that meeting the matters requiring the Stockholder Approval; (ii) during the period from the Closing through the thirtieth day prior to the deadline for stockholder nominations for the Company’s 2019 Annual Meeting of Stockholders (the “Standstill Period”), Broadfin Healthcare will be subject to customary standstill provisions, including with respect to proxy fights, voting of shares and transactions with third parties that seek to circumvent the standstill provisions and amendments to the Broadfin Agreement following its execution; and (iii) during the Standstill Period, Broadfin Healthcare will have customary replacement rights for any New Director who ceases to serve as a director of the Company for any reason during the Standstill Period; provided that only one of the New Directors serving on the Board at any time can be an employee, or otherwise not independent, of Broadfin Healthcare. The Broadfin Agreement also contains mutual non-disparagement provisions and releases of claims.

In connection with the Broadfin Agreement, the Retiring Directors have each entered into a board retirement agreement (the “Retirement Agreement) with the Company and Broadfin Healthcare to memorialize their retirement terms. The Retirement Agreements are effective as of the Closing. The information contained in Item 5.02 below relating to the Retirement Agreements described therein is incorporated herein by reference.

The foregoing description of the Broadfin Agreement does not purport to be complete and is qualified in its entirety by reference to Broadfin Agreement, a copy of which is filed as Exhibit 10.3 hereto, which is hereby incorporated into this report by reference.

CRG Loan Amendment

On May 16, 2018, the Company entered into an amendment (the “Amendment”) to the Company’s Term Loan Agreement with CRG Servicing LLC (“CRG”), as administrative agent for the lenders named therein, which was previously reported on February 21, 2017 (the “Loan Agreement”). The description of the general terms, conditions and covenants of and under the Loan Agreement and the security granted by the Company and and its subsidiaries thereunder are described in the Company’s Current Report on Form 8-K, filed with the SEC on February 27, 2017, as subsequently amended, which description is incorporated herein by reference.

Pursuant to the Amendment: (i) the interest only period of the Loan Agreement will be extended by one year, and certain milestones previously required for the extended interest only period have been removed; (ii) the “PIK” period (under which a portion of the interest accrued under the Loan Agreement can be deferred to maturity) will also be extended for a year; (iii) amortization of the loan principal can be deferred until maturity (making the payment of the loan a “balloon” payment) if the Company achieves and maintain a market capitalization of $200 million as of the conclusion of the interest only period (provided that if the Company achieves, and thereafter falls below a $200 million market capitalization, amortization of the loan principal will resume); and (iv) certain Company revenue targets, the failure of which would create an event of default under the loan, have been lowered.

The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to Amendment, a copy of which is filed as Exhibit 10.4 hereto, which is hereby incorporated into this report by reference.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The descriptions of the Amendment set forth above under Item 1.01 above are incorporated by reference into this Item 2.03.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Pursuant to the Broadfin Agreement described in Item 1.01, effective as of and simultaneously with the Closing, the size of the Board will be set at seven (7) individuals and the New Directors will be appointed to the Board. Pursuant to the Broadfin Agreement, the Company’s directors will be seated in the following Board classes:

Class I Directors (serving until the 2018 Annual Meeting): Todd C. Davis and Peter S. Greenleaf, each identified by Broadfin.

Class II Directors (serving until the 2019 Annual Meeting of Stockholders): Mark A. Sirgo (Vice Chairman of the Board), Herm Cukier and Kevin Kotler (the Director of Broadfin).

Class III Directors (serving until the 2020 Annual Meeting of Stockholders): Frank E. O’Donnell, Jr. (Chairman of the Board) and W. Mark Watson.

The following are biographical descriptions of the New Directors:

Kevin Kotler , age 46, has over 25 years of experience as an investor and analyst following the healthcare industry. He is the founder and Managing Member of Broadfin Capital, which is the

investment advisor for Broadfin Healthcare, a healthcare focused investment fund which he launched in 2005. Mr. Kotler has served as a Director of Novelion Therapeutics, Inc. since November 2016 and has served as a director of InnerSpace Neuro Solutions, Inc., a privately-held medical device company since 2014. Mr. Kotler earned a B.S. in economics from the Wharton School at the University of Pennsylvania in 1993. The Board believes Mr. Kotler is qualified to serve on the Company’s Board due to his experience in managing biotechnology investments.

Todd C. Davis , age 57, has served as the Founder, Managing Partner and President of RoyaltyRx Capital, LLC, special opportunities investment firm focused on pharmaceuticals, since January 2018. Mr. Davis previously served as Founding Managing Director and Managing Partner of HealthCare Royalty Partners, a global healthcare investment firm, from 2007 to December 2017. Previously, Mr. Davis was a partner at Paul Capital Partners, an investment firm where he co-managed royalty investments, from 2004 to 2006, and a partner at Apax Partners, a private equity investment group where he was responsible for biopharmaceutical growth investments, from 2001 to 2004. Prior to that, Mr. Davis held various sales and product management roles at Abbott Laboratories and worked in business development, operations and licensing at Elan Pharmaceuticals. Mr. Davis has served on the boards of directors of Ligand Pharmaceuticals Incorporated (NASDAQ: LGND), a biopharmaceutical company where he is a member of the audit and compensation committees, since March 2007, and Palvella Therapeutics, a rare-disease biopharmaceutical company serving patients with monogenic rare diseases, since June 2017. Mr. Davis previously served on the boards of directors of TearScience, a maker of ophthalmic medical devices where he was a member of the compensation committee, from February 2016 to October 2017, Acufocus, an ophthalmic medical device company, from April 2017 to December 2017, Suneva Medical, Inc., an aesthetics company where he was a member of the compensation committee, from January 2009 to September 2017, Helomics, Inc., an integrated clinical contract research organization where he was a member of the compensation committee, from September 2014 to June 2017, and Artes Medical, Inc. (NASDAQ: ARTE), a medical aesthetics company, from January 2008 to December 2008. Mr. Davis also is a board member of the Harvard Business School Healthcare Alumni Association. Mr. Davis earned a Bachelor of Science from the U.S. Naval Academy and an M.B.A. from Harvard Business School. The Board believes Mr. Davis is qualified to serve on the Board due to his experience as a biotechnology investor and his service as a board member of biotechnology companies.

Peter S. Greenleaf , age 48, has served as the Chief Executive Officer of Cerecor, Inc. (NASDAQ: CERQ), an integrated biopharmaceutical company focused on pediatric healthcare, since March 2018. Mr. Greenleaf previously served as Chief Executive Officer of Sucampo Pharmaceuticals, Inc. (NASDAQ: SCMP), a biopharmaceutical company focused on medical applications of a class of ion channel modulators, from March 2014 to February 2018, when Sucampo was sold to Mallincrodt PLC (NYSE: MNK). Prior to that, Mr. Greenleaf served as Chief Executive Officer of Histogenics Corporation, a regenerative medicine company, from June 2013 to March 2014, as President of MedImmune, Inc., an fully integrated biologics division of AstraZeneca Group and President of MedImmune Ventures, a venture capital fund within the AstraZeneca Group, a global, science-led biopharmaceutical business, from January 2010 to June 2013, and Senior Vice President, Commercial Operations of MedImmune, from 2006 to 2010. Mr. Greenleaf also held senior commercial roles at Centocor Biotech, Inc. (now Jansen Biotechnology, Johnson & Johnson), a biotechnology company founded with the goal of developing new diagnostic assays using monoclonal antibody technology, from 1998 to 2006, and at Boehringer Mannheim G.m.b.H. (now Roche Holdings), a diagnostics and pharmaceuticals business, from 1996 to 1998. Mr. Greenleaf has served on the board of directors of Cerecor, where he has been a member of its audit committee, since May 2017. Previously, he served on the boards of directors of Sucampo, including as Chairman, from March 2013 to February 2018, Mast Therapeutics, Inc. (NYSE MKT: MSTX), a clinical-stage biopharmaceutical company where he was a member of its audit committee and compensation committee, from November 2015 to April 2017, Mirna Therapeutics, Inc. (NASDAQ: MIRN), a clinical-stage biopharmaceutical company engaged in the

development of microRNA-based oncology therapeutics where he was a member of the audit committee, from February 2016 to August 2017, and Histogenics, from June 2013 to March 2014. Mr. Greenleaf also previously served on the boards of directors of Rib-X Pharmaceuticals, a biopharmaceutical firm that focuses on the design and development of novel broad-spectrum antibiotics for the treatment of antibiotic-resistant infections in hospital and community settings, from 2009 to 2010, LigoCyte Pharmaceuticals, an immunology company focused on developing vaccines and monoclonal antibodies for gastrointestinal and respiratory indications, from 2010 to 2011 and Corridor Pharmaceuticals, a biopharmaceutical company dedicated to developing and commercializing novel therapeutic Arginase inhibitors, from 2010 to 2013. Mr. Greenleaf currently chairs the Maryland Venture Fund Authority, whose vision is to oversee implementation of InvestMaryland, a public-private partnership to spur venture capital investment in the state. He is also a member of the board of directors of the Biotechnology Industry Organization, the largest trade organization in the world representing the biotechnology industry, where he serves on the Governing Boards of the Emerging Companies and Health Sections. Mr. Greenleaf previously served on the boards of PhARMA, the Tech Council of Maryland, a technology trade association for companies with operations in Maryland, Washington, D.C. and Virginia, and the University of Maryland Baltimore Foundation, Inc., which advises the President of the University of Maryland, Baltimore on matters affecting programs, students, faculty, employees, and the community. Mr. Greenleaf earned a M.B.A degree from St. Joseph’s University and a B.S. degree from Western Connecticut State University. The Board believes Mr. Greenleaf is qualified to serve on the Board due to his experience in leading and serving on the board of directors of biotechnology companies.

Retirement Agreements

As described under Item 1.01, the Retiring Directors’ voluntary retirement and resignation from the Board will be effective as of, and conditioned upon the occurrence of, the Closing (the date of Closing for these purposes being referred to herein as the “Retirement Date”). The Retiring Directors will receive the following benefits pursuant to the Retirement Agreement:

•

The respective Retiring Director’s retirement from the Company shall be deemed a “Retirement” within the meaning of the Company’s 2011 Equity Incentive Plan, as amended (the “Plan”) (including that such Retiring Director is departing from the Company in good standing), such that (i) any vested stock options previously awarded to such Retiring Director under the Plan shall remain available for exercise for the entire remainder of the option period of such options following the Retirement Date and (ii) all unvested restricted stock units and stock options previously awarded to such Retiring Director under the Plan, as listed in “Unvested Equity Awards” on Exhibit A on such Retiring Director’s respective Retirement Agreement, will vest on the dates specified at the time of original award.

•

Within five (5) business days after the Retirement Date, such Retiring Director shall receive cash payments equal to such amounts, as listed in “Additional Cash Retainers” on Exhibit A on such Retiring Director’s respective Retirement Agreement, that (i) such Retiring Director would have received for service on the Board (but not additional amounts for service on any committee thereof) for the fiscal quarters ending June 30, 2018 and September 30, 2018 and (ii) the such Retiring Director would have received for his service on committee(s) of the Board, as applicable, from April 1, 2018 through the Retirement Date.

•

Promptly following the 2018 Annual Meeting, such Retiring Director shall be awarded additional restricted stock units and options under the terms of the Plan as listed in “Additional Equity Awards” on Exhibit A on such Retiring Director’s respective Retirement Agreement.

•

For a period of six (6) years following the Retirement Date, if and to the extent that the Company shall maintain directors’ and officers’ liability insurance, such policy(ies) shall name such Retiring Director as an insured thereunder. In addition, the indemnification agreement previously executed by such Retiring Director and the Company shall remain unmodified and in full force and effect in accordance with the terms thereof.

The Retirement Agreements also contain other customary provisions, including mutual releases of claims by the Company and the Retiring Directors and a non-disparagement covenant. Broadfin Healthcare is party to the Retirement Agreements with respect to certain provisions thereof, notably releases and non-disparagement.

The foregoing description of the Retirement Agreements do not purport to be complete and are qualified in its entirety by reference to the form of Retirement Agreement, a copy of which is filed as Exhibit 10.5 hereto, which is hereby incorporated into this report by reference.

Item 5.03

Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

In connection with the Closing, the Company will file the Certificate of Designation. The description of the Certificate of Designation set forth above under Item 1.01 above is incorporated by reference into this Item 5.03.

Item 8.01.

Other Events.

On May 17, 2018, the Company issued a press release announcing the pricing of the Offering. This press release is attached as Exhibit 99.1 hereto and incorporated herein by reference.

Also on May 17, 2018, the Company issued a press release announcing that it entered into the Broadfin Agreement and the Amendment. This press release is attached as Exhibit 99.2 hereto and incorporated herein by reference.

Item 9.01.

Financial Statements and Exhibits.


(d)		Exhibits


1.1		Placement Agency Agreement, dated May 17, 2018, between the Company and William Blair & Company, L.L.C.

4.1		Form of Certificate of Designation of Series B Non-Voting Convertible Preferred Stock

5.1		Legal Opinion of Ellenoff Grossman & Schole LLP

10.1		Form of Securities Purchase Agreement, dated May 17, 2018, between the Company and the Investors

10.2		Registration Rights Agreement, dated May 17, 2018, between the Company and Broadfin Healthcare.

10.3		Agreement, dated May 17, 2018, between the Company and Broadfin Healthcare.



10.4		Amendment 2 to Term Loan Agreement, dated May 16, 2018, among the Company, CRG and the lenders named therein.

10.5		Form of Retirement Agreement, dated May 17, 2018, between the Company, the Retiring Directors and Broadfin Healthcare.

99.1		Press Release, dated May 17, 2018, announcing the pricing of the Offering.

99.2		Press Release, dated May 17, 2018, announcing the Broadfin Agreement and the Amendment.

Cautionary Note Regarding Forward-Looking Statements

This Current Report on Form 8-K, the press releases included herein, and any statements of representatives and partners of the Company related thereto contain, or may contain, among other things, certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve significant risks and uncertainties. Such statements may include, without limitation, statements with respect to the Company’s plans, objectives, projections, expectations and intentions and other statements identified by words such as “projects,” “may,” “will,” “could,” “would,” “should,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “potential” or similar expressions. These statements are based upon the current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties, including those detailed in the Company’s filings with the Securities and Exchange Commission. Actual results (including, without limitation, the results of the Offering, the Broadfin Agreement (including the changes to the Board effected thereunder) and the Amendment) may differ significantly from those set forth in the forward-looking statements. These forward-looking statements involve certain risks and uncertainties that are subject to change based on various factors (many of which are beyond the Company’s control). The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Exhibit 1.1

BioDelivery Sciences International, Inc.

Placement Agency Agreement

May 17, 2018

William Blair & Company, L.L.C.,

150 North Riverside Plaza

Chicago, Illinois 60606

Ladies and Gentlemen:

BioDelivery Sciences International, Inc., a Delaware corporation (the “Company”), proposes, subject to the terms and conditions stated herein, to issue and sell an aggregate of up to 5,000 shares of Series B Non-Voting Convertible Preferred Stock, par value $0.001 per share, of the Company (the “Preferred Stock”) to certain investors (each an “Investor”), in an offering under its registration statement on Form S-3 (Registration No. 333-205483). The aggregate of up to 5,000 shares of Preferred Stock to be sold by the Company and the shares of common stock, par value $0.001 per share, of the Company (the “Common Stock”) issuable upon conversion of the Preferred Stock (the “Conversion Shares”) are herein collectively called the “Shares.” The Company desires to engage William Blair & Company, L.L.C. (“William Blair”) in connection with such issuance and sale of the Preferred Stock.

1. On the date hereof, the Company entered into that certain Securities Purchase Agreement (the “Securities Purchase Agreement”), by and among the Company and the Investors, pursuant to which the Investors will purchase the Preferred Stock from the Company. The representations and warranties of the Company to the Investors set forth in Section 3 of Securities Purchase Agreement are expressly incorporated by reference herein, and such representations and warranties (the “Incorporated Company Representations and Warranties”) are expressly made to the Placement Agent (as defined below) with the same force and effect as if such Incorporated Company Representations and Warranties were set forth herein. In addition to the Incorporated Company Representations and Warranties, the Company represents and warrants to, and agrees with, the Placement Agent that:

(A) A registration statement on Form S-3 (File No. 333-205483) (the “Initial Registration Statement”) in respect of the Shares has been filed with the Securities and Exchange Commission (the “Commission”) by the Company in conformity with the requirements of the Securities Act of 1933, as amended (the “Act”), and the rules and regulations of the Commission thereunder; the Initial Registration Statement and any post-effective amendment thereto, each in the form heretofore delivered to the Placement Agent, and, excluding exhibits thereto but including all documents incorporated by reference in the prospectus contained therein, have been declared effective by the Commission in such form; other than a registration statement, if any, increasing the size of the offering (a “Rule 462(b) Registration Statement”), filed pursuant to Rule 462(b) under the Act, which became effective upon filing, and any preliminary prospectus supplement to the base prospectus included in the Initial Registration Statement and filed with the Commission pursuant to Rule 424(b) under the Act, no other document with respect to the Initial Registration Statement or document incorporated by reference therein has heretofore been filed with the Commission; and no stop order suspending the effectiveness of the Initial Registration Statement, any post-effective amendment thereto or the Rule 462(b) Registration Statement, if any, has been issued and no proceeding for that purpose has been initiated or threatened by the Commission.

Any preliminary prospectus included in the Initial Registration Statement or filed with the Commission pursuant to Rule 424(b) under the Act, including the base prospectus included in the Initial Registration Statement as supplemented by any preliminary prospectus supplement thereto, is hereinafter called a “Preliminary Prospectus.”

The various parts of the Initial Registration Statement and the Rule 462(b) Registration Statement, if any, including all exhibits thereto and including (i) the information contained in the form of final prospectus, including any prospectus supplement thereto, filed with the Commission pursuant to Rule 424(b) under the Act in accordance with Section 5(a) hereof, and deemed by virtue of Rule 430B or Rule 430C under the Act to be part of the Initial Registration Statement at the time it was declared effective and (ii) the documents incorporated by reference in the Preliminary Prospectus contained in the Initial Registration Statement at the time such part of the Initial Registration Statement became effective, each as amended at the time such part of the Initial Registration Statement became effective or such part of the Rule 462(b) Registration Statement, if any, became or hereafter becomes effective, are hereinafter collectively called the “Registration Statement.”

The Preliminary Prospectus relating to the Shares that was included in the Registration Statement immediately prior to the Applicable Time (as defined in Section 1(a)(D) hereof) is hereinafter called the “Pricing Prospectus.”

The Pricing Prospectus, including the base prospectus in the Registration Statement and any prospectus supplement thereto, including, without limitation, the final prospectus supplement thereto (the “Prospectus Supplement”), in the form filed pursuant to Rule 424(b) under the Act, is hereinafter called the “Prospectus.”

Any reference herein to any Preliminary Prospectus, the Pricing Prospectus or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the Act, as of the date of such Preliminary Prospectus or Prospectus, as the case may be; any reference to any amendment or supplement to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and include any documents filed after the date of such Preliminary Prospectus or Prospectus, as the case may be, under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and incorporated by reference in such Preliminary Prospectus or Prospectus, as the case may be; any reference to any amendment to the Registration Statement shall be deemed to refer to and include any annual report of the Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act after the effective date of the Initial Registration Statement that is incorporated by reference in the Registration Statement; and any “issuer free writing prospectus” as defined in Rule 405 under the Act prepared by or on behalf of the Company or used or referred to by the Company in connection with the offering of the shares of Preferred Stock is hereinafter called an “Issuer Free Writing Prospectus”);

The Pricing Prospectus, together with the information included in Schedule I(a) hereto and each Issuer Free Writing Prospectus filed or used by the Company on or before the Applicable Time, other than a road show that is an Issuer Free Writing Prospectus but is not required to be filed pursuant to Rule 433 under the Act, is hereinafter called the “Pricing Disclosure Package”;

(B) No order preventing or suspending the use of any Preliminary Prospectus or any Issuer Free Writing Prospectus has been issued by the Commission. Each Preliminary Prospectus, at the time of filing thereof, will conform in all material respects to the requirements of the Act and the rules and regulations of the Commission thereunder, and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by the Placement Agent expressly for use therein (the “Placement Agent Information”);

(C) Each document incorporated by reference in the Pricing Disclosure Package and the Prospectus, when it became effective or was filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder, and none of such documents contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and any further document so filed and incorporated by reference in the Prospectus or any further amendment or supplement thereto, when such document becomes effective or is filed with the Commission, as the case may be, will conform in all material respects to the requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the Commission thereunder and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with the Placement Agent Information;

(D) For the purposes of this Placement Agency Agreement (this “Agreement”), the “Applicable Time” is [ 🌑 ] a.m. (Eastern time) on the date of this Agreement. The Pricing Disclosure Package, as of the Applicable Time, did not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and each Issuer Free Writing Prospectus listed on Schedule I(b) hereto does not conflict with the information contained in the Registration Statement, the Pricing Disclosure Package or the Prospectus and each such Issuer Free Writing Prospectus, as supplemented by and taken together with the Pricing Disclosure Package as of the Applicable Time, did not include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to statements or omissions made in the Pricing Disclosure Package in reliance upon and in conformity with the Placement Agent Information;

(E) The Registration Statement, (a) at the time it initially became effective, (b) at the time of each amendment thereto for purposes of complying with Section 10(a)(3) of the Act (whether by post-effective amendment, incorporated report or form of prospectus), (c) at the time of the first contract of sale for the shares of Preferred Stock and (d) as of the Closing Date (as defined in Section 4 below), conformed and will conform, and the Prospectus (a) on its date, (b) at the time of filing the Prospectus pursuant to Rule 424(b) and (c) as of the Closing Date, and any further amendments or supplements to the Registration Statement or the Prospectus will conform, in all material respects to the requirements of the Act and the rules and regulations of the Commission thereunder and do not and will not, as of the applicable effective date as to each part of the Registration Statement and as of the applicable filing date as to the Prospectus and any amendment or supplement thereto, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with the Placement Agent Information;

(F) Except as set forth, incorporated by reference or described in the Registration Statement, Pricing Disclosure Package and the Prospectus, since the date of the latest audited financial statements included or incorporated by reference in the Pricing Prospectus, (i) none of the Company or any of its subsidiaries has sustained any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor disturbance or dispute or action, order or decree of any court or arbitrator or governmental or regulatory authority; (ii)

there has not been any change in the capital stock or long-term debt of the Company or any of its subsidiaries, or any dividend or distribution of any kind declared, set aside for payment, paid or made by the Company on any class of capital stock, (iii) neither the Company nor any of its subsidiaries has entered into any transaction or agreement that is material to the Company and its subsidiaries taken as a whole or incurred any liability or obligation, direct or contingent, that is material to the Company and its subsidiaries taken as a whole and (iv) there has not been any material adverse change, or any development involving a prospective material adverse change, in or affecting the general affairs, business, properties, management, financial position, stockholders’ equity, results of operations or prospects of the Company and its subsidiaries, taken as a whole (a “Material Adverse Effect”);

(G) The statements set forth in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2017 under the captions “Description of Business—Overview of “Specialty Pharmaceuticals” and the 505(b)(2) Regulatory Pathway” and “Description of Business—Government Regulation,” insofar as they purport to describe the provisions of laws, regulations, and documents referred to therein, are accurate, complete and fair in all material respects;

(H) Except as described in the Prospectus Supplement, there are no contracts, agreements or understandings between the Company and any person that would give rise to a valid claim against the Company or the Placement Agent for a brokerage commission, finder’s fee or other like payment in connection with this offering;

(I) Except as set forth, incorporated by reference or described in the Registration Statement, Pricing Disclosure Package and the Prospectus, no relationship, direct or indirect, exists between or among the Company, on the one hand, and the directors, officers, shareholders, customers or suppliers of the Company, on the other hand, that is required to be disclosed in the Pricing Prospectus and the Prospectus pursuant to Section 404 of Regulation S-K.

2. (a) On the basis of the representations, warranties and agreements of the Company herein contained, and subject to all the terms and conditions of this Agreement, William Blair shall be the Company’s sole lead placement (in such capacity, the “Placement Agent,” “you” or similar terminology), on a reasonable best efforts basis, in connection with the issuance and sale by the Company of the shares of Preferred Stock to the Investors in a proposed offering under the Registration Statement, with the terms of the offering to be subject to market conditions and negotiations between the Company, the Placement Agent and the prospective Investors (such offering shall be referred to herein as the “Offering”). The Company may also, in its sole discretion, retain (and compensate with the proceeds of the offering) FINRA member financial advisors in connection with the proposed offering. As compensation for services rendered, and provided that any of the shares of Preferred Stock are sold to Investors in the Offering, on the Closing Date (as defined below), the Company shall pay to the Placement Agent an amount in the aggregate equal to the placement fee set forth in Schedule II hereto (the “Placement Fee”). The sale of the shares of Preferred Stock shall be made pursuant to the Securities Purchase Agreement in the form included as Exhibit A hereto, on the terms described therein. The Company shall have the sole right to accept offers to purchase the shares of Preferred Stock and may reject any such offer in whole or in part.

(b) This Agreement shall not give rise to any commitment by the Placement Agent to purchase any of the shares of Preferred Stock, and the Placement Agent shall have no authority to bind the Company to accept offers to purchase the shares of Preferred Stock. The Placement Agent shall act on a reasonable best efforts basis and does not guarantee that it will be able to raise new capital in the Offering. The Placement Agent may retain other brokers or dealers to act as sub-agents on its behalf in connection with the Offering, the fees of which shall be paid out of the Placement Fee. Prior to the earlier of (i) the date on which this Agreement is terminated and

(ii) the Closing Date, the Company shall coordinate its efforts with respect the offering of the shares of Preferred Stock with the Placement Agent, although the Company shall be free to communicate with potential Investors without the knowledge or presence of the Placement Agent.

3. [Intentionally Omitted.]

4. (a) Payment of the purchase price for, and delivery of, the shares of Preferred Stock shall be made at a closing (the “Closing”) to occur on or before May 21, 2018 or on such other date as may be agreed upon in writing by the Placement Agent and the Company (the “Closing Date”), and of which each Investor will be notified in advance by the Placement Agent, in accordance with Rule 15c6-1 promulgated under the Exchange Act. At the Closing, the shares of Preferred Stock to be purchased by each Investor hereunder, in certificated form, and in such authorized denominations and registered in such names as the Investor may request upon at least forty-eight hours’ prior notice to the Company shall be delivered by or on behalf of the Company to the Investor through physical delivery of the shares of Preferred Stock, in each case against payment by or on behalf of each Investor of the purchase price therefor by wire transfer of Federal (same-day) funds to the account specified by the Company to the Investor at least forty-eight hours in advance, which account may be an escrow account. If the Company shall default in its obligations to deliver the shares of Preferred Stock to an Investor whose offer it has accepted, the Company shall indemnify and hold the Placement Agent harmless against any loss, claim or damage incurred by the Placement Agent arising from or as a result of such default by the Company.

(b) The documents to be delivered at the Closing by or on behalf of the parties hereto pursuant to Section 8 hereof, including any additional documents requested by the Placement Agent pursuant to Section 8(k) hereof, will be delivered at the offices of Latham & Watkins LLP, 330 North Wabash Avenue, Suite 2800, Chicago, IL 60611 or remotely by facsimile or e-mail/.pdf transmission, as agreed to by the Company and the Placement Agent, and the shares of Preferred Stock will be delivered to the Investor, all as of the Closing. For the purposes of this Section 4, “New York Business Day” shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in New York City are generally authorized or obligated by law or executive order to close.

5. The Company agrees with the Placement Agent:

(a) To prepare the Prospectus in a form approved by you and to file such Prospectus pursuant to Rule 424(b) under the Act not later than the Commission’s close of business on the second business day following the execution and delivery of this Agreement; to make no further amendment or any supplement to the Registration Statement or the Prospectus prior to the Closing Date which shall be reasonably disapproved by the Placement Agent promptly after reasonable notice thereof (other than an amendment or supplement which the Company believes, based on advice of legal counsel, it is required by law to file or use); to file in a timely manner all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the Prospectus and for so long as the delivery of a prospectus is required in connection with the offering or sale of the shares of Preferred Stock; to advise you, promptly after it receives notice thereof, of the time when any amendment to the Registration Statement has been filed or becomes effective or any amendment or supplement to the Prospectus has been filed and to furnish you with copies thereof if requested by you; to file promptly all material required to be filed by the Company with the Commission pursuant to Rule 433(d) under the Act; to advise you, promptly after it receives notice thereof, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus or other prospectus in respect of the shares of Preferred Stock, of the suspension of the qualification of the shares of Preferred Stock for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the Registration Statement or

the Prospectus or for additional information; and, in the event of the issuance of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus or other prospectus or suspending any such qualification, to promptly use its reasonable best efforts to obtain the withdrawal of such order;

(b) Promptly from time to time to take such action as you may reasonably request to qualify the shares of Preferred Stock for offering and sale under the securities laws of such jurisdictions as you may request and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of the shares of Preferred Stock, provided that in connection therewith the Company shall not be required to (i) qualify as a foreign corporation or other entity or as a dealer in securities in any such jurisdiction where it would not otherwise be required to so qualify, (ii) file a general consent to service of process in any jurisdiction or (iii) subject itself to taxation in any jurisdiction if it is not otherwise so subject;

(c) Prior to 10:00 a.m., New York City time, on the second New York Business Day next succeeding the date of this Agreement and from time to time, to furnish the Placement Agent with written and electronic copies of the Prospectus in New York City in such quantities as you may reasonably request, and, if the delivery of a prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Act) is required at any time prior to the expiration of nine months after the time of issue of the Prospectus in connection with the offering or sale of the shares of Preferred Stock and if at such time any event shall have occurred as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Act) is delivered, not misleading, or, if for any other reason it shall be necessary during such period to amend or supplement the Prospectus or to file under the Exchange Act any document incorporated by reference in the Prospectus in order to comply with the Act or the Exchange Act, to notify you and upon your request to file such document and to prepare and furnish without charge to the Placement Agent and to any dealer in securities as many written and electronic copies as you may from time to time reasonably request under the circumstances of an amended Prospectus or a supplement to the Prospectus which will correct such statement or omission or effect such compliance, and in case the Placement Agent are required to deliver a prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the Act) in connection with sales of any of the shares of Preferred Stock at any time nine months or more after the time of issue of the Prospectus, upon your request but at the expense of the Placement Agent, to prepare and deliver to the Placement Agent as many written and electronic copies as you may reasonably request under the circumstances of an amended or supplemented Prospectus complying with Section 10(a)(3) of the Act;

(d) To make generally available to its security holders (which may be satisfied by filing with the Commission’s Electronic, Gathering, Analysis and Retrieval System (“EDGAR”)) as soon as practicable, but in any event not later than sixteen months after the effective date of the Registration Statement (as defined in Rule 158(c) under the Act), an earnings statement of the Company and its subsidiaries (which need not be audited) complying with Section 11(a) of the Act and the rules and regulations of the Commission thereunder (including, at the option of the Company, Rule 158);

(e) Upon obtaining the approval of its stockholders at its 2018 Annual Meeting, the Company shall reserve and keep available at all times a sufficient number of shares of Common Stock for the purpose of enabling the Company to issue the shares of Common Stock issuable upon conversion of the Preferred Stock;

(f) To use the net proceeds received by it from the sale of the shares of Preferred Stock pursuant to this Agreement in the manner specified in the Prospectus Supplement under the caption “Use of Proceeds”; and

(g) If the Company elects to rely upon Rule 462(b), the Company shall file a Rule 462(b) Registration Statement with the Commission in compliance with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of this Agreement, and the Company shall at the time of filing either pay to the Commission the filing fee for the Rule 462(b) Registration Statement or give irrevocable instructions for the payment of such fee pursuant to Rule 111(b) under the Act;

6. The Company agrees with the Placement Agent that:

(a) Without the prior consent of the Placement Agent, it has not made and will not make any offer relating to the shares of Preferred Stock that would constitute a “free writing prospectus” as defined in Rule 405 under the Act; the Placement Agent represents and agrees that, without the prior consent of the Company and the Placement Agent, it has not made and will not make any offer relating to the shares of Preferred Stock that would constitute a free writing prospectus; any such free writing prospectus the use of which has been consented to by the Company and the Placement Agent is listed on Schedule I(b) hereto;

(b) The Company has complied and will comply with the requirements of Rule 433 under the Act applicable to any Issuer Free Writing Prospectus, including timely filing with the Commission or retention where required and legending; and the Company represents that it has satisfied and agrees that it will satisfy the conditions under Rule 433 under the Act to avoid a requirement to file with the Commission any electronic road show; and

(c) If at any time following issuance of an Issuer Free Writing Prospectus any event occurred or occurs as a result of which such Issuer Free Writing Prospectus would conflict with the information in the Registration Statement, the Pricing Prospectus or the Prospectus or would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances then prevailing, not misleading, the Company will give prompt notice thereof to the Placement Agent and, if requested by the Placement Agent, will prepare and furnish without charge to the Placement Agent an Issuer Free Writing Prospectus or other document which will correct such conflict, statement or omission; provided, however, that this covenant shall not apply to any statements or omissions in an Issuer Free Writing Prospectus made in reliance upon and in conformity with the Placement Agent Information.

7. The Company covenants and agrees with the Placement Agent that (a) the Company will pay or cause to be paid the following: (i) the fees, disbursements and expenses of the Company’s counsel and, except as otherwise agreed with the Placement Agent, accountants in connection with the registration of the Shares under the Act and all other expenses in connection with the preparation, printing, reproduction and filing of the Registration Statement, the Pricing Prospectus, any Issuer Free Writing Prospectus and the Prospectus and amendments and supplements thereto and the mailing and delivering of copies thereof to the Placement Agent and dealers; (ii) the cost of printing or producing any of this Agreement, Closing documents (including any compilations thereof) and any other documents in connection with the offering, purchase, sale and delivery of the shares of Preferred Stock; (iii) all expenses in connection with the qualification of the shares of Preferred Stock for offering and sale under state securities laws as provided in Section 5(b) hereof; (iv) all fees and expenses in connection with listing of the Conversion Shares on the Nasdaq Capital Market (the “Exchange”); (v) the cost of preparing stock certificates; (vi) the cost and charges of any transfer agent or registrar and (vii) all other costs and expenses incident to the performance of the Company’s obligations hereunder which are not otherwise specifically provided for in this Section 7. It is understood and agreed that, except as provided in this Section 7 and Sections 9 and 12 hereof, in connection with hosting meetings with prospective purchasers of the shares of Preferred Stock and investor presentations on any “road show” undertaken in connection with the marketing of the offering of the shares of Preferred Stock, the Company and the Placement

Agent will each pay their own costs associated with travel, hotel accommodations and any other costs and expenses. It is understood, however, that the Company shall bear the cost of any other matters not directly relating to the sale and purchase of the shares of Preferred Stock pursuant to this Agreement, and that, except as provided in this Section 7, and Sections 9 and 12 hereof, the Placement Agent will pay all of their own costs and expenses, including without limitation the fees of its counsel, stock transfer taxes on resale of any of the shares of Preferred Stock by them, and any advertising expenses connected with any offers they may make.

