Exhibit 10.1

CONFIDENTIAL TREATMENT REQUESTED

WITH RESPECT TO CERTAIN PORTIONS HEREOF

DENOTED WITH “***”

INTELLECTUAL PROPERTY ASSIGNMENT

AGREEMENT

between

QLT USA, INC.

AND

ARIUS TWO, INC.

TABLE OF CONTENTS

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Exhibit 10.1

CONFIDENTIAL TREATMENT REQUESTED

WITH RESPECT TO CERTAIN PORTIONS HEREOF

DENOTED WITH “***”

INTELLECTUAL PROPERTY ASSIGNMENT

AGREEMENT

This Intellectual Property Assignment Agreement (the “Agreement“) is made as of August 2, 2006 (the “Effective Date“) by and between QLT USA, Inc. (formerly Atrix Laboratories, Inc.), a Delaware corporation with its principal office at 2579 Midpoint Drive, Fort Collins, CO 80525-4417 (“Seller“), and Arius Two, Inc., a Delaware corporation with a mailing address at P.O. Box 14601, Research Triangle Park, NC 27709 (“Buyer“). Seller and Buyer are sometimes referred to collectively herein as the “Parties” or singly as a “Party.”

R E C I T A L S

WHEREAS, Seller and Arius Pharmaceuticals, Inc. (“Arius”) entered into that certain License Agreement dated May 27, 2004, as subsequently amended by that certain Consent and Amendment Agreement between Arius, Seller, and CDC IV, LLC (“CDC“), as assignee of Clinical Development Capital LLC, dated July 14, 2005, and that certain letter agreement between Seller and Arius executed July 14, 2005 (such License Agreement, as amended July 14, 2005, the “License Agreement“); and

WHEREAS , Seller has agreed to sell to Buyer, and Buyer has agreed to purchase from Seller the BEMA assets related specifically to the European Union.

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:

“ 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.

“ Applicable Laws ” means all applicable laws, rules, regulations and guidelines that may apply to the performance of either Party’s obligations under this Agreement.

“ Assumed Liabilities ” means all obligations and liabilities arising out of Buyer’s ownership of the Purchased Assets, whether arising prior to or after the Effective Date; except for such obligations and liabilities for which Seller is obligated to indemnify Buyer under Section 3.03 of this Agreement.

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential

treatment are being requested are denoted with “***”.

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

“ BEMA Know-How ” means the BEMA Know-How, as defined in the License Agreement, excluding the Ex-US BEMA Know-How.

“ BEMA Technology ” means the BEMA Technology, as defined in the License Agreement, excluding the Ex-US BEMA Technology.

“ Books and Records ” means the Books and Records, as defined in the License Agreement, excluding the Ex-US Books and Records.

“ Claims ” shall mean and include all past, present and future disputes, claims, controversies, demands, rights, obligations, liabilities, actions and causes of action of every kind and nature.

“ Combination Product ” means a Worldwide Product (as defined below) that is sold together with any other products and/or services 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 Worldwide Product).

“ 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, all governmental entities, foreign or domestic, 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 by or available to the public;

(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;

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(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 assign to Buyer as provided for herein without violating the terms of any agreement or other arrangement with any Third Party.

“ Encumbrance ” means any lien, pledge, hypothecation, mortgage, security interest, encumbrance, equitable interest, preference, right of possession, lease, tenancy, license, proxy, covenant, order, option, right of first refusal or preemptive right, whether arising out of an obligation to pay any taxes or otherwise.

“ Ex-US BEMA Know-How ” means all Know-How related to BEMA or any Product which is under the Control of Seller as of the Effective Date and is used or useable solely in the Ex-US Territory, 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 to the extent used or useable solely in the Ex-US Territory, all as of the Effective Date, excluding the Ex-US BEMA Patent Rights.

“ Ex-US BEMA Marks ” means all right, title, and interest in the Ex-US Territory to “BEMA” or any additional trademarks or service marks owned by Seller with respect to the Ex-US 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, including but not limited to any and all such rights in the Ex-US Territory existing solely under common law, statute, or similar bases not requiring explicit government notice or registration.

“ Ex-US BEMA Patent Rights ” means all Patent Rights in the Ex-US Territory claiming BEMA or any Improvement, or which are necessary, useful, or appropriate to develop, manufacture, or commercialize Products in the Ex-US Territory, and under the Control of Seller as of the Effective Date, which shall include but not be limited to the patents and patent applications listed on Exhibit A .

