CONFIDENTIAL TREATMENT REQUESTED WITH RESPECT TO CERTAIN PORTIONS HEREOF DENOTED WITH ?***? LICENSE AGREEMENT between ARIUS TWO, INC. and ARIUS PHARMACEUTICALS, INC. CONFIDENTIAL TREATMENT REQUESTED CONFIDENTIAL TREATMENT REQUESTED WITH RESPECT TO CERTAIN PORTIONS HEREOF DENOTED WITH

Exhibit 10.4

CONFIDENTIAL TREATMENT REQUESTED

WITH RESPECT TO CERTAIN PORTIONS HEREOF

DENOTED WITH “***”

LICENSE AGREEMENT

between

ARIUS TWO, INC.

and

ARIUS PHARMACEUTICALS, INC.

CONFIDENTIAL TREATMENT REQUESTED

WITH RESPECT TO CERTAIN PORTIONS HEREOF

DENOTED WITH “***”

LICENSE AGREEMENT

This License Agreement (the “Agreement”) is made as of September 5, 2007 (the “Effective Date”) by and between Arius Two, Inc., a Delaware corporation with its principal office at 2501 Aerial Center Parkway, Suite 205, Morrisville, NC 27560 (“Arius Two”), and Arius Pharmaceuticals, Inc., a Delaware corporation with a mailing address at P.O. Box 14501, Research Triangle Park, NC 27709 (“Arius”). Arius Two and Arius are sometimes referred to collectively herein as the “Parties” or singly as a “Party.”

RECITALS

WHEREAS , Arius Two wishes to grant to Arius, and Arius wishes to obtain from Arius Two, an exclusive license in the United States, Canada, and Mexico, with rights to sublicense, under Arius Two’s BEMA Technology to develop, manufacture (or have manufactured), market, advertise, promote, distribute, offer for sale, sell, export, and import the Product on the terms and subject to the conditions set forth herein.

NOW, THEREFORE , in consideration of the foregoing recitals and the mutual covenants and agreements contained herein, the Parties hereto, intending to be legally bound, do hereby agree as follows;

AGREEMENT

ARTICLE I

DEFINITIONS

Section 1.01 Definitions . The following terms as used in this Agreement shall have the meaning set forth below:

“Additional Product” means each additional Product to be sold in a Commercial Sale after the First Commercial Sale of the First Product and the Second Product.

“ADE” means any adverse event associated with the Product or the Demonstration Samples (including adverse drug experiences, as defined in Applicable Laws).

“Affiliate” means an individual, trust, business trust, joint venture, partnership, corporation, association or any other entity which owns, is owned by or is under common ownership with, a Party. For the purposes of this definition, the term “owns” (including, with correlative meanings, the terms “owned by” and “under common ownership with”) as used with respect to any Party, shall mean the possession (directly or indirectly) of more than 50% of the outstanding voting securities of a corporation or comparable equity interest in any other type of entity.

“Annual Net Sales” means the aggregate Net Sales in any calendar year.

“API” means an active pharmaceutical ingredient.

CONFIDENTIAL TREATMENT REQUESTED

WITH RESPECT TO CERTAIN PORTIONS HEREOF

DENOTED WITH “***”

“Applicable Laws” means all applicable laws, rules, regulations and guidelines that may apply to the development, marketing, manufacturing or sale of the Product in the Territory or the performance of either Party’s obligations under this Agreement including laws, regulations and guidelines governing the import, export, development, marketing, distribution and sale of the Product in the Territory, to the extent relevant, and including all cGMP or Good Clinical Practices standards or guidelines promulgated by the FDA or other Competent Authorities and including trade association guidelines, where applicable, as well as United States’ export control laws and the United States’ Foreign Corrupt Practices Act.

“BEMA” means Arius Two’s proprietary bioerodible, mucoadhesive multi-layer polymer film.

“BEMA Know-How” means all Know-How related to BEMA which is under the Control of Arius Two as of the Effective Date, or is created or acquired by, or under the Control of, Arius Two during the Term including, but not limited to, data and documentation of clinical trials, pharmacological, toxicological, clinical, assay, control, and manufacturing data, techniques, processes, methods, or systems, and any other information relating to BEMA, all as of the Effective Date and during the Term, which is not covered by the BEMA Patent Rights, but is or would be necessary or useful to develop, manufacture (or prepare for the manufacture of), or commercialize a Product.

“BEMA Patent Rights” means all Patent Rights in the Territory related to the patents and patent applications listed on Exhibit A , claiming BEMA or any Improvement, or which are necessary or appropriate to develop, manufacture and commercialize Products in the Territory, and that are under the Control of Arius Two as of the Effective Date or that come under Arius Two’s Control during the Term.

“BEMA Technology” means the BEMA Patent Rights and the BEMA Know How.

“Books and Records” means, in whatever media, any and all books and records, reports and accounts and data in connection with or related to a Product, Competent Authorities, Applicable Laws or this Agreement. Books and Records shall also include any market research and competitive reports, marketing reports and data.

“CDC” shall mean CDC IV, LLC.

“CDC Agreement” shall mean that certain Clinical Development and License Agreement, dated July 14, 2005, among BioDelivery Sciences International, Inc., Arius and CDC, as amended.