8. The obligations of the Placement Agent hereunder, as to the shares of Preferred Stock to be delivered at the Closing, shall be subject, in the discretion of the Placement Agent, to the condition that all Incorporated Company Representations and Warranties and the representations and warranties and other statements of the Company herein are, at and as of the Closing, true and correct, the condition that the Company shall have performed all of its respective obligations hereunder theretofore to be performed, and the following additional conditions:

(a) The Prospectus shall have been filed with the Commission pursuant to Rule 424(b) under the Act within the applicable time period prescribed for such filing by the rules and regulations under the Act and in accordance with Section 5(a) hereof; all material required to be filed by the Company pursuant to Rule 433(d) under the Act shall have been filed with the Commission within the applicable time period prescribed for such filing by Rule 433; if the Company has elected to rely upon Rule 462(b) under the Act, the Rule 462(b) Registration Statement shall have become effective by 10:00 P.M., Washington, D.C. time, on the date of this Agreement; no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission; no stop order suspending or preventing the use of the Prospectus or any Issuer Free Writing Prospectus shall have been initiated or threatened by the Commission; and all requests for additional information on the part of the Commission shall have been complied with to your reasonable satisfaction;

(b) Latham & Watkins LLP, counsel for the Placement Agent, shall have furnished to you its written opinion and negative assurance letter, dated as of the Closing Date, in form and substance satisfactory to you, with respect to such matters as you may reasonably request, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters;

(c) Ellenoff Grossman & Schole LLP, corporate and securities counsel for the Company, shall have furnished (i) to you and the Investors its written opinion, addressed to you and the Investors and dated as of the Closing Date, in form and substance satisfactory to you, and (ii) to you a negative assurance letter, addressed to you and dated as of the Closing Date, in form and substance satisfactory to you;

(d) Womble Bond Dickinson (US) LLP, intellectual property counsel for the Company, shall have furnished to you its written opinion, addressed to you and dated as of the Closing Date, in form and substance satisfactory to you;

(e) (i) On the date hereof, at a time prior to the execution of this Agreement, (ii) on the effective date of any post-effective amendment to the Registration Statement filed subsequent to the date of this Agreement, if any, and (iii) on the Closing Date, Cherry Bekaert LLP shall have furnished to you a letter or letters, dated the respective dates of delivery thereof, in form and substance satisfactory to you, which letters shall cover, without limitation, the various financial disclosures contained in the Registration Statement, the Preliminary Prospectus and the Prospectus;

(f) (i) The Company and its subsidiaries, taken as a whole, shall not have sustained since the date of the latest audited financial statements incorporated by reference in the Pricing Prospectus any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor disturbance or dispute or action, order or decree of any court or arbitrator or regulatory authority, in each case otherwise than as set forth or contemplated in the Pricing Disclosure Package, and (ii) since the respective dates as of which information is given in the Pricing Prospectus, there shall not have been any change in the capital stock or long-term debt of the Company and its subsidiaries, taken as a whole, or any change, or any development involving a prospective change, in or affecting the general affairs, business, properties, management, financial position, stockholders’ equity, results of operations or prospects (as such prospects are described in the Pricing Disclosure Package) of the Company and its subsidiaries, taken as a whole, otherwise than as set forth or contemplated in the Pricing Disclosure Package, the effect of which, in any such case described in clause (i) or (ii), is in your reasonable judgment so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the shares of Preferred Stock being delivered at the Closing on the terms and in the manner contemplated in the Prospectus;

(g) On or after the Applicable Time there shall not have occurred any of the following: (i) a suspension or material limitation in trading in securities generally on the Exchange; (ii) a suspension or material limitation in trading in the Company’s securities on the Exchange; (iii) a general moratorium on commercial banking activities declared by either Federal or New York State authorities or a material disruption in commercial banking or securities settlement or clearance services in the United States; (iv) the outbreak or escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war or (v) the occurrence of any other calamity or crisis or any change in financial, political or economic conditions in the United States or elsewhere, if the effect of any such event specified in clause (iv) or (v) in your judgment makes it impracticable or inadvisable to proceed with the public offering or the delivery of the shares of Preferred Stock being delivered at the Closing on the terms and in the manner contemplated in the Prospectus;

(h) [Intentionally Omitted];

(i) [Intentionally Omitted];

(j) The Company shall have complied with the provisions of Section 5(c) hereof with respect to the furnishing of copies of the Prospectus on the second New York Business Day next succeeding the date of this Agreement; and

(k) The Company shall have furnished or caused to be furnished to the Placement Agent at the Closing certificates of officers of the Company reasonably satisfactory to you as to the accuracy of the Incorporated Company Representations and Warranties and the representations and warranties of the Company herein at and as of the Closing, as to the performance by the Company of all of its obligations hereunder to be performed at or prior to the Closing, and as to such other matters as you may reasonably request.

9. (a) The Company will indemnify and hold harmless the Placement Agent against any losses, claims, damages or liabilities, joint or several, to which the Placement Agent may become subject, under the Act or otherwise (including in settlement of any litigation if such settlement is effected with the written consent of the Company), insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based (i) upon an untrue statement or alleged untrue statement of a material fact contained or incorporated by reference in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, any Issuer Free Writing Prospectus, any “issuer information” filed or required to be filed pursuant to Rule 433(d)

under the Act or any materials or information provided to investors by, or with the approval of, the Company in connection with the marketing of the offering of the shares of Preferred Stock (the “Marketing Materials”), including any roadshow or investor presentations made to investors by the Company (whether in person or electronically), or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or (ii) in whole or in part upon any inaccuracy in the representations and warranties of the Company contained herein; or (iii) in whole or in part upon any failure of the Company to perform its obligations hereunder or under law; and will reimburse the Placement Agent for any reasonable legal or other expenses reasonably incurred by the Placement Agent in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, any Issuer Free Writing Prospectus or in any Marketing Materials, in reliance upon and in conformity with the Placement Agent Information.

(b) The Placement Agent will indemnify and hold harmless the Company from and against any losses, claims, damages or liabilities to which the Company may become subject, under the Act or otherwise (including in settlement of any litigation, if such settlement is effected with the written consent of the Placement Agent), insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, in reliance upon and in conformity with information concerning the Placement Agent furnished in writing by or on behalf of the Placement Agent to the Company expressly for use therein; and will reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such action or claim as such expenses are incurred. Notwithstanding the provisions of this Section 9(b), in no event shall any indemnity by the Placement Agent under this Section 9(b) exceed the Placement Fee.

(c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party otherwise than under such subsection except to the extent such indemnifying party has been materially prejudiced by such failure (through the forfeiture of substantive rights or defenses). In case any such action shall be brought against any indemnified party, and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. An indemnifying party shall not be obligated under any settlement

agreement relating to any action under this Section 9 to which it has not agreed in writing. No indemnifying party shall, without the written consent of the indemnified party (which consent shall not be unreasonably withheld or delayed), effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party.

(d) If the indemnification provided for in this Section 9 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Placement Agent on the other from the offering of the shares of Preferred Stock. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required under subsection (c) above, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and the Placement Agent on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Placement Agent on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company bear to the total Placement Fee received by the Placement Agent, in each case as set forth in the table on the cover page of the Prospectus. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or the Placement Agent on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Placement Agent agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any reasonable legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), the Placement Agent shall not be required to contribute any amount in excess of the amount by which the total Placement Fee exceeds the amount of any damages which the Placement Agent has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

(e) The obligations of the Company under this Section 9 shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls the Placement Agent within the meaning of the Act and each broker-dealer affiliate of the Placement Agent; and the obligations of the Placement Agent under this Section 9 shall be in addition to any liability which the Placement Agent may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company and to each person, if any, who controls the Company within the meaning of the Act.

10. [Intentionally Omitted.]

11. The respective indemnities, agreements, representations, warranties and other statements of the Company and the Placement Agent, as set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of the Placement Agent or any controlling person of the Placement Agent, or the Company or any officer or director or controlling person of the Company, and shall survive delivery of and payment for the shares of Preferred Stock, provided that the Incorporated Company Representations and Warranties shall survive for the period set forth in the Securities Purchase Agreement.

12. If any condition specified in Section 8 is not satisfied when and as required to be satisfied, this Agreement may be terminated by the Placement Agent by notice to the Company at any time on or prior to the Closing Date. Upon such termination, the Company shall then not be under any liability to the Placement Agent except as provided in Sections 7 and 9 hereof.

13. [Intentionally Omitted.]

14. All statements, requests, notices and agreements hereunder shall be in writing, and if to the Placement Agent shall be delivered or sent by mail, nationally recognized overnight courier, telex, email or facsimile transmission to you as the Placement Agent to William Blair & Company, L.L.C., 150 North Riverside Plaza, Chicago, IL 60606, Fax Number: (312) 551-4646, Attention: General Counsel; and if to the Company shall be delivered or sent by mail, nationally recognized overnight courier, or facsimile transmission to 4131 ParkLake Avenue, Suite 225, Raleigh, North Carolina 27612, Fax Number: (919) 582-9051 with a copy sent by email to the Company at ernied@bdsi.com, Attention: Chief Financial Officer and a copy sent by email to Ellenoff Grossman & Schole LLP at bigrossman@egsllp.com.

In accordance with the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), the Placement Agent is required to obtain, verify and record information that identifies their respective clients, including the Company, which information may include the name and address of their respective clients, as well as other information that will allow the Placement Agent to properly identify their respective clients.

15. This Agreement shall be binding upon, and inure solely to the benefit of, the Placement Agent and the Company and, to the extent provided in Sections 9 and 11 hereof, the officers and directors of the Company and each person who controls the Company or the Placement Agent, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. No purchaser of any of the shares of Preferred Stock shall be deemed a successor or assign by reason merely of such purchase.

16. Time shall be of the essence of this Agreement. As used herein, the term “business day” shall mean any day when the Commission’s office in Washington, DC is open for business.

17. The Company acknowledges and agrees that (i) the Placement Agent has not assumed an advisory or fiduciary responsibility in favor of the Company with respect to the offering contemplated hereby or the process leading thereto (irrespective of whether the Placement Agent has advised or are currently advising the Company on other matters) or any other obligation to the Company except the obligations expressly set forth in this Agreement and (ii) the Company has consulted its own legal and financial advisors to the extent it deemed appropriate. The Company agrees that it will not claim that the Placement Agent has, in connection with the transactions contemplated hereby, rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to the Company, in connection with such transaction or the process leading thereto.

18. This Agreement supersedes all prior agreements and understandings (whether written or oral) between the Company and the Placement Agent with respect to the subject matter hereof.

19. THIS AGREEMENT AND ANY MATTERS RELATED TO THIS TRANSACTION SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS THAT WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE LAWS OF THE STATE OF NEW YORK. The Company agrees that any suit or proceeding arising in respect of this agreement or our engagement will be tried exclusively in the U.S. District Court for the Southern District of New York or, if that court does not have subject matter jurisdiction, in any state court located in The City and County of New York and the Company agrees to submit to the jurisdiction of, and to venue in, such courts.

20. The Company and the Placement Agent hereby irrevocably waive, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

21. This Agreement may be executed by any one or more of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument. Such counterparts may be delivered with electronic signature or delivered by facsimile or by e-mail delivery of a “pdf” format data file, which counterparts shall be valid as if original and which delivery shall be valid delivery thereof

22. Notwithstanding anything herein to the contrary, the Company is authorized to disclose to any persons the U.S. federal and state income tax treatment and tax structure of the potential transaction and all materials of any kind (including tax opinions and other tax analyses) provided to the Company relating to that treatment and structure, without the Placement Agent imposing any limitation of any kind. However, any information relating to the tax treatment and tax structure shall remain confidential (and the foregoing sentence shall not apply) to the extent necessary to enable any person to comply with securities laws. For this purpose, “tax structure” is limited to any facts that may be relevant to that treatment.

23. If any term or other provision of this Agreement shall be held invalid, illegal or unenforceable, the validity, legality or enforceability of the other provisions of this Agreement shall not be affected thereby, and there shall be deemed substituted for the provision at issue a valid, legal and enforceable provision as similar as possible to the provision at issue.

24. Except as otherwise expressly provided herein, the provisions of this Agreement may be amended or waived at any time only by the written agreement of the parties hereto. Any waiver, permit, consent or approval of any kind or character on the part of any such holders of any provision or condition of this Agreement must be made in writing and shall be effective only to the extent specifically set forth in writing. The failure of any party hereto to enforce at any time any provision of this Agreement shall not be construed to be a waiver of such provision, nor in any way to affect the validity of this Agreement or any part hereof or the right of any party thereafter to enforce each and every such provision. No waiver of any breach of this Agreement shall be held to constitute a waiver of any other or subsequent breach.

[Remainder of page intentionally left blank]

If the foregoing is in accordance with your understanding, please sign and return to us, and upon the acceptance hereof by you, this Agreement and such acceptance hereof shall constitute a binding agreement between the Placement Agent and the Company.

[Signature Pages Follow]


Very truly yours,

BioDelivery Sciences International, Inc.

By:		/s/ Mark A. Sirgo
Name:		Mark A. Sirgo, Pharm. D.
Title:		Vice Chairman


Accepted as of the date hereof:

William Blair & Company, L.L.C.

By:		/s/ Steve Maletzky

Name:		Steve Maletzky

Title:		Partner, ECM

SCHEDULE I

(a) Number of shares of Preferred Stock: 5,000

Initial price to public: $10,000.00 per share

(b)	Issuer Free Writing Prospectuses: Press Release on CRG Amendment and Board Changes, issued by the Company on May 17, 2018 and filed as a free writing prospectus.

SCHEDULE II

The Placement Fee shall be an amount in the aggregate equal to 3% of the gross proceeds received by the Company from the sale of the shares of Preferred Stock less the reimbursement of transaction-related expenses incurred by the Company up to $20,000.

Exhibit A

Form of Securities Purchase Agreement

[attached hereto]

Exhibit 4.1

CERTIFICATE OF DESIGNATION

SERIES B NON-VOTING CONVERTIBLE PREFERRED STOCK

BIODELIVERY SCIENCES INTERNATIONAL, INC.

Pursuant to Section 151 of the

Delaware General Corporation Law

BioDelivery Sciences International, Inc. , a Delaware corporation (the “ Corporation ”), in accordance with the provisions of Section 103 of the Delaware General Corporation Law (the “ DGCL ”) does hereby certify that, in accordance with Sections 141(c) and 151 of the DGCL, the following resolution was duly adopted by the Board of Directors of the Corporation at a meeting duly convened on May [●], 2018:

RESOLVED , that pursuant to the authority granted to and vested in the Board of Directors of the Corporation in accordance with the provisions of the Certificate of Incorporation of the Corporation, as amended (the “ Certificate of Incorporation ”), there is hereby established a series of the Corporation’s authorized preferred stock, par value $0.001 per share (the “ Preferred Stock ”), which series shall be designated as the Series B Convertible Preferred Stock, par value $0.001 per share, of the Corporation, with the designation, number of shares, powers, preferences, rights, qualifications, limitations and restrictions thereof (in addition to any provisions set forth in the Certificate of Incorporation which are applicable to the Preferred Stock of all classes and series) as follows:

SERIES B NON-VOTING CONVERTIBLE PREFERRED STOCK

SECTION 1. DEFINITIONS . For the purposes hereof, the following terms shall have the following meanings:

“ Affiliate ” means any person or entity that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a person or entity, as such terms are used in and construed under Rule 144 under the Securities Act. With respect to a Holder, any investment fund or managed account that is managed on a discretionary basis by the same investment manager as such Holder will be deemed to be an Affiliate of such Holder.

“ Alternate Consideration ” shall have the meaning set forth in Section 8(c).

“ Beneficial Ownership Limitation ” shall have the meaning set forth in Section 7(c).

“ Business Day ” means any day except Saturday, Sunday, any day which shall be a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

“ Buy-In ” shall have the meaning set forth in Section 7(e)(iii).

“ Bylaws ” shall have the meaning set forth in Section 4(b)(ii).

“ Closing Sale Price ” means, for any security as of any date, the last closing trade price for such security prior to 4:00 p.m., New York City time, on the principal securities exchange or trading market where such security is listed or traded, as reported by Bloomberg, L.P. (or an equivalent, reliable reporting service mutually acceptable to and hereafter designated by Holders of a majority of the then-outstanding Series B Preferred Stock and the Corporation), or if the foregoing do not apply, the last trade price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg, L.P., or, if no last trade price is reported for such security by Bloomberg, L.P., the average of the bid prices of any market makers for such security as reported on the OTC Pink Market by OTC Markets Group, Inc. If the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Sale Price of such security on such date shall be the fair market value as determined in good faith by the Board of Directors of the Corporation.

“ Commission ” means the Securities and Exchange Commission.

“ Common Stock ” means the Corporation’s common stock, par value $.001 per share, and stock of any other class of securities into which such securities may hereafter be reclassified or changed into.

“ Conversion Date ” shall have the meaning set forth in Section 7(a).

“ Conversion Price ” shall mean $1.80, as adjusted pursuant to paragraph 8 hereof.

“ Conversion Ratio ” shall have the meaning set forth in Section 7(b).

“ Conversion Shares ” means, collectively, the shares of Common Stock issuable upon conversion of the shares of Series B Preferred Stock in accordance with the terms hereof.

“ Daily Failure Amount ” means the product of (x) 0.005 multiplied by (y) the Closing Sale Price of the Common Stock on the applicable Share Delivery Date.

“ DGCL ” shall mean the Delaware General Corporation Law.

“ Distribution ” shall have the meaning set forth in Section 8(b).

“ DTC ” shall have the meaning set forth in Section 7(a).

“ DWAC Delivery ” shall have the meaning set forth in Section 7(a).

“ Equity Conditions ” means, during the period in question, (a) the Corporation shall have duly honored all conversions scheduled to occur or occurring pursuant to one or more Notices of Conversion of the applicable Holder on or prior to the dates so required, if any, (b) (i) there is an effective registration statement pursuant to which the Corporation may issue Conversion Shares or (ii) all of the Conversion Shares may be issued to the Holder pursuant to Section 3(a)(9) of the Securities Act and immediately resold, (c) the Corporation is current with its required filings under the Exchange Act, (d) the Common Stock is trading on principal securities exchange, (e) there is a sufficient number of authorized but unissued shares of Common Stock for the issuance of all of the shares then issuable pursuant to the Preferred Stock then outstanding, and (f) the issuance of the shares in question to the applicable Holder would not violate the Beneficial Ownership Limitation of such Holder set forth in Section 7(c) herein.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“ Forced Conversion Limitation ” shall have the meaning set forth in Section 7(f)

“ Fundamental Transaction ” shall have the meaning set forth in Section 8(c).

“ Holder ” means any holder of Series B Preferred Stock.

“ Issuance Date ” means May [●], 2018.

“ Junior Securities ” shall have the meaning set forth in Section 5(a).

“ Liquidation Event ” shall have the meaning set forth in Section 5(b).

“ Nasdaq ” means the Nasdaq Stock Market LLC.

“ Notice of Conversion ” shall have the meaning set forth in Section 7(a).

“ Parity Securities ” shall have the meaning set forth in Section 5(a).

“ Person ” means any individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

“ Purchase Agreement ” means the Securities Purchase Agreement, dated as of May [●], 2018, between the Corporation and the original Holders.

“ Required Holders ” means the holders of at least eighty percent (80%) of the outstanding shares of Series B Preferred Stock (voting together on an as-converted to Common Stock basis).

“ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“ Senior Securities ” shall have the meaning set forth in Section 5(a).

“ Series A Preferred Stock ” means the Corporation’s Series A Non-Voting Convertible Preferred Stock, par value $0.001 per share.

“ Share Delivery Date ” shall have the meaning set forth in Section 7(e)(i).

“ Stated Value ” shall mean $10,000.

“ Trading Day ” means a day on which the Common Stock is traded for any period on the principal securities exchange or if the Common Stock is not traded on a principal securities exchange, on a day that the Common Stock is traded on another securities market on which the Common Stock is then being traded.

“ Voting Limitation ” shall have the meaning set forth in Section 4(a).

SECTION 2. DESIGNATION, AMOUNT AND PAR VALUE; ASSIGNMENT.

(a) The series of preferred stock designated by this Certificate shall be designated as the Corporation’s “Series B Convertible Preferred Stock” (the “ Series B Preferred Stock ”) and the number of shares so designated shall be 5,000. Each share of Series B Preferred Stock shall have a par value of $0.001 per share.

(b) The Corporation shall register shares of the Series B Preferred Stock, upon records to be maintained by the Corporation for that purpose (the “ Series B Preferred Stock Register ”), in the name of the Holders thereof from time to time. The Corporation may deem and treat the registered Holder of shares of Series B Preferred Stock as the absolute owner thereof for the purpose of any conversion thereof and for all other purposes. The Corporation shall register the transfer of any shares of Series B Preferred Stock in the Series B Preferred Stock Register, upon surrender of the certificates evidencing such shares to be transferred, duly endorsed by the Holder thereof, to the Corporation at its principal place of business or such other office of the Corporation as may be designated by the Corporation. Upon any such registration or transfer, a new certificate evidencing the shares of Series B Preferred Stock so transferred shall be issued to the transferee and a new certificate evidencing the remaining portion of the shares not so transferred, if any, shall be issued to the transferring Holder, in each case, within two (2) Business Days. The provisions of this Certificate are intended to be for the benefit of all Holders from time to time and shall be enforceable by any such Holder.

SECTION 3. DIVIDENDS . The Corporation shall not, without the written consent or affirmative vote of the Required Holders, given in writing or by vote at a meeting declare, pay or set aside any dividends on shares of any other class or series of capital stock of the Corporation (other than dividends on shares of Common Stock payable in shares of Common Stock ) unless the holders of the Series B Preferred Stock then outstanding shall first receive, or simultaneously receive, a dividend on each outstanding share of Series B Preferred Stock in an amount at least equal to (i) in the case of a dividend on Common Stock or any class or series that is convertible into Common Stock, that dividend per share of Series B Preferred Stock as would equal the product of (A) the dividend payable on each share of such class or series determined, if applicable, as if all shares of such class or series had been converted into Common Stock (without giving effect for such purposes to the Beneficial Ownership Limitation set forth in Section 7(c) hereof) and (B) the number of shares of Common Stock issuable upon conversion of a share of Series B Preferred Stock (without giving effect for such purposes to the Beneficial Ownership Limitation set forth in Section 7(c) hereof), in each case calculated on the record date for determination of holders entitled to receive such dividend or (ii) in the case of a dividend on any class or series that is not convertible into Common Stock, at a rate per share of Series B Preferred Stock determined by (A) dividing the amount of the dividend payable on each share of such class or series of capital stock by the original issuance price of such class or series of capital stock (subject

to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to such class or series) and (B) multiplying such fraction by an amount equal to the Stated Value; provided that, if the Corporation declares, pays or sets aside, on the same date, a dividend on shares of more than one class or series of capital stock of the Corporation, the dividend payable to the holders of Series B Preferred Stock pursuant to this Section 3 shall be calculated based upon the dividend on the class or series of capital stock that would result in the highest Series B Preferred Stock dividend. Subject to the forgoing, Holders shall be entitled to receive, and the Corporation shall pay, dividends on shares of the Series B Preferred Stock equal (on an as-if-converted-to-Common-Stock basis without giving effect for such purposes to the Beneficial Ownership Limitation set forth in Section 7(c) hereof) to and in the same form as dividends (other than dividends in the form of Common Stock) actually paid on shares of the Common Stock when, as and if such dividends (other than dividends in the form of Common Stock) are paid on shares of the Common Stock. Except as set forth above, the Holders shall not be entitled to any dividend on the Series B Preferred Stock.

SECTION 4. VOTING RIGHTS .

(a) Except as otherwise provided herein or as otherwise required by the DGCL, the Series B Preferred Stock shall have no voting rights.

(b) Protective Provisions . At any time when shares of Series B Preferred Stock are outstanding, the Corporation shall not, either directly or indirectly by amendment, merger, consolidation or otherwise, do any of the following without (in addition to any other vote required by law or the Certificate of Incorporation) the written consent or affirmative vote of the Required Holders, given in writing or by vote at a meeting, and any such act or transaction entered into without such consent or vote shall be null and void ab initio , and of no force or effect:

(i) amend, alter, or repeal any provision of the Certificate of Incorporation, this Certificate, or the Corporation’s bylaws (the “ Bylaws ”) in a manner adverse to the Series B Preferred Stock, or file any certificate of designation of any series of Preferred Stock, if such action would adversely alter or change the preferences, rights, privileges or powers of, or restrictions provided for the benefit of the Series B Preferred Stock;

(ii) create, or authorize the creation of, or issue or obligate itself to issue shares of, any additional class or series of capital stock, or any other securities convertible into any additional class or series of capital stock, or increase the authorized number of shares of Series B Preferred Stock or increase the authorized number of shares of any additional class or series of capital stock unless the same ranks junior to the Series B Preferred Stock with respect to the distribution of assets on the liquidation, dissolution or winding up of the Corporation, the payment of dividends and rights of redemption; or

(iii) purchase or redeem (or permit any subsidiary to purchase or redeem) or pay or declare any dividend or make any distribution on, any shares of capital stock of the Corporation other than (i) redemptions of or dividends or distributions on the Series B Preferred Stock as expressly authorized herein, (ii) dividends or other distributions payable on the Common Stock solely in the form of additional shares of Common Stock and (iii) repurchases of stock from former employees, officers, directors, consultants or other persons who performed services for the Corporation or any subsidiary in connection with the cessation of such employment or service at the lower of the original purchase price or the then-current fair market value thereof.

SECTION 5. RANK; LIQUIDATION .

(a) The Series B Preferred Stock shall rank: (i) senior to all of the Common Stock; (ii) senior to any class or series of capital stock of the Corporation hereafter created specifically ranking by its terms junior to any Series B Preferred Stock (“ Junior Securities ”); (iii) on parity with any class or series of capital stock of the Corporation hereafter created specifically ranking by its terms on parity with the Series B Preferred Stock (“ Parity Securities ”); and (iv) junior to any class or series of capital stock of the Corporation hereafter created specifically ranking by its terms senior to any Series B Preferred Stock (“ Senior Securities ”), in each case, as to dividends, distributions of assets upon liquidation, dissolution or winding up of the Corporation, whether voluntarily or involuntarily.

(b) Subject to the prior and superior rights of the holders of any Senior Securities of the Corporation, upon liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary (each, a “ Liquidation

Event ”), each holder of shares of Series B Preferred Stock shall be entitled to receive, in preference to any distributions of any of the assets or surplus funds of the Corporation to the holders of the Common Stock and Junior Securities and pari passu with any distribution to the holders of Series A Preferred Stock and Parity Securities, an amount equal to $0.001 per share of Series B Preferred Stock, plus an additional amount equal to any dividends declared but unpaid on such shares, before any payments shall be made or any assets distributed to holders of any class of Common Stock or Junior Securities. If, upon any such Liquidation Event, the assets of the Corporation shall be insufficient to pay the holders of shares of the Series B Preferred Stock the amount required under the preceding sentence, then all remaining assets of the Corporation shall be distributed ratably to holders of the shares of the Series B Preferred Stock, Series A Preferred Stock and Parity Securities.

(c) After payment to the holders of shares of the Series B Preferred Stock of the amount required under Section 5(b) and subject to the prior and superior rights of the holders of any Senior Securities of the Corporation, the remaining assets or surplus funds of the Corporation, if any, available for distribution to stockholders shall be distributed ratably among the holders of the Series B Preferred Stock, the holders of Series A Preferred Stock, any other class or series of capital stock that participates with the Common Stock in the distribution of assets upon any Liquidation Event and the Common Stock, with the holders of the Series B Preferred Stock deemed to hold that number of shares of Common Stock into which such shares of Series B Preferred Stock are then convertible (without giving effect for such purposes to the Beneficial Ownership Limitation set forth in Section 7(c) hereof).

SECTION 6. Requisite Stockholder Approval .

(a) Subject to applicable law, the rules and regulations of Nasdaq and the Certificate of Incorporation and Bylaws, the Corporation covenants that it shall establish a record date for, call, give notice of, convene and hold a meeting of the holders of Common Stock of the Corporation (the “ Corporation Stockholders ’ Meeting ”), as promptly as practicable following the Issuance Date, but in no event later than August [●], 2018, for the purpose of, among other things, voting upon (i) an amendment to the Certificate of Incorporation to increase the Corporation’s authorized capital stock, in an amount necessary to provide for the full conversion of outstanding shares of the Series B Preferred Stock into shares of Common Stock (the “ Amendment ”) and (ii) the approval as may be required by the applicable rules and regulations of Nasdaq (or any successor entity) from the stockholders of the Corporation with respect to the transactions contemplated by the Transaction Documents (as defined in the Purchase Agreement) (the “ Stockholder Approval ”). Notwithstanding the foregoing, (i) if there are insufficient shares of Common Stock necessary to establish a quorum at the Corporation Stockholders’ Meeting, the Corporation may postpone or adjourn the date of the Corporation Stockholders’ Meeting to the extent (and only to the extent) the Corporation reasonably determines that such postponement or adjournment is necessary in order to conduct business at the Corporation Stockholders’ Meeting, (ii) the Corporation may postpone or adjourn the Corporation Stockholders’ Meeting to the extent (and only to the extent) the Corporation reasonably determines that such postponement or adjournment is required by applicable law, and (iii) the Corporation may postpone or adjourn the Corporation Stockholders’ Meeting to the extent (and only to the extent) the Corporation reasonably determines that such postponement or adjournment is necessary to solicit sufficient proxies to secure the favorable vote of the holders of a majority of the outstanding shares of Common Stock present in person or by proxy at the Corporation Stockholders’ Meeting and entitled to vote with respect to each of the Amendment and Stockholder Approval (collectively, such approval, the “ Requisite Stockholder Approval ”). The Corporation shall solicit from stockholders of the Corporation proxies in favor of the approval of the Amendment and Stockholder Approval in accordance with applicable law and the rules and regulations of Nasdaq, and, except as required to comply with fiduciary duties under applicable law, the Corporation’s Board of Directors shall (x) recommend that the Corporation’s stockholders vote to approve the Amendment and Stockholder Approval (the “ Recommendation ”), (y) use its reasonable best efforts to solicit such stockholders to vote in favor of the Amendment and Stockholder Approval and (z) use its reasonable best efforts to take all other actions necessary or advisable to secure the favorable votes of such stockholders required to approve and effect the Amendment and Stockholder Approval. The Corporation shall establish a record date for, call, give notice of, convene and hold the Corporation Stockholders’ Meeting in accordance with this Section 6, whether or not the Corporation’s Board of Directors at any time subsequent to the Issuance Date shall have changed its position with respect to its Recommendation or determined that the Amendment and Stockholder Approval is no longer advisable and/or recommended that stockholders of the Corporation reject the Amendment and Stockholder Approval.

(b) Except as required to comply with fiduciary duties under applicable law, the Corporation’s Board of Directors shall not (i) withdraw or modify the Recommendation in a manner adverse to any Holder, or adopt or propose a resolution to withdraw or modify the Recommendation that is or becomes disclosed publicly and which can reasonably be interpreted to indicate that the Corporation’s Board of Directors or any committee thereof does not support the Amendment or does not believe that the Conversion is in the best interests of the Corporation’s stockholders or (ii) fail to reaffirm, without qualification, the Recommendation, or fail to state publicly, without qualification, that the Conversion is in the best interests of the Corporation’s stockholders after any Holder requests in writing that such action be taken.

SECTION 7. CONVERSION .

(a) Conversions at Option of Holder . At any time after the date that the Requisite Stockholder Approval is obtained, each share of Series B Preferred Stock (or portion of a share of Series B Preferred, which portion shall not be less than 0.5 of a share of Series B Preferred Stock) shall be convertible, from time to time from and after the date thereof, at the option of the Holder thereof, into a number of shares of Common Stock equal to the Conversion Ratio in effect at the time of such conversion. Holders shall effect conversions by providing the Corporation with the form of conversion notice (via overnight courier, facsimile or email) attached hereto as Annex A (a “ Notice of Conversion ”), duly completed and executed. For purposes of clarification, unless required pursuant to industry standard stock transfer procedures, the Corporation or its transfer agent shall not require a Holder to obtain a medallion guaranty, notary attestation or any similar deliverable in order to effectuate the conversion of all or a portion of such Holder’s shares of Series B Preferred Stock. Provided the Corporation’s Common Stock transfer agent is participating in the Depository Trust Company (“ DTC ”), Fast Automated Securities Transfer program, the Notice of Conversion may specify, at the Holder’s election, whether the applicable Conversion Shares shall be credited to the account of the Holder’s prime broker with DTC through its Deposit Withdrawal Agent Commission system (a “ DWAC Delivery ”). The date on which a conversion of Series B Preferred Stock shall be deemed effective (the “ Conversion Date ”) shall be defined as the Trading Day that the Notice of Conversion, completed and executed, is sent (via overnight courier, facsimile or email) to, and received during regular business hours by, the Corporation. To effect conversions of shares of Series B Preferred Stock, a Holder shall not be required to surrender the certificate(s) representing the shares of Series B Preferred Stock to the Corporation unless all of the shares of Series B Preferred Stock represented thereby are so converted, in which case such Holder shall deliver the certificate representing such shares of Series B Preferred Stock promptly following the Conversion Date at issue. The calculations set forth in the Notice of Conversion shall control in the absence of manifest or mathematical error.

(b) Conversion Ratio . The “ Conversion Ratio ” for each share of Series B Preferred Stock (or portion of a share of Series B Preferred Stock, which portion shall not be less than 0.5 of a share of Series B Preferred Stock) shall be equal to the Stated Value divided by the Conversion Price.

(c) Beneficial Ownership Limitation . Notwithstanding anything herein to the contrary, the Corporation shall not effect any conversion of the Series B Preferred Stock, and a Holder shall not have the right to convert any portion of its Series B Preferred Stock, to the extent that, after giving effect to an attempted conversion set forth on an applicable Notice of Conversion, such Holder (together with such Holder’s Affiliates, and any other Person whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the Exchange Act and the applicable rules and regulations of the Commission, including any “group” of which the Holder is a member) would beneficially own a number of shares of Common Stock in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by such Holder and its Affiliates shall include the number of shares of Common Stock issuable upon conversion of the Series B Preferred Stock subject to the Notice of Conversion with respect to which the determination of such sentence is being made, but shall exclude the number of shares of Common Stock which are issuable upon (A) conversion of the remaining, unconverted shares of Series B Preferred Stock beneficially owned by such Holder or any of its Affiliates, and (B) exercise or conversion of the unexercised or unconverted portion of any other securities of the Corporation beneficially owned by such Holder or any of its Affiliates (including, without limitation, any convertible notes, convertible stock or warrants) that are subject to a limitation on conversion or exercise analogous to the limitation contained herein. Except as set forth in the

preceding sentence, for purposes of this Section 7(c), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the applicable rules and regulations of the Commission. In addition, for purposes hereof, “group” has the meaning set forth in Section 13(d) of the Exchange Act and the applicable rules and regulations of the Commission. For purposes of this Section 7(c), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Corporation’s most recent Form 10-K, Form 10-Q, Current Report on Form 8-K or other public filing with the Commission, as the case may be, (B) a more recent public announcement by the Corporation or (C) a more recent notice by the Corporation or the Corporation’s transfer agent to the Holder setting forth the number of shares of Common Stock then outstanding. For any reason at any time, upon the written or oral request of a Holder (which may be by email), the Corporation shall, within one (1) Business Day of such request, confirm orally and in writing to such Holder (which may be via email) the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to any actual conversion or exercise of securities of the Corporation, including shares of Series B Preferred Stock, by such Holder or its Affiliates since the date as of which such number of outstanding shares of Common Stock was last publicly reported or confirmed to the Holder. The “ Beneficial Ownership Limitation ” shall be 9.98% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock pursuant to such Notice of Conversion (to the extent permitted pursuant to this Section 7(c)). The Corporation shall be entitled to rely on representations made to it by the Holder in any Notice of Conversion regarding its Beneficial Ownership Limitation. By written notice to the Corporation, a Holder may from time to time increase or decrease the Beneficial Ownership Limitation to any other percentage specified in such notice; provided that any such increase or decrease will not be effective until the sixty-first (61 ^st ) day after such notice is delivered to the Corporation; provided , however , that, until Stockholder Approval has been obtained, a Holder shall only be permitted to increase the Beneficial Ownership Limitation up to 19.99%. The provisions of this Section 7(c) shall be construed, corrected and implemented in a manner so as to effectuate the intended beneficial ownership limitation herein contained and the shares of Common Stock underlying the Series B Preferred Stock in excess of the Beneficial Ownership Limitation shall not be deemed to be beneficially owned by the Holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the Exchange Act.

(d) [reserved]

(e) Mechanics of Conversion .

