Document:

BEMA Acquisition Consent, Amendment, and Waiver

 Exhibit 10.7 
 BEMA ACQUISITION CONSENT, AMENDMENT, AND WAIVER 
 This BEMA ACQUISITION CONSENT, AMENDMENT, AND
WAIVER (the “Consent”) is entered this August 2, 2006 (the “Consent Date”) by BioDelivery Sciences International, Inc. (“BDSI”), its wholly-owned subsidiary Arius Pharmaceuticals, Inc. (“Arius”),
BDSI’s wholly-owned subsidiary Arius Two, Inc. (“Arius Two”), and CDC IV, LLC (“CDC”) 
 WHEREAS, Arius, BDSI and
CDC are parties to that certain Clinical Development and License Agreement, dated July 14, 2005, as amended February 15, 2006 and May 16, 2006 (as amended, the “CDC License”), and Security Agreement, dated February 15,
2006, as amended May 16, 2006 (the “Security Agreement”), under which CDC has certain rights with respect to certain intellectual property rights and assets related to Arius’ BEMA Fentanyl product; 
 WHEREAS, Arius and QLT USA, Inc. (“QLT”) are parties to that certain License Agreement, dated May 27, 2004, as amended July 14, 2005,
concerning QLT’s BEMA technology (such agreement, the “QLT License”); 
 WHEREAS, Arius Two intends to acquire all of
QLT’s right, title, and interest in QLT’s BEMA-related assets regarding all jurisdictions outside the United States, as fully contemplated by the form of Intellectual Property Assignment Agreement between QLT and Arius Two attached hereto,
with all of its exhibits and related agreements, as Exhibit A (collectively, all of the foregoing, the “Acquisition Agreements”); 
 WHEREAS, upon acquisition of the assets and rights to be acquired under the Acquisition Agreements (such assets, the “Acquired Assets”), Arius Two intends to grant Arius an exclusive license in all jurisdictions outside the United
States under the Acquired Assets pursuant to that form of BEMA License Agreement, with all of its exhibits, attached hereto as Exhibit B (the “New License”). 
 WHEREAS, the CDC License and Security Agreement do not currently contemplate or permit Arius Two’s acquisition of the rights referenced above as
contemplated by the Acquisition Agreements or Arius Two’s granting of rights under the New License to Arius; 
 WHEREAS, CDC wishes to
enable Arius Two to enter into the Acquisition Agreements, acquire the Acquired Assets, and enter into the New License by executing this Consent; and 
 WHEREAS, the parties desire to amend the CDC License as set forth herein. 
 NOW THEREFORE, in consideration
of the foregoing premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Consent agree as follows: 
 1. Definitions. Any capitalized terms not separately defined in this Consent or by reference to the New License shall have the meaning provided in the CDC License. 
 2. Executed Acquisition Agreements. Attached hereto as Exhibit A is a final and complete copy of the Acquisition Agreements, together with final and
complete copies of all other agreements entered into between BDSI, Arius or any of their affiliates and QLT in connection with 

 the acquisition of the Acquired Assets. Except for the Acquisition Agreements, there are no other agreements, side
letters or other understandings between BDSI, Arius, or any of their affiliates and QLT related to the subject matter thereof (with the exception of the QLT License, which shall remain in effect, as amended by that certain Second Amendment
Agreement, dated August 2, 2006, between QLT and Arius following BDSI’s acquisition of the Acquired Assets). The parties acknowledge and agree that the consent of CDC is subject to the foregoing statements being true and correct.

 3. Consents and Waivers. 
 3.1
CDC. Effective upon the execution of the Acquisition Agreements, CDC agrees, notwithstanding anything to the contrary in the CDC License or Security Agreement, that (i) BDSI’s obligations under Section 8.2.19 of the CDC License
shall not apply to the Acquisition Assets or Arius Two’s interest in the New License and (ii) the Acquired Assets and Arius Two’s interest in the New License may be held and/or owned by Arius Two in lieu of Arius. CDC consents
(i) under Section 8.5.1 of the CDC License to (a) Arius Two’s granting of a security interest in the Collateral (as defined in the Acquisition Agreements) to QLT pursuant to the Acquisition Agreements and (b) any future
transfer of any or all of the Collateral to an Arius Two Assignee (as defined below) as a result of QLT exercising its remedies with respect to such Collateral under the Acquisition Agreements (provided, however, that such consent shall terminate
upon the termination of the security interest created in favor of QLT under the Acquisition Agreements), (ii) under Section 8.5.2 of the CDC License to Arius Two’s purchase of the Acquired Assets as contemplated by the Acquisition
Agreements, and (iii) to the amendment of the Atrix License pursuant to the form of amendment attached hereto as Exhibit C. 
 3.2 By Arius Two. Subject to Section 5 of this Consent, Arius Two hereby consents to the sublicense and/or assignment by Arius and the grant to CDC by Arius of a security interest in Arius’ rights in and to the, as the
following are defined in the New License, Fentanyl Product and related Clinical Documentation and Results, Governmental Approvals, Books and Records, Marketing Authorizations, and Know-How to the extent relating solely to the Territory, on and
subject to the terms set out in the New License, this Consent, the CDC License, and Security Agreement. 
 4. Amendments. 
  