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

“ Ex-US Books and Records ” means, in whatever media, any and all books and records, reports and accounts and data in connection with or related to any Ex-US Product, Ex-US BEMA Technology, or Ex-US BEMA Marks, or any research, development, or other activities primarily related to the foregoing (including but not limited to those related to filing, prosecution, and/or maintenance of the Ex-US BEMA Patent Rights), to the extent, with respect to each of the foregoing, they are solely related to the Ex-US Territory.

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“ Ex-US Patent Term ” means, on a Ex-US Product-by-Ex-US Product basis, the period of time ending on the expiration of the last to expire of the Ex-US BEMA Patent Rights covering such Ex-US Product in the Ex-US Territory.

“ Ex-US Product ” means individually and collectively any product which would infringe one or more valid claims of the Ex-US BEMA Patent Rights.

“ Ex-US Territory ” means all countries and jurisdictions in the world other than the United States.

“ 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.

“ 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.

“ 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.

“ Guaranty ” means that certain Guaranty to be executed by BioDelivery Sciences International, Inc. (“BDSI”), owner of all of the outstanding capital stock of Buyer, in the form attached hereto as Exhibit B .

“ Improvement ” means any and all developments, inventions or discoveries directly relating to the Ex-US BEMA Technology developed or acquired by, or under the Control of, a Party at any time prior to or following the Effective Date and shall include, but not be limited to, such developments intended to enhance the safety and/or efficacy of any Product.

“ 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 a Product on the market in a particular jurisdiction.

“ Marks ” means the Marks, as defined in the License Agreement, excluding the Ex-US BEMA Marks.

“ Net Sales ” means the gross amounts invoiced by Buyer, its Affiliates or sublicensees for sales of the Worldwide Product by Buyer, its Affiliates, or its sublicensees, as applicable, to a Third Party in a bona fide arm’s length transaction, less the following items: *** Net Sales shall not include any sales or transfers of Worldwide Products by Buyer or its Affiliates to Affiliates or sublicensees pursuant to manufacturing or distribution agreements where such Affiliate or sublicensee will ultimately sell such Worldwide Product and such amounts received in connection with sale will be included in Net Sales.

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A Worldwide 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 Buyer transfers Worldwide Product to a Third Party 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, the Net Sales price for such Worldwide Product shall be deemed to be the standard invoice price then being invoiced by Buyer in an arms length transaction with similar customers. The Net Sales of a Combination Product shall be calculated as if the invoiced sales price for a Product included within the Combination Product is *** . In the event that Buyer includes a Worldwide Product as part of a single bundled sale of separate products with separately stated prices, the Net Sales attributable to such Worldwide Product shall be the higher of *** .

“ Patent and Trademark Assignment Agreement ” means the Patent and Trademark Assignment Agreement executed by Seller in the form attached hereto as Exhibit C .

“ Patent and Trademark Security Agreement ” means that certain Patent and Trademark Security Agreement between Buyer and Seller in the form attached hereto as Exhibit D .

“ 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.

“ 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.

“ Product ” means a Product, as defined in the License Agreement, excluding an Ex-US Product.

“ Purchased Assets ” means the Ex-US BEMA Marks, Ex-US BEMA Technology, Ex-US Books and Records, and any and all benefits, privileges, causes of action, and remedies relating to the Ex-US BEMA Technology and the Ex-US BEMA Marks, whether before or hereafter accrued, including, without limitation, all rights in, to and under applications for, filings, registrations or renewals, and rights to apply for, file, register, maintain, extend or renew any of the foregoing and the right to bring actions for past, present or future infringement of or otherwise enforce any of the foregoing and to settle and retain the proceeds of such actions (including, without limitation, all causes of actions relating to the Ex-US BEMA Technology and the Ex-US BEMA Marks, claims and demands or other rights accruing with respect to the Ex-US BEMA Technology and the Ex-US BEMA Marks, or arising from any infringement of the Ex-US BEMA Technology and the Ex-US BEMA Marks, before or after the Effective Date), and any and all other rights corresponding thereto throughout the world.

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***CONFIDENTIAL TREATMENT REQUESTED***

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“ Secured Promissory Note ” means that certain secured promissory note made by Buyer in favor of Seller in the form attached hereto as Exhibit E , the terms and conditions of which are incorporated herein by reference.

“ Security Agreement ” means that certain Security Agreement between Buyer and Seller in the form attached hereto as Exhibit F .

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

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

“ US Assets ” means (i) the Marks, and all BEMA Technology and Books and Records Controlled by Seller and (ii) the License Agreement, as amended by the Second Amendment, and any subsequent amendments thereto executed by Arius and Seller.

“ Worldwide Product ” means, collectively, all Ex-US Products and Products.