(i) Delivery of Certificate or Electronic Issuance Upon Conversion . Not later than two (2) Trading Days after the applicable Conversion Date (the “ Share Delivery Date ”), the Corporation shall: (a) deliver, or cause to be delivered, to the converting Holder a physical certificate or certificates representing the number of Conversion Shares being acquired upon the conversion of shares of Series B Preferred Stock (which certificate or certificates shall not have any legends on it) or (b) in the case of a DWAC Delivery, electronically transfer such Conversion Shares by crediting the account of the Holder’s prime broker with DTC through its DWAC system. If in the case of any Notice of Conversion such certificate or certificates are not delivered to or as directed by or, in the case of a DWAC Delivery, such shares are not electronically delivered to or as directed by, the applicable Holder by the Share Delivery Date, the applicable Holder shall be entitled to elect to rescind such Notice of Conversion by written notice to the Corporation at any time on or before its receipt of such certificate or certificates for Conversion Shares or electronic receipt of such Conversion Shares, as applicable, in which event the Corporation shall promptly return to such Holder any original Series B Preferred Stock certificate delivered to the Corporation and such Holder shall promptly return to the Corporation any Common Stock certificates or otherwise direct the return of any shares of Common Stock delivered to the Holder through the DWAC system, representing the shares of Series B Preferred Stock unsuccessfully tendered for conversion to the Corporation. Notwithstanding anything herein to the contrary, the Corporation’s obligation to deliver shares of capital stock to a Holder within two (2) Business Days shall be automatically amended if, and to the extent that, the obligation to deliver shares within two (2) Business Days pursuant to Rule 15c6-1(a) (or any successor rule) promulgated under the Securities Exchange Act of 1933, as amended, is amended or modified.

(ii) Obligation Absolute . Subject to any limitations on the beneficial ownership of Series B Preferred Stock to which a Holder may be subject and subject to such Holder’s right to rescind a Notice of Conversion pursuant to Section 7(e)(i) above, the Corporation’s obligation to issue and deliver the Conversion Shares upon conversion of Series B Preferred Stock in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by a Holder to enforce the same, any waiver or consent with respect to any

provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by such Holder or any other Person of any obligation to the Corporation or any violation or alleged violation of law by such Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the Corporation to such Holder in connection with the issuance of such Conversion Shares. Subject to any limitations on the beneficial of ownership of Series B Preferred Stock to which a Holder may be subject and subject to such Holder’s right to rescind a Notice of Conversion pursuant to Section 7(e)(i) above, in the event a Holder shall elect to convert any or all of its Series B Preferred Stock, the Corporation may not refuse conversion based on any claim that such Holder or any one associated or affiliated with such Holder has been engaged in any violation of law, agreement or for any other reason, unless an injunction from a court, on notice to such Holder, restraining and/or enjoining conversion of all or part of the Series B Preferred Stock of such Holder shall have been sought and obtained by the Corporation, and the Corporation posts a surety bond for the benefit of such Holder in the amount of 150% of the value of the Conversion Shares into which would be converted the Series B Preferred Stock which is subject to such injunction, which bond shall remain in effect until the completion of arbitration/litigation of the underlying dispute and the proceeds of which shall be payable to such Holder to the extent it obtains judgment. In the absence of such injunction, the Corporation shall, subject to any limitations on the beneficial ownership of Series B Preferred Stock to which a Holder may be subject and subject to such Holder’s right to rescind a Notice of Conversion pursuant to Section 7(e)(i) above, issue Conversion Shares upon a properly noticed conversion. If the Corporation fails to deliver to a Holder such certificate or certificates, or electronically deliver (or cause its transfer agent to electronically deliver) such shares in the case of a DWAC Delivery, pursuant to Section 7(e)(i) on or prior to the second (2 ^nd ) Trading Day after the Share Delivery Date applicable to such conversion (other than a failure caused by incorrect or incomplete information provided by such Holder to the Corporation), then, unless the Holder has rescinded the applicable Notice of Conversion pursuant to Section 7(e)(i) above, the Corporation shall pay (as liquidated damages and not as a penalty) to such Holder an amount payable in cash equal to the product of (x) the number of Conversion Shares required to have been issued by the Corporation on such Share Delivery Date, (y) an amount equal to the Daily Failure Amount and (z) the number of Trading Days actually lapsed after such second (2 ^nd ) Trading Day after the Share Delivery Date during which such shares certificates have not been delivered, or, in the case of a DWAC Delivery, such shares not been electronically delivered; provided, however, the Holder shall only receive up to such amount of shares of Common Stock such that Holder and any other persons or entities whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the Exchange Act (including shares held by any “group” of which the Holder is a member, but excluding shares beneficially owned by virtue of the ownership of securities or rights to acquire securities that have limitations on the right to convert, exercise or purchase similar to the limitation set forth in Section 7(c) hereof) shall not collectively beneficially own greater than the percentage of the total number of shares of Common Stock of the Corporation then issued and outstanding applicable to any limitation on beneficial ownership to which such Holder may be subject. Nothing herein shall limit a Holder’s right to pursue actual damages for the Corporation’s failure to deliver Conversion Shares within the period specified herein and such Holder shall have the right to pursue all remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief; provided that Holder shall not receive duplicate damages for the Corporation’s failure to deliver Conversion Shares within the period specified herein. The exercise of any such rights shall not prohibit a Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law.

(iii) Compensation for Buy-In for Failure to Timely Deliver Certificates Upon Conversion . If the Corporation fails to deliver to a Holder the applicable certificate or certificates or to effect a DWAC Delivery, as applicable, by the Share Delivery Date pursuant to Section 7(e)(i) (other than a failure caused by incorrect or incomplete information provided by such Holder to the Corporation), and if after such Share Delivery Date such Holder is required by its brokerage firm to purchase (in an open market transaction or otherwise), or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by such Holder of the Conversion Shares which such Holder was entitled to receive upon the conversion relating to such Share Delivery Date (a “ Buy-In ”), the Corporation shall (A) pay in cash to such Holder (in addition to any other remedies available to or elected by such Holder) the amount by which (x) such Holder’s total purchase price (including any brokerage commissions) for the shares of Common Stock so purchased exceeds (y) the product of (1) the aggregate number of shares of Common Stock that such Holder was entitled to receive from the conversion at issue multiplied by (2) the actual sale price at which the sell order giving rise to such purchase obligation was executed (including any brokerage commissions) and (B) at the option of such Holder, either reissue (if surrendered) the shares of Series B Preferred Stock equal to the number of shares of Series B Preferred Stock submitted for conversion or deliver to

such Holder the number of shares of Common Stock that would have been issued if the Corporation had timely complied with its delivery requirements under Section 7(e)(i). For example, if a Holder purchases shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of shares of Series B Preferred Stock with respect to which the actual sale price (including any brokerage commissions) giving rise to such purchase obligation was a total of $10,000 under clause (A) of the immediately preceding sentence, the Corporation shall be required to pay such Holder $1,000. The Holder shall provide the Corporation written notice, within three (3) Trading Days after the occurrence of a Buy-In (a “ Buy-In Notice ”), indicating the amounts payable to such Holder in respect of such Buy-In together with applicable confirmations and other evidence reasonably requested by the Corporation. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Corporation’s failure to timely deliver certificates representing shares of Common Stock upon conversion of the shares of Series B Preferred Stock as required pursuant to the terms hereof; provided, however, that the Holder shall not be entitled to both (i) require the reissuance of the shares of Series B Preferred Stock submitted for conversion for which such conversion was not timely honored and (ii) receive the number of shares of Common Stock that would have been issued if the Corporation had timely complied with its delivery requirements under Section 7(e)(i).

(iv) Reservation of Shares Issuable Upon Conversion . The Corporation covenants that, following obtaining the Requisite Stockholder Approval, it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of the Series B Preferred Stock, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holders of the Series B Preferred Stock, not less than such aggregate number of shares of the Common Stock as shall be issuable (taking into account the adjustments of Section 8) upon the conversion of all outstanding shares of Series B Preferred Stock. The Corporation covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable.

(v) Fractional Shares . No fractional shares or scrip representing fractional shares of Common Stock shall be issued upon the conversion of the Series B Preferred Stock. As to any fraction of a share which a Holder would otherwise be entitled to receive upon such conversion, the Corporation shall at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Conversion Price or round up to the next whole share.

(vi) Transfer Taxes . The issuance of certificates for shares of the Common Stock upon conversion of the Series B Preferred Stock shall be made without charge to any Holder for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such certificates, provided that the Corporation shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the registered Holder(s) of such shares of Series B Preferred Stock and the Corporation 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 Corporation the amount of such tax or shall have established to the satisfaction of the Corporation that such tax has been paid.

(e) Status as Stockholder . Upon each Conversion Date: (i) the shares of Series B Preferred Stock being converted shall be deemed converted into shares of Common Stock and (ii) the Holder’s rights as a holder of such converted shares of Series B Preferred Stock shall cease and terminate, excepting only the right to receive certificates for or electronic delivery of such shares of Common Stock and to any remedies provided herein or otherwise available at law or in equity to such Holder because of a failure by the Corporation to comply with the terms of this Certificate. In all cases, the Holder shall retain all of its rights and remedies for the Corporation’s failure to convert Series B Preferred Stock.

(f) Forced Conversion upon Requisite Stockholder Approval . Notwithstanding anything herein to the contrary, upon Requisite Stockholder Approval, the Corporation may, within ten (10) Trading Days after the date of Requisite Stockholder Approval, deliver a written notice to all Holders (a “ Forced Conversion Notice ” and the date such notice is delivered to all Holders, the “ Forced Conversion Notice Date ”) to cause each Holder to convert all or part of such Holder’s Preferred Stock (as specified in such Forced Conversion Notice) pursuant to Section 7 (a “ Forced Conversion ”) up to each Holder’s Forced Conversion Limitation (as defined below), it being agreed that the “Conversion Date” for purposes of Section 7 shall be deemed to occur on the Forced Conversion Notice Date (such date, the “ Forced Conversion Date ”). The Corporation may not deliver a Forced Conversion Notice, and any

Forced Conversion Notice delivered by the Corporation shall not be effective, unless all of the Equity Conditions have been met on the Forced Conversion Date through and including the date of actual delivery of the Conversion Shares. Any Forced Conversion Notices shall be applied ratably to all of the Holders based on the then outstanding shares of Preferred Stock. For purposes of clarification, a Forced Conversion shall be subject to all of the provisions of Section 7, including, without limitation, the provisions on delivery of Conversion Shares and the limitations on conversion in Section 7(c). In addition, following the initial Forced Conversion hereunder, the Corporation may deliver one or more additional Forced Conversion Notices to the Holders to effect Forced Conversions up to the Forced Conversion Limitation pursuant to the terms hereunder, provided that the Company shall not deliver a Forced Conversion Notice to the Holders more than one time in a ninety (90) day period. In connection with the foregoing sentence, upon written request of the Corporation given no more often than one time in a forty five (45) day period, each Holder shall, within three business days following request, deliver notice in writing to the Corporation of such Holder’s current holdings of Common Stock and beneficial ownership of Common Stock for purposes of the Forced Conversion Limitation in order that the Corporation may effect additional Forced Conversions pursuant to the terms hereunder. For purposes herein, the “ Forced Conversion Limitation ” means, with respect to each Holder, a beneficial ownership limitation equal to 9% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock pursuant to such Forced Conversion Notice, which shall be calculated as set forth in Section 7(c) herein, assuming for purposes of such calculation that the Beneficial Ownership Limitation (as such term is used in Section 7(c) herein) shall be 9%.

SECTION 8. CERTAIN ADJUSTMENTS .

(a) Stock Dividends and Stock Splits . If the Corporation, at any time while the Series B Preferred Stock is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Corporation upon conversion of shares of Series B Preferred Stock) with respect to the then outstanding shares of Common Stock; (ii) subdivides outstanding shares of Common Stock into a larger number of shares; or (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares, then the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of the Corporation) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event (excluding any treasury shares of the Corporation). Any adjustment made pursuant to this Section 8(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision or combination.

(b) Rights Upon Distribution of Assets . If the Corporation shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “ Distribution ”), a Holder shall be entitled to receive the dividend or distribution of assets that would have been payable to such Holder pursuant to the Distribution had such Holder converted his or her shares of Series B Preferred Stock (or, if he or she had partially converted such shares prior to the Distribution, any unconverted portion thereof) immediately prior to such record date without giving effect for such purposes to the Beneficial Ownership Limitation set forth in Section 7(c) hereof.

(c) Fundamental Transaction . If, at any time while the Series B Preferred Stock is outstanding: (i) the Corporation effects any merger or consolidation of the Corporation with or into another Person (other than a merger in which the Corporation is the surviving or continuing entity and its Common Stock is not exchanged for or converted into other securities, cash or property), (ii) the Corporation effects any sale of all or substantially all of its assets in one transaction or a series of related transactions, (iii) any tender offer or exchange offer (whether by the Corporation or another Person) is completed pursuant to which all of the Common Stock is exchanged for or converted into other securities, cash or property, or (iv) the Corporation effects any reclassification of the Common Stock or any compulsory share exchange pursuant (other than as a result of a dividend, subdivision or combination covered by Section 8(a) above) to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (in any such case, a “ Fundamental Transaction ”), then, upon any subsequent conversion of this Series B Preferred Stock, the Holders shall have the right to receive, in lieu of the right to receive Conversion Shares, for each Conversion Share that would have been issuable upon such conversion immediately

prior to the occurrence of such Fundamental Transaction, the same kind and amount of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of one share of Common Stock (the “ Alternate Consideration ”). For purposes of any such subsequent conversion, the determination of the Conversion Ratio shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Corporation shall adjust the Conversion Ratio in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holders shall be given the same choice as to the Alternate Consideration it receives upon any conversion of this Series B Preferred Stock following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any successor to the Corporation or surviving entity in such Fundamental Transaction shall file a new Certificate of Designation with the same terms and conditions and issue to the Holders new preferred stock consistent with the foregoing provisions and evidencing the Holders’ right to convert such preferred stock into Alternate Consideration. The terms of any agreement to which the Corporation is a party and pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this Section 8(b) and ensuring that the Series B Preferred Stock (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction. The Corporation shall cause to be delivered (via overnight courier, facsimile or email) to each Holder, at its last address as it shall appear upon the books and records of the Corporation, written notice of any Fundamental Transaction at least ten (10) calendar days prior to the date on which such Fundamental Transaction is expected to become effective or close.

(d) Calculations . All calculations under this Section 8 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 8, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Corporation) issued and outstanding.

(e) Notice to the Holders .

(i) Adjustment to Conversion Price . Whenever the Conversion Price is adjusted pursuant to any provision of this Section 8, the Corporation shall promptly deliver to each Holder a notice setting forth the Conversion Ratio after such adjustment and setting forth a brief statement of the facts requiring such adjustment.

(ii) Other Notices . If: (A) the Corporation shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Corporation shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Corporation shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Corporation shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Corporation is a party, any sale or transfer of all or substantially all of the assets of the Corporation, of any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property or (E) the Corporation shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Corporation, then, in each case, the Corporation shall cause to be delivered (via overnight courier, facsimile or email) to each Holder at its last address as it shall appear upon the books and records of the Corporation, at least ten (10) calendar days (or in the event of a voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Corporation, at least seventy-five (75) calendar days) prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice.

SECTION 9. MISCELLANEOUS .

(a) Notices . Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any Notice of Conversion, shall be in writing and delivered personally, by email, facsimile, or sent by a nationally recognized overnight courier service, addressed to the Corporation, at 4131 ParkLake Avenue, Suite 225, Raleigh, NC 27612, facsimile number 919-582-9051, e-mail: mbrown@bdsi.com, or such other facsimile number or address or email address as the Corporation may specify for such purposes by notice to the Holders delivered in accordance with this Section. Any and all notices or other communications or deliveries to be provided by the Corporation hereunder shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight courier service or email addressed to each Holder at the facsimile number or address of such Holder appearing on the books of the Corporation, or if no such facsimile number or address appears on the books of the Corporation, at the principal place of business of such Holder. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile or email at the facsimile number or email address specified in or pursuant to this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the date immediately following the date of transmission, if such notice or communication is delivered via facsimile or mail at the facsimile number or email address specified in or pursuant to this Section between 5:30 p.m. and 11:59 p.m. (New York City time) on any date, (iii) the second (2 ^nd ) Business Day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.

(b) Lost or Mutilated Series B Preferred Stock Certificate . If a Holder’s Series B Preferred Stock certificate shall be mutilated, lost, stolen or destroyed, the Corporation shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated certificate, or in lieu of or in substitution for a lost, stolen or destroyed certificate, a new certificate for the shares of Series B Preferred Stock so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such certificate, and of the ownership thereof, reasonably satisfactory to the Corporation and, in each case, customary and reasonable indemnity, if requested. Applicants for a new certificate under such circumstances shall also comply with such other reasonable regulations and procedures and pay such other reasonable third-party costs as the Corporation may prescribe.

(c) Waiver . Any waiver by the Corporation or a Holder of a breach of any provision of this Certificate of Designation shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Certificate of Designation or a waiver by any other Holders. The failure of the Corporation or a Holder to insist upon strict adherence to any term of this Certificate of Designation on one or more occasions shall not be considered a waiver or deprive that party (or any other Holder) of the right thereafter to insist upon strict adherence to that term or any other term of this Certificate of Designation. Any waiver by the Corporation or a Holder must be in writing.

(e) Severability . If any provision of this Certificate of Designation is invalid, illegal or unenforceable, the balance of this Certificate of Designation shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable law.

(f) Next Business or Trading Day . Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day or a Trading Day, such payment shall be made on the next succeeding Business Day or Trading Day, as the case may be.

(g) Headings . The headings contained herein are for convenience only, do not constitute a part of this Certificate of Designation and shall not be deemed to limit or affect any of the provisions hereof.

(h) Status of Converted Series B Preferred Stock . If any shares of Series B Preferred Stock shall be converted or reacquired by the Corporation, such shares shall resume the status of authorized but unissued shares of preferred stock and shall no longer be designated as Series B Preferred Stock.

IN WITNESS WHEREOF , the Corporation has caused this Certificate of Designation to be signed by its duly authorized officer this day of May, 2018.

BIODELIVERY SCIENCES

INTERNATIONAL, INC.



By:
Name:
Title:

ANNEX A

NOTICE OF CONVERSION

(TO BE EXECUTED BY THE REGISTERED HOLDER IN ORDER TO

CONVERT SHARES OF SERIES B PREFERRED STOCK)

The undersigned Holder hereby irrevocably elects to convert the number of shares of Series B Non-Voting Convertible Preferred Stock indicated below, represented by stock certificate No(s). (the “ Preferred Stock Certificates ”), into shares of common stock, par value $.001 per share (the “ Common Stock ”), of BioDelivery Sciences International, Inc., a Delaware corporation (the “ Corporation ”), as of the date written below. If securities are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto. Capitalized terms utilized but not defined herein shall have the meaning ascribed to such terms in that certain Certificate of Designation of Preferences, Rights and Limitations (the “ Certificate of Designation ”) of Series B Non-Voting Convertible Preferred Stock (the “ Series B Preferred Stock ”) filed by the Corporation on , 2018.

As of the date hereof, the number of shares of Common Stock beneficially owned by the undersigned Holder (together with such Holder’s Affiliates, and any other Person whose beneficial ownership of Common Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the Exchange Act and the applicable regulations of the Commission, including any “group” of which the Holder is a member), including the number of shares of Common Stock issuable upon conversion of the Series B Preferred Stock subject to this Notice of Conversion, but excluding the number of shares of Common Stock which are issuable upon (A) conversion of the remaining, unconverted Series B Preferred Stock beneficially owned by such Holder or any of its Affiliates, and (B) exercise or conversion of the unexercised or unconverted portion of any other securities of the Corporation (including any warrants) beneficially owned by such Holder or any of its Affiliates that are subject to a limitation on conversion or exercise similar to the limitation contained in Section 7(c) of the Certificate of Designation, is . For purposes hereof, beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the applicable regulations of the Commission. In addition, for purposes hereof, “group” has the meaning set forth in Section 13(d) of the Exchange Act and the applicable regulations of the Commission.

Conversion calculations:

Date to Effect Conversion:

Number of shares of Series B Preferred Stock owned prior to Conversion:

Number of shares of Series B Preferred Stock to be Converted:

Stated Value of Shares of Series B Preferred Stock to be Converted: $

Number of shares of Common Stock to be Issued:

Address for delivery of physical certificates:

Or for DWAC Delivery:

DWAC Instructions:

Broker no:

Account no:


[HOLDER]



By:
Name:
Title
Date:

Exhibit 5.1

ELLENOFF GROSSMAN & SCHOLE LLP

1345 AVENUE OF THE AMERICAS

NEW YORK, NEW YORK 10105

TELEPHONE: (212) 370-1300

FACSIMILE: (212) 370-7889

www.egsllp.com

May 17, 2018

BioDelivery Sciences International, Inc.

801 Corporate Center Drive, Suite #210

Raleigh, North Carolina 27607

Re: Prospectus Supplement to Registration Statement on Form S-3

Ladies and Gentlemen:

This opinion is furnished to you in connection with (i) the Registration Statement on Form S-3 (File No. 333-205483) (the “ Registration Statement ”) filed by BioDelivery Sciences International, Inc., a Delaware corporation (the “ Company ”), with the Securities and Exchange Commission (the “ Commission ”) under the Securities Act of 1933, as amended (the “Securities Act”), for the purpose of registering with the Commission, among other things, shares of the Company’s common stock, $.001 par value per share (the “ Common Stock ”), and shares of the Company’s preferred stock, $.001 par value per share (the “ Preferred Stock ”), all of which may be issued and sold by the Company from time to time on a delayed or continuous basis pursuant to Rule 415 under the Securities Act at an aggregate offering price not to exceed $150,000,000, as set forth in the Registration Statement and the prospectus contained therein and (ii) the prospectus supplement (the “ Prospectus Supplement ”) relating to the issue and sale pursuant to the Registration Statement of (a) 5,000 shares (the “ Preferred Shares ”) of Preferred Stock that the Company has designated as Series B Non-Voting Convertible Preferred Stock, par value $.001 per share (the “ Series B Preferred Stock ”) and (b) the shares of Common Stock issuable upon conversion of the Preferred Shares (the “ Conversion Shares ”). The Preferred Shares and the Conversion Shares are referred to herein, collectively, as the “ Securities .”

The Securities are to be issued and sold by the Company to selected investors pursuant to (i) that certain securities purchase agreement dated as of May 17, 2018 (the “ SPA ”), between the Company and such investors and (ii) a placement agency agreement, dated as of May 17, 2018, between the Company and the placement agent named therein (the “ Placement Agency Agreement ”). The Placement Agency Agreement will be filed with the Commission as Exhibit 1.1 to the Company’s Current Report on Form 8-K, dated May 17, 2018; the form of certificate of designation of the Series B Preferred Stock (the “ Certificate of Designation ”) will be filed with the Commission as Exhibit 4.1 to such Current Report; and the form of SPA will be filed with the Commission as Exhibit 10.1 to such Current Report.

We are acting as counsel for the Company in connection with the issue and sale by the Company of the Securities. We have examined a signed copy of the Registration Statement, as filed with the Commission, including the exhibits thereto, and the form of Prospectus Supplement to be filed with the Commission. We have also examined and relied upon: (i) the Placement Agency Agreement, (ii) the SPA, (iii) minutes of meetings or actions taken by written consent of the Board of Directors, including committees thereof, of the Company as provided to us by the Company, (iv) the Certificate of Incorporation and the Second Amended and Restated Bylaws of the Company, each as restated and/or amended to date, (v) the form of Certificate of Designation and (vi) such other documents as we have deemed necessary for purposes of rendering the opinions hereinafter set forth.

In our examination of the foregoing documents, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as copies, the authenticity of the originals of such latter documents and the legal competence of all signatories to such documents. We have assumed that the Certificate of Designation shall be filed with the Secretary of State of Delaware in the form reviewed by us.

We express no opinion herein as to the laws of any state or jurisdiction other than the state laws of the General Corporation Law of the State of Delaware and the federal securities laws of the United States of America.

Based upon and subject to the foregoing, we are of the opinion that upon the filing of the Certificate of Designation with the Secretary of State of the State of Delaware, Securities will be duly authorized for issuance. The Preferred Shares, when issued and paid for in accordance with the terms and conditions of the SPA, and the Conversion Shares, when issued upon the conversion of the Preferred Shares in accordance with the terms of the Certificate of Designation, will be validly issued, fully paid and nonassessable.

It is understood that this opinion is to be used only in connection with the offer and sale of the Securities while the Registration Statement is in effect.

Please note that we are opining only as to the matters expressly set forth herein, and no opinion should be inferred as to any other matters. This opinion is based upon currently existing statutes, rules, regulations and judicial decisions, and we disclaim any obligation to advise you of any change in any of these sources of law or subsequent legal or factual developments which might affect any matters or opinions set forth herein.

We hereby consent to the filing of this opinion with the Commission in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act as an exhibit to the Current Report on Form 8-K to be filed by the Company in connection with the issue and sale of the Securities. In giving such consent, we do not hereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission.

Very truly yours

/s/ Ellenoff Grossman & Schole LLP

ELLENOFF GROSSMAN & SCHOLE LLP

Exhibit 10.1

SECURITIES PURCHASE AGREEMENT

This SECURITIES PURCHASE AGREEMENT (this “ Agreement ”), dated as of May 17, 2018, is by and among Biodelivery Sciences International, Inc., a Delaware corporation with headquarters located 4131 ParkLake Ave., Suite 225, Raleigh, North Carolina 27612, (the “ Company ”), and each of the investors listed on Schedule 1 hereto (individually, a “ Buyer ” and collectively, the “ Buyers ”).

RECITALS

A. The Company and each Buyer desire to enter into this transaction to purchase shares of the Company’s Series B Non-Voting Convertible Preferred Stock, par value $0.001 per share (the “ Series B Preferred Stock ”), pursuant to a currently effective shelf registration statement on Form S-3 (file No. 333-205483) (the “ Registration Statement ”), which has $150,000,000 of unallocated securities, which Registration Statement has been declared effective in accordance with the Securities Act of 1933, as amended (the “ 1933 Act ”), by the United States Securities and Exchange Commission (the “ SEC ”).

B. Each Buyer wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement such aggregate number of shares of Series B Preferred Stock as set forth opposite such Buyer’s name in Schedule 1 (which aggregate amount for all Buyers shall be 5,000 shares of Series B Preferred Stock, referred to as the “ Preferred Shares ”).

C. Contemporaneously with the execution and delivery of this Agreement, the Company is filing a Certificate of Designation of the Series B Convertible Preferred Stock (the “ Certificate of Designation ”), substantially in the form attached hereto as Exhibit A , with the Secretary of State of the State of Delaware.

D. Contemporaneously with the execution and delivery of this Agreement, the Company and the Lead Investor (as defined in Section 3(i) herein) are executing and delivering a Registration Rights Agreement, substantially in the form attached hereto as Exhibit B (the “ Registration Rights Agreement ”), pursuant to which the Company has agreed to provide certain registration rights with respect to the common stock of the Company, par value $0.001 per share (the “ Common Stock ”) issuable upon conversion of the Preferred Shares (the “ Conversion Shares ,” and together with the Preferred Shares, the “ Securities ”) under the 1933 Act and the rules and regulations promulgated thereunder, and applicable state securities laws;

E. Contemporaneously with the execution and delivery of this Agreement, the Company and the Lead Investor (as defined herein) are executing a Settlement Agreement, substantially in the form attached hereto as Exhibit C (the “ Settlement Agreement ”).

AGREEMENT

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and each Buyer hereby agree as follows:

1. PURCHASE AND SALE OF THE PREFERRED SHARES.

(a) Purchase of Preferred Shares . Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6 and 7 below, the Company shall issue and sell to each Buyer, and each Buyer severally, but not jointly, agrees to purchase from the Company on the Closing Date (as defined below) such aggregate number of Preferred Shares as is set forth opposite such Buyer’s name in Schedule 1 .

(b) Closing . The closing (the “ Closing ”) of the purchase of the Preferred Shares by the Buyers shall occur at the offices of Ellenoff Grossman & Schole LLP, 1345 Avenue of the Americas, New York, NY 10105 or by remote

electronic exchange of documents for Closing, as agreed by the parties hereto. The date and time of the Closing (the “ Closing Date ”) shall be 10:00 a.m., New York time, on the first (1 ^st ) Business Day (as defined below) on which the conditions to the Closing set forth in Sections 6 and 7 below are satisfied or waived (or such other date as is mutually agreed to by the Company and each Buyer). As used herein “ Business Day ” means any day other than a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by law to remain closed.

(c) Purchase Price . The aggregate purchase price for the Preferred Shares to be purchased by each Buyer (the “ Purchase Price ”) shall be the amount set forth opposite such Buyer’s name in Schedule 1 . The purchase price per Preferred Share is $10,000.

(d) Form of Payment ; Deliveries. On the Closing Date, (i) the Purchase Price will be released from escrow in accordance with the escrow agreement among the Company, William Blair & Company L.L.C. (the “ Placement Agent ”) and Wilmington Trust, National Association, as escrow agent (the “ Escrow Agreement ”) to the Company for the Preferred Shares to be issued and sold to such Buyer at the Closing, by wire transfer of immediately available funds and (ii) the Company shall deliver to each Buyer a certificate representing the Preferred Shares being purchased. The release of the Purchase Price from escrow shall be subject to receipt by the Company or the Placement Agent of the Lead Investor Confirmation (as defined in Section 7 herein).

2. BUYER’S REPRESENTATIONS AND WARRANTIES.

Each Buyer, severally and not jointly, represents and warrants to the Company with respect to only itself that, as of the date hereof and as of the Closing Date:

(a) Organization; Authority . If such Buyer is an entity, it is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with the requisite power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents (as defined below) to which it is a party and otherwise to carry out its obligations hereunder and thereunder.

(b) Validity; Enforcement . The Transaction Documents to which it is a party, have been duly and validly authorized, executed and delivered on behalf of such Buyer and shall constitute the legal, valid and binding obligations of such Buyer enforceable against such Buyer in accordance with their terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.

(c) No Conflicts . The execution, delivery and performance by such Buyer of the Transaction Documents to which it is a party and the consummation by such Buyer of the transactions contemplated hereby and thereby will not (i) result in a violation of the organizational documents of such Buyer, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which such Buyer is a party or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to such Buyer, except, in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which could not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of such Buyer to perform its obligations hereunder.

(d) Access to Information . Such Buyer acknowledges that it has had the opportunity to review the Transaction Documents (including all exhibits and schedules thereto) and the SEC Documents and has been afforded, (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Securities and the merits and risks of investing in the Securities; and (ii) access to information about the Company and its financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment.

3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

The Company represents and warrants to each of the Buyers that, as of the date hereof and as of the Closing Date:

(a) Organization and Qualification . The Company and each of its Subsidiaries (i) have been duly organized and are validly existing and in good standing under the laws of their respective jurisdiction of organization, and have all power and authority necessary to own their respective properties and conduct their businesses as described in the Pricing Disclosure Package, and (ii) have been duly qualified for the transaction of business and are in good standing under the laws of each other jurisdiction in which they own or lease properties or conduct any business so as to require such qualification, except in the case of clause (ii), where the failure to be so qualified or in good standing would not have a Material Adverse Effect. As used in this Agreement, “ Material Adverse Effect ” means material adverse change, or any development involving a prospective material adverse change, in or affecting (i) the general affairs, business, properties, management, financial position, stockholders’ equity, results of operations or prospects of the Company and its Subsidiaries, taken as a whole, or (ii) the authority or ability of the Company or any of its Subsidiaries to perform any of their respective obligations under any of the Transaction Documents (as defined below). Other than as set forth on exhibit 21.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, the Company has no Subsidiaries. “ Subsidiaries ” means any Person in which the Company, directly or indirectly, (A) owns any of the outstanding capital stock or holds any equity or similar interest of such Person or (B) controls or operates all or any part of the business, operations or administration of such Person, and each of the foregoing, is individually referred to herein as a “ Subsidiary ”

(b) Authorization; Enforcement; Validity . The Company has the requisite power and authority to enter into and perform its obligations under this Agreement and the other Transaction Documents and to issue the Preferred Shares in accordance with the terms hereof and thereof. The execution and delivery of this Agreement and the other Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Preferred Shares, the reservation Conversion Shares, and the issuance of the Conversion Shares upon conversion of the Preferred Shares, have been duly authorized by the Company’s board of directors and (other than the filing with the SEC of the prospectus supplement required by the Registration Statement pursuant to Rule 424(b) under the 1933 Act (the “ Prospectus Supplement ”) supplementing the base prospectus forming part of the Registration Statement (the “ Prospectus ”) and any other filings as may be required by any state securities agencies) no further filing, consent or authorization is required by the Company, its board of directors or its stockholders or other governing body. This Agreement has been, and the other Transaction Documents will be prior to the Closing, duly executed and delivered by the Company, and each constitutes the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with its respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies and except as rights to indemnification and to contribution may be limited by federal or state securities law. “ Transaction Documents ” means, collectively, this Agreement, the Registration Rights Agreement, the Certificate of Designation, the Settlement Agreement, the Escrow Agreement and each of the other agreements and instruments entered into or delivered by any of the parties hereto in connection with the transactions contemplated hereby and thereby, as may be amended from time to time.

(c) Issuance of Securities; Registration Statement . The issuance of the Preferred Shares are duly authorized and, upon issuance and payment in accordance with the terms of the Transaction Documents shall be validly issued, fully paid and non-assessable and free from all preemptive or similar rights, mortgages, defects, claims, liens, pledges, charges, taxes, rights of first refusal, encumbrances, security interests and other encumbrances (collectively “ Liens ”) with respect to the issuance thereof. Following the Company’s meeting of stockholders and approval of an increase in the Company’s authorized capital stock as contemplated by the Settlement Agreement (the “ Stockholders Meeting ”), the Company shall, so long as any of the Preferred Shares are outstanding, take all action necessary to reserve and keep available out of its authorized and unissued capital stock, solely for the purpose of effecting the Conversion Shares, 100% of the number of shares of Common Stock issuable upon conversion of the Preferred Shares (subject to reduction from time to time for the issuance of the Conversion Shares). Upon conversion of the Preferred Shares, when issued, the Conversion Shares will be validly issued, fully paid and nonassessable and free from all preemptive or similar rights or Liens with respect to the issue thereof, with the holders being entitled to all rights accorded to a holder of Common Stock. The issuance by the Company of the Securities has been registered under the 1933 Act, the Securities are being issued pursuant to the Registration Statement and all of the Securities are freely transferable and freely tradable by each of the Buyers without

restriction, whether by way of registration or some exemption therefrom, except as otherwise required by applicable law. The Registration Statement is effective and available for the issuance of the Securities thereunder and the Company has not received any notice that the SEC has issued or intends to issue a stop-order with respect to the Registration Statement or that the SEC otherwise has suspended or withdrawn the effectiveness of the Registration Statement, either temporarily or permanently, or intends or has threatened in writing to do so. The “Plan of Distribution” section under the Registration Statement permits the issuance and sale of the Securities hereunder and as contemplated by the other Transaction Documents. Upon receipt of the Preferred Shares, and upon conversion of the Preferred Shares, each of the Buyers will have good and marketable title to the Preferred Shares and Conversion Shares, as applicable. The Registration Statement and any prospectus included therein, including the Prospectus and the Prospectus Supplement, complied in all material respects with the requirements of the 1933 Act and the Securities Exchange Act of 1934, as amended (the “ 1934 Act ”) and the rules and regulations of the SEC promulgated thereunder and all other applicable laws and regulations. At the time the Registration Statement and any amendments thereto became effective, at the date of this Agreement and at each deemed effective date thereof pursuant to Rule 430B(f)(2) of the 1933 Act, the Registration Statement and any amendments thereto complied and will comply in all material respects with the requirements of the 1933 Act and did not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading. The Prospectus and any amendments or supplements thereto (including, without limitation the Prospectus Supplement), at the time the Prospectus or any amendment or supplement thereto was issued and at the Closing Date, complied, and will comply, in all material respects with the requirements of the 1933 Act and did not, and will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The Company meets all of the requirements for the use of Form S-3 under the 1933 Act for the offering and sale of the Securities contemplated by this Agreement, and the SEC has not notified the Company of any objection to the use of the form of the Registration Statement pursuant to Rule 401(g)(1) under the 1933 Act. The Registration Statement meets the requirements set forth in Rule 415(a)(1)(x) under the 1933 Act. At the earliest time after the filing of the Registration Statement that the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) under the 1933 Act) relating to any of the Securities, the Company was not and is not an “Ineligible Issuer” (as defined in Rule 405 under the 1933 Act). There are no contracts or other documents which are required to be described in the Registration Statement, the Pricing Prospectus or the Prospectus or to be filed as an exhibit to the Registration Statement which have not been described or filed as required. The statistical and market-related data included in the SEC Documents are based on or derived from sources which the Company believes are reliable and accurate. The Company (i) has not distributed any offering material in connection with the offer or sale of any of the Securities and (ii) until no Buyer holds any of the Securities, shall not distribute any offering material in connection with the offer or sale of any of the Securities to, or by, any of the Buyers (if required), in each case, other than the Registration Statement, the Prospectus or the Prospectus Supplement.