	 	4.1	CDC License. The CDC License shall be amended by: 

  

	 	a.	Adding the following at the end of Article 1: 

 “1.64
“Arius Two Agreement” means that certain BEMA License Agreement between Arius Two, Inc. (“Arius Two”) and Subsidiary, dated August 2, 2006, as amended. 
 1.65 “Arius Two Assignee” means a party, other than an Affiliate of the Company or Arius Two, assuming the rights and obligations of
Arius Two under the Arius Two Agreement as a result of QLT exercising its remedies under that certain Security Agreement between QLT and Arius Two dated August 2, 2006 (the “QLT Security Agreement”) with respect to the Collateral (as
defined in the QLT Security Agreement).”; 
  

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	 	b.	Inserting the phrase “or Arius Two License” following the phrase “Atrix License” in Section 1.9; 

  

	 	c.	Inserting the phrase “or Arius Two License” following the phrase “Atrix License” in Section 10.4.5; and 

  

	 	d.	Inserting the phrase “and Arius Two License (provided, however, that such license shall only be subject to such terms, conditions, and payment obligations under the Arius Two
License to the extent such Arius Two License has been assigned to an Arius Two Assignee)” following the phrase “Atrix License” in Section 10.5.3. 

 4.2 Prior Consent and Amendment Agreement. Arius and CDC agree that (i) upon the assignment of the Acquired Assets to Arius Two under the
Acquisition Agreement, the covenants of CDC under Section 10 of that certain Consent and Amendment Agreement between QLT, Arius, and CDC, dated July 14, 2005 (the “Original CDC Consent”), shall apply only with respect to the
United States (as defined in the Acquisition Agreements) and (ii) the last paragraph of Section 10 of the Original CDC Consent, as amended above, shall be further amended by deleting the phrase “it will not transfer” and
substituting in lieu thereof the phrase “it will not, except as (i) permitted by the Amended License (as further amended pursuant to that certain Second Amendment Agreement between QLT and Arius, dated August 2, 2006) or
(ii) contemplated by any sublicense agreement granting a sublicense thereunder by Arius or CDC, transfer”, with the effectiveness of this Section 4.2 to be subject to QLT’s prior or subsequent written agreement to the foregoing
in a separate writing executed by QLT. 
 5. CDC Covenants under New License. For purposes of this Section 5, all capitalized terms shall have
the meaning provided in the New License. In the event that QLT, an affiliate thereof, or any third party that is not an Affiliate of Arius Two or BDSI assumes the rights and obligations of Arius Two under the New License as a result of QLT
exercising its remedies with respect to the Collateral (as defined in the Acquisition Agreements) under the Acquisition Agreements (such a party assuming such rights and obligations as a result of such exercise, an “Arius Two Assignee”),
and such Arius Two Assignee terminates the New License after providing CDC with an opportunity to cure any Arius or CDC default as provided in the New License, or CDC fails to deliver to the Arius Two Assignee the License Request within the time
period set out in Section 2.04(d) of the New License, than CDC agrees and covenants that it will: 
  

	 	a.	comply with the provisions of Section 13.05 of the New License as if it were Arius, including but not limited to the following: (i) neither CDC nor Arius shall have any
right under the New License to practice within the BEMA Patent Rights or use any of the BEMA Technology, (ii) all rights, title or interest in, or other incidents of ownership under, the BEMA Technology and the Marks in the Territory licensed
under the New License shall revert to or shall be transferred by CDC to the Arius Two Assignee and shall become the sole property of the Arius Two Assignee, (iii) all sublicenses granted and co-marketing and co-promoting agreements executed by
Arius or CDC pursuant to Sections 3.01(b) and (c) of the New License shall 