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

Section 1.03 No Amendment to License Definitions . The definition of certain terms above which are also separately defined above shall not in any way alter, amend, or be used to interpret the definitions established under the License Agreement.

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ARTICLE II

PURCHASE, SALE, ASSIGNMENT, LICENSE, AND OPTION

Section 2.01 Purchase and Sales . Subject to the terms and conditions set forth in this Agreement, effective on the Effective Date, Seller hereby conveys, assigns, and transfers to Buyer, and Buyer hereby acquires from Seller, for the Purchase Price, free and clear of all Encumbrances, the Purchased Assets and shall assume, pay, discharge, and perform all Assumed Liabilities. For a period of three months following the Effective Date, Seller will cooperate with Buyer, as reasonably requested by Buyer and at Buyer’s expense, which expense shall be commercially reasonable and documented, in effecting the transfer of the Ex-US BEMA Marks to Buyer and enabling Buyer to file registrations, applications therefor, or equivalent formal legal recognition of, or rights with respect to, the Ex-US BEMA Marks in Buyer’s name in the Ex-US Territory, and Buyer shall own all right, title, and interest thereto in the Ex-US Territory.

Section 2.02 Know-How License . Seller hereby grants to Buyer an exclusive, perpetual, royalty-free, fully-paid license in the Ex-US Territory, with rights of sublicense, under and to the BEMA Know-How and Improvements (to the extent not claimed in any Ex-US BEMA Patent Rights) made, obtained, or Controlled by Seller and Books and Records to use, develop, market, advertise, promote, distribute, offer for sale, sell, export and import, manufacture, and have manufactured Ex-US Products, provided that following the expiration of the Ex-US Patent Term, such license shall be non-exclusive, fully-paid, perpetual, and royalty-free.

Section 2.03 Consideration . As consideration for the Purchased Assets, Buyer shall pay to Seller total consideration of $3,000,000 (the “Purchase Price“). The Purchase Price shall be payable as follows:

(a) $1,000,000 (the “Closing Cash Payment“), by wire transfer of immediately available funds on the Effective Date to an account designated by Seller; and

(b) $2,000,000, as evidenced by and subject to the Secured Promissory Note, to Seller as follows:

(i) $1,000,000 upon March 31, 2007; and

(ii) $1,000,000, within ten (10) business days after the initial Governmental Approval in the Ex-US Territory of the first Ex-US Product.

For the avoidance of doubt, (x) the payments referred to in this Section 2.03(b) shall be paid only once by Buyer and (y) the payment required by Section 2.03(b)(ii) shall only be become due and payable at such time as the event described in such Section has occurred.

Section 2.04 Amendment of License Agreement . Buyer and Seller agree that the License Agreement shall be amended pursuant to that certain Second Amendment Agreement, to be executed by Arius and Seller on the Effective Date, in the form attached hereto as Exhibit G (the “Second Amendment Agreement”).

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Section 2.05 Option. Buyer shall have the option (the “US Option”), for a period of twelve (12) months (the “Option Period”) following the Effective Date, to purchase the US Assets, free and clear of all Claims and Encumbrances, for a total purchase price of $7,000,000, payable as follows:

***

***. Buyer may exercise the US Option by providing written notice to Seller within twelve months of the Effective Date. Upon such notice, the Parties shall enter into good faith negotiations to enter into definitive agreements governing the sale and purchase of US Assets as soon as reasonably possible; provided, however, that if the Parties have not consummated the purchase of the US Assets within *** after the end of the Option Period, the US Option shall expire and be of no further force and effect. The terms and conditions of such acquisition shall include the economic provisions described above and otherwise be substantially similar to the terms and conditions described in this Agreement and its relevant exhibits. During the Option Period, and, if the US Option is exercised, any time preceding the purchase and sale of the US Assets, Seller shall not sell, license, assign, or otherwise transfer any of the US Assets and shall not voluntarily subject any of the US Assets to any Encumbrance.

Section 2.06 Expenses . The Parties shall each bear their own costs and expenses (including attorneys’ fees) incurred in connection with the negotiation and preparation of this Agreement and consummation of the transactions contemplated hereby. Buyer shall pay all documented costs associated with the perfection and recordal of the documents related to the assignment of the Purchased Assets.