(d) No Conflicts . The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Preferred Shares, the Conversion Shares and the reservation for issuance of the Conversion Shares) will not (i) result in a violation of the Certificate of Incorporation (as defined below) (including, without limitation, any certificate of designation contained therein), Bylaws (as defined below), certificate of formation, memorandum of association, articles of association, bylaws or other organizational documents of the Company or any of its Subsidiaries, or any capital stock or other securities of the Company or any of its Subsidiaries, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) in any respect under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party, or (iii) subject to Stockholder Approval, result in a violation of any law, rule, regulation, order, judgment or decree (including, without limitation, foreign, federal and state securities laws and regulations and the rules and regulations of Nasdaq Capital Market (the “ Principal Market ”) and including all applicable foreign, federal and state laws, rules and regulations) applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected; except in the case of each of clauses (ii) and (iii), such as would not reasonably be expected to result in a Material Adverse Effect. For purposes herein, “ Stockholder Approval ” means the approval as may be required by the applicable rules and regulations of Nasdaq (or any successor entity) from the stockholders of the Corporation with respect to the transactions contemplated by the Transaction Documents.

(e) Consents . Neither the Company nor any Subsidiary is required to obtain any consent from, authorization or order of, or make any filing or registration with (other than the filing with the SEC of the Prospectus Supplement and any other filings as may be required by any state securities agencies), any Governmental Entity (as defined below) or any regulatory or self-regulatory agency (other than filings required to be made with the Principal Market relating to the listing of additional shares) or any other Person in order for it to execute, deliver or perform any of its respective obligations under or contemplated by the Transaction Documents, in each case, in accordance with the terms hereof or thereof. Subject to Stockholder Approval, all consents, authorizations, orders, filings and registrations which the Company or any Subsidiary is required to obtain pursuant to the preceding sentence have been or will be obtained or effected on or prior to the Closing Date, and neither the Company nor any of its Subsidiaries are aware of any facts or circumstances which might prevent the Company or any of its Subsidiaries from obtaining or effecting any of the registration, application or filings contemplated by the Transaction Documents except as would not reasonably be expected to result in a Material Adverse Effect. “ Governmental Entity ” means any nation, state, county, city, town, village, district, or other political jurisdiction of any nature, federal, state, local, municipal, foreign, or other government, governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal), multi-national organization or body; or body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature or instrumentality of any of the foregoing, including any entity or enterprise owned or controlled by a government or a public international organization or any of the foregoing.

(f) Acknowledgment Regarding Buyer’s Purchase of Securities . The Company acknowledges and agrees that each Buyer is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby and thereby and that no Buyer is prior to the transactions contemplated by the Transaction Documents, except as contemplated in the Transaction Documents, (i) an officer or director of the Company or any of its Subsidiaries, (ii) an “affiliate” (as defined in Rule 144 promulgated under the 1933 Act (or a successor rule thereto) (collectively, “ Rule 144 ”)) of the Company or any of its Subsidiaries or (iii) to its knowledge, a “beneficial owner” of more than 10% of the shares of Common Stock (as defined for purposes of Rule 13d-3 of the 1934 Act). The Company further acknowledges that no Buyer is acting as a financial advisor or fiduciary of the Company or any of its Subsidiaries (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated hereby and thereby, and any advice given by a Buyer or any of its representatives or agents in connection with the Transaction Documents and the transactions contemplated hereby and thereby is merely incidental to such Buyer’s purchase of the Securities. The Company further represents to each Buyer that the Company’s decision to enter into the Transaction Documents has been based solely on the independent evaluation by the Company and its representatives.

(g) Placement Agent’s Fees . The Company shall be responsible for the payment of any placement agent’s fees, financial advisory fees, or brokers’ commissions (other than for Persons engaged by any Buyer or its investment advisor) relating to or arising out of the transactions contemplated hereby, including, without limitation, placement agent fees payable to the Placement Agent in connection with the sale of the Securities. The fees and expenses of the Placement Agent to be paid by the Company or any of its Subsidiaries are as set forth on Schedule 3(g) attached hereto. The Company shall pay, and hold each Buyer harmless against, any liability, loss or expense (including, without limitation, attorney’s fees and out-of-pocket expenses) arising in connection with any such claim. The Company acknowledges that it has engaged the Placement Agent in connection with the sale of the Securities. Other than the Placement Agent and such agent’s advisors, neither the Company nor any of its Subsidiaries has engaged any placement agent or other agent in connection with the offer or sale of the Securities.

(h) No Integrated Offering . Assuming the accuracy of the Buyers’ representations and warranties set forth in Section 2 , neither the Company, nor any of its affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Securities to be integrated with prior offerings by the Company for purposes of any applicable shareholder approval provisions of any Principal Market on which any of the securities of the Company are listed or designated.

(i) Application of Takeover Protections; Rights Agreement . The Company and its board of directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, interested stockholder, business combination, poison pill (including, without limitation, any distribution under a rights agreement), stockholder rights plan or other similar anti-takeover provision under the Certificate of Incorporation, Bylaws or other organizational documents or the laws of the jurisdiction of its incorporation or otherwise which is or

could become applicable to any Buyer as a result of the transactions contemplated by this Agreement, including, without limitation, the Company’s issuance of the Securities and any Buyer’s ownership of the Securities. The Company and its board of directors have taken all necessary action, if any, in order to render inapplicable any stockholder rights plan or similar arrangement relating to accumulations of beneficial ownership of shares of Common Stock or a change in control of the Company or any of its Subsidiaries.

(j) SEC Documents; Financial Statements . During the two (2) years prior to the date hereof, the Company has timely filed all reports, schedules, forms, proxy statements, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the 1934 Act (all of the foregoing filed prior to the date hereof and all exhibits and appendices included therein and financial statements, notes and schedules thereto and documents incorporated by reference therein being hereinafter referred to as the “ SEC Documents ”), other than the timely filing of such Form 8-Ks as would not affect the Company’s eligibility to use Form S-3. As of their respective dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. As of their respective dates, the financial statements of the Company included in the SEC Documents complied in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto as in effect as of the time of filing. Such financial statements have been prepared in accordance with generally accepted accounting principles (“ GAAP ”), consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments which will not be material, either individually or in the aggregate). The reserves, if any, established by the Company or the lack of reserves, if applicable, are reasonable based upon facts and circumstances known by the Company on the date hereof and there are no loss contingencies that are required to be accrued by the Statement of Financial Accounting Standard No. 5 of the Financial Accounting Standards Board which are not provided for by the Company in its financial statements or otherwise. The Company is not currently contemplating to amend or restate any of the financial statements (including, without limitation, any notes or any letter of the independent accountants of the Company with respect thereto) included in the SEC Documents (the “ Financial Statements ”), nor is the Company currently aware of facts or circumstances which would require the Company to amend or restate any of the Financial Statements, in each case, in order for any of the Financials Statements to be in compliance with GAAP and the rules and regulations of the SEC. The Company has not been informed by its independent accountants that they recommend that the Company amend or restate any of the Financial Statements or that there is any need for the Company to amend or restate any of the Financial Statements.

(k) Certified Accountants . Cherry Bekaert LLP, which has certified the Financial Statements, are independent public accountants as required by the 1933 Act and the rules and regulations of the SEC thereunder.

(l) Absence of Certain Changes . Since the date of the Company’s most recent audited financial statements contained in a Form 10-K, except as supplemented by the Form 10-Q for the quarterly period ended March 31, 2018, there has been no event, occurrence or development that has had or that would reasonably be expected to result in a Material Adverse Effect. Since the date of the Company’s most recent audited financial statements contained in a Form 10-K, except as set forth in a subsequent SEC Document, neither the Company nor any of its Subsidiaries has (i) declared or paid any dividends, (ii) sold any assets, individually or in the aggregate, outside of the ordinary course of business; (iii) incurred any additional debt under the Company’s existing credit facility, (iv) increased the cash or equity compensation of any of its directors or executive officers, (v) made any capital expenditures, individually or in the aggregate, outside of the ordinary course of business, (vi) entered into any contract, arrangement or agreement (or amendment thereto) which is required to be filed as an exhibit to the Company’s periodic filings with the SEC but which has not yet been so filed, (vii) had any material change which is required to be disclosed in the Company’s period filings with the SEC but which has not yet been disclosed in the SEC Documents. Neither the Company nor any of its Subsidiaries has taken any steps to seek protection pursuant to any law or statute relating to bankruptcy, insolvency, reorganization, receivership, liquidation or winding up, nor does the Company or any Subsidiary have any knowledge or reason to believe that any of their respective creditors

intend to initiate involuntary bankruptcy proceedings or any actual knowledge of any fact which would reasonably lead a creditor to do so. The Company and its Subsidiaries, on a consolidated basis, after giving effect to the transactions contemplated hereby to occur at the Closing, will not be Insolvent (as defined below). For purposes of this Section 3(l) , “ Insolvent ” means, (i) with respect to the Company and its Subsidiaries, on a consolidated basis, (A) the present fair saleable value of the Company’s and its Subsidiaries’ assets is less than the amount required to pay the Company’s and its Subsidiaries’ total Indebtedness (as defined below), (B) the Company and its Subsidiaries are unable to pay their debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured or (C) the Company and its Subsidiaries intend to incur or believe that they will incur debts that would be beyond their ability to pay as such debts mature; and (ii) with respect to the Company and each Subsidiary, individually, (A) the present fair saleable value of the Company’s or such Subsidiary’s (as the case may be) assets is less than the amount required to pay its respective total Indebtedness, (B) the Company or such Subsidiary (as the case may be) is unable to pay its respective debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured or (C) the Company or such Subsidiary (as the case may be) intends to incur or believes that it will incur debts that would be beyond its respective ability to pay as such debts mature. Neither the Company nor any of its Subsidiaries has engaged in any business or in any transaction, and is not about to engage in any business or in any transaction, for which the Company’s or such Subsidiary’s remaining assets constitute unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted.

(m) No Undisclosed Events, Liabilities, Developments or Circumstances . To the Company’s knowledge, no event, liability, development or circumstance has occurred or exists, or is reasonably expected to exist or occur with respect to the Company, any of its Subsidiaries or any of their respective businesses, properties, liabilities, prospects, operations (including results thereof) or condition (financial or otherwise), that would reasonably be expected to result in a Material Adverse Effect.

(n) Conduct of Business; Regulatory Permits . Neither the Company nor any of its Subsidiaries is in violation of any term of or in default under its Certificate of Incorporation, any certificate of designation, preferences or rights of any other outstanding series of preferred stock of the Company or any of its Subsidiaries or Bylaws or their organizational charter, certificate of formation, memorandum of association, articles of association, Certificate of Incorporation or certificate of incorporation or bylaws, respectively. Neither the Company nor any of its Subsidiaries is in violation of any judgment, decree or order or any statute, ordinance, rule or regulation applicable to the Company or any of its Subsidiaries, and neither the Company nor any of its Subsidiaries will conduct its business in violation of any of the foregoing, except in all cases for possible violations which would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. During the two years prior to the date hereof, (i) the Common Stock has been listed or designated for quotation on the Principal Market, (ii) trading in the Common Stock has not been suspended by the SEC or the Principal Market and (iii) the Company has received no communication, written or oral, from the SEC or the Principal Market regarding the suspension or delisting of the Common Stock from the Principal Market. The Company and each of its Subsidiaries possess all certificates, authorizations and permits issued by the appropriate regulatory authorities necessary to conduct their respective businesses, except where the failure to possess such certificates, authorizations or permits would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect, and neither the Company nor any such Subsidiary has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit. There is no agreement, commitment, judgment, injunction, order or decree binding upon the Company or any of its Subsidiaries or to which the Company or any of its Subsidiaries is a party which has or would reasonably be expected to have the effect of prohibiting or materially impairing any business practice of the Company or any of its Subsidiaries, any acquisition of property by the Company or any of its Subsidiaries or the conduct of business by the Company or any of its Subsidiaries as currently conducted other than such effects, individually or in the aggregate, which would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect on the Company or any of its Subsidiaries.

(o) Foreign Corrupt Practices . Neither the Company nor any of its Subsidiaries nor any director, officer, agent or employee of the Company or any of its Subsidiaries has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977; or (iv) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment.

(p) Sarbanes-Oxley Act . The Company and each Subsidiary is in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002, as amended, and any and all applicable rules and regulations promulgated by the SEC thereunder.

(q) Transactions With Affiliates . Except as set forth in the SEC Documents, there are no transactions between the Company or any Subsidiaries, on the one hand, and Affiliates of the Company or any Subsidiaries, on the other hand.

(r) Equity Capitalization . The Company has an authorized capitalization as set forth in the Prospectus in the column entitled “Actual” under the caption “Capitalization”; all of the issued shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable; except for Bioral Nutrient Delivery, LLC, all of the issued shares of capital stock of each Subsidiary have been duly and validly authorized and issued, are fully paid and non-assessable and are owned directly or indirectly by the Company, free and clear of all liens, encumbrances or claims; and none of the issued shares of capital stock of the Company was issued in violation of the preemptive or other similar rights of any security holder of the Company

(s) Existing Securities; Obligations . (A) The holders of outstanding shares of the Company’s capital stock are not entitled to preemptive or other rights to subscribe for the shares of Preferred Shares that have not been complied with or otherwise effectively waived; (B) except as set forth in the SEC Documents, there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares, interests or capital stock of the Company or any of its Subsidiaries, or contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares, interests or capital stock of the Company or any of its Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares, interests or capital stock of the Company or any of its Subsidiaries; (C) there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of their securities under the 1933 Act (except pursuant to this Agreement); (D) there are no outstanding securities or instruments of the Company or any of its Subsidiaries which contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to redeem a security of the Company or any of its Subsidiaries; (E) there are no securities or instruments containing anti-dilution or similar provisions; (F) neither the Company nor any Subsidiary has any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement; and (G) the Company has not sold or issued any shares of Common Stock during the six-month period preceding the date of the Prospectus, including any sales pursuant to Regulation D of, the 1933 Act, other than (i) shares issued pursuant to employee benefit plans, stock option plans or other employee compensation plans or pursuant to outstanding options, rights or warrants, or (ii) as set forth, incorporated by reference or described in the SEC Documents.

(t) Organizational Documents . The Company has filed on EDGAR true, correct and complete copies of the Company’s Articles of Incorporation, as amended and as in effect on the date hereof (the “ Certificate of Incorporation ”), and the Company’s second amended and restated bylaws as in effect on the date hereof (the “ Bylaws ”), and the terms of all Convertible Securities and the material rights of the holders thereof in respect thereto.

(u) Litigation; Investigations . Except as described in the SEC Documents, there are no actions, suits, proceedings, inquiries or investigations before or by the Principal Market, any court, public board, government agency, including, but not limited to, the Department of Justice, the SEC, the Office of Inspector General, the Federal Trade Commission or the FDA, self-regulatory organization or body pending or, to the Knowledge of the Company, threatened against or affecting the Company, the Common Stock or any of the Company’s officers or directors, whether of a civil or criminal nature or otherwise.

(v) Insurance . The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company and its Subsidiaries are engaged. Neither the Company nor any such Subsidiary has been refused any insurance coverage sought or applied for, and neither the Company nor any such Subsidiary has any reason to believe that it will be unable to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not reasonably be expected to have a Material Adverse Effect.

(w) Employee Relations . Neither the Company nor any of its Subsidiaries is a party to any collective bargaining agreement or employs any member of a union. The Company and its Subsidiaries believe that their relations with their employees are good. No executive officer (as defined in Rule 501(f) promulgated under the 1933 Act) or other key employee of the Company or any of its Subsidiaries has notified the Company or any such Subsidiary that such officer intends to leave the Company or any such Subsidiary or otherwise terminate such officer’s employment with the Company or any such Subsidiary. The Company and its Subsidiaries are in compliance with all federal, state, local and foreign laws and regulations respecting labor, employment and employment practices and benefits, terms and conditions of employment and wages and hours, except where failure to be in compliance would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

(x) Title . Except as set forth in the SEC Documents, the Company and its Subsidiaries do not own any real property and have good and marketable title to all personal property owned by them which is material to the business of the Company, in each case free and clear of all liens, encumbrances and defects except such as do not materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company and its Subsidiaries; and any real property and buildings held under lease by the Company and its Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company and its Subsidiaries.

(y) FDA and Regulatory Matters . Except in each case as set forth in the SEC Documents, the Company and its Subsidiaries (i) are and at all times have been in material compliance with all federal, state, local and foreign statutes, rules and regulations applicable to the ownership, testing, development, manufacture, packaging, processing, use, distribution, handling, marketing, labeling, advertising, promotion, sale, offer for sale, storage, import, export or disposal of any product under development, subject to an approved New Drug Application, or manufactured or distributed by or on behalf of the Company or its Subsidiaries, including, without limitation, the Federal Food, Drug, and Cosmetic Act and the Controlled Substances Act (“ Industry Laws ”); (ii) have not received any FDA Form 483, notice of adverse finding, warning letter, untitled letter or other similar correspondence or notice from the U.S. Food and Drug Administration (the “ FDA ”), the Drug Enforcement Administration (the “ DEA ”) or any other federal, state, local or foreign governmental or regulatory authority alleging or asserting material noncompliance with any Industry Laws or any licenses, certificates, approvals, clearances, authorizations, permits, registrations and supplements or amendments thereto required by any such Industry Laws (“ Healthcare Permits ”); (iii) possess all material Healthcare Permits, which are valid and in full force and effect, and are not in material violation of any term of any such Healthcare Permit, and no event has occurred which allows, or after notice or lapse of time would allow, revocation or termination of any Healthcare Permit or results in any other material impairment of the rights of the holder of any Healthcare Permit; (iv) have not received notice of any claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action from the FDA, DEA or any other federal, state, local or foreign governmental or regulatory authority or third party alleging that any product operation or activity is in material violation of any Industry Laws or Healthcare Permits, and have no knowledge that the FDA, DEA or any other federal, state, local or foreign governmental or regulatory authority or third party is considering any such claim, litigation, arbitration, action, suit, investigation or proceeding; (v) have not received notice that the FDA, DEA or any other federal, state, local or foreign governmental or regulatory authority has taken, is taking or intends to take action to limit, suspend, modify or revoke any material Healthcare Permit, and have no knowledge that the FDA, DEA or any other federal, state, local or foreign governmental or regulatory authority is considering such action; (vi) have filed, obtained, maintained or submitted all material reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments as required by any Industry Laws or Healthcare Permits, and all such reports, documents, forms, notices, applications, records, claims, submissions and supplements or amendments were materially complete and correct on the date filed (or were corrected or supplemented by a subsequent submission); and (vii) have not, either voluntarily or involuntarily, initiated, conducted or issued or caused to be initiated, conducted or issued, any recall, correction, market withdrawal or replacement, safety alert, post-sale warning, “dear doctor” letter, or other notice or action relating to the alleged lack of safety or efficacy of any product or any alleged product defect or violation and, to the knowledge of the Company, no third party has initiated, conducted or intends to initiate any such notice or action.

(z) Clinical Trials. To the Company’s knowledge, the preclinical and clinical trials conducted by or on behalf of the Company and its Subsidiaries were and, if still ongoing, are being conducted in all material respects in

accordance with experimental protocols, procedures and controls pursuant to accepted professional scientific standards and all Industry Laws and Healthcare Permits; (ii) the descriptions of the results of such studies, tests and trials contained in the SEC Documents are accurate and complete in all material respects and fairly present the data derived from such studies, tests and trials; (iii) except to the extent disclosed in each of the Pricing Disclosure Package, the Company is not aware of any studies, tests or trials, the results of which the Company believes reasonably call into question the study, test, or trial results described or referred to in the SEC Documents when viewed in the context in which such results are described and the clinical state of development; and (iv) except as described in the SEC Documents, since December 31, 2013, the Company has not received any notices or correspondence from the FDA or any other federal, state, local or foreign governmental or regulatory authority requiring the termination, suspension or material modification of any studies, tests or preclinical or clinical trials conducted by or on behalf of the Company.

(aa) Compliance with Healthcare Laws. Each of the Company and its Subsidiaries and, to the knowledge of the Company, their directors, officers, employees and agents is, and at all times has been, in material compliance with all applicable healthcare laws and regulations, including, without limitation, the federal Anti-kickback Statute (42 U.S.C. § 1320a-7b(b)), the Anti-Inducement Law (42 U.S.C. § 1320a-7a(a)(5)), the civil False Claims Act (31 U.S.C. §§ 3729 et seq.), the administrative False Claims Law (42 U.S.C. § 1320a-7b(a)), the Health Insurance Portability and Accountability Act of 1996 (42 U.S.C. § 1320d et seq.), as amended by the Health Information Technology for Economic and Clinical Health Act (42 U.S.C. §§ 17921 et seq.), the exclusion laws (42 U.S.C. § 1320a-7), and the Food Drug and Cosmetic Act (21 U.S.C. §§ 301 et seq.), Medicare (Title XVIII of the Social Security Act), Medicaid (Title XIX of the Social Security Act), the regulations promulgated pursuant to such laws, and any other state or federal law, accreditation standards, regulation, guidance document, manual provision, program memorandum, opinion letter, or other issuance which regulates kickbacks, patient or program charges, recordkeeping, claims process, documentation requirements, medical necessity, referrals, the hiring of employees or acquisition of services or supplies from those who have been excluded from government health care programs, quality, safety, privacy, security, licensure, accreditation or any other aspect of providing health care or pharmaceutical services (collectively, the “ Health Care Laws ”); (ii) neither the Company nor any of its Subsidiaries nor, to the knowledge of the Company, any director, officer, employee, agent, employee or affiliate of the Company or any of its Subsidiaries, have committed any act, made any statement or failed to make any statement that would reasonably be expected to provide a basis for the FDA or any other governmental or regulatory authority to invoke its policy with respect to “Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities,” or similar policies, set forth in any Health Care Law; (iii) neither the Company nor any of its Subsidiaries nor, to the knowledge of the Company, any director, officer, employee, agent, employee or affiliate of the Company or any of its Subsidiaries has been convicted of any crime or engaged in any conduct that has resulted, or would reasonably be expected to result, in debarment under any Health Care Law, including, without limitation, 21 U.S.C. Section 335a; (iv) no claims, actions, proceedings or investigations that would reasonably be expected to result in such a material debarment or exclusion are pending or, to the knowledge of the Company, threatened, against the Company, its Subsidiaries or, to the knowledge of the Company, any director, officer, employee, agent, employee or affiliate of the Company or any of its Subsidiaries; (v) neither the Company nor any of its Subsidiaries has received any notification, correspondence or any other written or oral communication from any governmental or regulatory entity (including, without limitation, the FDA, DEA, the Centers for Medicare and Medicaid Services, and the Department of Health and Human Services Office of Inspector General) of potential or actual material non-compliance by, or liability of, the Company or any of its Subsidiaries under any Health Care Law; (vi) neither the Company nor any of its Subsidiaries is a party to any corporate integrity agreements, monitoring agreements, consent decrees, settlement orders, or similar agreements with or imposed by any governmental or regulatory entity; and (vii) the manufacture of Company’s and its Subsidiaries products by or on behalf of the Company and/or its Subsidiaries is being conducted in compliance in all material respects with all applicable Laws, including, without limitation, the FDA’s current good manufacturing practice regulations for products in the United States, and the respective counterparts thereof promulgated by governmental and regulatory authorities in countries outside the United States.

(bb) Intellectual Property Rights . The Company and its Subsidiaries own, possess, have a license to or have adequate rights to use on reasonable terms, all patents, patent applications, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks, trade names, domain names, or other intellectual property including registrations and applications for registration thereof (collectively “ Intellectual Property ”) necessary to carry on the business now operated by them or as described in the SEC Documents to be operated by them. Except

as described in the SEC Documents (i) to the Company’s knowledge, after due investigation, there are no rights of third parties to any such Intellectual Property except as to third parties who have granted the Company a license thereto, (ii) to the Company’s knowledge, after due investigation, there is no material infringement, misappropriation or other violation by third parties of any such Intellectual Property, (iii) neither the Company nor any of its Subsidiaries has received any notice of or is otherwise aware of any infringement or misappropriation of, or conflict with, asserted rights of others with respect to any Intellectual Property or of any facts or circumstances which would render any Intellectual Property invalid or unenforceable in whole or in part, or otherwise inadequate to protect the interest of the Company or any of its Subsidiaries therein, and which infringement or conflict (if the subject of any unfavorable decision, ruling or finding) or invalidity, unenforceability or inadequacy, in whole or in part, that would, individually or in the aggregate, result in a Material Adverse Effect, (iv) to the Company’s knowledge, after due investigation, none of the Intellectual Property used by the Company in its business has been obtained or is being used by the Company in violation of any contractual obligation binding on the Company or in violation of the rights of any third parties, (v) the Company is not aware of any facts that it believes would form a reasonable basis for a successful challenge that any of its employees are in or have ever been in violation of any employment contract, patent disclosure agreement, invention assignment agreement, non-competition agreement, non-solicitation agreement, nondisclosure agreement or any restrictive covenant to or with a former employer where such violation relates to such employee’s breach of a confidentiality obligation, obligation to assign to the company Intellectual Property, or obligation not to use third party Intellectual Property or other proprietary rights on behalf of the Company and (vi) the Company is not a party to or bound by any options, licenses or other agreements with respect to the Company’s or any third party’s Intellectual Property that are required to be set forth in the SEC Documents, but are not described in all material respects in the SEC Documents.

(cc) Environmental Laws . Except as disclosed in the SEC Documents, neither the Company nor any of its Subsidiaries is in violation of any statute, any rule, regulation, decision or order of any governmental authority or any court, domestic or foreign, relating to the use, disposal or release of hazardous or toxic substances or relating to the protection or restoration of the environment or human exposure to hazardous or toxic substances (collectively, “ Environmental Laws ”), owns or operates any real property contaminated with any substance that is subject to any Environmental Laws, is liable for any off-site disposal or contamination pursuant to any Environmental Laws, or is subject to any claim relating to any environmental laws, which violation, contamination, liability or claim would individually or in the aggregate be reasonably expected to have a Material Adverse Effect; and the Company is unaware of any pending investigation which might lead to such a claim.

(dd) Tax Status . The Company and each of its Subsidiaries (i) has timely made or filed all foreign, federal and state income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject or has requested extensions thereof (except in any case in which the failure so to file would not have a Material Adverse Effect), (ii) has timely paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith and (iii) has set aside on its books provision reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. The Company is not operated in such a manner as to qualify as a passive foreign investment company, as defined in Section 1297 of the U.S. Internal Revenue Code of 1986, as amended (the “ Code ”).

(ee) Internal Accounting and Disclosure Controls . The Company maintains a system of “internal control over financial reporting” (as such term is defined in Rule 13a-15(f) under the 1934 Act) that complies with the requirements of the 1934 Act and has been designed by the Company’s principal executive officer and principal financial officer, or under their supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. The Company and its Subsidiaries maintain internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as disclosed in the Registration Statement, the Company’s internal control over financial reporting is effective and there are no material weaknesses or significant deficiencies in its internal control over financial reporting. Since the date of the latest audited financial statements included in the SEC Documents, there has been no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

(ff) Disclosure Controls . The Company maintains “disclosure controls and procedures” (as such term is defined in Rule 13a-15(e) under the 1934 Act) that comply with the requirements of the 1934 Act; such disclosure controls and procedures have been designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the 1934 Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, including controls and procedures designed to ensure that such information is accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding required disclosure; and such disclosure controls and procedures are effective.

(gg) Off Balance Sheet Arrangements . There is no transaction, arrangement, or other relationship between the Company or any of its Subsidiaries and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in its SEC Documents and is not so disclosed or that otherwise could be reasonably likely to have a Material Adverse Effect.

(hh) Investment Company Status . Neither the Company nor any of its Subsidiaries is, and after giving effect to the offering and sale of the shares of Preferred Shares and the application of the proceeds thereof as described in the Prospectus Supplement, none of them will not be, an “investment company” or an entity “controlled” by an “investment company”, as each such term is defined in the Investment Company Act of 1940, as amended.

(ii) Registration Eligibility . The Company is eligible to register the issuance of the Securities by the Company using Form S-3 promulgated under the 1933 Act.

(jj) Transfer Taxes . On the Closing Date, all stock transfer or other taxes (other than income or similar taxes) which are required to be paid in connection with the issuance, sale and transfer of the Securities to be sold to each Buyer hereunder will be, or will have been, fully paid or provided for by the Company, and all laws imposing such taxes will be or will have been complied with.

(kk) Money Laundering . The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “ Money Laundering Laws ”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its Subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.

(ll) Market Manipulation . The Company has not taken and will not take, directly or indirectly, any action which is designed to or which has constituted or which would reasonably be expected to cause or result in stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Preferred Shares.

(mm) Unlawful Payments . Neither the Company nor any of its Subsidiaries nor any director, officer, agent or employee of the Company or any of its Subsidiaries has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977; or (iv) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment.

(nn) Stock Option Plans . Each stock option granted by the Company was granted (i) in accordance with the terms of the applicable stock option plan of the Company and (ii) with an exercise price at least equal to the fair market value of the Common Stock on the date such stock option would be considered granted under GAAP and applicable law. No stock option granted under the Company’s stock option plan has been backdated. The Company has not knowingly granted, and there is no and has been no policy or practice of the Company to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the release or other public announcement of material information regarding the Company or its Subsidiaries or their financial results or prospects.

(oo) Disclosure . The Company confirms that neither it nor any other person acting on its behalf has provided any of the Buyers or their agents or counsel with any information that constitutes or could reasonably be expected to constitute material, non-public information concerning the Company or any of its Subsidiaries, other than the existence of the transactions contemplated by this Agreement and the other Transaction Documents. The Company understands and confirms that each of the Buyers will rely on the foregoing representations in effecting transactions in securities of the Company. All disclosure provided to the Buyers regarding the Company and its Subsidiaries, their businesses and the transactions contemplated hereby, including the schedules to this Agreement, furnished by or on behalf of the Company or any of its Subsidiaries is true and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. All of the written information furnished after the date hereof by or on behalf of the Company or any of its Subsidiaries to each Buyer pursuant to or in connection with this Agreement and the other Transaction Documents, taken as a whole, will be true and correct in all material respects as of the date on which such information is so provided and will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. No event or circumstance has occurred or information exists with respect to the Company or any of its Subsidiaries or its or their business, properties, liabilities, prospects, operations (including results thereof) or conditions (financial or otherwise), which, under applicable law, rule or regulation, requires public disclosure at or before the date hereof or announcement by the Company but which has not been so publicly disclosed. The Company acknowledges and agrees that no Buyer makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 2 .

(pp) OFAC . Neither the Company nor any of its subsidiaries nor any director, officer, agent, employee or affiliate of the Company or any of its subsidiaries is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not directly or indirectly use the proceeds of the offering of the shares of Preferred Stock, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.

4. COVENANTS.

(a) Efforts . Each Buyer shall use its commercially reasonably efforts to timely satisfy each of the covenants hereunder and conditions to be satisfied by it as provided in Section 6 of this Agreement. The Company shall use its best efforts to timely satisfy each of the covenants hereunder and conditions to be satisfied by it as provided in Section 7 of this Agreement.

(b) Amendments to the Registration Statement; Prospectus Supplements; Free Writing Prospectuses . The Company has not made, and agrees that unless it obtains the prior written consent of the Buyer it will not make, an offer relating to the Securities that would constitute an “issuer free writing prospectus” as defined in Rule 433 promulgated under the 1933 Act (an “ Issuer Free Writing Prospectus ”) or that would otherwise constitute a “free writing prospectus” as defined in Rule 405 promulgated under the 1933 Act (a “ Free Writing Prospectus ”) required to be filed by the Company or the Buyer with the SEC or retained by the Company or the Buyer under Rule 433 under the 1933 Act. The Buyer has not made, and agrees that unless it obtains the prior written consent of the Company it will not make, an offer relating to the Securities that would constitute a Free Writing Prospectus required to be filed by the Company with the SEC or retained by the Company under Rule 433 under the 1933 Act. Any such Issuer Free Writing Prospectus or other Free Writing Prospectus consented to by the Buyer or the Company is referred to in this Agreement as a “ Permitted Free Writing Prospectus .” The Company agrees that (x) it has treated and will treat, as the case may be, each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus and (y) it has complied and will comply, as the case may be, with the requirements of Rules 164 and 433 under the 1933 Act applicable to any Permitted Free Writing Prospectus, including in respect of timely filing with the SEC, legending and record keeping. Buyers consent to the following Issuer Free Writing Prospectus: Press Release on CRG Amendment and Board Changes, issued by the Company on May 17, 2018 and filed as a free writing prospectus.

(c) Prospectus Delivery . As soon as practicable after execution of this Agreement the Company shall file a Prospectus Supplement with respect to the Securities to be issued on the Closing Date, as required under, and in conformity with, the 1933 Act, including Rule 424(b) thereunder. The Company shall deliver or make available to the Buyer, without charge, an electronic copy of each form of Prospectus Supplement, together with the Prospectus,

and any Permitted Free Writing Prospectus on the Closing Date. The Company consents to the use of the Prospectus (and of any Prospectus Supplements thereto) in accordance with the provisions of the 1933 Act and with the securities or “blue sky” laws of the jurisdictions in which the Securities may be sold by the Buyer, in connection with the offering and sale of the Securities and for such period of time thereafter as the Prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the 1933 Act) is required by the 1933 Act to be delivered in connection with sales of the Securities. If during such period of time any event shall occur that in the judgment of the Company and its counsel is required to be set forth in the Registration Statement or the Prospectus or any Permitted Free Writing Prospectus or should be set forth therein in order to make the statements made therein (in the case of the Prospectus, in light of the circumstances under which they were made) not misleading, or if it is necessary to amend the Registration Statement or supplement or amend the Prospectus or any Permitted Free Writing Prospectus to comply with the 1933 Act or any other applicable law or regulation, the Company shall forthwith prepare and, subject to Section 4(b) above, file with the SEC an appropriate amendment to the Registration Statement or Prospectus Supplement to the Prospectus (or supplement to the Permitted Free Writing Prospectus) and shall expeditiously furnish or make available to the Buyer an electronic copy thereof.