“Combination Product” means a Product that is sold together with any other products and/or services within the Territory at a unit price, whether packaged together or separately with another pharmaceutical product or other device, equipment, instrumentation, or other components (other than solely containers or packaging exclusively for the Product).

“Commercial Sale” means the sale for use, consumption or resale of each Product in the Territory by Arius, its Affiliate, or its sublicensee. A sale to an Affiliate or a sublicensee shall not constitute a Commercial Sale unless the Affiliate or sublicensee is the end user of the Product.

2

CONFIDENTIAL TREATMENT REQUESTED

WITH RESPECT TO CERTAIN PORTIONS HEREOF

DENOTED WITH “***”

“Commercially Reasonable Efforts” shall mean, except as otherwise explicitly set forth in this Agreement, those efforts consistent with the exercise of prudent scientific and business judgment, as applied to products having comparable market potential within the relevant product lines of that Party and generally accepted practices in the pharmaceutical industry. “Comparable market potential” shall be fairly determined by a Party in good faith and without limitation may be based upon market size, price, competition, patent rights, product liability issues and general marketing parameters.

“Competent Authorities” means collectively the governmental entities in the Territory responsible for the regulation of medicinal products intended for human use.

“Confidential Information” means any confidential or proprietary information of a Party, whether in oral, written, graphic or electronic form. Confidential Information shall not include any information which the receiving Party can prove by competent evidence:

(a) is now, or hereafter becomes, through no act or failure to act on the part of the receiving Party, generally known or available;

(b) is known by the receiving Party at the time of receiving such information, as evidenced by its written records maintained in the ordinary course of business;

(c) is hereafter furnished to the receiving Party by a Third Party, as a matter of right and without restriction on disclosure;

(d) is independently developed by the receiving Party, as evidenced by its written records maintained in the ordinary course of business, without knowledge of, and without the aid, application or use of, the disclosing Party’s Confidential Information; or

(e) is the subject of a written permission to disclose provided by the disclosing Party.

“Control” means the possession of the ability to grant a license or sublicense as provided for herein without violating the terms of any agreement or other arrangement with any Third Party.

“CPI” means the Consumer Price Index for All Urban Consumers, All Items, U.S.A. Area, 1982-1984 = 100, as published by the Bureau of Labor Statistics, United States Department of Labor (U.S. City Average). If such index is discontinued, CPI shall then mean the most nearly comparable index published by the Bureau of Labor Statistics or other official agency of the United States government.

“Demonstration Samples” means Units, absent their applicable active ingredient, used to demonstrate the manner in which the Product is prepared and used, and labeled “demonstration samples, for demonstration purposes only, not for human use.”

“Development Costs” means the directly allocable and documented out-of-pocket and internal costs of research and development (but not capital costs) incurred by Arius, or Arius Two at Arius’ written request, in conducting the Parties’ respective work under this Agreement.

3

CONFIDENTIAL TREATMENT REQUESTED

WITH RESPECT TO CERTAIN PORTIONS HEREOF

DENOTED WITH “***”

“Effective Date” means September 5, 2007.

“FDA” means the Food and Drug Administration, the governmental entity responsible in the United States for the regulation of medicinal products intended for human use.

“Fentanyl Product” means the first Product containing Fentanyl, used for the treatment of pain and sold in a Commercial Sale.

“First Commercial Sale” means the first Commercial Sale of each Product.

“First Product” means the first Product to be sold in a Commercial Sale.

“GAAP” means generally accepted accounting principles of the United States consistently applied on a basis consistent throughout the periods indicated and consistent with each other.

“Good Clinical Practices” means good clinical practices as defined in 21 CFR § 50 et seq. and § 312 et seq.

“Governmental Approval” means all permits, licenses and authorizations, including but not limited to, import permits and Marketing Authorizations required by any Competent Authority as a prerequisite to the manufacturing, marketing or selling of the Product or the Units for human therapeutic use in the Territory.

“Improvements” means any and all developments, inventions or discoveries directly relating to the BEMA Technology developed or acquired by, or under the Control of, a Party at any time during the Term and shall include, but not be limited to, such developments intended to enhance the safety and/or efficacy of any Product.

“IND Application” means any Investigational New Drug Application filed with the FDA for marketing approval for a drug pursuant to the Federal Drug and Cosmetic Act (21 U.S.C. Section 321, et seq.) and the regulations promulgated thereunder, including any amendments or supplements thereto.

“Know-How” means all know-how, trade secrets, inventions, data, processes, techniques, procedures, compositions, devices, methods, formulas, protocols and information, whether or not patentable, which are not generally publicly known, including, without limitation, all chemical, biochemical, toxicological, and scientific research information, whether in written, graphic or video form or any other form or format.

“Marketing Authorization” means all necessary and appropriate regulatory approvals, including but not limited to, variations thereto, and Pricing and Reimbursement Approvals to put the Product on the market in a particular jurisdiction in the Territory.

“Marks” means “BEMA” or any additional trademarks owned by Arius Two with respect to the BEMA Technology, alone or accompanied by any logo or design and any non-English language equivalents in figure, sound or meaning, whether registered or not.