ARTICLE III

PATENT INFRINGEMENT

Section 3.01 Infringement Claimed by Third Parties . In the event a Third Party commences a judicial or administrative proceeding against a Party and such proceeding pertains to the Ex-US BEMA Patent Rights or Ex-US BEMA Marks (the “Third Party Claim”), or threatens to commence such a Third Party Claim, the Party against whom such proceeding is threatened or commenced shall give prompt notice to the other Party. Buyer shall, using its choice of counsel and at its own cost and expense, defend any and all such Third Party Claims or proceedings with respect to any of the Purchased Assets or the licensing of rights thereto by Seller to Arius, and Seller shall, at Buyer’ cost and expense, provide such assistance and cooperation to Buyer as may be reasonably requested by Buyer to defend any such Third Party Claims. The above notwithstanding, without Seller’s prior written consent, which shall not be unreasonably withheld, Buyer may only settle any such claim so long as the terms of such settlement do not (a) impair Seller’s rights hereunder, or (b) impose any costs directly or indirectly on Seller.

Section 3.02 Indemnification of Seller . Buyer shall indemnify and hold Seller, its Affiliates, and their respective employees, directors and officers, harmless from and against any liabilities or obligations, damages, losses, claims, encumbrances, costs or expenses (including attorneys’ fees) (any or all of the foregoing herein referred to as “Loss“) insofar as a Loss or

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actions in respect thereof occurs subsequent to the Effective Date and arises out of or is based upon (a) any claims that the use, marketing, sale, promotion, distribution, manufacture, shipment or sale of an Ex-US Product infringes the patent, including any willful infringement by Buyer, its Sublicensees or Affiliates, trademark or proprietary right or any other published intellectual property right of a Third Party; (b) Buyer’s or its sublicensees’ manufacture, development, marketing, use, handling, storage, sale, distribution or promotion of the Ex-US Product or any demonstration samples; (c) any product liability claim that is brought against Seller by any Third Party arising out of or related to any Ex-US Product; (d) Buyer’s prosecution of a Third Party infringement claim, (e) any Third Party Claim arising out of or related to the Purchased Assets; or (f) Buyer’s breach of its representations, warranties or covenants set forth in this Agreement; provided, however, Buyer shall not be required to indemnify Seller for any Claim for which Seller is obligated to indemnify Buyer under Section 3.03.

Section 3.03 Indemnification of Buyer. Seller shall indemnify and hold Buyer, its Affiliates, and their respective employees, directors, officers, and licensees harmless from and against any Losses insofar as a Loss or actions in respect thereof arises out of or is based upon Seller’s breach of any of its representations, warranties, or covenants set forth in this Agreement.

Section 3.04 Payment of Costs and Expenses . Upon the indemnifying party’s (the “Indemnifying Party”) receipt of a reasonably detailed invoice setting forth the reasonable, documented costs and expenses incurred by the indemnified party (the “Indemnified Party”) with respect to matters for which the Indemnifying Party is obligated to reimburse or indemnify the Indemnified Party pursuant to Section 3.01, 3.02, or 3.03, the Indemnifying Party shall pay such costs and expenses within 30 days.

Section 3.05 Termination of Obligations . Upon the assignment or sale of the Purchased Assets to Seller, an Affiliate thereof, or any Third Party as a result of Seller’s exercise of its rights under the Security Agreement or Patent and Trademark Security Agreement, Buyer shall have no further obligations under Sections 3.01 and 3.02 solely with respect to any Third Party Claims or Losses that arise out of, or are caused by, the use of the Purchased Assets by Seller, its Affiliates or any Third Party assigned the Purchased Assets as a result of the exercise of Seller’s rights under the Security Agreement or Patent and Trademark Security Agreement, any assignee of any of the foregoing, or licensees of any of the foregoing after the date of such assignment or sale.

ARTICLE IV

CONFIDENTIALITY

Section 4.01 Confidentiality . For a period of three (3) years after the Effective Date, each Party shall maintain all Confidential Information of the other Party as confidential and shall not disclose any such Confidential Information to any Third Party or use any such Confidential Information for any purpose, except (a) as expressly authorized by this Agreement, (b) as required by law, rule, regulation or court order (provided that the disclosing Party shall first notify the other Party, shall use Commercially Reasonable Efforts to obtain confidential treatment of any such information required to be disclosed, and shall disclose only the minimum information required to be disclosed in order to comply), or (c) to its Affiliates, sublicensees,

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employees, agents, consultants and other representatives to accomplish the purposes of this Agreement, so long as such persons are under an obligation of confidentiality no less stringent than as set forth herein, provided that information concerning any of the Purchased Assets (or rights licensed under Section 2.02) shall be deemed the Confidential Information of Buyer solely with respect to the Ex-US Territory. Each Party may use such Confidential Information only to the extent required to accomplish the purposes of this Agreement. Each Party shall use at least the same standard of care as it uses to protect its own Confidential Information (but not less than a reasonable standard of care) to ensure that its Affiliates, employees, agents, consultants and other representatives do not disclose or make any unauthorized use of the other Party’s Confidential Information. Each Party shall promptly notify the other Party upon discovery of any unauthorized use or disclosure of the other Party’s Confidential Information.