(d) Stop Orders . The Company shall advise the Buyer promptly (but in no event later than 24 hours) and shall confirm such advice in writing: (i) of the Company’s receipt of notice of any request by the SEC for amendment of or a supplement to the Registration Statement, the Prospectus, any Permitted Free Writing Prospectus or for any additional information; (ii) of the Company’s receipt of notice of the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement or prohibiting or suspending the use of the Prospectus or any Prospectus Supplement, or of the suspension of qualification of the Securities for offering or sale in any jurisdiction, or the initiation or contemplated initiation of any proceeding for such purpose; (iii) of the Company becoming aware of the happening of any event, which makes any statement of a material fact made in the Registration Statement, the Prospectus or any Permitted Free Writing Prospectus untrue or which requires the making of any additions to or changes to the statements then made in the Registration Statement, the Prospectus or any Permitted Free Writing Prospectus in order to state a material fact required by the 1933 Act to be stated therein or necessary in order to make the statements then made therein (in the case of the Prospectus, in light of the circumstances under which they were made) not misleading, or of the necessity to amend the Registration Statement or supplement the Prospectus or any Permitted Free Writing Prospectus to comply with the 1933 Act or any other law or (iv) if at any time following the date hereof the Registration Statement is not effective or is not otherwise available for the issuance of the Securities or any Prospectus contained therein is not available for use for any other reason. Thereafter, the Company shall promptly notify such holders when the Registration Statement, the Prospectus, any Permitted Free Writing Prospectus and/or any amendment or supplement thereto, as applicable, is effective and available for the issuance of the Securities. If at any time the SEC shall issue any stop order suspending the effectiveness of the Registration Statement or prohibiting or suspending the use of the Prospectus or any Prospectus Supplement, the Company shall use best efforts to obtain the withdrawal of such order at the earliest possible time.

(e) Blue Sky . The Company shall, on or before the Closing Date, take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for, or to, qualify the Securities for sale to the Buyers at the Closing pursuant to this Agreement under applicable securities or “Blue Sky” laws of the states of the United States (or to obtain an exemption from such qualification), and shall provide evidence of any such action so taken to the Buyers on or prior to the Closing Date. Without limiting any other obligation of the Company under this Agreement, the Company shall timely make all filings and reports relating to the offer and sale of the Securities required under all applicable securities laws (including, without limitation, all applicable federal securities laws and all applicable “Blue Sky” laws), and the Company shall comply with all applicable foreign, federal, state and local laws, statutes, rules, regulations and the like relating to the offering and sale of the Securities to the Buyers.

(f) Reporting Status . Until the date which is the later of the date on which (i) the Preferred Shares are no longer outstanding or (ii) the Company is no longer obligated under the Registration Rights Agreement to maintain the registration statement filed thereunder, the Company shall timely file all reports required to be filed with the SEC pursuant to the 1934 Act, and the Company shall not terminate its status as an issuer required to file reports under the 1934 Act even if the 1934 Act or the rules and regulations thereunder would otherwise permit such termination.

(g) Use of Proceeds . The Company will use the proceeds from the sale of the Securities as described in the Prospectus Supplement, but not, directly or indirectly, for (i) except as set forth on Schedule 4(g) , the satisfaction of any indebtedness of the Company or any of its Subsidiaries, (ii) the redemption or repurchase of any securities of the Company or any of its Subsidiaries, or (iii) the settlement of any outstanding litigation.

(h) Listing . The Company shall use best efforts to maintain the Common Stock’s listing on the Principal Market. If after using best efforts the Company is unable to maintain such listing, the Company shall us best efforts to provide that the Common Stock is quoted for trading on the over-the-counter market.

(i) Fees . The Company shall be responsible for the payment of any Placement Agent’s fees, financial advisory fees, transfer agent fees, DTC fees or broker’s commissions (other than for Persons engaged by any Buyer) relating to or arising out of the transactions contemplated hereby (including, without limitation, any fees or commissions payable to the Placement Agent, who is the Company’s sole placement agent in connection with the transactions contemplated by this Agreement). The Company shall be responsible for all costs and expenses incurred by Broadfin Healthcare Master Fund Ltd. (the “ Lead Investor ”), including fees of counsel to the Lead Investor in connection with entering into this Agreement and the Transaction Documents and the transactions contemplated herein and therein, including any filings required by Section 13 or Section 16 of the 1934 Act. The Company shall pay, and hold each Buyer harmless against, any liability, loss or expense (including, without limitation, reasonable attorneys’ fees and out-of-pocket expenses) arising in connection with any claim relating to any such payment. Except as otherwise set forth in the Transaction Documents, each party to this Agreement shall bear its own expenses in connection with the sale of the Securities to the Buyers.

(j) Disclosure of Transactions . The Company shall, on or before 9:30 a.m., New York time, on the first (1 ^st ) Business Day after the date of this Agreement, issue one or more press releases (collectively, the “ Press Release ”) reasonably acceptable to the Buyers disclosing all the material terms of the transactions contemplated by the Transaction Documents. On or before 9:30 a.m., New York time, on the first (1 ^st ) Business Day after the date of this Agreement, the Company shall file a Current Report on Form 8-K describing all the material terms of the transactions contemplated by the Transaction Documents in the form required by the 1934 Act and attaching all the material Transaction Documents (including, without limitation, this Agreement (and all schedules to this Agreement)) (including all attachments, the “ 8-K Filing ”). From and after the filing of the 8-K Filing, the Company shall have disclosed all material, non-public information (if any) provided to any of the Buyers by the Company or any of its Subsidiaries or any of their respective officers, directors, employees or agents in connection with the transactions contemplated by the Transaction Documents, other than with respect to the Lead Investor. From and after the issuance of the Press Release, the Company shall ensure that the Buyer shall not be in possession of any material, nonpublic information received from the Company or any of its respective officers, directors, employees or agents, that is not disclosed in the Press Release. The Company shall not, and shall cause each of its officers, directors, employees and agents not to, provide the Buyer with any material, nonpublic information regarding the Company from and after the filing of the Press Release without the express written consent of the Buyer pursuant to a Confidentiality and Nondisclosure Agreement.

(k) Reservation of Shares . Following the Stockholders Meeting, so long as any of the Preferred Shares remain outstanding, the Company shall take all action necessary to at all times have authorized, and reserved for the purpose of issuance, no less than 100% of the sum of the maximum number of Conversion Shares issuable upon conversion of all the Preferred Shares then outstanding (without regard to any limitations on the conversion of the Preferred Shares set forth therein) (collectively, the “ Required Reserve Amount ”). If at any time the number of shares of Common Stock authorized and reserved for issuance is not sufficient to meet the Required Reserve Amount, the Company will promptly take all corporate action necessary to authorize and reserve a sufficient number of shares, including, without limitation, calling a special meeting of stockholders to authorize additional shares to meet the Company’s obligations pursuant to the Transaction Documents, in the case of an insufficient number of authorized shares, obtain stockholder approval of an increase in such authorized number of shares, and voting the management shares of the Company in favor of an increase in the authorized shares of the Company to ensure that the number of authorized shares is sufficient to meet the Required Reserve Amount.

(l) Conduct of Business . The business of the Company and its Subsidiaries shall not be conducted in violation of any law, ordinance or regulation of any Governmental Entity, except where such violations would not reasonably be expected to result, either individually or in the aggregate, in a Material Adverse Effect.

(m) Participation Right . Until the first anniversary of the Closing Date, neither the Company nor any of its Subsidiaries shall, directly or indirectly, effect any Subsequent Placement unless the Company shall have first complied with this Section 4(m) . The Company acknowledges and agrees that the right set forth in this Section 4(m) is a right granted by the Company, separately, to each Buyer.

(i) At least three (3) days prior to any proposed or intended Subsequent Placement, the Company shall deliver to each Buyer a written notice (each such notice, a “ Pre-Notice ”), which Pre-Notice shall not contain any information (including, without limitation, material, non-public information) other than: (A) if the proposed Offer Notice (as defined below) constitutes or contains material, non-public information, a statement asking whether the Investor is willing to accept material non-public information or (B) if the proposed Offer Notice does not constitute or contain material, non-public information, (x) a statement that the Company proposes or intends to effect a Subsequent Placement, (y) a statement that the statement in clause (x) above does not constitute material, non-public information and (z) a statement informing such Buyer that it is entitled to receive an Offer Notice (as defined below) with respect to such Subsequent Placement upon its written request. Upon the written request of a Buyer within one (1) day after the Company’s delivery to such Buyer of such Pre-Notice, and only upon a written request by such Buyer, the Company shall promptly, but no later than one day after such request, deliver to such Buyer an irrevocable written notice (the “ Offer Notice ”) of any proposed or intended issuance or sale or exchange (the “ Offer ”) of the securities being offered (the “ Offered Securities ”) in a Subsequent Placement, which Offer Notice shall (A) identify and describe the Offered Securities, (B) describe the price and other terms upon which they are to be issued, sold or exchanged, and the number or amount of the Offered Securities to be issued, sold or exchanged, (C) identify the persons (if known) to which or with which the Offered Securities are to be offered, issued, sold or exchanged and (D) offer to issue and sell to or exchange with such Buyer in accordance with the terms of the Offer such Buyer’s pro rata portion of the Offered Securities, provided that the number of Offered Securities which such Buyer shall have the right to subscribe for under this Section 4(m) shall be (x) based on such Buyer’s pro rata portion of the Offered Securities equal to the percentage of the Company’s outstanding equity ownership held by such Buyer, assuming conversion of all the outstanding Preferred Shares and the Company’s Series A Non-Voting Convertible Preferred Stock, on the date of delivery of the Pre-Notice (the “ Basic Amount ”), and (y) with respect to each Buyer that elects to purchase its Basic Amount, any additional portion of the Offered Securities attributable to the Basic Amounts of other Buyers as such Buyer shall indicate it will purchase or acquire should the other Buyers subscribe for less than their Basic Amounts (the “ Undersubscription Amount ”), which process shall be repeated until each Buyer shall have an opportunity to subscribe for any remaining Undersubscription Amount.

(ii) To accept an Offer, in whole or in part, such Buyer must deliver a written notice to the Company prior to the end of the one (1) Business Day after such Buyer’s receipt of the Offer Notice (the “ Offer Period ”), setting forth the portion of such Buyer’s Basic Amount that such Buyer elects to purchase and, if such Buyer shall elect to purchase all of its Basic Amount, the Undersubscription Amount, if any, that such Buyer elects to purchase (in either case, the “ Notice of Acceptance ”). If the Basic Amounts subscribed for by all Buyers are less than the total of all of the Basic Amounts, then each Buyer who has set forth an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Basic Amounts subscribed for, the Undersubscription Amount it has subscribed for; provided, however, if the Undersubscription Amounts subscribed for exceed the difference between the total of all the Basic Amounts and the Basic Amounts subscribed for (the “ Available Undersubscription Amount ”), each Buyer who has subscribed for any Undersubscription Amount shall be entitled to purchase only that portion of the Available Undersubscription Amount as the Basic Amount of such Buyer bears to the total Basic Amounts of all Buyers that have subscribed for Undersubscription Amounts, subject to rounding by the Company to the extent it deems reasonably necessary. Notwithstanding the foregoing, if the Company desires to modify or amend the terms and conditions of the Offer prior to the expiration of the Offer Period, the Company may deliver to each Buyer a new Offer Notice and the Offer Period shall expire on the first (1 ^st ) Business Day after such Buyer’s receipt of such new Offer Notice.

(iii) The Company shall have seven (7) Business Days from the expiration of the Offer Period above (A) to offer, issue, sell or exchange all or any part of such Offered Securities as to which a Notice of Acceptance has not been given by a Buyer (the “ Refused Securities ”) pursuant to a definitive agreement(s) (the “ Subsequent Placement Agreement ”), but only upon terms and conditions (including, without limitation, unit prices and interest rates) that are not more favorable to the acquiring person or persons or less favorable to the Company than those set forth in the Offer Notice and (B) to publicly announce (x) the execution of such Subsequent Placement Agreement, and (y) either (I) the consummation of the transactions contemplated by such Subsequent Placement Agreement or (II) the termination of such Subsequent Placement Agreement, which shall be filed with the SEC on a Current Report on Form 8-K with such Subsequent Placement Agreement and any documents contemplated therein filed as exhibits thereto (except with respect to the termination of such Subsequent Placement, which shall be set forth in a written notice or e-mail to the Buyers and shall relieve such Buyers of any duty of confidentiality with respect to, or a duty not to trade on the basis of, any material, non-public information delivered by the Company, any of its Subsidiaries or agents with respect thereto).

(iv) In the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the terms specified in Section 4(m)(iii) above), then each Buyer may, at its sole option and in its sole discretion, reduce the number or amount of the Offered Securities specified in its Notice of Acceptance to an amount that shall be not less than the number or amount of the Offered Securities that such Buyer elected to purchase pursuant to Section 4(m)(ii) above multiplied by a fraction, (A) the numerator of which shall be the number or amount of Offered Securities the Company actually proposes to issue, sell or exchange (including Offered Securities to be issued or sold to Buyers pursuant to this Section 4(m) prior to such reduction) and (B) the denominator of which shall be the original amount of the Offered Securities. In the event that any Buyer so elects to reduce the number or amount of Offered Securities specified in its Notice of Acceptance, the Company may not issue, sell or exchange more than the reduced number or amount of the Offered Securities unless and until such securities have again been offered to the Buyers in accordance with Section 4(m)(i) above.

(v) Upon the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, such Buyer shall acquire from the Company, and the Company shall issue to such Buyer, the number or amount of Offered Securities specified in its Notice of Acceptance, as reduced pursuant to Section 4(m)(iv) above if such Buyer has so elected, upon the terms and conditions specified in the Offer. The purchase by such Buyer of any Offered Securities is subject in all cases to the preparation, execution and delivery by the Company and such Buyer of a separate purchase agreement relating to such Offered Securities reasonably satisfactory in form and substance to such Buyer and its counsel.

(vi) Any Offered Securities not acquired by a Buyer or other Persons in accordance with this Section 4(m) may not be issued, sold or exchanged until they are again offered to such Buyer under the procedures specified in this Agreement.

(vii) The Company and each Buyer agree that if any Buyer elects to participate in the Offer, neither the Subsequent Placement Agreement with respect to such Offer nor any other transaction documents related thereto (collectively, the “ Subsequent Placement Documents ”) shall include any term or provision whereby such Buyer shall be required to agree to any restrictions on trading as to any securities of the Company or be required to consent to any amendment to or termination of, or grant any waiver, release or the like under or in connection with, any agreement previously entered into with the Company or any instrument received from the Company.

(viii) Notwithstanding anything to the contrary in this Section 4(m) and unless otherwise agreed to by such Buyer, the Company shall either confirm in writing to such Buyer that the transaction with respect to the Subsequent Placement has been abandoned or shall publicly disclose its intention to issue the Offered Securities, in either case, in such a manner such that such Buyer will not be in possession of any material, non-public information, by the seventh (7 ^th ) Business Day following the end of the Offer Period. If by such seventh (7 ^th ) Business Day, no public disclosure regarding a transaction with respect to the Offered Securities has been made, and no notice regarding the abandonment of such transaction has been received by such Buyer, such transaction shall be deemed to have been abandoned and such Buyer shall not be in possession of any material, non-public information with respect to the Company or any of its Subsidiaries. Should the Company decide to pursue such transaction with respect to the Offered Securities, the Company

shall provide such Buyer with another Offer Notice and such Buyer will again have the right of participation set forth in this Section 4(m) . The Company shall not be permitted to deliver more than one such Offer Notice to such Buyer in any sixty (60) day period, except as expressly contemplated by the last sentence of Section 4(m)(ii) .

(ix) The Company shall not circumvent the provisions of this Section 4(m) by providing terms or conditions to one Buyer that are not provided to all.

(x) Notwithstanding the foregoing, this Section 4(m) shall not apply in respect of the issuance of (A) shares of Common Stock or options to purchase Common Stock to directors, officers, consultants or employees of the Company in their capacity as such pursuant to an Approved Stock Plan (as defined below), provided that the exercise price of any such options is not lowered, none of such options are amended to increase the number of shares issuable thereunder and none of the terms or conditions of any such options are otherwise materially changed in any manner that adversely affects any of the Buyers; provided further, that for any issuance of securities to consultants to qualify under this clause (A), they may only be issued as “restricted securities” (as defined in Rule 144) without any registration rights; (B) shares of Common Stock issued upon the conversion or exercise of Convertible Securities (other than options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (A) above) issued prior to the date hereof, provided that the conversion, exercise or other method of issuance (as the case may be) of any such Convertible Security is made solely pursuant to the conversion, exercise or other method of issuance (as the case may be) provisions of such Convertible Security that were in effect on the date immediately prior to the date of this Agreement, the conversion, exercise or issuance price of any such Convertible Securities (other than options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (A) above) is not lowered, none of such Convertible Securities (other than options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (A) above) are amended to increase the number of shares issuable thereunder and none of the terms or conditions of any such Convertible Securities (other than options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (A) above) are otherwise materially changed in any manner that adversely affects any of the Buyers; (C) the Conversion Shares; and (D) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company, provided that any such issuance shall only be to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities (each of the foregoing in clauses (A) through (D), collectively the “ Excluded Securities ”). “ Approved Stock Plan ” means any employee benefit plan which has been approved by the board of directors of the Company prior to or subsequent to the date hereof pursuant to which shares of Common Stock and options to purchase Common Stock may be issued to any employee, officer, consultant or director for services provided to the Company in their capacity as such. “ Convertible Securities ” means any capital stock or other security of the Company or any of its Subsidiaries that is at any time and under any circumstances directly or indirectly convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any capital stock or other security of the Company (including, without limitation, Common Stock) or any of its Subsidiaries.

(n) Passive Foreign Investment Company . The Company shall conduct its business, and shall cause its Subsidiaries to conduct their respective businesses, in such a manner as will ensure that the Company will not be deemed to constitute a passive foreign investment company within the meaning of Section 1297 of the Code.

(o) Effective Registration Statement . So long as the Preferred Shares are outstanding, the Company shall take all steps necessary to keep a registration statement on Form S-3 covering such shares and the Conversion Shares continually effective.

(p) Voting . Each Buyer, severally and not jointly, agrees to vote all shares of Common Stock over which such Buyer has voting control on the applicable record date in favor of any resolution on the Amendment (as defined in the Certificate of Designation) and Stockholder Approval, to the extent permissible under Nasdaq rules, that are presented to the stockholders of the Company at the Corporation Stockholders’ Meeting (as defined in the Certificate of Designation) and at any meeting of stockholders held subsequent thereto as a result of any adjournment or postponement of such Corporation Stockholders’ Meeting.

5. REGISTER; TRANSFER AGENT INSTRUCTIONS; LEGEND.

(a) Register . The Company shall maintain at its principal executive offices (or such other office or agency of the Company as it may designate by notice to each holder of Securities), a register for the Preferred Shares in which the Company shall record the name and address of the Person in whose name the Preferred Shares have been issued (including the name and address of each transferee), the number of Preferred Shares held by such Person and the number of Conversion Shares issuable upon conversion of the Preferred Shares held by such Person. The Company shall keep the register open and available at all times during business hours for inspection of any Buyer or its legal representatives.

(b) [reserved]

(c) Legends . Certificates and any other instruments evidencing the Securities shall not bear any restrictive or other legend.

(d) FAST Compliance . While any Preferred Shares remain outstanding, the Company shall maintain a transfer agent that participates in the DTC Fast Automated Securities Transfer Program.

6. CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.

The obligation of the Company hereunder to issue and sell the Preferred Shares to each Buyer at the Closing is subject to the satisfaction, at or before the Closing Date, of each of the following conditions, provided that these conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion by providing each Buyer with prior written notice thereof:

(a) Such Buyer shall have executed each of the other Transaction Documents to which it is a party and delivered the same to the Company.

(b) Such Buyer and each other Buyer shall have delivered to the escrow account the Purchase Price for the Preferred Shares being purchased by such Buyer at the Closing by wire transfer of immediately available funds in accordance with the Company’s instructions.

(c) The representations and warranties of such Buyer shall be true and correct in all material respects as of the date when made and as of the Closing Date as though originally made at that time (except for representations and warranties that speak as of a specific date, which shall be true and correct as of such specific date), and such Buyer shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by such Buyer at or prior to the Closing Date.

7. CONDITIONS TO EACH BUYER’S OBLIGATION TO PURCHASE.

The obligation of each Buyer hereunder to purchase its Preferred Shares at the Closing is subject to the satisfaction, at or before the Closing Date, of each of the following conditions, provided that these conditions are for each Buyer’s sole benefit and may be waived by such Buyer at any time in its sole discretion by providing the Company with prior written notice thereof:

(a) The Company shall have duly executed and delivered to such Buyer each of the Transaction Documents to which such Buyer is a party.

(b) The Company shall have filed the Certificate of Designation with the Delaware Secretary of State, and such Certificate of Designation shall be effective.

(c) Such Buyer shall have received the opinion of Ellenoff Grossman & Schole LLP, the Company’s counsel, dated as of the Closing Date, in the form reasonably acceptable to such Buyer.

(d) The Company shall have duly executed and delivered, or caused to be delivered, to such Buyer a certificate evidencing a number of Preferred Shares equal to such Buyer’s Purchase Price divided by $10,000 as set forth across from such Buyer’s name in Schedule 1 , registered in the name of such Buyer;

(e) The Chief Executive Officer of the Company shall have signed the waiver in substantially the form set forth in Exhibit D .

(f) Each of the directors of the Company set forth on Schedule 7(f) shall have entered into a Director Retirement Agreement in the form set forth on Exhibit E hereto.

(g) Each of the individuals set forth on Schedule 7(g) shall have been nominated and approved by the Company’s board of directors to serve as a director of the board, effective upon the Closing.

(h) Each of the individuals listed on Schedule 7(g) shall have received and executed an indemnification agreement with the Company, effective on the Closing.

(i) The Company shall have amended its term loan agreement with ACRG Servicing LLC, as administrative agent and collateral agent, in a form reasonably satisfactory to the Buyers.

(j) The Company shall have delivered to such Buyer a certificate evidencing the formation and good standing of the Company and each of its Subsidiaries in each such entity’s jurisdiction of formation issued by the Secretary of State (or comparable office) of such jurisdiction of formation as of a date within two (2) days of the Closing Date.

(k) The Company shall have delivered to such Buyer a certificate evidencing the Company’s qualification as a foreign corporation and good standing issued by the Secretary of State (or comparable office) of each jurisdiction in which the Company conducts business and is required to so qualify, as of a date within two (2) days of the Closing Date.

(l) The Company shall have filed a Notification: Listing of Additional Shares with the Principal Market for the Conversion Shares and shall have received no objection thereto from the Principal Market.

(m) Each and every representation and warranty of the Company shall be true and correct as of the date when made and as of the Closing Date as though originally made at that time (except for representations and warranties that speak as of a specific date, which shall be true and correct as of such specific date) and the Company shall have performed, satisfied and complied in all respects with the covenants, agreements and conditions required to be performed, satisfied or complied with by the Company at or prior to the Closing Date. Such Buyer shall have received a certificate, duly executed by the Chief Executive Officer of the Company, dated as of the Closing Date, to the foregoing effect and as to such other matters as may be reasonably requested by such Buyer in the form acceptable to such Buyer.

(n) No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or Governmental Entity of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Transaction Documents.

(o) Since the date of execution of this Agreement, no event or series of events shall have occurred that would reasonably be expected to have or result in a Material Adverse Effect.

(p) From the date hereof to the Closing Date, (i) trading in the Common Stock shall not have been suspended by the SEC or the Principal Market (except for any suspension of trading of limited duration agreed to by the Company, which suspension shall be terminated prior to the Closing), and, (ii) at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such service, or on the Principal Market, nor shall a banking moratorium have been declared either by the United States or New York State

authorities nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of each Buyer, makes it impracticable or inadvisable to purchase the Securities at the Closing.

(q) The Registration Statement shall be effective and available for the issuance and sale of the Securities hereunder and the Company shall have delivered to such Buyer the Prospectus and the Prospectus Supplement as required thereunder.

(r) The Company and its Subsidiaries shall have delivered to such Buyer such other documents, instruments or certificates relating to the transactions contemplated by this Agreement as such Buyer or its counsel may reasonably request.

Upon the satisfaction of the conditions in this Section 7, the Lead Investor or its representative shall promptly deliver a written confirmation (which may be an e-mail) to the Company and the Placement Agent (the “ Lead Investor Confirmation ”) in connection with the Closing.

8. TERMINATION.

In the event that the Closing shall not have occurred with respect to a Buyer within five (5) days of the date hereof, then such Buyer shall have the right to terminate its obligations under this Agreement with respect to itself at any time on or after the close of business on such date without liability of such Buyer to any other party; provided, however, (i) the right to terminate this Agreement under this Section 8 shall not be available to such Buyer if the failure of the transactions contemplated by this Agreement to have been consummated by such date is the result of such Buyer’s breach of this Agreement and (ii) the abandonment of the sale and purchase of the Preferred Shares shall be applicable only to such Buyer providing such written notice, provided further that no such termination shall affect any obligation of the Company under this Agreement to reimburse such Buyer for the expenses described in Section 4(i) above. Nothing contained in this Section 8 shall be deemed to release any party from any liability for any breach by such party of the terms and provisions of this Agreement or the other Transaction Documents or to impair the right of any party to compel specific performance by any other party of its obligations under this Agreement or the other Transaction Documents.

9. MISCELLANEOUS.

(a) Governing Law; Jurisdiction; Jury Trial . All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or under any of the other Transaction Documents or with any transaction contemplated hereby or thereby, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude any Buyer from bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations to such Buyer or to enforce a judgment or other court ruling in favor of such Buyer. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY.

(b) Counterparts . This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. In the event that any signature is delivered with electronic signature or is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force as if such electronic signature, facsimile or “.pdf” signature page were an original thereof.

(c) Headings; Gender . The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine, neuter, singular and plural forms thereof. The terms “including,” “includes,” “include” and words of like import shall be construed broadly as if followed by the words “without limitation.” The terms “herein,” “hereunder,” “hereof” and words of like import refer to this entire Agreement instead of just the provision in which they are found.

(d) Severability . If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).

(e) Entire Agreement; Amendments . This Agreement supersedes all other prior oral or written agreements between the Buyer, the Company, their affiliates and Persons acting on their behalf with respect to the matters discussed herein, and this Agreement and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be amended other than by an instrument in writing signed by the Company and the Buyers which purchased a majority of the Preferred Shares at the Closing hereunder. No provision hereof may be waived other than by an instrument in writing signed by the party against whom enforcement is sought. No such amendment shall be effective to the extent that it applies to less than all of the holders of the Preferred Shares then outstanding.

(f) Notices . Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon delivery, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (iii) one (1) Business Day after deposit with an overnight courier service with next day delivery specified, in each case, properly addressed to the party to receive the same. The addresses, facsimile numbers and e-mail addresses for such communications shall be:

If to the Company:

BioDelivery Sciences International, Inc.

4131 ParkLake Avenue, Suite #225

Raleigh, North Carolina 27612

Facsimile: (919) 582-9051

E-Mail: ernied@bdsi.com

Attention: Chief Financial Officer

With a copy (for informational purposes only) to:

Ellenoff Grossman & Schole LLP

1345 Avenue of the Americas, 11th Floor

New York, New York 10105

Facsimile: (212) 370-7889

E-Mail: bigrossman@egsllp.com

Attention: Barry I. Grossman, Esq.

If to a Buyer, to its address, e-mail address and facsimile number set forth on the Schedule 1 , with copies to such Buyer’s representatives as set forth on the Schedule of Buyers, or to such other address, e-mail address and/or facsimile number and/or to the attention of such other Person as the recipient party has specified by written notice given to each other party five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s facsimile machine or e-mail containing the time, date, recipient facsimile number and, with respect to each facsimile transmission, an image of the first page of such transmission or (C) provided by an overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile or e-mail or receipt from an overnight courier service in accordance with clause (i), (ii) or (iii) above, respectively. To the extent that any notice provided pursuant to any Transaction Document constitutes, or contains material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the SEC pursuant to a Current Report on Form 8-K.

(g) Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns.

(h) No Third Party Beneficiaries . This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, other than the Indemnitees referred to in Section 9(k) .

(i) Survival . The representations, warranties, agreements and covenants shall survive the Closing, provided that the representations and warranties shall survive for a period of two (2) years following the Closing. Each Buyer shall be responsible only for its own representations, warranties, agreements and covenants hereunder.

(j) Further Assurances . Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

(k) Indemnification . In consideration of the Buyer’s execution and delivery of the Transaction Documents and acquiring the Securities thereunder and in addition to all of the Company’s other obligations under the Transaction Documents, the Company shall defend, protect, indemnify and hold harmless the Buyer, any affiliate of Buyer and each of their respective partners, members, officers, directors, employees and investors and any of the foregoing Persons’ accounting and legal representatives retained in connection with the transactions contemplated by this Agreement (collectively, the “ Indemnitees ”) from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “ Indemnified Liabilities ”), incurred by any Indemnitee as a result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation or warranty made by the Company in the Transaction Documents or any other certificate, instrument or document contemplated thereby, or (b) any breach of any covenant, agreement or obligation of the Company contained in the Transaction Documents or any certificate, instrument or document contemplated thereby. To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. Except as otherwise set forth herein, the mechanics and procedures with respect to the rights and obligations under this Section 9(k) shall be the same as those set forth in Section 2.5.3 of the Registration Rights Agreement.

(l) Construction . The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party. No specific representation or warranty shall limit the generality or applicability of a more general representation or warranty. Each and every reference to share prices, shares of Common Stock and any other numbers in this

Agreement that relate to the Common Stock shall be automatically adjusted for any stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions that occur with respect to the Common Stock after the date of this Agreement. It is expressly understood and agreed that for all purposes of this Agreement, and without implication that the contrary would otherwise be true, neither transactions nor purchases nor sales shall include the location and/or reservation of borrowable shares of Common Stock.

(m) Remedies . Each Buyer and in the event of assignment by Buyer of its rights and obligations hereunder, each holder of Securities, shall have all rights and remedies set forth in the Transaction Documents and all rights and remedies which such holders have been granted at any time under any other agreement or contract and all of the rights which such holders have under any law. Any Person having any rights under any provision of this Agreement shall be entitled to enforce such rights specifically (without posting a bond or other security), to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law. Furthermore, the Company recognizes that in the event that it or any Subsidiary fails to perform, observe, or discharge any or all of its or such Subsidiary’s (as the case may be) obligations under the Transaction Documents, any remedy at law would inadequate relief to the Buyers. The Company therefore agrees that the Buyers shall be entitled to specific performance and/or temporary, preliminary and permanent injunctive or other equitable relief from any court of competent jurisdiction in any such case without the necessity of proving actual damages and without posting a bond or other security. The remedies provided in this Agreement and the other Transaction Documents shall be cumulative and in addition to all other remedies available under this Agreement and the other Transaction Documents, at law or in equity (including a decree of specific performance and/or other injunctive relief).

(n) Withdrawal Right . Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the Transaction Documents, whenever any Buyer exercises a right, election, demand or option under a Transaction Document and the Company or any Subsidiary does not timely perform its related obligations within the periods therein provided, then such Buyer may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company or such Subsidiary (as the case may be), any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights.

(o) Independent Nature of Buyers’ Obligations and Rights . The obligations of each Buyer under the Transaction Documents are several and not joint with the obligations of any other Buyer, and no Buyer shall be responsible in any way for the performance of the obligations of any other Buyer under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken by any Buyer pursuant hereto or thereto, shall be deemed to constitute the Buyers as, and the Company acknowledges that the Buyers do not so constitute, a partnership, an association, a joint venture or any other kind of group or entity, or create a presumption that the Buyers are in any way acting in concert or as a group or entity, and the Company shall not assert any such claim with respect to such obligations or the transactions contemplated by the Transaction Documents or any matters, and the Company acknowledges that the Buyers are not acting in concert or as a group, and the Company shall not assert any such claim, with respect to such obligations or the transactions contemplated by the Transaction Documents. The decision of each Buyer to purchase Securities pursuant to the Transaction Documents has been made by such Buyer independently of any other Buyer. Each Buyer acknowledges that no other Buyer has acted as agent for such Buyer in connection with such Buyer making its investment hereunder and that no other Buyer will be acting as agent of such Buyer in connection with monitoring such Buyer’s investment in the Securities or enforcing its rights under the Transaction Documents. The Company and each Buyer confirms that each Buyer has independently participated with the Company and its Subsidiaries in the negotiation of the transaction contemplated hereby with the advice of its own counsel and advisors. Each Buyer shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of any other Transaction Documents, and it shall not be necessary for any other Buyer to be joined as an additional party in any proceeding for such purpose. The use of a single agreement to effectuate the purchase and sale of the Securities contemplated hereby was solely in the control of the Company, not the action or decision of any Buyer, and was done solely for the convenience of the Company and its Subsidiaries and not because it was required or requested to do so by any Buyer. It is expressly understood and agreed that each provision contained in this Agreement and in each other Transaction Document is between the Company, each Subsidiary and a Buyer, solely, and not between the Company, its Subsidiaries and the Buyers collectively and not between and among the Buyers. No consideration (including any modification of any Transaction Document) shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of this Agreement unless the same consideration is also offered

to all of the parties to this Agreement. For clarification purposes, this provision constitutes a separate right granted to each Buyer by the Company and negotiated separately by each Buyer, and is intended for the Company to treat the Buyers as a class and shall not in any way be construed as the Buyers acting in concert or as a group with respect to the purchase, disposition or voting of Securities or otherwise.

[ signature pages follow ]

IN WITNESS WHEREOF , each Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first written above.


COMPANY:

BIODELIVERY SCIENCES INTERNATIONAL, INC.



By:
Name:		Mark A. Sirgo, Pharm. D.
Title:		Vice Chairman

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

Name of Buyer:

Signature of Authorized Signatory of Buyer:

Name of Authorized Signatory:

Title of Authorized Signatory:

Email Address of Authorized Signatory:

Facsimile Number of Authorized Signatory:

Address for Notice to Buyer:

Address for Delivery of Securities to Buyer (if not same as address for notice):

Purchase Price: $

Preferred Shares:

EIN Number:

List of Schedules

Schedule 1 – Buyers

Schedule 3(g) - Placement Agent Fees and Expenses

Schedule 4(g) - Use of Proceeds

Schedule 7(f) – Resigning Directors

Schedule 7(g) – Director Nominees

SCHEDULE 1 - BUYERS


Buyer	Preferred Shares	Aggregate Purchase Price

SCHEDULE 3(G) - PLACEMENT AGENT FEES AND EXPENSES

The Company shall pay a fee to the Placement Agent equal to 3% of the gross proceeds of the offering less the reimbursement of transaction-related expenses incurred by the Company up to $20,000.

SCHEDULE 4(G) - USE OF PROCEEDS

Trade payables incurred in the ordinary course of business and Permitted Indebtedness (as defined in the Term Loan Agreement between the Company and CRG Servicing LLC, as administrative agent and collateral agent)

SCHEDULE 7(F) – RESIGNING DIRECTORS

•

Samuel Sears

•

Barry Feinberg

•

Timothy Tyson

•

Thomas D’Alonzo

SCHEDULE 7(G)- DIRECTOR NOMINEES

•

Kevin Kotler

•

Todd C. Davis

•

Peter S. Greenleaf

EXHIBIT A

Certificate of Designation

EXHIBIT B

Registration Rights Agreement

Exhibit C

Settlement Agreement

Exhibit D

Waiver

EXHIBIT E

Director Retirement Agreement

Exhibit 10.2

REGISTRATION RIGHTS AGREEMENT

REGISTRATION RIGHTS AGREEMENT (this “ Agreement ”), dated as of May 17, 2018, by and among Biodelivery Sciences International, Inc., a Delaware corporation, with headquarters located at 4131 Parklane Avenue, Suite 225, Raleigh, NC 27612 (the “ Company ”), and the Lead Investor (as defined below) (each a “ Investor ” and collectively the “ Investors ”, provided that, if the context requires, references to “Investors” shall be deemed to be references to “Investor”).