4

CONFIDENTIAL TREATMENT REQUESTED

WITH RESPECT TO CERTAIN PORTIONS HEREOF

DENOTED WITH “***”

“NDA” means a new drug application and all amendments and supplements thereto, and all additional documentation required to be filed with the FDA or other Competent Authority for approval to commence commercial sale of a Product in the Territory for human therapeutic use.

“Net Sales” means the gross amounts invoiced by Arius, its Affiliates or sublicensees for sales of the Product in the Territory by Arius, its Affiliates, or its sublicensees, as applicable, to a Third Party in a bona fide arm’s length transaction, less the following items: *** .

A Product shall be considered sold when billed out or invoiced. Components of Net Sales shall be determined in the ordinary course of business in accordance with historical practice and using the accrual method of accounting in accordance with GAAP.

In the event Arius transfers Product to a Third Party in the Territory in a bona fide arm’s length transaction, for consideration, in whole or in part, other than cash or to a Third Party in other than a bona fide arm’s length transaction, *** .

“Packaging” means any and all containers, cartons, shipping cases, inserts, package inserts or other similar material, including instructions for use, used in packaging or accompanying the Product.

“Patent Rights” means all rights under patents and patent applications, and any and all patents issuing therefrom (including utility, model and design patents and certificates of invention), together with any and all substitutions, extensions (including supplemental protection certificates), registrations, confirmations, reissues, divisionals, continuations, continuations-in-part, re-examinations, renewals and foreign counterparts of the foregoing, and all improvements, supplements, modifications or additions.

“Phase I” means the initial introduction of the Product as an investigational new drug into humans designed to determine the metabolism and pharmacologic actions of the Product in humans, the side effects associated with increasing doses and, if possible, to gain early evidence on effectiveness, and also includes studies of drug metabolism, structure-activity relationships and mechanism of action in humans.

“Phase II” means a controlled clinical study conducted to evaluate dose and obtain preliminary data on the effectiveness of the Product for a particular indication or indications in patients with the disease or condition under study and to determine the common short-term side effects and risks associated with the Product.

“Phase III” means an expanded controlled or uncontrolled clinical trial performed after preliminary evidence suggesting effectiveness of the Product has been obtained, in order to gather the additional information about effectiveness and safety that is needed to evaluate the overall benefit-risk relationship of the Product and to provide an adequate basis for physician labeling.

“Phase IV” means, as applicable, a study or program designed to obtain additional safety or efficacy data, detect new uses for or abuses of a Product, or to determine effectiveness for labeled indications under conditions of widespread usage, which is commenced after regulatory approval of a Product.

5

CONFIDENTIAL TREATMENT REQUESTED

WITH RESPECT TO CERTAIN PORTIONS HEREOF

DENOTED WITH “***”

“Pricing and Reimbursement Approvals” means any pricing and reimbursement approvals which may or must be obtained before placing a Product on the market in a particular jurisdiction in the Territory.

“Prime Rate of Interest” means the prime rate of interest published from time to time in the Wall Street Journal as the prime rate; provided, however that if the Wall Street Journal does not publish the Prime Rate of Interest, then the term “Prime Rate of Interest” shall mean the rate of interest publicly announced by Bank of America, N.A., as its Prime Rate, Base Rate, Reference Rate or the equivalent of such rate, whether or not such bank makes loans to customers at, above, or below said rate.

“Product” means individually and collectively any product which, but for the licenses granted under this Agreement, would infringe one or more valid claims of the BEMA Patent Rights.

“Product Development” shall mean Arius’ use of commercially reasonable efforts to take, at its sole cost and expense or together with a strategic partner or sublicensee, all actions reasonably necessary in connection with the development of a Product including but not limited to (a) any formulation, chemistry, toxicology, or other research and development activities reasonably related to the development of a Product, (b) all preclinical and clinical studies, including Phase I, Phase II, Phase III, and/or, if and as appropriate, Phase IV studies, and (c) preparation, organization, and filing of regulatory documents, including the NDAs for such Product with the FDA.

“Product Recall” means any recall, market withdrawal, or correction of a Product from or in the Territory.

“Royalty” means the royalty to be paid by Arius to Arius Two as set forth in Article IV.

“Royalty Term” means on a Product-by-Product basis the period of time commencing on the First Commercial Sale of each Product in the Territory and ending on the expiration of the last to expire of the BEMA Patent Rights covering such Product in the Territory.

“Second Product” means the second Product to be sold in a Commercial Sale.

“Sublicense Revenue” means

(a) all license fees, sublicense fees, license option payments (whether in relation to the grant or exercise of any license option), milestone payments, and royalties on sales of the *** , the Marks and any other kinds of revenue whatsoever received (including value received in the form of securities) by Arius, and/or an Affiliate of Arius, in respect of the grant to Third Parties of sublicenses in the Territory *** , or the right to manufacture, sell or distribute, in the Territory, *** ;

(b) any net manufacturing profits (defined as revenues from applicable manufacturing less fully-burdened manufacturing and supply costs) realized by Arius, and/or an Affiliate of Arius, on any supply, in the Territory, *** ;

6

CONFIDENTIAL TREATMENT REQUESTED

WITH RESPECT TO CERTAIN PORTIONS HEREOF

DENOTED WITH “***”

(c) research and development payments received by Arius, and/or any Affiliate of Arius, in connection with its performance under a development program for any Product in the Territory, where such payments are made other than for reimbursement of costs and expenses incurred by Arius, and/or an Affiliate of Arius, at full-time equivalent rates equal to or below the following (as adjusted annually for percentage increases or decreases in CPI), with the amounts paid above such full-time equivalent rates considered Sublicense Revenue:

(i) $ *** per hour for Vice President level employees and above;

(ii) $ *** per hour for Director level employees;

(iii) $ *** per hour for supervisor level employees;

(iv) $ *** per hour for non-supervisor, laboratory, or regulatory associates;

(v) actual reasonable market expenses for non-Affiliate consultants.