  

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 promptly be assigned to the Arius Two Assignee effective as of the date of the termination of the New
License, and (iv) Arius and CDC shall grant and assign to the Arius Two Assignee all of either parties’ right, title and interest in, to or under all Governmental Approvals, Books and Records, Clinical Documentation and Results, and
Marketing Authorizations to the extent used or useable in the Territory in connection with the Products and all other data, reports, studies, analysis or similar items created or obtained by Arius or CDC in connection with the development, marketing
or commercialization of Products in the Territory, provided that, in the event any of the foregoing also relate to the development, marketing, or commercialization of products outside the Territory, Arius and CDC shall, in lieu of the foregoing
assignment, grant the Arius Two Assignee a nonexclusive, perpetual, royalty-free, fully-paid license to the foregoing in the Territory for the sole purpose of developing, marketing, and commercializing Products in the Territory; 
  

	 	b.	release and discharge its security interest under the Security Agreement in all assets to be assigned pursuant to the foregoing. 

 In addition, CDC covenants and agrees that it will not, except as (i) permitted by the New License (as further amended pursuant to that certain First
Amendment Agreement between Arius Two and Arius, dated August 2, 2006 and that certain Sublicensing Consent between Arius Two and Arius dated August 2, 2006) or (ii) contemplated by any sublicense agreement granting a sublicense
thereunder by Arius or CDC, transfer, license, sublicense, or assign, to a third party any of its rights to the Fentanyl Product or related Governmental Approvals, Books and Records, Clinical Documentation and Results, Marketing Authorizations and
Know-How to the extent used or useable in the Territory in connection with the Products, or its security interest therein (collectively, the “BEMA Assets”); provided, however, the parties hereto agree that CDC may transfer, license,
sublicense, assign or grant a security interest in its rights to receive payments (including without limitation, royalty payments), its rights to receive information related to such payments, and contractual rights related to the enforcement of its
right to receive such payments, in each case, in connection with the BEMA Assets. 
 The parties agree that (i) QLT shall be deemed a
third party beneficiary of this Section 5 for purposes of enforcing this provision and (ii) this Section 5 shall not be amended without QLT’s prior written consent. The provisions of this Section 5 shall terminate upon the
termination of the security interest created in favor of QLT under the Acquisition Agreements. 
 6. CDC Payments Not Sublicense Revenue. Arius
represents and warrants to Arius Two that none of the amounts to be paid by CDC to Arius under the CDC License are “Sublicense Revenue” as defined in the New License. Based upon and subject to the continued accuracy of the foregoing
representation of Arius, Arius Two acknowledges that no amounts are due or payable by Arius to Arius Two under the New License as a result of Arius’ receipt of payments from CDC under the CDC License. 
 7. License to Continue in Full Force and Effect. To the extent that the terms of the CDC License or Security Agreement are varied by this Consent, such variations
shall be deemed to be lawfully made amendments to the CDC License pursuant to Section 11.5 thereof and to the Security Agreement pursuant to Section 7.1 thereof. Except as they may be modified by this Consent, the CDC License and Security
Agreement shall remain unchanged and in full force and effect. 
  

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 8. Governing Law. This Consent shall be governed by, and construed and enforced in accordance with, the laws of
the State of New York, without regard to its conflicts of laws rules. 
 9. Counterparts. This Consent may be executed in two or more counterparts,
each of which shall be deemed and original, but all of which together shall constitute one and the same instrument. Signatures to the Consent may be transmitted via facsimile and such signatures shall be deemed to be originals. 
 [Signature page to follow] 
  

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 IN WITNESS WHEREOF, the parties have executed and delivered this Consent as of August 2, 2006.

  

			
	ARIUS PHARMACEUTICALS, INC.
		
	By:	 	 /s/ Mark A. Sirgo

	Name:	 	 Mark A. Sirgo

	Title:	 	 President

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

	Name:	 	 Mark A. Sirgo

	Title:	 	 President & CEO

	
	CDC IV, LLC
		
	By:	 	 /s/ David Ramsey

	Name:	 	 David Ramsey

	Title:	 	 Partner

	
	ARIUS TWO, INC.
		