RECITALS

A. In connection with the Securities Purchase Agreement by and among the parties hereto of even date herewith (the “ Purchase Agreement ”), the Company has agreed, upon the terms and subject to the conditions set forth in the Purchase Agreement, to issue and sell to investors, including the Lead Investor, an aggregate of 5,000 shares of the Company’s Series B Convertible Preferred Stock, par value $0.001 per share (the “ Preferred Shares ”); and

B. To induce the Lead Investor to execute and deliver the Purchase Agreement, the Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the “ 1933 Act ”), and applicable state securities laws to the Lead Investor;

NOW , THEREFORE , in consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by each party hereto, the parties hereby agree as follows:

1. Certain Definitions . Capitalized terms used in this Agreement and not otherwise defined herein shall have the respective meanings ascribed to such terms in the Purchase Agreement. As used in this Agreement, the following terms shall have the following respective meanings:

“ Affiliate ” means, with respect to any Person, any other Person controlling, controlled by or under direct or indirect common control with such Person (for the purposes of this definition “control,” when used with respect to any specified Person, shall mean the power to direct the management and policies of such Person, directly or indirectly, whether through ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” shall have meanings correlative to the foregoing).

“ Agreement ” has the meaning specified therefor in the introductory paragraph of this Agreement.

“ Claims ” has the meaning ascribed to such term in Section 2.5.1 .

“ Closing Date ” has the meaning set forth in the Purchase Agreement.

“ Common Stock ” means the Company’s common stock, par value $0.001 per share.

“ Company ” has the meaning specified therefor in the introductory paragraph of this Agreement.

“ Conversion Shares ” means the shares of Common Stock issuable upon conversion of the Preferred Shares.

“ Company Indemnified Person ” has the meaning ascribed to such term in Section 2.5.1 .

“ Demand Notice ” has the meaning ascribed to such term in Section 2.1.1 .

“ Demand Registration ” has the meaning ascribed to such term in Section 2.1.1 .

“ Demand Right ” has the meaning ascribed to such term in Section 2.1.1 .

“ Equity Interest ” means (a) with respect to a corporation, any and all shares of capital stock of such corporation, (b) with respect to a partnership, limited liability company, trust, or similar Person, any and all units, interests, or other partnership or limited liability company interests, and (c) any other direct or indirect equity ownership or participation in a Person.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

“ Holder ” means each of the Investors and any Person holding Registrable Securities to whom the rights under Section 2 have been transferred in accordance with Section 2.8 .

“ Holder Indemnified Person ” has the meaning ascribed to such term in Section 2.5.2 .

“ Included Registrable Securities ” has the meaning ascribed to such term in Section 2.2.1 .

“ Indemnified Damages ” has the meaning ascribed to such term in Section 2.5.1 .

“ Indemnified Party ” has the meaning ascribed to such term in Section 2.5.3 .

“ Indemnifying Party ” has the meaning ascribed to such term in Section 2.5.3 .

“Lead Investor” means Broadfin Healthcare Master Fund, Ltd.

“ Managing Underwriter ” means, with respect to any Underwritten Offering, the book running lead manager of such Underwritten Offering.

“ Person ” means an individual or entity, including, without limitation, any corporation, association, joint stock company, trust, joint venture, general or limited partnership, limited liability company, unincorporated organization, or governmental entity (or any department, agency or political subdivision thereof).

“ Piggyback Registration ” has the meaning ascribed to such term in Section 2.2.1 .

“ Pro Rata Basis ” with respect to a Registration Statement means relative to the number of Registrable Securities then held by each Investor whose Registrable Securities are included in the Registration Statement.

“ Preferred Shares ” has the meaning specified therefor in the Recitals of this Agreement.

“ Purchase Agreement ” has the meaning specified therefor in the Recitals of this Agreement.

“ Purchase Price ” has the meaning set forth in the Purchase Agreement.

“ register , ” “ registered ” and “ registration ” refer to the registration effected by preparing and filing a Registration Statement in compliance with the Securities Act, and the declaration or ordering of the effectiveness of such Registration Statement by the SEC.

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“ Registrable Securities ” means (a) any Conversion Shares, (b) any shares of Common Stock or other capital stock of the Company held by, or issued or issuable with respect to or in exchange for the other outstanding securities of the Company held by, the Investors and (c) any shares of Common Stock or other capital stock of the Company issued or issuable with respect to or in exchange for the Preferred Shares or the shares described in clause (b) above as a result of any stock split, stock dividend, distribution, recapitalization, exchange or similar event or otherwise, which securities in clauses (a)-(c) herein may not be freely sold by a Holder without restriction on volume or manner of sale under Rule 144; provided, however, that such shares shall only be treated as Registrable Securities if and only for so long as they are held by a Holder and (1) have not been disposed of pursuant to a Registration Statement declared effective by the SEC, (2) have not been disposed of pursuant to Rule 144, or (3) have not otherwise been sold in a transaction exempt from the registration requirements of the Securities Act so that all transfer restrictions and restrictive legends with respect thereto are removed upon the consummation of such sale.

“ Registration Expenses ” means all expenses incurred by the parties in complying with Sections 2.1 and 2.2 , including, without limitation, all registration, qualification, exchange listing and filing fees, printing expenses, fees and expenses of counsel (including one counsel for all Holders selling shares in such registration) and independent accountants for the Company, blue sky fees and expenses and fees and expenses of the transfer agent for the Common Stock, incident to or required by any such registration (but excluding the Selling Expenses for any Holder).

“ Registration Period ” has the meaning ascribed to such term in Section 2.4.1 .

“ Registration Statement ” means a registration statement under the Securities Act filed by the Company with the SEC.

“ Registration Term ” has the meaning ascribed to such term in Section 2.1.1 .

“ Rule 144 ” means Rule 144 promulgated under the Securities Act or any successor or similar rule as may be enacted by the SEC from time to time, all as the same shall be in effect at the time.

“ SEC ” means the Securities and Exchange Commission of the United States or any other U.S. federal agency at the time administering the Securities Act.

“ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC thereunder, all as the same shall be in effect at the time.

“ Selling Expenses ” means all underwriting discounts and selling commissions and similar fees applicable to the sale of Registrable Securities, all fees and expenses of legal counsel for any Holder (other than fees and expenses of one counsel for the Holders that constitute Registration Expenses) and all transfer taxes relating to any sale of Registrable Securities.

“ Selling Holder ” means a Holder who is selling Registrable Securities pursuant to Section 2.2 .

“ Subsidiary ” means, as to a Person, any corporation, partnership, joint venture, limited liability company, association or other entity or organization in which such Person owns (directly or indirectly) any Equity Interest or other similar ownership interest.

“ Underwritten Offering ” means an offering in which shares of Common Stock are sold to an underwriter on a firm commitment or best efforts basis for reoffering to the public pursuant to a Registration Statement.

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“ Violations ” has the meaning ascribed to such term in Section 2.5.1 .

2. Registration Rights .

2.1. Demand Registration .

2.1.1. Demand Procedure . So long as any Registrable Securities remain outstanding (the “ Registration Term ”), Investors shall have the right (the “ Demand Right ”), by written notice to the Company (a “ Demand Notice ”), to require the Company to register all or a portion of the Registrable Securities held by the Investors under and in accordance with the provisions of the Securities Act (a “ Demand Registration ”), provided that the Company shall not be required to make a Demand Registration for an amount of Registrable Securities less than $5,000,000 as measured by Purchase Price (as defined in the Purchase Agreement) of such Registrable Securities. The Company shall, within two (2) Business Days after the date the Demand Notice is given, provide written notice of such request to all Holders of Registrable Securities. As soon as practicable, but in any case no later than thirty (30) days following the receipt by the Company of the original Demand Notice, the Company will file (i) an “automatic shelf registration statement” (as defined in Rule 405 under the Securities Act) on Form S-3ASR with the SEC, if the Company is then a “well-known seasoned issuer” (as defined in Rule 405 under the Securities Act) eligible to file Form S-3ASR under the applicable rules and regulations of the SEC, or (ii) a Registration Statement on Form S-3 with the SEC, if the Company is not then eligible to file an automatic shelf registration statement on Form S-3ASR under the applicable rules of the SEC, in either case with respect to resale of the issued and outstanding Registrable Securities covered by the original Demand Notice and any additional Registrable Securities requested to be included in such registration by any other Holders, as specified by such other Holders in a Demand Notice which shall be provided to the Company on or before ten (10) days after the date the Company’s Notice is given to such Holders; provided, however, that if the Company is not then eligible to file a Registration Statement on Form S-3ASR or Form S-3, the Company shall instead file a Registration Statement on Form S-1 (or other applicable form) no later than forty five (45) days following receipt of the original Demand Notice. The Company will use commercially reasonable efforts to cause such Registration Statement to be declared effective by the SEC as promptly as practicable after such filing (except in the case of an automatic shelf registration statement on Form S-3ASR that is deemed effective upon filing).The Company shall not be required to effect more than three (3) Demand Registrations for all the Holders as a group; except that the Company shall effect additional Demand Registrations as necessary to register under a Registration Statement all Registrable Securities excluded or withdrawn from the initial Demand Registration by the Managing Underwriter (if any) pursuant to the last sentence of Section 2.1.3 .

2.1.2. Postponement . Notwithstanding anything to the contrary in this Agreement, the Company will, upon written notice to any Holder whose Registrable Securities are included in or proposed to be included in the Registration Statement pursuant to Section 2.1.1 , be entitled to postpone the filing of, or, except in the case of an automatic shelf registration statement on Form S-3ASR, declaration of effectiveness of, any Registration Statement prepared pursuant to the exercise of a Demand Right for a reasonable period of time not in excess of one hundred and twenty (120) days, if the board of directors of the Company determines, in the good faith exercise of its business judgment, and has delivered to the Holders written certification to the effect, that such registration and offering would (A) require disclosure of material non-public information concerning the Company which, at such time, is not in the best interest of the Company or (B) be materially detrimental to the Company and its stockholders because it would (1) materially interfere with a material acquisition, corporate reorganization, or other similar transaction involving the Company; (2) require premature disclosure of material information that the Company has a bona fide business purpose for preserving as confidential; or (3) render the Company unable to comply with requirements under the Securities Act or Exchange Act; provided, however , such postponement right shall be exercised by the Company not more than once. In the event of any such

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postponement, the Company will promptly notify the Holders whose Registrable Securities are included in or proposed to be included in the Registration Statement in writing when the events or circumstances permitting such postponement have ended. In the event that the Company is subject to a binding lock-up agreement with one or more third-party underwriters at any time that a Holder requests a Demand Registration, the Company shall have the right to postpone the filing of a Registration Statement pursuant to the Demand Notice until the expiration of the applicable lock-up period (not to exceed ninety (90) days).The Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to Section 2.1.1 during the period that is thirty (30) days before the Company’s good faith estimate of the date of filing of, and ending on a date that is ninety (90) days after the effective date of, a Company-initiated registration, provided that the Company is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective.

2.1.3. Marketing Factors . If any Demand Registration is in the form of an Underwritten Offering, the Investors will select and obtain the services of the investment banking firm or firms and manager or managers that will administer the offering and the counsel to such investment banking firms and managers. If the Managing Underwriter or underwriters of any proposed Underwritten Offering of shares of Common Stock pursuant to a Demand Registration advises the Company that the total issued and outstanding Registrable Securities held by all of the Holders exceeds the number of shares of Common Stock which can be sold in such offering or would have an adverse effect on the price, timing or distribution of the shares of Common Stock proposed to be offered in such Underwritten Offering or other marketing factors with respect thereto, then the shares of Common Stock to be included in such Underwritten Offering on behalf of the Holders shall include the number of Registrable Securities that such Managing Underwriter or underwriters advises the Company can be sold without having such adverse effect, and the number of shares that may be included in such Underwritten Offering shall be allocated to the Holders on a Pro Rata Basis. If the Managing Underwriter excludes or withdraws fifty percent (50%) or more of the total number of Registrable Securities that the Holders have requested to be included in such registration, then such Demand Registration shall not count as a Demand Registration permitted hereunder. If the Managing Underwriter excludes or withdraws any Registrable Securities from such Underwritten Offering pursuant to this Section 2.1.3 , then the Registration Term shall be extended until such time as those excluded or withdrawn Registrable Securities are registered under a Registration Statement or cease to be Registrable Securities.

2.1.3.1. If a Demand Registration is not filed by the Company within the time required by Section 2.1.1 following a Demand Notice (or, in the event of a postponement under Section 2.1.2 , then within thirty (30) days of a notice by the Company that the events or circumstances permitting such postponement have ended), then the Selling Holders (on a Pro Rata Basis) shall be entitled to a payment from the Company, as liquidated damages and not as a penalty, in the amount per month equal to one percent (1.0%) of the Purchase Price (as such term is defined in each of the respective Purchase Agreements with respect to each Selling Holder) for the Registrable Securities subject to such Demand Registration, from the date the Company was required to file the relevant Demand Registration until it is actually filed (or, if earlier, such Selling Holder no longer holds Registrable Securities) and pro-rated for any partial month. The maximum penalty payable by the Company for all such failures to timely file shall not exceed ten percent (10%) of the Purchase Price (as such term is defined in each of the Purchase Agreement) in the aggregate. The liquidated damages payable pursuant to the immediately preceding sentence shall be payable within five (5) Business Days after the end of each such monthly period, and shall be paid in immediately available funds.

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2.2. Piggyback Registration .

2.2.1. Participation . If the Company proposes to file a Registration Statement, at any time beginning on the Closing Date until the end of the Registration Term, with respect to shares of Common Stock for its own account, for sale to the public, or to register shares of Common Stock for stockholders of the Company other than the Holders, in each case in connection with the public offering of such shares solely for cash and other than (x) a registration on Form S-8 relating solely to employee benefit plans, (y) a registration relating solely to a transaction contemplated by Rule 145 under the Securities Act, or (z) a registration on any registration form which does not permit secondary sales or does not include substantially the same information as would be required to be included in a Registration Statement covering the sale of Registrable Securities, then the Company shall give prompt notice of such proposed registration to each Holder and such notice shall offer each Holder (or any Holder who is not participating in the proposed Registration Statement) the opportunity to include in such registration such number of Registrable Securities (the “ Included Registrable Securities ”) as such Holder may request in writing (a “ Piggyback Registration ”). The notice required to be provided in this Section 2.2.1 to each Holder shall be provided pursuant to Section 5 . Each Holder shall then have fifteen (15) days to request inclusion of Registrable Securities in the registration. If no request for inclusion from a Holder is received within the specified time, such Holder shall have no further right to participate in such Piggyback Registration. If, at any time after giving written notice of its intention to undertake a registration and prior to the closing of such registration, the Company shall determine for any reason not to undertake or to delay such registration, the Company may, at its election, give written notice of such determination to the Selling Holders and, (x) in the case of a determination not to undertake such registration, shall be relieved of its obligation to sell any Included Registrable Securities in connection with such terminated registration, and (y) in the case of a determination to delay such registration, shall be permitted to delay offering any Included Registrable Securities for the same period as the delay in the registration. Any Selling Holder shall have the right to withdraw such Selling Holder’s request for inclusion of such Selling Holder’s Registrable Securities in such offering by giving written notice to the Company of such withdrawal up to and including the time of pricing of such offering. A Piggyback Registration shall not be considered a Demand Registration for purposes of Section 2.1 of this Agreement. The Company shall have no obligation under this Section 2.2 to make any offering of its shares of Common Stock or to complete an offering of its shares of Common Stock that it proposes to make.

2.2.2. Priority of Piggyback Registration . If the Managing Underwriter or underwriters of any proposed Underwritten Offering of shares of Common Stock included in a Piggyback Registration advises the Company that the total amount of shares of Common Stock which the Selling Holders and any other Persons (other than the Company) intend to include in such offering exceeds the number which can be sold in such offering or would have an adverse effect on the price, timing or distribution of the shares of Common Stock proposed to be offered in such Underwritten Offering, then the shares of Common Stock to be included in such Underwritten Offering on behalf of the Selling Holders shall include the number of Registrable Securities that such Managing Underwriter or underwriters advises the Company can be sold without having such adverse effect. Such shares of Common Stock shall be allocated pro rata among the Selling Holders and any other Persons who possess registration rights who have requested participation in the Piggyback Registration (“ Other Holders ”) (based, for each such Selling Holder or Other Holder, on the percentage derived by dividing (A) the number of shares of Common Stock or other capital stock of the Company proposed to be sold by such Selling Holder or such Other Holder in such offering by (B) the aggregate number of shares of such class of securities proposed to be sold by all Selling Holders and all Other Holders in the Piggyback Registration).

2.3. Expenses of Registration . All Registration Expenses incurred in connection with any registration, qualification or compliance pursuant to Section 2.1 and Section 2.2 shall be borne by the Company; provided, however, that the Company shall not be required to pay for any Registration Expenses for any registration proceeding begun pursuant to Section 2.1 if the registration request is subsequently withdrawn at the request of the Holder delivering such Demand Notice (in which case all

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Selling Holders shall bear such expenses on a Pro Rata Basis), unless such Holder agrees that such withdrawn registration shall constitute a Demand Registration to which the Holders were entitled pursuant to Section 2.1. All Selling Expenses (other than underwriting discounts and commissions) relating to the sale of Registrable Securities registered by or on behalf of the Holders shall be borne by the Company, including the reasonable and documented fees, disbursements and related charges of one counsel to the Lead Investor, or to the Selling Holders if the Lead Investor is not a Selling Holder (not to exceed $20,000 without the prior approval of the Company).

2.4. Registration Procedures . In the case of the registration, qualification or compliance effected by the Company pursuant to this Agreement, the Company will, upon reasonable request, inform each Holder as to the status of such registration, qualification and compliance. At its expense, in the case of a Registration Statement filed pursuant to Section 2.1 or Section 2.2, the Company will, during such time as any Holder holds Registrable Securities:

2.4.1. use commercially reasonable efforts to cause such Registration Statement to become effective and to prepare and file such amendments and post-effective amendments to the Registration Statement and any documents required to be incorporated by reference therein as may be necessary to keep the applicable Registration Statement filed and declared effective pursuant to this Agreement, and any related qualification or compliance under state securities laws which it is necessary to obtain, effective until the earliest of (A) the date upon which all Registrable Securities cease to be Registrable Securities and (B) the date upon which the Holders have completed the distribution described in such Registration Statement, whichever first occurs (the period of time during which the Company is required hereunder to keep the Registration Statement effective is referred to herein as the “ Registration Period ”).

2.4.2. at least five (5) Business Days prior to filing a Registration Statement and at least three (3) Business Days prior to the filing of a prospectus or any amendments or supplements to a Registration Statement or a prospectus (but not any periodic report to be incorporated by reference in a Registration Statement or a prospectus), the Company shall furnish to the Holders of the Registrable Securities covered by such Registration Statement and the underwriter or underwriters, if any, copies of or drafts of all such documents proposed to be filed, which documents shall be subject to the reasonable review of such Holders and underwriters, if any, and the Company shall use commercially reasonable efforts to satisfy any objections with respect thereto raised by the Selling Holders, or the underwriters, if any;

2.4.3. in the event of any Underwritten Offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the underwriter(s) of such offering;

2.4.4. furnish such number of prospectuses and other documents incident thereto as any Holder from time to time may reasonably request to enable such Holder to consummate the disposition of the Registrable Securities owned by such Holder;

2.4.5. use commercially reasonable efforts to timely register or qualify such Registrable Securities under such other securities or blue sky laws of such jurisdictions as any Holder reasonably requests and do any and all other acts and things which may be reasonably necessary to enable such Holder to consummate the disposition of the Registrable Securities owned by such Holder in such jurisdictions; provided , that the Company will not be required to (A) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 2.4 , (B) subject itself to taxation in any such jurisdiction or (C) file a general consent to service of process in any jurisdiction unless the Company is already subject to service in such jurisdiction;

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2.4.6. notify each Holder of such Registrable Securities as promptly as practicable (A) after becoming aware of the happening of any event as a result of which the Registration Statement, the prospectus included in the Registration Statement, as then in effect, or any prospectus supplement contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (B) if the board of directors of the Company determines, in the good faith exercise of its business judgment, that the disposition of Registrable Securities pursuant to the Registration Statement would (I) require disclosure of material non-public information concerning the Company which, at such time, is not in the best interest of the Company, or (II) otherwise materially and adversely affect the Company or its stockholders because it would (1) materially interfere with a material acquisition, corporate reorganization, or other similar transaction involving the Company; (2) require premature disclosure of material information that the Company has a bona fide business purpose for preserving as confidential; or (3) render the Company unable to comply with requirements under the Securities Act or Exchange Act, (C) of the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose or the receipt by the Company of written correspondence from the SEC notifying the Company that the SEC may undertake either of the foregoing or (D) of the receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Securities for sale under the applicable securities or blue sky laws of any jurisdiction, and notify each Holder of such Registrable Securities when such events or circumstances have ended and the applicable Registration Statement is again available for use in connection with dispositions of Registrable Securities and, if appropriate, the Company will in connection therewith prepare a supplement or amendment to the prospectus included in the applicable Registration Statement as promptly as reasonably practicable, but in any event within 60 days of the Company’s suspension notice, so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, and to take such other commercially reasonable action as promptly as reasonably practicable as is necessary to remove a stop order, suspension, written notification from the SEC of the possibility thereof or proceedings related thereto. The Company shall not be permitted to suspend usage of the Registration Statement in the case of any event described in clause (A) or (B) of the preceding sentence more than a total of sixty (60) days in any twelve-month period;

2.4.7. notify each Holder of such Registrable Securities as promptly as practicable of (A) the filing of the Registration Statement or any prospectus or prospectus supplement to be used in connection therewith, or any amendment or supplement thereto, and, with respect to such Registration Statement or any other registration statement or any post-effective amendment thereto, when the same has become effective; and (B) the receipt of any written comments from the SEC with respect to any filing referred to in clause (A) and any written request by the SEC for amendments or supplements to the Registration Statement or any prospectus or prospectus supplement thereto;

2.4.8. upon request and subject to appropriate confidentiality arrangements between the parties, furnish to all Holders copies of all transmittal letters or other correspondence with the SEC or any other governmental agency or self-regulatory body or other body having jurisdiction (including any domestic or foreign securities exchange) to the extent related to a Registration Statement filed pursuant to Section 2.1 or Section 2.2 ;

2.4.9. in the case of an Underwritten Offering, use commercially reasonable efforts to cause to be furnished, upon request of the underwriters, (i) an opinion of counsel for the Company dated the date of the closing under the underwriting agreement and (ii) a “comfort” letter, dated the pricing date of such Underwritten Offering and a letter of like kind dated the date of the closing under the underwriting agreement, in each case, signed by the independent public accountants who have audited

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any of the Company’s financial statements included or incorporated by reference into the Registration Statement, and each of the opinion and the “comfort” letter shall be in customary form and cover such matters with respect to such Registration Statement (and the prospectus and any prospectus supplement included therein) as such underwriters may reasonably request and which are customarily covered in opinions of issuer’s counsel and in accountants’ letters delivered to the underwriters in similar Underwritten Offerings of securities;

2.4.10. otherwise use its commercially reasonable efforts to comply with all applicable rules and regulations of the SEC, and make available to its security holders, as soon as reasonably practicable, an earnings statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 promulgated thereunder;

2.4.11. make available to the appropriate representatives of the Managing Underwriter and Holders access to such information and Company personnel as is reasonable and customary to enable such parties to establish a due diligence defense under the Securities Act to the extent such defense is available to such person; provided , that the Company need not disclose any non-public information to any such representative unless and until such representative has entered into a confidentiality agreement with the Company;

2.4.12. provide a transfer agent and registrar for all Registrable Securities covered by such Registration Statement not later than the effective date of such Registration Statement;

2.4.13. if requested by a Holder and subject to review by the Company and approval by the Company, such approval not to be unreasonably withheld or delayed, (i) incorporate in a prospectus supplement or post-effective amendment such information as such Holder reasonably requests to be included therein relating to the sale and distribution of Registrable Securities, including information with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering and (ii) make all required filings of such prospectus supplement or post-effective amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment; and

2.4.14. cause all such Registrable Securities to be listed or quoted on each securities exchange or nationally recognized automated quotation system on which similar securities issued by the Company are then listed or quoted.

2.5. Indemnification . In the event any Registrable Securities are included in a Registration Statement under this Agreement:

2.5.1. To the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold harmless and defend each Holder, the directors, officers, members, partners, employees, agents, underwriters, advisors, representatives of, and each Person, if any, who controls any Holder within the meaning of the Securities Act or the Exchange Act (each, a “ Company Indemnified Person ”), against any losses, claims, damages, liabilities, judgments, fines, penalties, charges, costs, reasonable attorneys’ fees, amounts paid in settlement or expenses, joint or several, (collectively, “ Claims ”) incurred in investigating, preparing or defending any action, claim, suit, inquiry, proceeding, investigation or appeal taken from the foregoing by or before any court or governmental, administrative or other regulatory agency, body or the SEC, whether pending or threatened (“ Indemnified Damages ”), to which any of them may become subject to the extent such Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon: (A) any untrue statement or alleged untrue statement of a material fact in a Registration Statement or any post-effective amendment

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thereto or in any document incorporated by reference therein, or the omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (B) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus or contained in any related free writing prospectuses of the Company or in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in each case in light of the circumstances under which the statements therein were made, not misleading or (C) any violation or alleged violation by the Company of the Securities Act, the Exchange Act or any other law relating to the offer or sale of the Registrable Securities pursuant to a Registration Statement (the matters in the foregoing clauses (A), (B) and (C) being, collectively, “ Violations ”). Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 2.5.1 : (i) shall not apply to a Claim by a Company Indemnified Person to the extent arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of such Company Indemnified Person expressly for use in connection with the preparation of the Registration Statement or any such amendment thereof or supplement thereto and (ii) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably withheld or delayed. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Company Indemnified Person and shall survive the transfer of the Registrable Securities by the Holders pursuant to Section 2.8 .

2.5.2. In connection with any Registration Statement in which a Holder is participating, each such Holder agrees to severally and not jointly indemnify, hold harmless and defend, to the same extent and in the same manner as is set forth in Section 2.5.1 , the Company, each of its directors, each of its officers who signs the Registration Statement, each of its employees, agents, advisors and representatives and each Person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act (each, a “ Holder Indemnified Person ”), against any Claim or Indemnified Damages to which any of them may become subject, under the Securities Act, the Exchange Act or otherwise, to the extent such Claim or Indemnified Damages arise out of or are based upon any Violation, in each case to the extent, and only to the extent, that such Violation occurs in reliance upon and in conformity with written information furnished to the Company by or on behalf of such Holder expressly for use in connection with such Registration Statement; provided , however , that the indemnity agreement contained in this Section 2.5.2 and the agreement with respect to contribution contained in Section 2.5.4 shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of such Holder, which consent shall not be unreasonably withheld or delayed; provided , further , however , that the Holder shall be liable under this Section 2.5.2 for only that amount of a Claim or Indemnified Damages as does not exceed the net proceeds (net of any Selling Expenses) to such Holder as a result of the sale of Registrable Securities pursuant to such Registration Statement, except in the event of fraud by such Holder. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Holder Indemnified Person and shall survive the transfer of the Registrable Securities by the Holders pursuant to Section 2.8 . Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 2.5.2 with respect to any preliminary prospectus shall not inure to the benefit of any Holder Indemnified Person if the untrue statement or omission of material fact contained in the preliminary prospectus was corrected on a timely basis in the prospectus, as then amended or supplemented.

2.5.3. Each Company Indemnified Person or Holder Indemnified Person entitled to indemnification under this Section 2.5 (the “ Indemnified Party ”) shall give notice to the party required to provide indemnification (the “ Indemnifying Party ”) promptly after such Indemnified Party has actual knowledge of any Claim as to which indemnity may be sought, and unless in such Indemnified Party’s reasonable judgment a conflict of interest may exist between such Indemnified Party and the

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Indemnifying Party, shall permit the Indemnifying Party to assume the defense of any such Claim or any litigation resulting therefrom, provided that counsel for the Indemnifying Party, who shall conduct the defense of such Claim, shall be approved by the Indemnified Party (whose approval shall not unreasonably be withheld), and the Indemnified Party may participate in such defense at such party’s expense, and provided, further, that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Agreement, unless such failure is prejudicial to the Indemnifying Party in defending such Claim.

2.5.4. If the indemnification provided for in this Section 2.5 is held by a court of competent jurisdiction to be unavailable to an Indemnified Party with respect to any Claim or Indemnified Damages referred to therein, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party thereunder, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Claim or Indemnified Damages in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and of the Indemnified Party on the other in connection with the Violations which resulted in such Claim or Indemnified Damages as well as any other relevant equitable considerations. The relative fault of the Indemnifying Party and of the Indemnified Party shall be determined by reference to, among other things, whether the Violation relates to information supplied by the Indemnifying Party or by the Indemnified Party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such Violation. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who is not guilty of such fraudulent misrepresentation.

2.6. Covenants of Holders .

2.6.1. Each Holder agrees that, upon receipt of any notice from the Company pursuant to Section 2.4.6 , such Holder will forthwith discontinue disposition of Registrable Securities pursuant to the applicable Registration Statement (and if so requested by the Company, each Holder shall deliver to the Company all copies, other than permanent file copies, then in such Holder’s possession, of the prospectus covering such Registrable Securities at the time of receipt of such notice), until the receipt of written notification from the Company that the circumstances requiring the discontinuation of the use of such Registration Statement have ended and, if applicable, receipt from the Company of copies of a supplemented or amended prospectus.

2.6.2. Each Holder whose Registrable Securities are included in a Registration Statement pursuant to an Underwritten Offering severally agrees to enter into such lock-up agreement as the Managing Underwriter may in its reasonable discretion require in connection with any such Underwritten Offering (which lock-up agreement may provide for a lock-up period of up to 90 days); provided, however, that all executive officers and directors of the Company shall be subject to similar restrictions or enter into similar agreements (subject to such exceptions as the Managing Underwriter may permit in its reasonable discretion).

2.6.3. Each Holder agrees to notify the Company, at any time when a prospectus relating to a Registration Statement contemplated by Sections 2.1 or 2.2 , as the case may be, is required to be delivered by it under the Securities Act, of the occurrence of any event relating to the Holder which requires the preparation of a supplement or amendment to such prospectus included in the Registration Statement so that, as thereafter delivered to the purchasers of Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading relating to such Holder, and each Holder shall promptly make available to the Company the information to enable the Company to prepare any such supplement or amendment. Each Holder also agrees that, upon delivery of any notice by it to the Company of the happening of any event of the kind

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described in the preceding sentence of this subsection, the Holder will forthwith discontinue disposition of Registrable Securities pursuant to such Registration Statement until its receipt of the copies of the supplemental or amended prospectus contemplated by this subsection, which the Company shall promptly (and in any event within 60 days of any such Company notice) make available to each Holder and, if so requested by the Company, each Holder shall deliver to the Company all copies, other than permanent file copies then in such Holder’s possession, of the prospectus covering such Registrable Securities at the time of delivery of such notice.

2.6.4. Each Holder shall promptly furnish to the Company such information regarding such Holder and the distribution proposed by such Holder as the Company may reasonably request in writing or as shall be required in connection with any registration, qualification or compliance referred to in this Section 2 . Such Holder will assist the Company in updating such information in the Registration Statement and any prospectus supplement relating thereto.

2.6.5. Each Holder hereby covenants with the Company not to make any disposition of Registrable Securities pursuant to the Registration Statement other than in compliance with the Securities Act and other applicable laws ( provided , that for purposes of this covenant, each Holder shall be entitled to rely on the accuracy and completeness of disclosures with respect to which the Company is providing indemnification pursuant to Section 2.5 hereof).

2.7. Rule 144 Reporting . With a view to making available to the Holders the benefits of certain rules and regulations of the SEC which at any time permit the sale of the Registrable Securities to the public without registration, the Company agrees to use commercially reasonable best efforts after the Closing Date and until such date that all Registrable Securities have been (A) disposed of pursuant to a Registration Statement declared effective by the SEC, (B) disposed of pursuant to Rule 144 or (C) otherwise been sold in a transaction exempt from the registration requirements of the Securities Act so that all transfer restrictions and restrictive legends with respect thereto are removed upon the consummation of such sale, to:

2.7.1. make and keep adequate current public information with respect to the Company available, as those terms are understood and defined in Rule 144, at all times; and

2.7.2. file with the SEC in a timely manner all reports and other documents required of the Company under the Exchange Act for so long as the Company remains subject to such requirements, and the filing of such reports is required for sales under Rule 144.

2.8. Transfer of Registration Rights . The rights to cause the Company to register Registrable Securities granted to the Holder by the Company under Sections 2.1 and 2.2 may be assigned in full (but only with all related obligations) by a Holder (i) to a Subsidiary of such Holder, provided that such Holder retains its ownership interest in such Subsidiary, (ii) to an Affiliate of such Holder (other than a Subsidiary of such Holder) provided that such assignment shall not be with the intent of or as part of a transaction or a series of related transactions to transfer, assign, merge or exchange such Affiliate to or with a Person that is not an Affiliate of such Holder or (iii) to a transferee or assignee in conjunction with a transfer or assignment of all or substantially all of such Holder’s assets to such transferee or assignee; provided, however, that, as a condition precedent to any such transfer or assignment, (A) such transfer or assignment shall be effected in accordance with applicable securities laws; (B) such Holder gives prior written notice to the Company; and (C) such transferee agrees in writing to comply with the terms and provisions of this Agreement and such transfer does not violate any other provision of this Agreement. Except as permitted by this Section 2.8, the rights of a Holder with respect to Registrable Securities as set out herein shall not be transferable to any other Person, and any attempted transfer shall cause all rights of such Holder therein to be forfeited. The term “Buyer” as used in this agreement shall include any assignee of Buyer’s rights permitted by this Section.

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3. Governing Law; Jurisdiction; Jury Trial . Section 9(a) of the Purchase Agreement is incorporated herein by reference as if fully set forth herein.

4. Severability . If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated by this Agreement is not affected in any manner materially adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that such transactions are fulfilled to the extent possible.

5. Notices . Section 9(f) of the Purchase Agreement is incorporated herein by reference as if fully set forth herein.

6. Titles and Subtitles . The titles and subtitles contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

7. Waivers and Amendments . The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed by the Company and the Holders of a majority or more of the then outstanding Registrable Securities, provided that, if any amendment, modification or waiver disproportionately and adversely impacts a Holder (or group of Holders), the consent of such disproportionately impacted Holder (or group of Holders) shall be required. No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of this Agreement unless the same consideration also is offered to all of the parties to this Agreement.

8. Successors and Assigns . This Agreement shall be binding upon and inure solely to the benefit of each party and its successors and permitted assigns.

9. Entire Agreement . This Agreement, in conjunction with the Purchase Agreement and the other agreements referenced therein, constitute the entire agreement and understanding of the parties, and supersede all prior agreements and undertakings, both written and oral, among the parties, with respect to the subject matter hereof and thereof.

10. Counterparts . This Agreement may be executed in multiple counterparts and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. In the event that any signature is delivered by electronic signature or is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force as if such electronic signature, facsimile or “.pdf” signature page were an original thereof.

11. Specific Performance . The parties hereto acknowledge that there would be no adequate remedy at law if they fail to perform their obligations hereunder, and it is therefore agreed that each such Person, in addition to and without limiting any other remedy or right it may have, will have the right to an

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injunction (whether temporary, preliminary or permanent) or other equitable relief in any court of competent jurisdiction, enjoining any such breach, and enforcing specifically the terms and provisions hereof, and each of the parties hereto hereby waives any and all defenses it may have on the ground of lack of jurisdiction or competence of the court to grant such an injunction or other equitable relief. The existence of this right will not preclude any such Person from pursuing any other rights and remedies at law or in equity that such Person may have.

12. No Third Party Beneficiaries . Nothing expressed or implied in this Agreement shall be construed to give any Person other than the parties hereto any legal or equitable rights hereunder.

[Signature page to follow]

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IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first above written.


COMPANY:

BIODELIVERY SCIENCES INTERNATIONAL, INC.