(d) any amount in excess of fair market value paid by a subscriber for stock of Arius and/or its Affiliates as consideration for the grant of a sublicense in the Territory or right to manufacture, sell or distribute, in the Territory, *** (a “Premium Equity Payment”);

(i) where Arius or one of its Affiliates is publicly listed on a recognized stock exchange, the premium paid over the average closing price of such stock of Arius or its Affiliates, for the 30 trading day period immediately prior to any such subscription; or

(ii) where Arius, and/or an Affiliate of Arius, is not publicly listed on a recognized stock exchange, the premium paid over the fair market value of such stock as reasonably determined by the board of directors of Arius, and/or an Affiliate of Arius, in good faith and certified in a resolution of such board taking into account *** .

If Arius Two disagrees with *** , and provides written notice thereof to Arius, then the Parties shall attempt to agree on such value in good faith without the use of appraisers. If the Parties are unable to so agree within the 21 days immediately following the giving of such written notice, then each Party shall select an independent, neutral appraiser experienced in the business of evaluating or appraising the market value of stock. *** .

Notwithstanding the foregoing, Third Party Royalties for a particular Product shall be deducted from Sublicense Revenue for such Product for purposes of calculating the amount due Arius Two pursuant to Section 4.03, provided, however, that in no event shall the total deduction of Third Party Royalties in any calendar quarter exceed *** % of Sublicense Revenue as computed without such deductions.

“Territory” means the United States (incliding its territories and possessions, including the Commonwealth of Puerto Rico), Canada, and Mexico.

7

CONFIDENTIAL TREATMENT REQUESTED

WITH RESPECT TO CERTAIN PORTIONS HEREOF

DENOTED WITH “***”

“Third Party” means any entity other than: (a) Arius Two, (b) Arius or (c) an Affiliate of Arius Two or Arius.

“Third Party Royalties” means royalties paid by Arius to a Third Party for a particular Product on a Product-by-Product basis (other than an Affiliate of Arius) in respect of a third party patent or patent application to which Arius is required to obtain a license (and, in the absence of such license, would be infringed by the practice of BEMA Technology as determined as set forth in Section 4.01(d)) for such Product, provided that any royalties required to practice BEMA Technology with respect to a specific API, as opposed to BEMA Technology generally, or a technology not related to BEMA, shall not be deemed Third Party Royalties hereunder.

“Unit” means the Product and its Packaging. The Packaging may be changed or reformulated by Arius from time to time and the term “Unit” shall refer to the Product in such changed or reformulated package.

“United States” means the United States of America, its territories and possessions, including the Commonwealth of Puerto Rico.

Section 1.02 Defined Terms . Each of the following terms is defined in the Section set forth opposite such term below:

8

CONFIDENTIAL TREATMENT REQUESTED

WITH RESPECT TO CERTAIN PORTIONS HEREOF

DENOTED WITH “***”

Section 1.03 Interpretation . The Section headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement. Except where the context clearly requires to the contrary: (a) each reference in this Agreement to a designated “Section” or “Exhibit” is to the corresponding Section or Exhibit of or to this Agreement; (b) instances of gender or entity-specific usage (e.g., “his” “her” “its” “person” or “individual”) shall not be interpreted to preclude the application of any provision of this Agreement to any individual or entity; (c) “including„ shall mean “including, without limitation”; (d) references to Applicable Laws shall mean such Applicable Laws in effect during the Term (taking into account any amendments thereto effective at such time without regard to whether such amendments were enacted or adopted after the Effective Date); (e) references to “$” or “dollars” shall mean the lawful currency of the United States; (f) references to “Federal” or “federal” shall be to laws, agencies or other attributes of the United States (and not to any State or locality thereof); (g) the meaning of the terms “domestic” and “foreign” shall be determined by reference to the United States; (h) references to “days” shall mean calendar days; (i) references to months or years shall be to the actual calendar months or years at issue (taking into account the actual number of days in any such month or year); and {j) days, business days and times of day shall be determined by reference to local time in Denver, Colorado.

Section 1.04 Scope . All definitions herein, and all right, title, claim, interest, obligation and duty of the parties (including CDC) under this Agreement shall only pertain to, concern, and be effective with respect to, the United States, Canada, and Mexico, whether or not any specific clause, section or portion of this Agreement (including any term, definition, obligation (including indemnification obligations), covenant, representation or warranty of the parties) specifically makes reference to, or is qualified by, the word “Territory”.

9

CONFIDENTIAL TREATMENT REQUESTED

WITH RESPECT TO CERTAIN PORTIONS HEREOF

DENOTED WITH “***”

ARTICLE II

DEVELOPMENT

Section 2.01 Arius Obligations .