Section 4.02 Disclosure of Agreement . Neither Party shall release to any Third Party or publish in any way any non-public information with respect to the terms of this Agreement without the prior written consent of the other Party, which consent shall not be unreasonably withheld. Notwithstanding the foregoing a Party may disclose the terms of this Agreement to potential investors, lenders, investment bankers and other financial institutions of its choice solely for purposes of financing the business operations of such Party, or, in the case of Buyer, to any prospective or actual sublicensee, manufacturer, marketing or other corporate partner, acquirer, acquisition target, or existing investor or lender of a Party or any Affiliate thereof, including but not limited to Meda AB, CDC, and Laurus Master Fund, Ltd. (or any affiliate thereof); provided such Party only discloses such information under conditions of confidentiality on terms substantially similar to those contained in this Article IV. Nothing contained in this paragraph shall prohibit either Party from filing this Agreement as required by the rules and regulations of the Securities and Exchange Commission, national securities exchanges (including those located in countries outside of the United States) or the Nasdaq Stock Market; provided the disclosing Party discloses only the minimum information required to be disclosed in order to comply with such requirements, including requesting confidential treatment of this Agreement (after consultation with the other Party) and filing this Agreement in redacted form.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

Section 5.01 Corporate Power . As of the Effective Date, each Party hereby represents and warrants that such Party is duly organized and validly existing and in good standing under the laws of the jurisdiction of its incorporation and has full power and authority to enter into this Agreement and the transactions contemplated hereby and to carry out the provisions hereof.

Section 5.02 Due Authorization . As of the Effective Date, each Party hereby represents and warrants that such Party is duly authorized to execute and deliver this Agreement and to perform its obligations hereunder.

Section 5.03 Binding Obligation . As of the Effective Date, each Party hereby represents and warrants that this Agreement is a legal and valid obligation binding upon it and is enforceable in accordance with its terms, except that the enforcement of the rights and remedies created hereby is subject to bankruptcy, insolvency, reorganization and similar laws of general

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application affecting the rights and remedies of creditors and that the availability of the remedy of specific performance or of injunctive relief is subject to the discretion of the court before which any proceeding therefor may be brought. As of the Effective Date, the execution, delivery and performance of this Agreement by such Party (a) does not conflict with or violate (with or without notice, passage of time, or both) (i) any agreement, instrument or understanding, oral or written, to which it is a party or by which it may be bound, (ii) any provision of its certificate of incorporation, bylaws, or other governance documents or any resolution adopted by such Party’s Board of Directors or stockholders, or (iii) any law, regulation, order or requirement of any court, governmental body or administrative or other agency having authority over it and (b) will not result in the imposition or creation of any Encumbrance upon or with respect to any of the Purchased Assets, except as contemplated by this Agreement. Seller represents and warrants that, to its knowledge, it will not be required to make any filing with, give notice to, or obtain any consent or approval from any person, entity, or governmental body or other agency in connection with the execution and delivery of this Agreement or other agreements and documents that are referenced herein or attached hereto as exhibit or the consummation of the transactions contemplated hereby and thereby, which if not obtained or made could reasonably be expected to have a material adverse effect on the transactions contemplated by this Agreement.

Section 5.04 Ownership of Purchased Assets. As of the Effective Date, Seller represents and warrants that it is the sole owner of all right, title and interest in and to the Purchased Assets, free and clear of all Encumbrances.

Section 5.05 Patent Proceedings . As of the Effective Date, Seller represents and warrants that to Seller’s actual knowledge, without having made an investigation or search, (a) no patent or patent application within the Ex-US BEMA Patent Rights or BEMA Patent Rights is the subject of any pending interference, opposition, cancellation or other protest proceeding, (b) except with respect to matters previously disclosed to Seller by Buyer or its Affiliates, there is no claim pending, previously made, or threatened alleging that the Ex-US BEMA Technology and the BEMA Technology, or the use, manufacture, sale, or importation of technology or products embodying the BEMA Technology or Ex-US BEMA Technology, infringes or misappropriates any copyright, patent, trade secret, trademark, or other published intellectual property right of any third party, (c) except with respect to matters previously disclosed to Seller by Buyer or its Affiliates, and except that for purposes of this Section 5.05(c) only, Seller’s actual knowledge shall mean the actual knowledge, without having made an investigation or search, of Michael R. Duncan and Sean F. Moriarty, no prior use, manufacture, sale, or importation of the Ex-US BEMA Technology, BEMA Technology, or any technology or products embodying the foregoing by Seller, its Affiliates, or their Third Party licensees (excluding Seller’s grant of licenses under the License Agreement) constituted infringement or misappropriation of any copyright, patent, trade secret, trademark, or other published intellectual property right of any Third Party, (d) all filings, payments, and other actions required to be made or taken to maintain such item of the Ex-US BEMA Patent Rights in full force and effect have been made by the applicable deadline, and (e) that it has complied, in all material respects, with its obligations under the License Agreement.