	By:	 	 /s/ Mark A. Sirgo

	Name:	 	 Mark A. Sirgo

	Title:	 	 President

 SIGNATURE PAGE TO BEMA ACQUISITION CONSENT, AMENDMENT, AND WAIVERLetter agreement between BDSI, Arius, Arius Two, and CDC

 Exhibit 10.8 
 CDC IV, LLC 
 47 HULFISH STREET, SUITE 310 
 PRINCETON, NEW JERSEY 08542 
 August 2, 2006 
 BioDelivery Sciences International, Inc. 
 Arius Pharmaceuticals, Inc. and 
 Arius Two, Inc. 
 2501 Aerial Center Parkway, Suite 205 
 Morrisville, North Caroline 27560 
 Attn:
Mark A. Sirgo, President and Chief Executive Officer 
 RE: Clinical Development and License Agreement 
 Dear Mr. Sirgo: 
 The
purpose of this letter (this “Letter Agreement”) is to set out certain understandings and agreements between (i) CDC IV, LLC (“CDC”) and (ii) BioDelivery Sciences International, Inc. (“BioDelivery”), Arius
Pharmaceuticals, Inc., a wholly-owned subsidiary of BDSI (“Arius”) and Arius Two, Inc., a wholly-owned subsidiary of BioDelivery (“Arius Two”). 
 Reference is hereby made to that certain Clinical Development and License Agreement (as amended, the “CDC License”), dated as of July 14, 2005 among CDC (as successor in interest to Clinical Development
Capital LLC), BioDelivery and Arius. Pursuant to the terms of the CDC License, BioDelivery, Arius and Arius Two have requested that CDC consent to, among other things, (i) the acquisition by Arius Two of certain assets related to the BEMA
Fentanyl product from QLT USA, Inc., and (ii) the amendment of the CDC License in connection with such acquisition and the subsequent license of certain rights with respect to such assets by Arius to Meda AB; in each case pursuant to the terms
of (A) that certain Sublicensing Consent and Amendment, entered into as of the date hereof, by BDSI, Arius and CDC (the “Sublicensing Consent”) and (B) that certain BEMA Acquisition Consent, Amendment and Waiver, entered into as
of the date hereof, by BDSI, Arius, Arius Two and CDC (the “Acquisition Consent” and together with the Sublicensing Consent, collectively, the “CDC Consents”). As a condition to CDC entering into the CDC Consents, CDC is
requiring BDSI, Arius and Arius Two to enter into this Letter Agreement. Capitalized terms used herein, but not otherwise defined herein, shall have the meanings set forth in the Acquisition Consent. 
 1. Defaults and Terminations under the New License. Notwithstanding anything to the contrary set forth in the CDC License, the QLT License, the New License, the
Acquisition Agreements, the CDC Consents or any agreements entered into by any of BDSI, Arius or Arius Two in connection with any of the foregoing, BDSI, Arius and Arius Two hereby agree and acknowledge that (i) in no event shall Arius Two
declare any default against Arius under the New License, or otherwise exercise any right to terminate the New License or other remedy thereunder, without the written consent of CDC, in its sole and absolute discretion and (ii) in no 