(a) Arius shall use Commercially Reasonable Efforts to pursue Product Development for the Fentanyl Product. Notwithstanding the exclusivity provisions of Sections 3.02(a) and 3.03, if Arius fails to perform in accordance with the covenant contained in this Section 2.01(a), the rights granted to Arius with respect to the Mark and the License (as defined below) will become nonexclusive, effective *** following written notice to Arius from Arius Two, and Arius Two may, effective *** following written notice to Arius, terminate the rights granted to Arius with respect to the Mark and the License, for all applications of the Fentanyl Product involving the treatment of pain, which remedy shall be in addition to all other remedies Arius Two may have at law or in equity. Arius Two shall (i) provide CDC with a copy of such notice simultaneously with the provision of such notice to Arius and (ii) notwithstanding the lapse of *** subsequent to the notice provided to Arius, provide CDC an opportunity to remedy such failure to perform within *** of the expiration of the *** notice to Arius. No remedy available to Arius Two under Section 2.01(a) shall be effective prior to the lapse of such *** grace period granted to CDC. If CDC or Arius cures any failure by Arius to perform in accordance with the covenant contained in Section 2.01(a), such performance shall be deemed a cure of the failure by Arius to perform.

(b) Arius shall provide Arius Two with written reports regarding the status and progress of the clinical development of the Fentanyl Product at least once per quarter until such time as the Fentanyl Product is approved by the FDA, which reports shall be delivered no later than *** following the end of the applicable quarter.

(c) Arius shall maintain Books and Records in connection with its Product Development for the Fentanyl Product in accordance with Applicable Laws and otherwise in sufficient detail and in good scientific manner appropriate for patent and regulatory purposes, including to obtain Governmental Approvals, and shall properly reflect all work done and results achieved by Arius in the performance of Product Development for the Fentanyl Product in such Books and Records. Arius Two has the right to audit and inspect the materials in such Books and Records pursuant to Section 15.12 for the sole purposes of verifying Arius’ compliance with its obligations under Section 2.01(a), and Arius shall promptly provide copies of such Books and Records to Arius Two upon request.

Section 2.02 Arius Two Obligations . Arius Two shall, at Arius’ cost and expense, assist Arius in any reasonable manner with respect to Government Approvals, as shall be reasonably requested by Arius as necessary to enable Arius to manufacture, sell, use, offer for sale, distribute, and market Products in the Territory under this Agreement, including but not limited to the assignment to Arius of any Government Approvals in the Territory and provision and/or obtaining of appropriate correspondence, clearance or transfer letters, or any other form of authorization, license, permit, or the like from regulatory authorities with respect to Government Approvals in the Territory. The costs and expenses incurred by Arius Two under the preceding sentence shall be reimbursed to Arius Two by Arius as provided in Section 2.05. Arius shall have

10

CONFIDENTIAL TREATMENT REQUESTED

WITH RESPECT TO CERTAIN PORTIONS HEREOF

DENOTED WITH “***”

the right to make amendments to the Government Approvals in the Territory, make additional applications thereunder, conduct such studies, or undertake any and all such actions as are necessary in order to maintain and apply for any marketing or product approvals, licenses, registrations or authorizations in the Territory with respect to Products. Upon Arius Two’s written request, Arius shall provide Arius Two with copies of any such documents that relate to the Fentanyl Product, including without limitation all amendments to the relevant Governmental Approvals in the Territory, any additional applications, and the results of any such studies.

Section 2.03 Availability of Resources . Arius shall maintain facilities and/or enter into contractual relationships as are consistent with generally accepted practices in the pharmaceutical industry in order to carry out, or ensure the carrying out of, Product Development of the Fentanyl Product.

Section 2.04 Regulatory and Clinical Documentation .

(a) Subject to Sections 2.01, 3.02, 3.04 and 14.05, Arius will own or retain access to all documentation, including all notes, summaries and analyses related thereto, developed in connection with such clinical trials and regulatory submissions (the “Clinical Documentation”) and the results of such clinical testing (the “Results”); provided that Arius shall provide Arius Two with copies of all such Clinical Documentation and Results that relate to the Fentanyl Product in the Territory upon reasonable advance request. The parties agree that the Clinical Documentation and Results generated by any sublicensee of Arius with respect to the Territory will, to the extent provided in the relevant sublicense, be the property of such sublicensee; provided, however, that (i) Arius shall provide Arius Two with copies of all such Clinical Documents and Results in Arius’ possession that relate to the Fentanyl Product upon reasonable advance request and (ii) Arius shall, if and as reasonably requested by Arius Two in writing, use commercially reasonable efforts to obtain any sublicensee’s Clinical Documentation or Results with respect to the Territory not in Arius’ possession and, upon Arius’ receipt thereof, provide such Clinical Documentation and Results to Arius Two.

(b) Arius shall maintain Books and Records in connection with Product Development of the Fentanyl Product in the Territory in accordance with Applicable Laws and in reasonably sufficient detail and a scientific manner appropriate for regulatory purposes, including to obtain Governmental Approvals. Arius Two will have the right to audit and inspect such Books and Records related to the Fentanyl Product pursuant to Section 15.12, and Arius shall promptly provide copies of such Books and Records to Arius Two upon written request.