Section 5.06 Legal Proceedings . Except as noted below, as of the Effective Date, each Party hereby represents and warrants to the other Party that there is no action, suit or proceeding

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pending against or affecting, or, to the knowledge of either Party, threatened against or affecting that Party, or any of its assets, before any court or arbitrator or any governmental body, agency or official that would, if decided against either Party that would have a material adverse effect on that Party’s ability to consummate the transactions contemplated by this Agreement. Buyer acknowledges that Seller is currently engaged in litigation related to its product containing leuprolide acetate in the Atrigel ^® deliver system, the outcome of which, and the effect on Seller, cannot presently be determined.

Section 5.07 Limitation on Warranties . Except as expressly set forth in this Agreement, nothing herein shall be construed as a representation or warranty by Seller to Buyer that the Ex-US BEMA Technology or BEMA Technology is not infringed by any Third Party, or that the practice of such rights does not infringe any published intellectual property rights of any Third Party. Neither Party makes any warranties, express or implied, concerning the commercial utility of the Product.

Section 5.08 Limitation of Liability . NEITHER PARTY SHALL BE ENTITLED TO RECOVER FROM THE OTHER PARTY ANY SPECIAL, EXEMPLARY OR PUNITIVE DAMAGES (AS SUCH TERMS ARE DEFINED IN BLACK’S LAW DICTIONARY, SIXTH EDITION) IN CONNECTION WITH THIS AGREEMENT.

ARTICLE VI

COVENANTS

Section 6.01 Access to Books and Records . Upon five days prior written notice from Seller, Buyer shall permit Seller or its representatives (which representatives shall be subject to the confidentiality provisions of the Agreement) to inspect those books and records (including but not limited to financial records) as Seller deems necessary to ensure Buyer’s compliance with Section 6.02 of this Agreement.

Section 6.02 Commercially Reasonable Efforts . Buyer agrees to use Commercially Reasonable Efforts to pursue Governmental Approval of the Ex-US Product under Section 2.03(b)(ii) of this Agreement. Buyer shall promptly advise Seller of any issues that materially and adversely affect its ability to pursue Governmental Approval of the Ex-US Product in accordance with Section 2.03(b)(ii).

Section 6.03 Compliance . Buyer covenants and agrees that it shall comply, in all material respects, with all Applicable Laws affecting the use, possession, distribution, advertising and promotion in connection with the sale and distribution of the Ex-US Products and any demonstration samples. Buyer’s obligations under this Section 6.03 shall terminate upon Buyer’s payment in full of all amounts due under the Secured Promissory Note.

Section 6.04 Further Actions . Upon the terms and subject to the conditions hereof, each of the Parties hereto shall use its Commercially Reasonable Efforts to (a) take, or cause to be taken, all appropriate action and do, or cause to be done, all things necessary, proper or advisable under Applicable Law or otherwise to consummate and make effective the transactions contemplated by this Agreement, (b) obtain from Competent Authorities any consents, licenses,

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***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential

treatment are being requested are denoted with “***”.

permits, waivers, approvals, authorizations or orders required to be obtained or made by the Parties in connection with the authorization, execution and delivery of this Agreement and the consummation of the transactions contemplated by this Agreement and (c) make all necessary filings, and thereafter make any other required submissions, with respect to this transaction under Applicable Law. The Parties hereto shall cooperate with each other in connection with the making of all such filings, including by providing copies of all such documents to the other Party’s counsel (subject to appropriate confidentiality restrictions) prior to filing and, if requested, by accepting all reasonable additions, deletions or changes suggested in connection therewith. Seller covenants that (i) in the event any Know-How or Patent Rights related to BEMA in the Ex-US Territory come under its Control following the Effective Date, (1) it shall immediately notify Buyer and provide to Buyer all written information related thereto and (2) subject to Buyer reimbursing Seller for any costs incurred by Seller following the Effective Date in obtaining such rights, such Know-How and Patent Rights shall be deemed Purchased Assets for purposes of this Agreement and immediately assigned, free and clear of all liens, claims, and encumbrances (except with respect to such liens, claims or encumbrances existing on the date Seller obtained such rights), to Buyer, or if they cannot be so assigned, included in the license granted in Section 2.02, and (ii) if Seller becomes aware of any Know-How or Patent Rights related to BEMA to which it has rights in the Ex-US Territory under the Pliva Agreement, Pfizer Agreement, or any other agreement, Seller shall (1) immediately notify Buyer in writing and provide to Buyer all written information related thereto and (2) use Commercially Reasonable Efforts, as requested by Buyer, an at Buyer’s expense, which expense shall be commercially reasonable and documented, to obtain Control of such Know-How or Patent Rights for purposes of assigning all right, title, and interest thereto to Buyer consistent with the foregoing, or if not so assignable, including in the license granted under Section 2.02.