By:		/s/ Mark A. Sirgo
Name:		Mark A. Sirgo, Pharm. D.
Title:		Vice Chairman



LEAD INVESTOR:

BROADFIN HEALTHCARE MASTER FUND, LTD.
By:
its Director



By:		/s/ Kevin Kotler
Name:		Kevin Kotler
Title:		Director

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[Signature Page to Registration Rights Agreement]

Exhibit 10.3

EXECUTION VERSION

AGREEMENT

This agreement (this “ Agreement ”) is made and entered into as of May 17, 2018, by and between BioDelivery Sciences International, Inc., a Delaware corporation (the “ Company ”), and Broadfin Healthcare Master Fund, Ltd., a Cayman Islands exempted company (“ Broadfin Healthcare ”), and its affiliates (such Affiliates (as defined herein) together with Broadfin Healthcare, “ Broadfin ”). Each of the Company and Broadfin is referred to herein as a “ Party ” and, collectively, as the “ Parties ”.

RECITALS

WHEREAS, the Company and Broadfin have engaged in discussions regarding, among other things, the composition of the Board of Directors of the Company (the “ Board ”);

WHEREAS, Broadfin has nominated certain individuals for election as directors at the Company’s 2018 annual meeting of stockholders (the “ 2018 Annual Meeting ”);

WHEREAS, as of the date of this Agreement (prior to the consummation of the Financing (as defined below)), Broadfin beneficially owns (as determined under Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”)) 4,278,819 shares (the “ Shares ”) of the Company’s common stock, par value $0.001 per share (the “ Common Stock ”), constituting approximately 7.3% of the Common Stock issued and outstanding;

WHEREAS, simultaneously with the execution of this Agreement, each of Thomas W. D’Alonzo, Barry I. Feinberg, Samuel P. Sears, Jr. and Timothy C. Tyson (collectively, the “ Resigning Directors ”) has entered into a Retirement Agreement in the form attached hereto as Exhibit A (collectively, the “ Retirement Agreements ”), providing for, among other things, his irrevocable resignation from the Board, certain compensation terms and non-disparagement and release of claims provisions with respect to the Company and Broadfin, each effective subject to and contingent on the closing of the Financing (as defined below) (the “ Closing ”);

WHEREAS, simultaneously with their entry into this Agreement, the Company and Broadfin are entering into a Securities Purchase Agreement (the “ Purchase Agreement ”) pursuant to which Broadfin and certain other institutional investors named therein will agree to acquire shares of Series B Preferred Stock of the Company in an equity financing (the “ Financing ”); and

WHEREAS, in connection with the Purchase Agreement, the Parties jointly desire to come to an agreement with respect to the composition of the Board and certain other matters as provided in this Agreement, effective subject to and contingent on the Closing.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties, intending to be legally bound, agree as follows:

EXECUTION VERSION

1. Effectiveness; Board Appointments and Related Agreements .

(a) The Parties expressly agree that each of the transactions and actions contemplated by this Agreement shall be effective subject to and contingent on the Closing, and shall occur simultaneously with the Closing (the “ Effective Time ”) except as specifically provided herein.

(b) Board Appointments .

(i) The Company agrees that, simultaneously with the execution of this Agreement, the Board and all applicable committees of the Board shall take all necessary actions to, as of the Effective Time (A) cause each of the Resigning Directors to resign from the Board in accordance with the Retirement Agreements, (B) appoint to the Board the following three (3) new directors – Kevin Kotler as a Class II director with a term expiring at the Company’s 2019 annual meeting of stockholders (the “ 2019 Annual Meeting ”), and each of Todd C. Davis and Peter S. Greenleaf as Class I directors with terms expiring at the 2018 Annual Meeting (Messrs. Kotler, Davis and Greenleaf, each a “ Broadfin Director ”, and collectively, the “ Broadfin Directors ”), and (C) set the size of the Board at seven (7) directors.

(ii) The Company will nominate and support the election of Messrs. Davis and Greenleaf (or any applicable Broadfin Replacement Director (as defined below)) as Class I directors (the “ 2018 Nominees ”) at the 2018 Annual Meeting, and will nominate and support the election of any other Broadfin Director(s) at any other stockholder meeting that may be held during the Standstill Period (as defined below), as applicable.

(iii) If any Broadfin Director (or any Broadfin Replacement Director) is unable or unwilling to serve as a director, resigns as a director, is removed as a director or ceases to serve as a director for any reason prior to the expiration of the Standstill Period, and at such time Broadfin beneficially owns (as determined under Rule 13d-3 promulgated under the Exchange Act) at least the lesser of (x) 2.0% of the Company’s then outstanding Common Stock (calculated on an as converted into Common Stock basis, assuming full conversion of all outstanding shares of the Company’s Series A Non-Voting Convertible Preferred Stock and Series B Non-Voting Convertible Preferred Stock), and (y) 2.0% of the Common Stock outstanding at the Closing (calculated on an as converted into Common Stock basis, assuming full conversion of all outstanding shares of the Company’s Series A Non-Voting Convertible Preferred Stock and Series B Non-Voting Convertible Preferred Stock, and subject to adjustment for stock splits, reclassifications, combinations and similar adjustments) (such lesser amount, the “ Minimum Ownership Threshold ”), Broadfin shall have the ability to recommend a substitute person(s) for appointment to the Board (any such replacement nominee, a “ Broadfin Replacement Director ”). Any Broadfin Replacement Director must qualify as “independent” pursuant to Nasdaq listing standards and satisfy the Company’s publicly disclosed guidelines and policies with respect to service on the Board. Subject to the approval of the Nominating and Corporate Governance Committee of the Board, not to be unreasonably withheld, delayed or conditioned, the Board shall appoint any such Broadfin Replacement Director to the Board to serve the unexpired term of the departed Broadfin Director, and such replacement shall be considered a Broadfin Director for all purposes of this Agreement; provided , however , that only one (1) Broadfin Director serving on the Board at any time can be an employee or Affiliate of Broadfin Healthcare, or otherwise fail to be independent of Broadfin.

EXECUTION VERSION

(iv) During the period commencing at the Effective Time through the expiration or termination of the Standstill Period, the Board and all applicable committees of the Board shall take all necessary actions (including with respect to nominations for election at the 2018 Annual Meeting) to fix the size of the Board at seven (7) directors, unless Broadfin Healthcare consents in writing to otherwise alter the size of the Board.

(v) The Board shall give the Broadfin Directors the same due consideration for membership to any committee of the Board as any other independent director. Additionally, subject to Nasdaq rules and applicable laws, rules and regulations, the Board and all applicable committees of the Board shall take all necessary actions to ensure that, during the Standstill Period, each committee of the Board, including any new committee(s) that may be established, shall include at least one (1) Broadfin Director; provided , however , that Mr. Kotler shall not (A) serve on the Audit Committee of the Board if, in the determination of the Board after consultation with counsel to the Company, such service would violate applicable laws, rules or regulations and (B) simultaneously serve on each and every committee of the Board (provided, that Mr. Kotler and each other Broadfin Director shall be invited to participate in each regular meeting of each Board committee).

(vi) During the Standstill Period, if at any time none of the Broadfin Directors serving on the Board is an employee or Affiliate of Broadfin Healthcare, or otherwise fail to be independent of Broadfin, and at such time Broadfin’s beneficial ownership of Common Stock (calculated on an as converted into Common Stock basis, assuming full conversion of all outstanding shares of the Company’s Series A Non-Voting Convertible Preferred Stock and Series B Non-Voting Convertible Preferred Stock) is no less than the Minimum Ownership Threshold, Broadfin will have the right to select and appoint an observer to the Board and the committees thereof (the “ Observer ”) who shall receive copies of all documents distributed to the Board and the committees thereof, including notice of all meetings thereof, all written consents executed thereby, all materials prepared for consideration at any meeting thereof, and all minutes related to each meeting thereof contemporaneous with their distribution to the Board or any committee; provided , however , the Company shall not provide the Observer with any material, nonpublic information about the Company unless, in advance of the delivery of such information, Broadfin Healthcare (x) consents to the Observer’s receipt of such information and (y) enters into a customary confidentiality agreement in the form substantially similar to that utilized by the Company for third party consultants and reasonably acceptable to Broadfin. The Observer shall be permitted to attend and reasonably participate, but not vote, at all meetings of the Board and the committees thereof (whether such meetings are held in person, telephonically or otherwise). Notwithstanding the foregoing, the Company reserves the right to exclude the Observer from access to any material or meeting or portion thereof if, and only to the extent that, the Board determines reasonably and in good faith that such exclusion is necessary to preserve the attorney-client privilege. It is understood by the Parties that at such time that Broadfin’s beneficial ownership of Common Stock is less than the Minimum Ownership Threshold, Broadfin and the Observer shall no longer be entitled to exercise any of the rights enumerated in this Section 1(b)(vi), including, without limitation, attendance and participation at any and all meetings of the Board and the committees thereof or the receipt of copies of any and all documents distributed to the Board and the committees in connection with such meetings or otherwise.

EXECUTION VERSION

(i) The Company agrees to hold the 2018 Annual Meeting no later than seventy-five (75) days after the date hereof.

(ii) As of the Effective Time, Broadfin hereby (A) irrevocably withdraws the notice of stockholder nomination of individuals for election as directors at the 2018 Annual Meeting submitted to the Company on April 27, 2018, and (B) irrevocably withdraws any related materials or notices submitted to the Company in connection therewith.

(d) Additional Agreements .

(i) Each Party will cause each of its Affiliates and Associates to comply with the terms of this Agreement and will be responsible for any breach of this Agreement by any such Affiliate or Associate. As used in this Agreement, the terms “Affiliate” and “Associate” shall have the respective meanings set forth in Rule 12b-2 promulgated under the Exchange Act, and include all persons or entities that at any time during the term of this Agreement become Affiliates or Associates of any person or entity referred to in this Agreement.

(ii) Upon the Effective Time, except as provided herein, Broadfin will not, and will not permit any of its Associates to, directly or indirectly, (A) nominate or recommend for nomination any person for election at the 2018 Annual Meeting, (B) submit any proposal for consideration at, or bring any other business before, the 2018 Annual Meeting, or (C) initiate, encourage or participate in any “vote no,” “withhold” or similar campaign with respect to the 2018 Annual Meeting. Broadfin will not publicly or privately encourage or support any other stockholder, person or entity to take any of the actions described in this Section 1(d)(ii).

(iii) Broadfin will appear in person or by proxy at the 2018 Annual Meeting and will cause all shares of Common Stock that it beneficially owns as of the record date for the 2018 Annual Meeting (which may include shares of preferred stock) to be voted at the 2018 Annual Meeting in favor of the election of the 2018 Nominees and otherwise in accordance with the recommendations of the Board, to the extent permissible under Nasdaq rules.

(iv) Each Broadfin Director shall adhere to and act as necessary to be in compliance with all Company policies generally applicable to the Company’s independent directors, including but not limited to policies related to insider trading and securities law compliance.

EXECUTION VERSION

2. Standstill Provisions . Broadfin agrees that, from the Effective Time through the thirtieth (30th) calendar day prior to the deadline for stockholder nominations for the 2019 Annual Meeting (the “ Standstill Period ”), neither it nor any of its Associates will, and it will cause each of its Associates not to, directly or indirectly, in any manner:

(i) engage in any solicitation of proxies or consents or become a “participant” in a “solicitation” (as such terms are defined in Regulation 14A under the Exchange Act) of proxies or consents (including, without limitation, any solicitation of consents that seeks to call a special meeting of stockholders), in each case, with respect to securities of the Company;

(ii) form, join or in any way participate in any “group” (within the meaning of Section 13(d)(3) of the Exchange Act) with respect to the Common Stock (other than a “group” that is comprised of all or some of the entities and persons identified as “Reporting Persons” in Broadfin’s Schedule 13D filed with respect to the Common Stock, as amended); provided , however , that nothing herein shall limit the ability of an Affiliate of Broadfin Healthcare to join a “group” with Broadfin following the execution of this Agreement, so long as any such Affiliate agrees to be bound by the terms and conditions of this Agreement;

(iii) deposit any Common Stock or other voting securities of the Company in any voting trust or subject any such securities to any arrangement or agreement with respect to the voting of any such securities, other than any such voting trust, arrangement or agreement solely among the members of Broadfin and otherwise in accordance with this Agreement;

(iv) seek or submit, or encourage any person or entity to seek or submit, nomination(s) in furtherance of a “contested solicitation” for the appointment, election or removal of directors with respect to the Company or seek, encourage or take any other action with respect to the appointment, election or removal of any directors; provided , however , that nothing in this Agreement shall prevent Broadfin or its Associates from taking actions in furtherance of identifying director candidates in connection with the 2019 Annual Meeting, so long as such actions do not create a public disclosure obligation for Broadfin or the Company, and are undertaken on a basis reasonably designed to be confidential and in accordance in all material respects with Broadfin’s normal practices;

(v) (A) make any proposal for consideration by stockholders at any annual or special meeting of stockholders of the Company, (B) make any offer or proposal (with or without conditions) with respect to any merger, acquisition, recapitalization, restructuring, disposition or other business combination involving Broadfin Healthcare or any of its Affiliates and the Company, (C) affirmatively solicit a third party, on an unsolicited basis, to make an offer or proposal (with or without conditions) with respect to any merger, acquisition, recapitalization, restructuring, disposition or other business combination involving the Company, or publicly encourage or support any third party in making such an offer or proposal, (D) publicly comment on any third party proposal regarding any merger, acquisition, recapitalization, restructuring, disposition, or other business combination with respect to the Company by such third party prior to such proposal becoming public or (E) call or seek to call a special meeting of stockholders;

EXECUTION VERSION

(vi) seek, alone or in concert with others, representation on the Board, except as specifically permitted in Section 1;

(vii) advise, encourage, support or influence any person or entity with respect to the voting or disposition of any securities of the Company at any annual or special meeting of stockholders, except in accordance with Section 1;

(viii) make any public proposal, alone or in concert with others, to amend any provision of the Company’s certificate of incorporation or bylaws;

(ix) demand an inspection of the Company’s books and records under Section 220 of the General Corporation Law of the State of Delaware or other statutory or regulatory provisions providing for stockholder access to books and records; or

(x) make any request or submit any proposal to amend the terms of this Agreement other than through non-public communications with the Company that would not be reasonably determined to trigger public disclosure obligations for any Party;

provided that the restrictions in this Section 2(a) will terminate automatically upon the earlier of: (x) as a non-exclusive remedy for any material breach of this Agreement (including, without limitation, a failure to appoint a Broadfin Replacement Director in accordance with Section 1(b)(iii) or any breach of Section 11), upon five (5) business days’ prior written notice by Broadfin to the Company following such breach, if such breach has not been cured within such notice period; provided , further , that Broadfin is not in material breach of this Agreement at the time such notice is given; and (y) such time as the Company files with the Securities and Exchange Commission (the “ SEC ”) or delivers to its stockholders any preliminary proxy statement, definitive proxy statement or other proxy materials in connection with the 2018 Annual Meeting that is inconsistent with the terms of this Agreement or the Purchase Agreement.

(b) Except as expressly provided in Section 1 or Section 2(a), Broadfin shall be entitled to (i) vote the Company stock that it beneficially owns as Broadfin determines in its sole discretion and (ii) disclose, publicly or otherwise, how it intends to vote or act with respect to any securities of the Company, any stockholder proposal or other matter to be voted on by the stockholders of the Company and the reasons therefor (in each case, subject to Section 1(d)(iii)).

(c) Nothing in this Section 2 shall be deemed to limit the exercise in good faith by a Broadfin Director of his or her fiduciary duties solely in his or her capacity as a director of the Company and in a manner consistent with such person’s and Broadfin’s obligations under this Agreement.

3. Representations and Warranties of the Company . The Company represents and warrants to Broadfin that (a) the Company has the corporate power and authority to execute this Agreement and to bind it hereto, (b) this Agreement has been duly and validly authorized, executed and delivered by the Company, constitutes a valid and binding obligation and agreement of the Company, and is enforceable against the Company in accordance with its terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws generally affecting the rights

EXECUTION VERSION

of creditors and subject to general equity principles, (c) the execution, delivery and performance of this Agreement by the Company does not and will not (i) violate or conflict with any law, rule, regulation, order, judgment or decree applicable to the Company, or (ii) result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both would constitute such a breach, violation or default) under or pursuant to, or result in the loss of a material benefit under, or give rise to any right of termination, amendment, acceleration or cancellation under, any organizational document or any agreement or instrument to which the Company is a party or by which it is bound, including but not limited to giving rise to any “Change of Control” or “Change in Control” under any Company plan, agreement or instrument.

4. Representations and Warranties of Broadfin . Broadfin represents and warrants to the Company that (a) Broadfin has the corporate power and authority to execute this Agreement and to bind it hereto, (b) this Agreement has been duly and validly authorized, executed and delivered by Broadfin, constitutes a valid and binding obligation and agreement of Broadfin, and is enforceable against Broadfin in accordance with its terms, except as enforcement thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or similar laws generally affecting the rights of creditors and subject to general equity principles, (c) the execution, delivery and performance of this Agreement by Broadfin does not and will not (i) violate or conflict with any law, rule, regulation, order, judgment or decree applicable to Broadfin, or (ii) result in any breach or violation of or constitute a default (or an event which with notice or lapse of time or both would constitute such a breach, violation or default) under or pursuant to, or result in the loss of a material benefit under, or give rise to any right of termination, amendment, acceleration or cancellation under, any organizational document or any agreement or instrument to which Broadfin is a party or by which it is bound and (d) as of the date of this Agreement (prior to the consummation of the Financing), Broadfin beneficially owns 4,278,819 shares of Common Stock.

5. Press Release . Within twenty-four (24) hours following the execution of this Agreement, the Company and Broadfin shall jointly issue a mutually agreeable press release (the “ Press Release ”) announcing certain terms of this Agreement in the form attached hereto as Exhibit B . Prior to the issuance of the Press Release and subject to the terms of this Agreement, neither the Company (including the Board and any committee thereof) nor Broadfin shall issue any press release or make public announcement regarding this Agreement or the matters contemplated hereby without the prior written consent of the other Party. During the Standstill Period, neither the Company nor Broadfin shall make any public announcement or statement that is inconsistent with or contrary to the terms of this Agreement.

6. Specific Performance . Each of Broadfin, on the one hand, and the Company, on the other hand, acknowledges and agrees that irreparable injury to the other Party hereto would occur in the event any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached and that such injury would not be adequately compensable by the remedies available at law (including the payment of money damages). It is accordingly agreed that Broadfin, on the one hand, and the Company, on the other hand (the “ Moving Party ”), shall each be entitled to specific enforcement of, and injunctive relief to prevent any violation of, the terms hereof, and the other Party hereto will not take action, directly or indirectly, in opposition to the Moving Party seeking such relief on the grounds that any other remedy or relief is available at law or in equity. This Section 6 is not the exclusive remedy for any violation of this Agreement.

EXECUTION VERSION

7. Expenses . The Company shall reimburse Broadfin for its reasonable, documented out-of-pocket fees and expenses (including legal and administrative costs and expenses) incurred through the Closing in connection with Broadfin’s involvement at the Company, Broadfin’s director nominations and the appointment of the Broadfin Directors to the Board, including, but not limited to its Schedule 13D filings and the negotiation and execution of this Agreement. Such reimbursement shall be made only upon submission by Broadfin to the Company of reasonable documentation evidencing such out-of-pocket fees and expenses for which Broadfin is seeking reimbursement.

8. Severability . If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated. It is hereby stipulated and declared to be the intention of the Parties that the Parties would have executed the remaining terms, provisions, covenants and restrictions without including any of such which may be hereafter declared invalid, void or unenforceable. In addition, the Parties agree to use their best efforts to agree upon and substitute a valid and enforceable term, provision, covenant or restriction for any of such that is held invalid, void or enforceable by a court of competent jurisdiction.

9. Notices . Any notices, consents, determinations, waivers or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered: (a) upon receipt, when delivered personally; (b) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending Party); (c) upon confirmation of receipt, when sent by email (provided such confirmation is not automatically generated); or (d) one (1) business day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the Party to receive the same. The addresses and facsimile numbers for such communications shall be:

If to the Company:

BioDelivery Sciences International, Inc.

131 ParkLake Ave., Suite 225

Raleigh, North Carolina 27612

Attention: Ernest R. De Paolantonio

Chief Financial Officer, Treasurer and Secretary

Facsimile: (919) 582-9051

E-mail: ernied@bdsi.com

EXECUTION VERSION

with a copy (which shall not constitute notice) to:

Ellenoff Grossman & Schole LLP

1345 Avenue of the Americas, 11th Floor

New York, New York 10105

Attention: Barry I. Grossman, Esq.

Facsimile: (646) 895-7204

E-mail: bigrossman@egsllp.com

If to Broadfin or any member thereof:

Broadfin Capital, LLC

300 Park Avenue, 25th Floor

New York, New York 10022

Attention: Kevin Kotler

Facsimile: (212) 808-2464

Email: kevin@broadfincapital.com

with a copy (which shall not constitute notice) to:

Olshan Frome Wolosky LLP

1325 Avenue of the Americas

New York, New York 10019

Attention: Steve Wolosky, Esq.

Kenneth Mantel, Esq.

Facsimile: (212) 451-2222

Email: swolosky@olshanlaw.com

kmantel@olshanlaw.com

10. Applicable Law . This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware without reference to the conflict of laws principles thereof. Each Party irrevocably agrees that any legal action or proceeding with respect to this Agreement and the rights and obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this Agreement and the rights and obligations arising hereunder brought by the other Party hereto or its successors or assigns, shall be brought and determined exclusively in the Delaware Court of Chancery and any state appellate court therefrom within the State of Delaware (or, if the Delaware Court of Chancery declines to accept jurisdiction over a particular matter, any federal court within the State of Delaware). Each Party hereby irrevocably submits with regard to any such action or proceeding for itself and in respect of its property, generally and unconditionally, to the personal jurisdiction of the aforesaid courts and agrees that it will not bring any action relating to this Agreement in any court other than the aforesaid courts. Each Party hereby irrevocably waives, and agrees not to assert in any action or proceeding with respect to this Agreement, (a) any claim that it is not personally subject to the jurisdiction of the above-named courts for any reason, (b) any claim that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) to the fullest extent

EXECUTION VERSION

permitted by applicable legal requirements, any claim that (i) the suit, action or proceeding in such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper or (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.

11. Mutual Non-Disparagement . Subject to applicable law, each Party covenants and agrees that, during the Standstill Period, neither it nor any of its Affiliates, nor any of their respective principals, members, general partners, directors (or former directors, including the Resigning Directors), officers (or former officers), employees or agents shall in any way criticize, disparage, call into disrepute or otherwise defame or slander the other Party or any of its Affiliates, or any of their respective principals, members, general partners, directors (or former directors, including the Resigning Directors), officers (or former officers), employees or agents, in any manner that would reasonably be expected to damage the business or reputation thereof. The foregoing shall not restrict the ability of any person or entity to comply with any subpoena or other legal process or respond to a request for information (provided that such request is not targeted at this Agreement or the other Party hereto) from any governmental authority with competent jurisdiction over the party from whom information is sought. Mutual Releases . In consideration of the mutual agreements and covenants herein contained, as of the Effective Time, each Party knowingly and voluntarily releases and forever discharges the other Party and its Affiliates, subsidiaries, divisions, insurers, predecessors, successors and assigns, and each of their current and former principals, members, general partners, directors (including the Resigning Directors), officers, employees, attorneys, agents and representatives (collectively, the “ Released Parties ”), of and from any and all claims, known and unknown, asserted or unasserted, which any Party or its Affiliates, subsidiaries, divisions, insurers, predecessors, successors or assigns, or any of their current or former principals, members, general partners, directors (including the Resigning Directors), officers, employees, attorneys, agents or representatives, has or may have against any Released Parties as of the date of this Agreement, including but not limited to (a) any claims, whether statutory, common law, or otherwise; (b) any claims for breach of contract, breach of fiduciary duty, conversion, quantum meruit, unjust enrichment, breach of oral promise, tortuous interference with business relations, injurious falsehood, defamation, and any other common law contract and tort claims; (c) any claims for attorneys’ fees, costs, disbursements, or other expenses; and (d) any claims for damages; provided , however , this release does not include any Party’s right to enforce the terms of this Agreement. Nothing in this Agreement extinguishes any claims any Party may have: (A) against the other Party for breach of this Agreement; or (B) against any of the Released Parties for any claims arising from events that occur following the date hereof.

13. Entire Agreement; Amendment and Waiver; Successors and Assigns; Third Party Beneficiaries; Term . This Agreement, together with the Purchase Agreement, the Retirement Agreement and the other agreements contemplated thereby, contains the entire understanding of the Parties with respect to the subject matter thereof. There are no restrictions, agreements, promises, representations, warranties, covenants or undertakings between the Parties with respect to the subject matter of this Agreement other than those expressly set forth herein or in the Purchase Agreement, the Retirement Agreement and the other agreements contemplated thereby. No amendments or modifications of this Agreement can be made except (i) in writing signed by an authorized representative of each the Company and Broadfin and (ii) with the approval of a majority of the disinterested directors serving on the Board (which group will include all

EXECUTION VERSION

Broadfin Directors who are independent of Broadfin). No failure on the part of any Party to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of such right, power or remedy by such Party preclude any other or further exercise thereof or the exercise of any other right, power or remedy. All remedies hereunder are cumulative and are not exclusive of any other remedies provided by law. The terms and conditions of this Agreement shall be binding upon, inure to the benefit of, and be enforceable by the Parties hereto and their respective successors, heirs, executors, legal representatives, and permitted assigns. No Party shall assign this Agreement or any rights or obligations hereunder without, with respect to Broadfin, the prior written consent of the Company, and with respect to the Company, the prior written consent of Broadfin. This Agreement is solely for the benefit of the Parties and is not enforceable by any other persons or entities. This Agreement shall terminate at the end of the Standstill Period; provided , however , that either Party may bring an action following such termination alleging a breach of this Agreement occurring prior to the end of the Standstill Period.

14. Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each of the Parties and delivered to the other Party (including by means of electronic delivery or facsimile).

[The remainder of this page intentionally left blank]

EXECUTION VERSION

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized signatories of the Parties as of the date hereof.


COMPANY:

BIODELIVERY SCIENCES INTERNATIONAL, INC.
By:		/s/ Frank E. O’Donnell, Jr.
Name:		Frank E. O’Donnell, Jr.
Title:		Chairman of the Board


BROADFIN:

BROADFIN HEALTHCARE MASTER FUND, LTD.

By:		/s/ Kevin Kotler
Name:		Kevin Kotler
Title:		Director

[Signature Page to Agreement]

[Signature Page to Settlement Agreement]

EXHIBIT A

Form of Retirement Agreement

(see attached)

A-1

EXHIBIT B

Press Release

(see attached)

B-2

Exhibit 10.4

Execution Version

AMENDMENT 2 TO TERM LOAN AGREEMENT

THIS AMENDMENT 2 TO TERM LOAN AGREEMENT, dated as of May 16, 2018 (this “ Amendment ”) is made among BioDelivery Sciences International, Inc. (“ Borrower ”), CRG Servicing LLC, as administrative agent and collateral agent (in such capacity, “ Administrative Agent ”) and the lenders listed on the signature pages hereof under the heading “LENDERS” (each a “ Lender ” and, collectively, the “ Lenders ”), with respect to the Term Loan Agreement.

RECITALS

WHEREAS, the Borrower, Agent and the Lenders are parties to the Term Loan Agreement, dated as of February 21, 2017, with the Subsidiary Guarantors from time to time party thereto, as amended by Amendment 1 to Term Loan Agreement, dated as of December 15, 2017 (collectively, the “ Loan Agreement ”).

WHEREAS, the parties hereto desire to amend each of the Term Loan Agreement on the terms and subject to the conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein, the parties agree as follows:

SECTION 1. Definitions; Interpretation .

(a) Terms Defined in Loan Agreement . All capitalized terms used in this Amendment (including in the recitals hereof) and not otherwise defined herein shall have the meanings assigned to them in the Loan Agreement.

(b) Interpretation . The rules of interpretation set forth in Section 1.03 of the Loan Agreement shall be applicable to this Amendment and are incorporated herein by this reference.

SECTION 2. Amendments to Term Loan Agreement . Subject to Section 3 of this Amendment, the Loan Agreement is hereby amended as follows:

2.1 The definition of “Interest Only Period” in Section 1.01 of the Loan Agreement is amended and restated in its entirety as follows:

“ Interest-Only Period ” means the period from and including the first Borrowing Date and through and including (a) the twelfth (12th) Payment Date following the first Borrowing Date or (b) so long as no Default or Event of Default has occurred and is continuing, the sixteenth (16th) Payment Date following the first Borrowing Date.

2.2 The definition of “PIK Period” in Section 1.01 of the Loan Agreement is amended and restated in its entirety as follows:

“ PIK Period ” means the period beginning on the first Borrowing Date through and including the earlier to occur of (a) the sixteenth (16) Payment Date after the first Borrowing Date), and (b) the date on which any Default

shall have occurred ( provided that (i) if such Default shall have been cured or waived, the PIK Period shall resume until the earlier to occur of the next Default and sixteenth (16 ^th ) Payment Date, after the first Borrowing Date).

2.3 Section 3.01(a) of the Loan Agreement is amended and restated in its entirety as follows:

(a) Repayment . During the Interest-Only Period, no scheduled payments of principal of the Loans shall be due. Borrower agrees to repay to the Lenders the outstanding principal amount of the Loans (1) on each Payment Date occurring after the Interest-Only Period, in equal installments, or (2) if Borrower achieves a Market Capitalization of at least $200,000,000 prior to the end of the Interest-Only Period, the Stated Maturity Date; provided that if after such achievement, Borrower’s Market Capitalization decreases to below $200,000,000 any time following the end of the Interest-Only Period, payments of principal shall resume on the next Payment Date regardless of whether Borrower’s achieves a Market Capitalization of at least $200,000,00 thereafter. The amounts of such installments, if any, shall be calculated by dividing (i) the sum of the aggregate principal amount of the Loans outstanding on the first day following the end of the Interest-Only Period or such next Payment Date on which payments of principal are to begin, by (ii) the number of Payment Dates remaining prior to and including the Stated Maturity Date.

2.4 Clauses (b) through (f) of Section 10.02 of the Loan Agreement are amended and restated in its entirety as follows:

(b) during the twelve month period beginning on January 1, 2018, of at least $40,000,000;

(d) during the twelve month period beginning on January 1, 2020, of at least $60,000,000;

(e) during the twelve month period beginning on January 1, 2021, of at least $70,000,000; and

(f) during the twelve month period beginning on January 1, 2022, of at least $80,000,000.

2.5 Exhibit D of the Term Loan Agreement is hereby amended and restated in its entirety as Exhibit A attached hereto.

SECTION 3. Conditions of Effectiveness . The effectiveness of Section 2 of this Amendment shall be subject to the following conditions precedent:

(a) Borrower and all of the Lenders shall have duly executed and delivered this Amendment pursuant to Section 13.04 of the Loan Agreement; provided, however, that this Amendment shall have no binding force or effect unless all conditions set forth in this Section 3 have been satisfied;

(b) No Default or Event of Default under the Loan Agreement shall have occurred and be continuing;

(c) Borrower shall have received gross cash proceeds of at least $40,000,000 from a Qualified Equity Issuance during the period from the date hereof to 30 days after the date hereof in a single transaction or series of related transactions and have delivered to Administrative Agent evidence satisfactory to the Administrative Agent thereof;

(d) the Borrower shall have paid or reimbursed Lenders for Lenders’ reasonable out of pocket costs and expenses incurred in connection with this Amendment, including Lenders’ reasonable and documented out of pocket legal fees and costs, pursuant to Section 13.03(a)(i)(z) of the Loan Agreement; and

(e) the Administrative Agent has confirmed to Borrower in writing of its receipt of the executed Amendment required in Section 3(a), receipt of satisfactory evidence required by Section 3(c) and receipt of costs and expenses required by Section 3(d).

SECTION 4. Representations and Warranties; Reaffirmation .

(a) Each Obligor hereby represents and warrants to each Lender as follows:

(i) The Borrower has full power, authority and legal right to make and perform this Amendment. This Amendment is within the Borrower’s corporate powers and has been duly authorized by all necessary corporate board of directors and, if required, by all necessary shareholder action. This Amendment has been duly executed and delivered by the Borrower and constitutes a legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms, except as such enforceability may be limited by (a) bankruptcy, insolvency, reorganization, moratorium or similar laws of general applicability affecting the enforcement of creditors’ rights and (b) the application of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). This Amendment (x) does not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority or any third party, except for such as have been obtained or made and are in full force and effect, (y) will not violate any applicable law or regulation or the charter, bylaws or other organizational documents of the Borrower and its Subsidiaries or any order of any Governmental Authority, other than any such violations that, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect, (z) will not violate or result in an event of default under any material indenture, agreement or other instrument binding upon the Borrower and its Subsidiaries or assets, or give rise to a right thereunder to require any payment to be made by any such Person.

(ii) No Default has occurred or is continuing or will result after giving effect to this Amendment.

(iii) The representations and warranties made by or with respect to the Borrower in Section 7 of the Loan Agreement are (A) in the case of representations qualified by “materiality,” “Material Adverse Effect” or similar language, true and correct in all respects and (B) in the case of all other representations and warranties, true and correct in all material respects (except that the representation regarding representations and warranties that refer to a specific earlier date are true and correct on the basis set forth above as of such earlier date), in each case taking into account any changes made to schedules updated in accordance with Section 7.21 of the Loan Agreement or attached hereto.

(iv) There has been no Material Adverse Effect since the date of the Loan Agreement.

(b) Each Obligor hereby ratifies, confirms, reaffirms, and acknowledges its obligations under the Loan Documents to which it is a party and agrees that the Loan Documents remain in full force and effect, undiminished by this Amendment, except as expressly provided herein. The Borrower acknowledges and affirms that the Back-End Facility Fee payable under the Fee Letter is calculated based on the principal amount of Loans advanced, which includes PIK Loans. By executing this Amendment, the Borrower acknowledges that it has read, consulted with its attorneys regarding, and understands, this Amendment.

(c) Borrower and Lenders hereby acknowledge and agree that upon an event of an acceleration or other mandatory prepayment event, the “ Redemption Date ” for purposes of calculating the Prepayment Premium will be date of such acceleration or such obligation to mandatorily prepay arose.

(d) Borrower further acknowledges that the Prepayment Premium (as a component of the Redemption Price) and the back-end facility fee specified in the Fee Letter shall be due and payable whenever so stated in the Loan Documents, or by any applicable operation of law, regardless of the circumstances causing any related acceleration or payment prior to the Stated Maturity Date, including without limitation any Event of Default or other failure to comply with the terms of this Agreement, whether or not notice thereof has been given, or any acceleration by, through, or on account of any bankruptcy filing.

(e) The Administrative Agent and the Lenders acknowledge that the Borrower has disclosed to them that it is contemplating a financing transaction (the “ Broadfin Transaction ”) consisting of an offering of Series B Non-Voting Convertible Preferred Stock (the “ Series B Stock ”) with gross proceeds of at least $40 million pursuant to which Broadfin Capital LLC or its affiliates (“ Broadfin ”) would participate, and in connection with which four (4) members of the Borrower’s board of directors will resign and three (3) individuals selected by Broadfin would be appointed as members of the Borrower’s board of directors (such appointments, “ Board Appointments ”). The Administrative Agent and the Lenders agree that neither the acquisition by Broadfin of Series B Stock in the Broadfin Transaction (or any acquisition of common stock by Broadfin upon conversion thereof) nor the Board Appointments, in each case if consummated, would not constitute a Change of Control for purposes of the Loan Agreement. For the avoidance of doubt, this Section 4(e) shall not be deemed to constitute a waiver of any Change of Control arising from any events (including any acquisitions of the Borrower’s Equity Interests or any change in the members of the Borrower’s board of directors), other than as expressly noted above in connection with the Broadfin Transaction.

SECTION 5. G OVERNING L AW ; S UBMISSION TO J URISDICTION ; W AIVER OF J URY T RIAL .