(c) Any IND Application, NDA, or Governmental Approval required by any Competent Authority in the Territory or prepared, filed or obtained by Arius in the Territory, or, with respect to the Fentanyl Product in the Territory, to the extent required under the CDC Agreement, CDC shall be prepared, filed and obtained in Arius’, or, with respect to the Fentanyl Product in the Territory, to the extent required under the CDC Agreement, CDC’s name and shall be owned and controlled exclusively by Arius.

(d) Notwithstanding anything to the contrary contained in this Section 2.04, in the event CDC terminates the CDC Agreement (“CDC Termination”) and Arius does not exercise, if available, any of its rights to continue development of the Fentanyl Product, CDC shall send

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CONFIDENTIAL TREATMENT REQUESTED

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written notice to Arius Two of such event (the “CDC Termination Notice”). At the written request of CDC (the “License Request”), which request must be sent no later than *** following the date of such CDC Termination (provided that no written notice from Arius challenging the termination is delivered to Arius Two within *** of the date of the CDC Termination Notice), and upon the cure by CDC of any Arius default under this Agreement (which cure is effectuated during the applicable grace period set forth herein), Arius Two shall be deemed to have granted its consent to and CDC and Arius shall be deemed to have effected: (i) an assignment by Arius to CDC of all of its right, title, and interest to all Governmental Approvals, NDAs, Books and Records, Clinical Documentation, Results, Marketing Authorizations, and Know-How, in each case solely to the extent directly related to the Fentanyl Product in the Territory, and (ii) a grant by Arius to CDC of an exclusive, royalty bearing sublicense under the BEMA Technology and the Marks to use, develop, market, advertise, promote, distribute, offer for sale, sell export and import, manufacture and have manufactured the Fentanyl Product in the Territory, with the right to sublicense subject to and in accordance with Section 3.02(b). If a written challenge is delivered to Arius Two by Arius, there shall be no deemed transfer as set forth above until Arius Two receives either (i) consent to the transfer signed by Arius and CDC, or (ii) a court order, final and without opportunity on the part of Arius or CDC to appeal, confirming the CDC Termination, or (iii) a binding arbitration award confirming the CDC Termination. In addition to providing to Arius Two the CDC Termination Notice and the License Notice, CDC shall forward to Arius Two any notice of default or intent to terminate or notice of termination under the CDC Agreement simultaneously with the provision of notice to Arius. Promptly after delivery of the License Notice, and in the event that Arius is in default of this Agreement with respect to the Fentanyl Product, cure of such default by CDC, each of Arius and CDC shall enter into separate agreements with Arius Two in a form substantially the same as the form of this Agreement (including equivalent financial terms in each of such new licenses at the full rates or amounts as set out in this Agreement) with such changes as are reasonable and appropriate in the circumstances to reflect the separation of rights between CDC and Arius and except that:

(i) for greater clarity, the definitions of “First Product”, “Second Product” and “Additional Product” will relate to the first, second and subsequent Products, respectively, to be sold in a Commercial Sale by Arius or by CDC or their Affiliates or sublicensees;

(ii) the nature of the rights granted will be defined in the case of the license to Arius to exclude rights related to the Fentanyl Product and all Clinical Documentation and Results related thereto, and, in the case of CDC will be limited to the Fentanyl Product and all Clinical Documentation and Results related thereto, and all rights to the BEMA Technology that may have application to the Fentanyl Product and any other Product will be co-exclusive (instead of exclusive) between Arius and CDC;

(iii) except for the additional time granted to CDC under Section 3.02(e), the cure periods applicable to any breach by Arius or CDC under the respective new licenses will revert to the cure periods as specified in the original License and no separate notice of breach or time to cure shall be given to CDC.

Section 2.05 Costs and Expenses . Arius shall be responsible for all Development Costs incurred after the Effective Date. Furthermore, Arius will reimburse Arius Two for Arius

12

CONFIDENTIAL TREATMENT REQUESTED

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DENOTED WITH “***”

Two’s costs and expenses incurred in satisfying its obligations, if and as requested by Arius, pursuant to Section 2.02 or 3.02(e) at a rate equal to the FTE rates listed below for personnel (as adjusted annually for percentage increases in CPI), and at Arius Two’s actual cost for all other costs incurred by Arius Two, provided such costs shall be reasonable and documented. Such reimbursement shall be paid by Arius within 30 days of its receipt from Arius Two of a reasonably detailed invoice setting forth such costs and expenses. For purposes of this Section 2.05, the FTE rates to be charged by Arius Two shall be as follows:

(a) $ *** per hour for Director level employees and above,

(b) $ *** per hour for supervisor level employees,

(c) $ *** per hour for non-supervisor, laboratory, or regulatory associates.

Arius Two shall keep complete and accurate books and records pertaining to the Development Costs incurred at Arius’ request pursuant to this Agreement in sufficient detail to permit Arius to confirm the accuracy of such Development Costs. Arius shall have the right to audit and inspect such Books and Records pursuant to the terms of Section 15.12, but only to the extent reasonably necessary to confirm the accuracy of the calculation of the Development Costs.

ARTICLE III

LICENSE

Section 3.01 Intentionally Deleted .