ARTICLE VII

DELIVERIES

Section 7.01 Deliveries By Seller. On the Effective Date, Seller shall deliver, or cause to be delivered, the following items, duly executed by Seller, as applicable:

(a) the Patent and Trademark Assignment Agreement;

(b) the Second Amendment Agreement;

(c) all Ex-US Books and Records (which shall include but not be limited to those related to filing, prosecution, and/or maintenance of the Ex-US BEMA Patent Rights) and any actual filings or correspondence with any patent or trademark offices or agencies outside in the Ex-US Territory; provided, however, that Seller shall be permitted to retain copies of the same for its internal records; and

(d) any other documents necessary to properly record the assignment to Buyer of all of Seller’s right, title and interest in and to the Purchased Assets.

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***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential

treatment are being requested are denoted with “***”.

Section 7.02 Deliveries By Buyer . On the Effective Date, Buyer shall deliver the following items, duly executed by Buyer:

(a) the Closing Cash Payment;

(b) the Secured Promissory Note;

(c) the Security Agreement;

(d) the Patent and Trademark Security Agreement;

(e) the Guaranty; and

(f) the Second Amendment Agreement, duly executed by Arius.

ARTICLE VIII

MISCELLANEOUS

Section 8.01 Governing Law . This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of New York (as permitted by Section 5-1401 of the New York General Obligations Law), without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of New York to the rights and duties of the Parties.

Section 8.02 Waiver . Except as specifically provided for herein, the waiver from time to time by either of the parties of any of their rights or their failure to exercise any remedy shall not operate or be construed as a continuing waiver of same or of any other of such Party’s rights or remedies provided in this Agreement.

Section 8.03 Severability . In case any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Any provision of this Agreement held invalid or unenforceable in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

Section 8.04 Notices . All notices and other communications provided for herein shall be dated and in writing and shall be deemed to have been duly given (a) on the date of delivery, if delivered personally, by e-mail or by facsimile machine, receipt confirmed, (b) on the following business day, if delivered by a nationally recognized overnight courier service, with receipt acknowledgement requested, or (c) three business days after mailing, if sent by registered or certified mail, return receipt requested, postage prepaid, in each case, to the party to whom it is directed at the following address (or at such other address as any party hereto shall hereafter specify by notice in writing to the other parties hereto):

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Section 8.05 Independent Contractors . It is expressly agreed that the relationship between the two Parties shall not constitute a partnership or agency of any kind. Neither Seller nor Buyer shall have the authority to make any statements, representations or commitments of any kind, or to take any action, which shall be binding on the other Party, without the prior written consent of the other Party.

Section 8.06 Rules of Construction . The Parties hereto agree that they have been represented by counsel during the negotiation and execution of this Agreement and, therefore, waive the application of any law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the Party drafting such agreement or document. Whenever the context hereof shall so require, the singular shall include the plural, the male gender shall include the female gender and neuter, and vice versa.

Section 8.07 Publicity . Subject to Section 4.02, Buyer and Seller shall consult with each other before issuing any press release with respect to this Agreement or the transactions contemplated hereby and neither shall issue any such press release or make any such public statement without the prior consent of the other, which consent shall not be unreasonably

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***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential

treatment are being requested are denoted with “***”.

withheld; provided, however, (a) that a Party may, without the prior consent of the other Party, issue such press release or make such public statement as may upon the advice of counsel be required by law or the rules and regulations of the Nasdaq or any other stock exchange, or (b) if it has used reasonable efforts to consult with the other Party prior thereto, (such consent shall be deemed to have been given if the recipient of the press release or public statement fails to respond to the other Party within 48 hours after the recipient’s receipt of such press release or public statement). No such consent of the other Party shall be required to release information which has previously been made public.