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

(b) Submission to Jurisdiction . The Borrower agrees that any suit, action or proceeding with respect to this Amendment or any other Loan Document to which it is a party or any judgment entered by any court in respect thereof may be brought initially in the federal or state courts in Houston, Texas or in the courts of its own corporate domicile and irrevocably submits to the non-exclusive jurisdiction of each such court for the purpose of any such suit, action, proceeding or judgment. This Section 6 is for the benefit of the Lenders only and, as a result, no Lender shall be prevented from taking proceedings in any other courts with jurisdiction. To the extent allowed by applicable Laws, the Lenders may take concurrent proceedings in any number of jurisdictions.

(c) Waiver of Jury Trial . T HE B ORROWER AND EACH L ENDER HEREBY IRREVOCABLY WAIVES , TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW , ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY SUIT , ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS A MENDMENT , THE OTHER L OAN D OCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY .

SECTION 6. Miscellaneous .

(a) No Waiver . Nothing contained herein shall be deemed to constitute a waiver of compliance with any term or condition contained in the Loan Agreement or any of the other Loan Documents or constitute a course of conduct or dealing among the parties. Except as expressly stated herein, the Lenders reserve all rights, privileges and remedies under the Loan Documents. Except as amended hereby, the Loan Agreement and other Loan Documents remain unmodified and in full force and effect. All references in the Loan Documents to the Loan Agreement shall be deemed to be references to the Loan Agreement as amended hereby.

(b) Severability . In case any provision of or obligation under this Amendment shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

(c) Headings . Headings and captions used in this Amendment (including the Exhibits, Schedules and Annexes hereto, if any) are included for convenience of reference only and shall not be given any substantive effect.

(d) Integration . This Amendment constitutes a Loan Document and, together with the other Loan Documents, incorporates all negotiations of the parties hereto with respect to the subject matter hereof and is the final expression and agreement of the parties hereto with respect to the subject matter hereof.

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

(f) Controlling Provisions . In the event of any inconsistencies between the provisions of this Amendment and the provisions of any other Loan Document, the provisions of this Amendment shall govern and prevail. Except as expressly modified by this Amendment, the Loan Documents shall not be modified and shall remain in full force and effect.

(g) Notices . Agent and Lenders hereby designate that all notices, requests, instructions, directions and other communications provided for herein and in any loan Document, shall be given or made in writing (including by telecopy) delivered to Administrative Agent or any Lender to its address specified on the signature page hereto.

[Remainder of page intentionally left blank]

IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment, as of the date first above written.


BORROWER:

BIODELIVERY SCIENCES INTERNATIONAL INC.



By:		/s/ Mark A. Sirgo
Name:		Mark A. Sirgo Pharm. D.
Title:		Vice Chairman



SUBSIDIARY GUARANTORS:

ARIUS PHARMACEUTICALS, INC.



By:		/s/ Ernest De Paolantonio
Name:		Ernest De Paolantonio
Title:		CFO



ARIUS TWO, INC.



By:		Ernest De Paolantonio
Name:		Ernest De Paolantonio
Title:		CFO

Signature Page to Amendment 2 to Term Loan Agreement (BDSI)


ADMINISTRATIVE AGENT:
CRG SERVICING LLC

By		/s/ Nathan Hukill
		Nathan Hukill
		Authorized Signatory

Address for Notices:
1000 Main Street, Suite 2500
Houston, TX 77002
Attn:		General Counsel
Tel.:		713.209.7350
Fax:		713.209.7351
Email:		notices@crglp.com

LENDERS:


CRG ISSUER 2017-1
By: CRG SERVICING LLC, acting by power of attorney


		By:		/s/ Nathan Hukill
				Nathan Hukill
				Authorized Signatory



Address for Notices:
1000 Main Street, Suite 2500
Houston, TX 77002
Attn:		General Counsel
Tel.:		713.209.7350
Fax:		713.209.7351
Email:		notices@crglp.com


CRG PARTNERS III – PARALLEL FUND “A” L.P.

By CRG PARTNERS III – PARALLEL FUND

“A” GP L.P., its General Partner

By CRG PARTNERS III – PARALLEL FUND

“A” GP LLC, its General Partner


		By		/s/ Nathan Hukill
				Nathan Hukill
				Authorized Signatory


Address for Notices:
1000 Main Street, Suite 2500
Houston, TX 77002
Attn:		General Counsel
Tel.:		713.209.7350
Fax:		713.209.7351
Email:		notices@crglp.com

Signature Page to Amendment 2 to Term Loan Agreement (BDSI)


		By		/s/ Nathan Hukill
				Nathan Hukill
				Authorized Signatory


Address for Notices:
1000 Main Street, Suite 2500
Houston, TX 77002
Attn:		General Counsel
Tel.:		713.209.7350
Fax:		713.209.7351
Email:		notices@crglp.com

Signature Page to Amendment 2 to Term Loan Agreement (BDSI)

EXHIBIT D

TO TERM LOAN AGREEMENT

FORM OF COMPLIANCE CERTIFICATE

[DATE]

This certificate is delivered pursuant to Section 8.01(d) of, and in connection with the consummation of the transactions contemplated in, the Term Loan Agreement, dated as of February 21, 2017 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the “ Loan Agreement ”), among Borrower, CRG Servicing LLC, as administrative agent and collateral agent (in such capacities, the “ Administrative Agent ”), and the lenders and the subsidiary guarantors from time to time party thereto. Capitalized terms used herein and not otherwise defined herein are used herein as defined in the Loan Agreement.

The undersigned, a duly authorized Responsible Officer of Borrower having the name and title set forth below under his signature, hereby certifies, on behalf of Borrower for the benefit of the Secured Parties and pursuant to Section 8.01(d) of the Loan Agreement that such Responsible Officer of Borrower is familiar with the Loan Agreement and that, in accordance with each of the following sections of the Loan Agreement, each of the following is true on the date hereof, both before and after giving effect to any Loan to be made on or before the date hereof:

In accordance with Section 8.01 [ (a)/(b) ] of the Loan Agreement, attached hereto as Annex A are the financial statements for the [fiscal quarter/fiscal year] ended [ ] required to be delivered pursuant to Section 8.01 [ (a)/(b) ] of the Loan Agreement. Such financial statements fairly present in all material respects the consolidated financial position, results of operations and cash flow of Borrower and its Subsidiaries as at the dates indicated therein and for the periods indicated therein in accordance with GAAP [(subject to the absence of footnote disclosure and normal year-end audit adjustments)] ¹ [The examination by such auditors in connection with such financial statements has been made in accordance with the standards of the United States’ Public Company accounting Oversight Board (or any successor entity).] ²

Attached hereto as Annex B are the calculations used to determine compliance with each financial covenant contained in Section 10 of the Loan Agreement.

No Default or Event of Default is continuing as of the date hereof[, except as provided for on Annex C attached hereto, with respect to each of which Borrower proposes to take the actions set forth on Annex C ].

As of the date hereof, the representations and warranties made by Borrower in Section 7 of the Loan Agreement (A) in the case of representations and warranties qualified by “materiality”, “Material Adverse Effect” or “knowledge”, are true and correct in all respects and (B) in the case of all other representations and warranties, are true and correct in all material respects, with the same force and effect as if made on and as of the date hereof (except that the representation regarding representations and warranties that refer to a specific earlier date shall be that they were true on such earlier date)[, except as provided for on Annex D attached hereto, with respect to each of which Borrower proposes to take the actions set forth on Annex D ].

¹	Insert language in brackets only for quarterly certifications.

²	Insert language in brackets only for annual certifications.

IN WITNESS WHEREOF, the undersigned has executed this certificate on the date first written above.


BIODELIVERY SCIENCES INTERNATIONAL, INC.



By
Name:
Title:

ANNEX A TO COMPLIANCE CERTIFICATE

Financial Statements

[see attached]

ANNEX B TO COMPLIANCE CERTIFICATE

Calculations of Financial Covenant Compliance


I.	Section 10.01: Minimum Liquidity
A.	Amount of (i) a cash that is unencumbered by Liens (other than Liens securing the Obligations and Liens permitted pursuant to Section 9.02(j)) plus (ii) the amount of Permitted Cash Equivalent Investments (which for greater certainty shall not include any undrawn credit lines), in each case, to the extent held in an account over which the Secured Parties have a perfected security interest.:	$

	Is Line IA equal to or greater than $10,000,000	Yes: In compliance; No: Not in compliance

II.	Section 10.02(a)-(e): Minimum Revenue—Subsequent Periods
A.	Product Revenues during the twelve month period beginning on January 1, 2017	$

	[Is line II.A equal to or greater than $30,000,000?	Yes: In compliance; No: Not in compliance] ³

B.	Product Revenues during the twelve month period beginning on January 1, 2018	$

	[Is line II.B equal to or greater than $40,000,000?	Yes: In compliance; No: Not in compliance] ⁴

C.	Product Revenues during the twelve month period beginning on January 1, 2019	$

	[Is line II.C equal to or greater than $50,000,000?	Yes: In compliance; No: Not in compliance] ⁵

D.	Product Revenues during the twelve month period beginning on January 1, 2020	$

³	Include bracketed entry only on the Compliance Certificate to be delivered within 90 days of the end of 2017 pursuant to Section 8.01(b) of the Loan Agreement.

⁴	Include bracketed entry only on the Compliance Certificate to be delivered within 90 days of the end of 2018 pursuant to Section 8.01(b) of the Loan Agreement.

⁵	Include bracketed entry only on the Compliance Certificate to be delivered within 90 days of the end of 2019 pursuant to Section 8.01(b) of the Loan Agreement.



	[Is line II.D equal to or greater than $60,000,000?	Yes: In compliance; No: Not in compliance] ⁶

E.	Product Revenues during the twelve month period beginning on January 1, 2021	$

	[Is line II.E equal to or greater than $70,000,000?	Yes: In compliance; No: Not in compliance] ⁷

F.	Product Revenues during the twelve month period beginning on January 1, 2021	$

	[Is line II.E equal to or greater than $80,000,000?	Yes: In compliance; No: Not in compliance] ⁸

⁶	Include bracketed entry only on the Compliance Certificate to be delivered within 90 days of the end of 2020 pursuant to Section 8.01(b) of the Loan Agreement.

⁷	Include bracketed entry only on the Compliance Certificate to be delivered within 90 days of the end of 2021 pursuant to Section 8.01(b) of the Loan Agreement.

⁸	Include bracketed entry only on the Compliance Certificate to be delivered within 90 days of the end of 2022 pursuant to Section 8.01(b) of the Loan Agreement.

Exhibit 10.5

FORM OF DIRECTOR RETIREMENT AGREEMENT

This DIRECTOR RETIREMENT AGREEMENT (this “ Agreement ”) is entered into this 17 ^th day of May, 2018 by and among BioDelivery Sciences International, Inc. (the “ Company ”), [ ] (the “ Director ”), and with respect to Sections 3 through 11, inclusive, and Sections 13 and 14 hereof, Broadfin Healthcare Master Fund Ltd. (“ Broadfin ”). The Director, the Company and Broadfin may be collectively referred to as the “parties” or individually referred to as a “party.”

WHEREAS , the Director is a member of the board of directors of the Company (the “ Board ”);

WHEREAS , concurrently with the execution and delivery of this Agreement: (i) the Company and Broadfin are entering into a stock purchase agreement pursuant to which Broadfin and certain institutional investors will agree to acquire shares of Series B Non-Voting Convertible Preferred Stock of the Company (the “ Purchase Agreement ”) and (ii) the Company and Broadfin are entering into an agreement with respect to the composition of the Board and certain other matters (the “ BDSI Board Agreement ”);

WHEREAS , the Purchase Agreement and the BDSI Board Agreement require the resignation of the Director from the Board; and

WHEREAS , the Director, the Company and Broadfin desire to memorialize the terms under which the Director will retire and resign from the Board.

NOW, THEREFORE , in consideration of the promises and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows.

1. Relationship to the Company . The Director hereby voluntarily and irrevocably resigns and retires from his directorship and membership on the Board and any committees thereof on the date of, and effective and conditioned upon the closing, of the transactions contemplated by, the Purchase Agreement (the “ Retirement Date ”). As of the Retirement Date, and subject to the closing of the Purchase Agreement, the Director shall no longer serve as a director of the Company and shall have no rights or powers of a director of the Company (except for any rights or benefits provided for specifically in this Agreement), and as of the Retirement Date, the Director shall not take any action, or make any public or private statement, to the contrary.

2. Retirement Benefits . In consideration for and subject to the Director’s compliance with the agreements and covenants set forth in herein, the Director shall, effective as of the Retirement Date and contingent upon his compliance with the terms and provisions of this Agreement, be entitled to receive the following from the Company (the “ Retirement Benefits ”):

(a) The Director’s retirement from the Company shall be deemed a “Retirement” within the meaning of the Company’s 2011 Equity Incentive Plan, as amended (the “ Plan ”) (including that the Director is departing from the Company in good standing), such that (i) any vested stock options previously awarded to the Director under the Plan shall remain available for exercise for the entire remainder of the option period of such options following the Retirement Date and (ii) all unvested restricted stock units and stock options previously awarded to the Director under the Plan, as listed in “Unvested Equity Awards” on Exhibit A , will vest on the dates specified at the time of original award.

(b) Within five (5) business days after the Retirement Date, the Director shall receive cash payments equal to such amounts, as listed in “Additional Cash Retainers” on Exhibit A , that (i) the Director would have received for service on the Board (but not additional amounts for service on any committee thereof) for the fiscal quarters ending June 30, 2018 and September 30, 2018 and (ii) the Director would have received for his service on committee(s) of the Board, as applicable, from April 1, 2018 through the Retirement Date.

(c) Promptly following the Company’s 2018 annual meeting of stockholders, the Director shall be awarded additional restricted stock units and options under the terms of the Plan as listed in “Additional Equity Awards” on Exhibit A .

(d) For a period of six (6) years following the Retirement Date, if and to the extent that the Company shall maintain directors’ and officers’ liability insurance, such policy(ies) shall name the Director as an insured thereunder. In addition, the indemnification agreement previously executed by the Director and the Company shall remain unmodified and in full force and effect in accordance with the terms thereof.

3. Releases .

(a) In consideration of the Retirement Benefits, the Director for himself, his affiliates, spouse, agents, heirs, assigns and any other person or entity claiming to claim through him, hereby knowingly, voluntarily, unconditionally and irrevocably releases and discharges each of Broadfin and the Company, their respective successors, predecessors, affiliates and subsidiaries, and each of the foregoing entities’ respective directors, officers, partners, trustees, fiduciaries managers, members, employees, agents, representatives and benefit plans (collectively, the “ Broadfin/Company Released Parties ”) from any and all claims, debts, liabilities, causes of action, charges, sums of money, accounts, reckonings, bonds, bills, covenants, contracts, agreements, commitments, arrangements, promises, or obligations or understandings of any kind whatsoever in law or equity, whether written or oral, known or unknown, suspected or unsuspected, asserted or unasserted, conditional or unconditional, accrued or unaccrued, liquidated or unliquidated, whether contractual, statutory or otherwise, and under any known or unknown duties, either fiduciary or otherwise, including liabilities arising out of the sole or concurrent negligence or gross negligence of any Broadfin/Company Released Party, that the Director has now has or had against any of the Broadfin/Company Released Parties through the date of mutual execution of this Agreement (collectively, the “ Director Released Claims ”); provided , however , that the foregoing release shall not waive or release claims of any director fees that are payable pursuant to the terms of this Agreement. The Director also acknowledges that, except as provided for herein, he shall have no further rights with respect to unvested equity or equity-based compensation pursuant to the Plan or otherwise. The Director shall refrain from asserting any claim or otherwise attempting to collect or enforce any such Director Released Claim against any of the Broadfin/Company Released Parties. In addition, the Director hereby waives all rights and benefits afforded by any laws which provide in substance that a general release does not extend to claims which a person does not know or suspect to exist in its favor at the time of executing the release which, if known by it, may have materially affected its settlement with the other person.

(b) In consideration of entering into this Agreement, the Company hereby knowingly, voluntarily, unconditionally and irrevocably releases and discharges the Director and his heirs and assigns (collectively, the “ Director Released Parties ”) from any and all claims, debts, liabilities, causes of action, charges, sums of money, accounts, reckonings, bonds, bills, covenants, contracts, agreements, commitments, arrangements, promises, or obligations or understandings of any kind whatsoever in law or equity, whether written or oral, known or unknown, suspected or unsuspected, asserted or unasserted, conditional or unconditional, accrued or unaccrued, liquidated or unliquidated,

whether contractual, statutory or otherwise, and under any known or unknown duties, either fiduciary or otherwise, including liabilities arising out of the sole or concurrent negligence or gross negligence of the Director, that the Company has now or had against the Director through the date of mutual execution of this Agreement (collectively, the “ Company Released Claims ”); provided , however , that the foregoing release shall not waive or release claims relating to the enforcement of this Agreement. The Company shall refrain from asserting any claim or otherwise attempting to collect or enforce any such Company Released Claim against any of the Director Released Parties. In addition, the Company hereby waives all rights and benefits afforded by any laws which provide in substance that a general release does not extend to claims which a person does not know or suspect to exist in its favor at the time of executing the release which, if known by it, may have materially affected its settlement with the other person.

(c) In consideration of entering into this Agreement, Broadfin and its affiliates hereby knowingly, voluntarily, unconditionally and irrevocably releases and discharges the Director Released Parties from any and all claims, debts, liabilities, causes of action, charges, sums of money, accounts, reckonings, bonds, bills, covenants, contracts, agreements, commitments, arrangements, promises, or obligations or understandings of any kind whatsoever in law or equity, whether written or oral, known or unknown, suspected or unsuspected, asserted or unasserted, conditional or unconditional, accrued or unaccrued, liquidated or unliquidated, whether contractual, statutory or otherwise, and under any known or unknown duties, either fiduciary or otherwise, including liabilities arising out of the sole or concurrent negligence or gross negligence of Director, that Broadfin has now or had against the Director through the date of mutual execution of this Agreement (collectively, the “ Broadfin Released Claims ”); provided , however , that the foregoing release shall not waive or release claims relating to the enforcement of this Agreement, the Purchase Agreement, the BDSI Board Agreement or any other agreement contemplated thereby. Broadfin shall refrain from asserting any claim or otherwise attempting to collect or enforce any such Broadfin Released Claim against any of the Director Released Parties. In addition, Broadfin hereby waives all rights and benefits afforded by any laws which provide in substance that a general release does not extend to claims which a person does not know or suspect to exist in its favor at the time of executing the release which, if known by it, may have materially affected its settlement with the other person.

(d) Notwithstanding Section 3(a), the Company agrees and acknowledges that the Director shall remain eligible for indemnification for any claims which relate to his service as a director prior to the Retirement Date, subject to the limits set forth under applicable law, under the terms of any indemnification agreement between the Company and the Director, the Company’s Certificate of Incorporation and the Amended and Restated Bylaws of the Company, each as amended.

4. Nondisparagement . As a material inducement for the parties to enter into this Agreement and provide the consideration set forth herein, the parties each agree that, for a period of two (2) years following the Retirement Date, neither it nor any of its affiliates, nor any of their respective directors, officers, partners, trustees, fiduciaries managers, members, employees, agents or representatives shall in any way criticize, disparage, call into disrepute or otherwise defame or slander the other party or any of its affiliates, or any of their respective directors, officers, partners, trustees, fiduciaries managers, members, employees, agents or representatives, in any manner that would reasonably be expected to damage the business or reputation thereof. The foregoing shall not restrict the ability of any person or entity to comply with any subpoena or other legal process or respond to a request for information (provided that such request is not targeted at this Agreement or another party) from any governmental authority with competent jurisdiction over the party from whom information is sought.

5. Review by Counsel . The Director represents and agrees that he fully understands his right to discuss all aspects of this Agreement with his private attorney, that to the extent, if any, that he desires, he has availed himself of this right, that he has carefully read and fully understands all of the provisions of this Agreement and that he is voluntarily and knowingly entering into this Agreement.

6. Severability . All provisions of this Agreement are severable, and the unenforceability or invalidity of any of the provisions of this Agreement shall not affect the validity or enforceability of the remaining provisions of this Agreement. Should any part of this Agreement be held unenforceable, the unenforceable portion or portions shall be removed (and no more), and the remaining portions of this Agreement shall be enforced as fully as possible (removing the minimum amount possible).

7. Amendment . This Agreement may not be amended, supplemented or modified except in writing signed by the person(s) against whose interest(s) such change shall operate.

8. Third-Party Beneficiaries . Except as set forth in this Agreement, this Agreement shall not confer any rights upon any person or entity. For the avoidance of doubt, each Broadfin/Company Released Party and Director Released Party that is not a signatory hereto is an intended third-party beneficiary of the Director’s releases, covenants and representations set forth in Sections 3 and 4 herein.

9. Entire Agreement . This Agreement, together with the Purchase Agreement, the BDSI Board Agreement, and any other agreements contemplated thereby, sets forth the entire and fully integrated understanding between the parties, and there are no representations, warranties, covenants or understandings, oral or otherwise, that are not expressly set out herein or therein. The parties acknowledge that, in deciding to enter into this Agreement, they have not relied upon any statements not written in this Agreement.

10. Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original but all of which together will constitute one in the same instrument. The executed signature page to this Agreement may be transmitted by facsimile transmission, by electronic mail in “portable document format” (.pdf) form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing an original signature, and shall have the same effect as an original for all purposes.

11. Choice of Law . This Agreement and any disputes arising out of or related to this Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware applicable to contracts made and to be performed entirely therein, without giving effect to its conflicts of laws principles or rules, to the extent such principles or rules would require or permit the application of the laws of another jurisdiction. THE DIRECTOR HEREBY KNOWINGLY, VOLUNTARILY, AND IRREVOCABLY WAIVES ANY RIGHT HE MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM HEREUNDER.

12. Equitable Relief . The Director agrees and acknowledges that a violation of the agreements and covenants contained in this Agreement (including, without limitation, Section 1 hereof) will cause irreparable damage to the Company, and that it is and will be impossible to estimate or determine the damage that will be suffered by the Company in the event of breach by the Director of any such agreement and covenant. Therefore, the Director agrees that, in the event of any violation or threatened violation of such agreements and covenants, the Company shall be entitled as a matter of course to specific performance, and/or an injunction out of any court of competent jurisdiction restraining such violation or threatened violation by the Director, such right to specific performance and an injunction to be cumulative and in addition to whatever other remedies the Company may have.

13. Failure to Act Not Waiver . The parties agree that the failure of a party at any time to require performance of any provision of this Agreement shall not affect, diminish, obviate or void in any way the party’s full right or ability to require performance of the same or any other provision of this Agreement at any time thereafter.

14. Construction . Captions and paragraph headings used in this agreement are for convenience only, are not part of this Agreement, and shall not be used in construing it. All words used in this Agreement will be construed to be of such gender or number as the circumstances require.

[Signature Page Follows]

IN WITNESS WHEREOF, the parties have executed this Director Retirement Agreement as of the dates set forth below.


BIODELIVERY SCIENCES INTERNATIONAL, INC.



By:
Name:		Mark A. Sirgo Pharm. D.
Title:		Vice Chairman


[Director]

With respect to Sections 3 through 11, inclusive, and Sections 13 and 14 hereof:


BROADFIN HEALTHCARE MASTER FUND LTD.

By:
Name:		Kevin Kotler
Title:		Director

Exhibit A

Unvested Equity Awards ⁽¹⁾

Options to purchase [7,500 / 1,829] shares of common stock at an exercise price of $2.64 per share, issued on July 14, 2017 and expiring on July 14, 2027

Restricted stock units with respect to [15,000 / 3,657] shares of common stock, issued on July 14, 2017

Additional Cash Retainers ⁽²⁾

Board service for quarter ending June 30, 2018 – $11,250

Board service for quarter ending September 30, 2018 – $11,250

Committee service from April 1, 2018 through the Retirement Date – $[3,125 / 1,250]

Additional Equity Awards ⁽³⁾

Options to purchase 6,875 shares of common stock at an exercise price equal to 100% of the Fair Market Value of such share determined as of the Date of Grant and expiring 10 years after the Date of Grant (such capitalized terms having the meanings given under the Plan).

Restricted stock units with respect to 13,750 shares of common stock.

(1)	To vest in accordance with the Plan and existing terms of the awards.

(2)	To be paid in accordance with Company practice with respect to payment of cash retainers for independent directors.

(3)	To be awarded promptly following the Company’s 2018 annual meeting of stockholders, and to vest in the same manner as the Company’s annual equity awards made to independent directors.

Exhibit 99.1

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BioDelivery Sciences Announces Pricing of $50 Million Equity Financing

Raleigh, North Carolina – May 17, 2018 — BioDelivery Sciences International, Inc. (NASDAQ: BDSI) today announced that it has entered into definitive agreements with existing institutional and other accredited investors to purchase an aggregate of approximately $50 million worth of BDSI’s newly designated Series B Non-Voting Convertible Preferred Stock (Series B Stock) in a registered direct offering.

The Series B Stock is being sold for $10,000 per share, and each share of Series B Stock will be convertible into a number of shares of BDSI common stock determined by dividing $10,000 by $1.80. Although BDSI will receive the proceeds of the offering at closing, the Series B Stock will not be convertible into common stock until BDSI receives stockholder approval of the transaction for Nasdaq Stock Market purposes as well as stockholder approval of an increase in BDSI’s authorized shares of common stock.

The offering is expected to yield total gross proceeds of $50 million to BDSI, before deducting placement agent fees and other estimated offering expenses. The closing of the offering is expected to take place on or about May 21, 2018, subject to the satisfaction of certain customary and other negotiated closing conditions described in the prospectus supplement to be filed with the U.S. Securities and Exchange Commission (SEC) in connection with the offering.

William Blair & Company, L.L.C. is acting as the sole placement agent for the offering.

This registered offering is being made pursuant to an effective shelf registration statement (No. 333-205483) previously filed with and declared effective by the SEC. A prospectus supplement and accompanying prospectus describing the terms of the offering will be filed with the SEC and will be available on the SEC’s website located at http://www.sec.gov. Alternatively, you may request the prospectus supplement, when available, from William Blair & Company, L.L.C., by calling toll-free 1(800) 621-0687.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About BioDelivery Sciences International

BioDelivery Sciences International, Inc. (NASDAQ: BDSI) is a specialty pharmaceutical company with a focus in the areas of pain management and addiction medicine. BDSI is utilizing its novel

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and proprietary BioErodible MucoAdhesive (BEMA ^® ) technology and other drug delivery technologies to develop and commercialize, either on its own or in partnership with third parties, new applications of proven therapies aimed at addressing important unmet medical needs.

BDSI’s marketed products and those in development address serious and debilitating conditions such as breakthrough cancer pain, chronic pain, and opioid dependence. BDSI’s headquarters is in Raleigh, North Carolina.

Cautionary Note on Forward-Looking Statements

This press release and any statements of stockholders, directors, employees, representatives and partners of BioDelivery Sciences International, Inc. (“BDSI”) related thereto contain, or may contain, among other things, certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve significant risks and uncertainties. Such statements may include, without limitation, statements with respect to the satisfaction of the closing conditions to the offering and other statements identified by words such as “projects,” “may,” “will,” “could,” “would,” “should,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “potential” or similar expressions. These statements are based upon the current beliefs and expectations of the BDSI’s management and are subject to significant risks and uncertainties, including those detailed in the BDSI’s filings with the Securities and Exchange Commission. Actual results (including, without limitation, the results of the financing described herein) may differ significantly from those set forth or implied in the forward-looking statements. These forward-looking statements involve certain risks and uncertainties that are subject to change based on various factors (many of which are beyond the BDSI’s control). BDSI undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future presentations or otherwise, except as required by applicable law.

BDSI ^® , BEMA ^® , ONSOLIS ^® , BUNAVAIL ^® and BELBUCA ^® are registered trademarks of BioDelivery Sciences International, Inc. The BioDelivery Sciences, BUNAVAIL, and BELBUCA logos are trademarks owned by BioDelivery Sciences International, Inc. All other trademarks and tradenames are owned by their respective owners.

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Contacts

Mary Coleman

BioDelivery Sciences International, Inc.

919-582-9050

mcoleman@bdsi.com

Monique Kosse

Managing Director

LifeSci Advisors

212-915-3820

monique@lifesciadvisors.com

Exhibit 99.2

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BioDelivery Sciences Announces Agreement with Broadfin Capital on Comprehensive Plan to Strengthen Business

$50 Million Equity Financing Led By Broadfin Announced Separately Today

Three New Independent Directors Selected by Broadfin Added To Board; Four Current Independent Directors Retiring

Amends Senior Credit Facility with CRG, which Includes Pushing Out Principal Debt Repayment to 2021

Transactions Extend BDSI’s Cash Runway Through 2020

Raleigh, North Carolina – May 17, 2018 — BioDelivery Sciences International, Inc. (NASDAQ: BDSI) today announced that it has entered into an agreement with an affiliate of Broadfin Capital LLC (Broadfin), a large BDSI stockholder, to reconstitute BDSI’s Board of Directors and to significantly strengthen BDSI’s financial position. The closing of this agreement is subject to and effective upon the closing of BDSI’s $50 million equity financing announced earlier today.

Under the agreement, at the closing, Broadfin Managing Partner Kevin Kotler will join BDSI’s board, along with pharmaceutical industry veterans Todd Davis and Peter Greenleaf, who were selected by Broadfin. Mr. Davis recently served as Founder, Managing Partner and President of RoyaltyRx Capital, LLC, a special opportunities investment firm focused on pharmaceuticals. Mr. Greenleaf is currently the Chief Executive Officer of Cerecor, Inc. (Nasdaq: CERC), and previously served as the Chief Executive Officer of Sucampo Pharmaceuticals, Inc. (Nasdaq: SCMP) through its sale to Mallinckrodt PLC (NYSE: MNK) in February 2018. Both individuals have strong commercial and merger and acquisitions experience, which BDSI believes will be essential as it looks to potentially expand in the pain space and accelerate BELBUCA sales in an effort to create significant stockholder value.

Chairman of the Board Dr. Frank O’Donnell, Vice Chairman of the Board Dr. Mark Sirgo, and W. Mark Watson will remain on BDSI’s board in their existing roles, along with BDSI’s newly appointed Chief Executive Officer, Herm Cukier. Four existing members of the BDSI board, Thomas D’Alonzo, Barry Feinberg, Samuel Sears and Timothy Tyson, will voluntarily retire from the BDSI board as part of the agreement.

Kevin Kotler, Managing Partner of Broadfin, stated “As a large BDSI stockholder, Broadfin is pleased to reach this agreement with BDSI that strengthens the company’s balance sheet and reconstitutes the board through the addition of three highly-qualified independent directors,

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each of whom will support BDSI’s positive commercial and strategic growth. Once appointed to the board, I look forward to working with newly appointed CEO Herm Cukier, my fellow directors and management to help build on the early commercial success of BELBUCA and enhance value for all stockholders.”

Frank E. O’Donnell, Jr., Chairman of the Board of BDSI, stated “We look forward to the addition of Kevin, Peter and Todd to our board. The extensive pharmaceutical experience and track records of our new board members will be invaluable at this significant time for BDSI as we look to take our company to the next level behind BELBUCA. We believe that our agreement with Broadfin, our equity financing and the loan amendment with CRG validate our overall strategy and will support BDSI as we seek to drive sales of our products. Our entire board and all of the officers and employees of BDSI also want to thank Tom D’Alonzo, Barry Feinberg, Sam Sears and Tim Tyson for their dedication and contributions to BDSI during their respective tenures as directors.”

Pursuant to the agreement, at the closing, Broadfin will withdraw its notice of nomination of persons for election as directors at BDSI’s 2018 annual meeting of stockholders. Broadfin also agreed to vote its shares at the annual meeting for BDSI’s director nominees and otherwise in accordance with the board’s recommendations, and to certain customary standstill restrictions through the 30 ^th day prior to the nomination deadline for BDSI’s 2019 annual meeting. Mr. Davis and Mr. Greenleaf will join the BDSI board as Class I directors who will be up for election at BDSI’s 2018 annual meeting of stockholders. Mr. Kotler will join the Board as a Class II director who will be up for election at BDSI’s 2019 annual meeting of stockholders.

The $50 million equity financing is being led by Broadfin Capital and includes participation by new and existing shareholders of the company including Stonepine Capital LP, Armistice Capital and CRG Capital.

BDSI also announced that it has entered into an amendment to its senior credit facility with affiliates of CRG Capital that provides BDSI with certain positive accommodations. This amendment is also subject to and effective upon the closing of BDSI’s $50 million equity financing. Under the terms of the loan amendment, the interest only period of the loan and BDSI’s ability to defer a portion of the interest under the loan to maturity will be extended by one year. In addition, the loan agreement provides that if BDSI achieves and maintains a predetermined market capitalization, payment of the entire loan principal may be deferred until the December 21, 2022 maturity date. Also, the loan amendment provides for certain favorable modifications to the minimum revenue covenants. BDSI has previously drawn $60 million of the $75 million that is potentially available under the CRG facility.

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The complete agreement between BDSI and Broadfin as well as agreements related to the equity financing and CRG loan amendments have been or will be included as exhibits to BDSI’s Current Reports on Form 8-K which have been or will be filed with the Securities and Exchange Commission.

The closing of the equity financing and the other transactions described herein are expected to take place on or about May 21, 2018, subject to the satisfaction of certain customary and other negotiated closing conditions to the financing described in the prospectus supplement filed with the U.S. Securities and Exchange Commission (SEC) in connection with the offering.

BDSI has filed a shelf registration statement (including a base prospectus and a prospectus supplement) with the SEC for the $50 million offering to which this communication relates. Before you invest, you should read the base prospectus, prospectus supplement and other documents BDSI has filed with the SEC for more complete information about BDSI and such offering. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, William Blair & Company, L.L.C., the placement agent for the offering, will arrange to send you such material if you request it by calling toll-free 1-(800) 621-0687.

About BioDelivery Sciences International

BioDelivery Sciences International, Inc. (NASDAQ: BDSI) is a specialty pharmaceutical company with a focus in the areas of pain management and addiction medicine. BDSI is utilizing its novel and proprietary BioErodible MucoAdhesive (BEMA ^® ) technology and other drug delivery technologies to develop and commercialize, either on its own or in partnership with third parties, new applications of proven therapies aimed at addressing important unmet medical needs.

About Broadfin Capital

Broadfin Capital is a global equity healthcare manager founded in 2005. With $700 million of assets under management, Broadfin applies a value-oriented investment strategy based on deep, fundamental research. Broadfin’s investment team draws on its extensive experience in the medical technology, pharmaceuticals and biotechnology sectors with a particular focus on small and mid-cap investments.

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For more information, please visit or follow us:


Internet:		www.bdsi.com
Facebook:		Facebook.com/BioDeliverySI
Twitter:		@BioDeliverySI

Cautionary Note on Forward-Looking Statements

This press release and any statements of stockholders, directors, employees, representatives and partners of BioDelivery Sciences International, Inc. (“BDSI”) related thereto contain, or may contain, among other things, certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve significant risks and uncertainties. Such statements may include, without limitation, statements with respect to the BDSI’s plans, objectives, projections, expectations and intentions and other statements identified by words such as “projects,” “may,” “will,” “could,” “would,” “should,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “potential” or similar expressions. These statements are based upon the current beliefs and expectations of the BDSI’s management and are subject to significant risks and uncertainties, including those detailed in the BDSI’s filings with the Securities and Exchange Commission. Actual results (including, without limitation, the results of the board changes, financing and loan amendment described herein) may differ significantly from those set forth or implied in the forward-looking statements. These forward-looking statements involve certain risks and uncertainties that are subject to change based on various factors (many of which are beyond the BDSI’s control). BDSI undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future presentations or otherwise, except as required by applicable law.

Contacts

Mary Coleman

BioDelivery Sciences International, Inc.

919-582-9050

mcoleman@bdsi.com

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Monique Kosse

Managing Director

LifeSci Advisors

212-915-3820

monique@lifesciadvisors.com