Section 3.02 License Terms . The terms and conditions of the exclusive license (the “License”) granted to Arius shall be as follows:

(a) Subject to the terms and conditions of this Agreement, Arius Two hereby grants to Arius a sole and exclusive (subject to Section 2.01), royalty-bearing license under the BEMA Technology to use, develop, market, advertise, promote, distribute, offer for sale, sell, export and import, manufacture, and have manufactured Products in the Territory, with the right to sublicense in accordance with Section 3.02(b). Subject to the terms of this Agreement, Arius shall have the right to assign this Agreement, on the basis set forth in Section 15.02. During the term of this Agreement, Arius Two shall not grant any right or license to any third party with respect to the BEMA Technology in the Territory.

(b) Subject to the terms of this Agreement, Arius shall have the right to grant a sublicense hereunder to an Affiliate or a Third Party; provided, however, that any such sublicense agreement (and any subsequent amendments or revisions thereto) shall be delivered to Arius Two for review and Arius Two’s approval, which approval shall not be unreasonably withheld, prior to its execution, provided that Arius Two shall be deemed to have approved such sublicense agreement if Arius Two does not, within *** of receiving an approval request from Arius, provide Arius written notice objecting to such sublicense agreement, detailing Arius Two’s objections; and provided, further, that with respect to the Fentanyl Product, such approval shall be in Arius Two’s sole and absolute discretion. Further, any such sublicense agreement (or

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any subsequent amendments or revision thereto) shall (i) be delivered to Arius Two upon execution, (ii) be consistent with the terms and conditions of this Agreement, and (iii) impose on the sublicense, as applicable, payment, confidentiality, reporting, record keeping requirements, and audit and inspection rights reasonably sufficient to enable Arius to comply with its corresponding obligations set forth in this Agreement. The execution of such a sublicense shall not relieve Arius of its obligations under this Agreement.

(c) Subject to the terms of this Agreement, Arius shall have the right to enter into a co-marketing or co-promotion agreement with a Third Party in the Territory; provided, however, that any such agreement with respect to co-marketing or co-promoting the Fentanyl Product in the Territory shall be delivered to Arius Two for review and Arius Two’s approval, which approval shall not be unreasonably withheld, prior to its execution, provided that, Arius Two shall be deemed to have approved such an agreement if Arius Two does not, within *** of receiving an approval request from Arius, provide Arius written notice objecting to such agreement, detailing Arius Two’s objections. Any co-marketing or co-promotion agreement entered into by Arius pursuant to this Section 3.02(c) shall not conflict with this Agreement and shall impose on the comarketer or co-promoter payment, confidentiality, reporting, record keeping requirements, and audit and inspection rights sufficient to enable Arius to comply with this Agreement. Arius shall keep Arius Two reasonably informed of the status of any negotiations with any such proposed co-marketer or co-promoter of the Fentanyl Product and shall promptly provide Arius Two with a copy of any co-marketing or co-promotion agreement entered into with such co-marketer or co-promoter of the Fentanyl Product in the Territory. The execution of a co-marketing or co-promotion agreement shall not relieve Arius of its obligations under this Agreement.

(d) Arius acknowledges that it shall have no right, title or interest in or to the BEMA Technology in the Territory except to the extent set forth in this Agreement, and Arius Two reserves all rights to use the BEMA Technology except as otherwise expressly granted to Arius pursuant to this Agreement. Nothing in this Agreement shall be construed to grant Arius any rights or license to any intellectual property of Arius Two other than as expressly set forth herein.

(e) Arius shall prepare and file with each of the Competent Authorities in each country in the Territory the appropriate applications and related documents necessary to obtain Governmental Approval to market and sell the Fentanyl Product, and, if not the Fentanyl Product, the First Product, in each country in the Territory in which Arius decides to market the Fentanyl Product, and, if not the Fentanyl Product, the First Product. The above and the provisions of Section 2.06 notwithstanding, Arius shall, *** ].

Section 3.03 Trademarks . Subject to the terms and conditions of this Agreement, Arius Two hereby grants to Arius a sole and exclusive (subject to Section 2.01), royalty-free license to use the Marks solely in connection with the use, promotion, marketing, distribution, offer for sale, and sale of the Products, on a Product-by-Product basis, in the Territory during the Royalty Term. Arius may grant a sublicense to the Marks in accordance with Section 3.02(b). Arius acknowledges that it shall have no right, title or interest in or to the Marks except to the extent set forth in the license granted to Arius under this Section 3.03, and Arius Two reserves all rights to use the Marks except as otherwise expressly granted to Arius pursuant to this Agreement.

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Arius shall use the Marks in the exact form set forth on Exhibit B , attached hereto, including the “®” symbol or “TM” symbol, as applicable. All content or other specific graphic elements provided by Arius Two shall remain the property of Arius Two and shall be used only in the manner set forth in this Agreement except as otherwise previously approved in writing by Arius Two.

Section 3.04 Ownership of Intellectual Property .

