X0202 3 2005-05-05 0 0001103021 BIODELIVERY SCIENCES INTERNATIONAL INC BDSI 0001326017 Poole William 1301 KINGS GRANT DRIVE RALEIGH NC 27614 1 0 0 0 Series A Convertible Preferred Stock 4.25 Common Stock 3190 D The Series A Preferred will be convertible into shares of the Company's common stock (the "Common Stock") on a one for one basis. The Series A Preferred is eligible for conversion upon the earlier to occur of: (i) FDA approval of Arius' first proposed product of the Company's Arius Pharmaceuticals subsidiary (ii) 30 days notice to the Company of a Conversion Event (hereinafter defined) or (iii) August 24, 2009. The term "Conversion Event" is defined in the Certificate of Designation of the Series A Preferred to mean the failure of the Company to provide at least $3,000,000 to Arius as required to: (i) pay Atrix Laboratories, Inc. ("Atrix") $1,000,000 by August 24, 2004 pursuant to the terms of a license agreement between Aruius and Atrix and (ii)fund, in a total amount of no less than $2,000,000, the operations of Arius. One share of common stock for one share of preferred stock. Not applicable William S. Poole 2005-05-05