 event shall CDC be required to cure any defaults by Arius under the New License in order to exercise its rights under
Sections 2.04(d) or 13.06 or other similar provisions of the New License. The foregoing restrictions shall terminate to the extent Arius Two fails to satisfy its Obligations (as such term is defined in the certain Security Agreement by and between
Arius Two and QLT, dated as of the date hereof (the “QLT Security Agreement”)), QLT thereafter exercises its rights with respect to the Collateral (as defined in the QLT Security Agreement) pursuant to the Acquisition Agreements, and Arius
Two’s rights and obligations under the New License are assigned to an Arius Two Assignee. 
 2. Transfer of Acquired Assets to Arius and Termination
of New License. BDSI, Arius and Arius Two hereby agree and acknowledge that upon the termination of the security interest created in favor of QLT under the Acquisition Agreements (i) the New License shall automatically terminate and
(ii) simultaneously therewith, Arius Two shall assign and transfer all of its right, title and interest in and to the Acquired Assets to Arius and to the extent any such Acquired Assets are not already subject to a security interest in favor of
CDC pursuant to the Security Agreement, such Acquired Assets shall automatically, and without the need for further action on the part of any person or entity, become subject to the security interests (and other provisions) in favor of CDC under the
Security Agreement. 
 3. Arius Two as a Party to the CDC License Agreement. Each of BDSI, Arius, Arius Two and CDC hereby agree and acknowledge that
by executing this Letter Agreement, Arius Two shall, subject to the terms of the Acquisition Agreements, become a party to the CDC License and included as part of the definition of the “Company”, together with BDSI and Arius. From and
after the date hereof, Arius Two hereby agrees and acknowledges that, subject to the terms of the Acquisition Agreements, it (i) shall, in addition to BDSI and Arius, be responsible for all of duties and obligations of the “Company”
under the CDC License and (ii) shall otherwise be bound by the terms of the CDC License as part of the “Company”. For purposes of clarity, it is hereby agreed and acknowledged that the New License and the Acquisition Agreements (and
all documents entered into in connection therewith) shall be considered “Company Agreements” under the CDC License, provided that, upon assignment of Arius Two’s rights and obligations under the New License to any Arius Two Assignee,
the New License shall no longer be deemed a “Company Agreement” with respect to Arius Two, but shall still be considered a “Company Agreement” with respect to Arius under the CDC License. 
 4. Payment of CDC Costs and Expenses. BDSI hereby agrees to reimburse CDC for any and all reasonable costs and expenses incurred by, or on behalf of, CDC or its
affiliates (including, without limitation, all legal fees and expenses) related to CDC’s review, negotiation and execution of the CDC Consents and all documents related thereto, provided that, notwithstanding the foregoing, BDSI shall not in
any event be required to reimburse CDC in excess of $25,000 in total for any legal fees and expenses due pursuant to the foregoing or with respect to any outstanding reimbursement obligations BDSI may have under any other prior written agreements
between BDSI and CDC for legal fees and expenses incurred by CDC prior to the date of this letter. Subject to the presentation of reasonably detailed invoices describing the legal services rendered and fees to be reimbursed, such amounts shall be
paid by BDSI to CDC by wire transfer of immediately available funds to an account designated by CDC at the time of the closing of the transactions contemplated herein. 

 5. Further Assurances. Upon the request of CDC, each of BDSI, Arius and Arius Two hereby agree to execute and
deliver any and all additional instruments and documents and take such other future actions as may be necessary or reasonably requested by CDC to document and consummate the agreements and understandings described in, or otherwise in connection
with, this Letter Agreement. 
 6. Miscellaneous Provisions. This Letter Agreement will be governed by and interpreted in accordance with the internal
laws of the State of New York, without regard to its conflicts of laws rules. To the extent that the CDC License or New License (or any other agreements entered into by CDC and one or more of BDSI, Arius or Arius Two in connection therewith) are
varied by this Letter Agreement, such variations shall be deemed to be lawfully made amendments to such agreements and to the extent there is a conflict between this Letter Agreement and such other agreements, the terms of this Letter Agreement
shall control. Except as modified by this Letter Agreement, the CDC License and the New License (and any other agreements entered into by CDC and one or more of BDSI, Arius or Arius Two in connection therewith), such other agreements shall remain
unchanged and in full force and effect. This Letter Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. The rights and obligations of each party to this Letter Agreement may not
be assigned or delegated by BDSI, Arius or Arius Two without the prior written consent of CDC. This Letter Agreement may be executed in two or more counterparts, each of which will be deemed an original, but all of which taken together will
constitute one and the same document. For the purposes hereof, a facsimile copy of this Letter Agreement, including the signature pages hereto, will be deemed an original. 
 [No Further Text on This Page] 

 Please indicate your agreement to the provisions of this Letter Agreement by having a duly authorized
officer of each of BDSI, Arius and Arius Two execute this Letter Agreement and then return an executed copy to my attention at the address provided above. 
  

			
	Very truly yours,
	
	CDC IV, LLC
		
	By:	 	 /s/ David Ramsey

	Name:	 	David Ramsey
	Title:	 	Partner

  

			
	AGREED TO AND ACCEPTED AS
	OF THE DATE FIRST SET FORTH ABOVE.
	
	ARIUS PHARMACEUTICALS, INC.
		
	By:	 	 /s/ Mark A. Sirgo

	Name:	 	 Mark A. Sirgo

	Title:	 	 President

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

	Name:	 	 Mark A. Sirgo

	Title:	 	 President & CEO

	
	ARIUS TWO, INC.
		
	By:	 	 /s/ Mark A. Sirgo

	Name:	 	 Mark A. Sirgo

	Title:	 	 President

 SIGNATURE PAGE TO LETTER AGREEMENT

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