(a) Each Party shall own all right, title and interest in and to any Improvements made by such Party. During the Term, each Party shall promptly notify the other Party of Improvements made by such Party (the “Improving Party”). In addition to any exclusive rights licensed hereunder and notwithstanding Section 3.04(b), Arius Two shall grant to Arius a non-exclusive non-royalty-bearing license, with rights of sublicense, under Improvements made or obtained by, or under the Control of, Arius Two and any Patent Rights claiming such Improvements, to use, develop, market, advertise, promote, distribute, offer for sale, sell, export, import, manufacture, and have manufactured such Improvements in the Territory. In the event Arius Two terminates this Agreement pursuant to Sections 14.02 or 14.03 or the License is terminated for any reason, Arius shall grant to Arius Two a non-exclusive, perpetual, irrevocable non-royalty-bearing license, with rights of sublicense, under, to the extent Controlled by Arius, Improvements made by Arius or any sublicensee of Arius and any Patent Rights claiming such Improvements, to use, patent, develop, market, advertise, promote, distribute, offer for sale, sell, export, import, manufacture, and have manufactured BEMA-based Products in the Territory.

(b) For the avoidance of doubt and except as specifically set forth in this Agreement, Arius shall have no right, title or interest in the Territory in or to the BEMA Technology, the Marks, or Improvements made by Arius Two, and Arius Two shall have no right, title or interest in or to Improvements or developments, inventions or discoveries made by Arius.

Section 3.05 License Following Expiration . After expiration of the Royalty Term, Arius shall retain a non-exclusive fully-paid and royalty-free license under the BEMA Know-How, Improvements made or obtained by, or under the Control of, Arius Two, and Marks to manufacture, use, import, sell and offer for sale Products in the Territory.

ARTICLE IV

ROYALTY AND MILESTONE PAYMENTS

Section 4.01 Royalty Payments on Arius Sales .

(a) Arius shall pay to Arius Two royalties equal to the following percentages of Net Sales by Arius, its Affiliates, and its or its Affiliates’ sublicensees of the First Product, for a period equal to the Royalty Term for the First Product:

(A)  *** % of Annual Net Sales for Annual Net Sales equal to or less than $ *** ;

(B)  *** % of Annual Net Sales for Annual Net Sales more than $ *** and less than or equal to $ *** ;

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(C)  *** % of Annual Net Sales for Annual Net Sales more than $ *** and less than or equal to $ *** ; and

(D)  *** % of Annual Net Sales for Annual Net Sales greater than $ *** .

(b) Arius shall pay to Arius Two royalties equal to the following percentages of Net Sales by Arius or its Affiliates (but not sales by Third Party sublicensees) of the Second Product (or if the Second Product is not sold by Arius or its Affiliates, the next Product sold by Arius or its Affiliates), for a period equal to the Royalty Term for the Second Product (or if the Second Product is not sold by Arius or its Affiliates, the next Product sold by Arius or its Affiliates), respectively:

(A)  *** % of Annual Net Sales for Annual Net Sales equal to or less than $ *** ;

(B)  *** % of Annual Net Sales for Annual Net Sales more than $ *** and less than or equal to $ *** ;

(C)  *** % of Annual Net Sales for Annual Net Sales more than $ *** and less than or equal to $ *** ; and

(D)  *** % of Annual Net Sales for Annual Net Sales greater than $ *** .

(c) Arius shall pay to Arius Two royalties equal to *** % of Net Sales by Arius or its Affiliates of any Product(s) for which royalties are not due under subsections 4.01 (a) or (b) above, for a period equal to the Royalty Term for each such Product, provided that, for purposes of this Section 4.01(c), only sales of Products by Arius and its Affiliates (but not sales by Third Party sublicensees) shall be considered Net Sales for purposes of calculating the royalty due under this Section 4.01(c).

(d) If, except for the grant of a royalty-bearing license to Arius by a Third Party controlling the rights to a patent (or patent application), the development, manufacture (or have manufactured), marketing, advertising, promotion, distribution, offer for sale, sale, export, or import of a Product would infringe said patent or patent application (if such application were to issue), as reasonably determined by Arius and supported by written advice of Arius’ patent counsel, which counsel shall be reasonably acceptable to Arius Two (a copy of which, if requested by Arius Two, shall be provided to Arius Two), Arius may deduct a pro rata amount of any Third Party Royalties actually paid with respect to such Product from the Royalty owing to Arius Two for sales of that Product pursuant to Sections 4.01(a), 4.01(b), and 4.01(c) above, provided that (i) in no event shall the Royalties due Arius Two with respect to such Product be less than *** % of the royalties that would be payable to Arius in the absence of any such deduction and (ii) such deduction will only apply to the Royalties owed by Arius to Arius Two under Sections 4.01(a), 4.01(b), and 4.01(c) above with respect to such Product and not any other Product.

Section 4.02 Intentionally Omitted .

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Section 4.03 Royalty Payments on Sublicensee Sales . Arius shall pay to Arius Two Royalties equal to *** % of any Sublicense Revenue.

Section 4.04 Minimum Payments . The aggregate annual Royalty payments on Net Sales and Sublicense Revenues paid to Arius Two by Arius pursuant to Sections 4.01 and 4.03, respectively, with respect to Net Sales made and Sublicense Revenues received during the time periods set forth on Exhibit C shall not be less than the minimum amounts set forth in Exhibit C with respect to the corresponding time periods (the “Minimum Royalties”). In the event that such aggregate Royalty payments correspon