Section 8.08 Entire Agreement; Amendment . This Agreement (including the Exhibits attached hereto) sets forth all of the covenants, promises, agreements, warranties, representations, conditions and understandings between the parties hereto with respect to the subject matter hereof and supersedes and terminates all prior agreements and understandings between the Parties. There are no covenants, promises, agreements, warranties, representations conditions or understandings, either oral or written, between the parties other than as set forth herein. No subsequent alteration, amendment, change or addition to this Agreement shall be binding upon the Parties hereto unless reduced to writing and signed by the respective authorized officers of the Parties.

Section 8.09 Headings . The captions contained in this Agreement are not a part of this Agreement, but are merely guides or labels to assist in locating and reading the several Articles hereof.

Section 8.10 Waiver of Jury Trial . THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT.

Section 8.11 Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Signatures to this Agreement may be transmitted via facsimile and such signatures shall be deemed to be originals.

Section 8.12 Assignment . Neither Party may assign, sell, hypothecate or otherwise transfer any interest in or obligation under this Agreement without the prior written consent of the other Party; provided that, notwithstanding the foregoing, either Party shall be entitled to assign, sell, hypothecate, or transfer its interest in or obligations under this Agreement without such consent (i) to any Affiliate or (ii) in connection with any sale of substantially all of its assets or business (or portion of its assets or business related to the subject matter hereof), merger, acquisition, consolidation, or other similar transaction. Notwithstanding the foregoing, any such assignment shall not relieve the assigning Party of its responsibilities for performance of its obligations under this Agreement.

[Signature page to follow.]

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***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential

treatment are being requested are denoted with “***”.

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed in duplicate by their duly authorized officers as of the Effective Date.

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Exhibit 10.2

CONFIDENTIAL TREATMENT REQUESTED

WITH RESPECT TO CERTAIN PORTIONS HEREOF

DENOTED WITH “***”

SECURED PROMISSORY NOTE

FOR VALUE RECEIVED, the undersigned, Arius Two, Inc., a Delaware corporation (the “Borrower”), HEREBY UNCONDITIONALLY PROMISES TO PAY to the order of QLT USA, Inc., a Delaware corporation (the “Lender”), the principal sum of TWO MILLION UNITED STATES DOLLARS (U.S. $2,000,000), without interest, except as otherwise provided in this Secured Promissory Note (“Note”), as follows.

This Note has been executed and delivered pursuant to, and in accordance with the terms and conditions of, the Intellectual Property Assignment Agreement, dated August 2, 2006, by and between Borrower and Lender (the “Transfer Agreement”) and is subject to the terms and conditions of the Transfer Agreement, which are, by this reference, incorporated herein and made a part hereof. Capitalized terms used in this Note without definition shall have the respective meanings set forth in the Transfer Agreement.

Borrower shall pay the principal amount of this Note in accordance with the terms and conditions set forth in the Transfer Agreement, including, without limitation, the payment schedule set forth in Section 2.03(b) thereof.

In the event that any amount of principal, or any other amount payable hereunder, is not paid in full when due (whether by acceleration or otherwise), the Borrower shall pay interest on such unpaid principal, interest or other amount, from the date such amount becomes due until the date such amount is paid in full, payable on demand, at a rate of *** % per annum; provided that payment of any such interest at such rate shall not constitute a waiver of any Event of Default and shall be without prejudice to the right of the Lender to exercise any of its rights and remedies hereunder. All computations of interest shall be made on the basis of a year of 360 days for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest is payable. In no event shall the Borrower be obligated to pay the Lender interest, charges or fees at a rate in excess of the highest rate permitted by applicable law.

All payments hereunder shall be made in lawful money of the United States of America and in same day or immediately available funds, prior to 1:00 pm (Colorado time), to the Lender, in accordance with the Lender’s payment instructions received by Borrower in writing at least one (1 Business Day in advance of the due date of such payment.

Whenever any payment hereunder shall be stated to be due, or whenever any other date specified hereunder would otherwise occur, on a day other than a Business Day (as

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential

treatment are being requested are denoted with “***”.

defined below), then, except as otherwise provided herein, such payment shall be made, and such interest payment date or other date shall occur, on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest hereunder. As used herein, “Business Day” means a day other than a Saturday or a Sunday on which banks are open for business in the State of Colorado.

The Borrower agrees to make all payments under this Note without setoff or deduction and regardless of any counterclaim or defense, including, without limitation, any deduction or setoff arising out of or in connection with the Transfer Agreement; provided , however , that no payment hereunder shall be deemed to be a waiver of any right or claim that the Borrower may have under the Transfer Agreement. The Borrower represents and warrants to the Lender that there is no claim, defense, counterclaim or set-off which could be asserted by or is available to the Borrower against the Lender.

The Borrower may, at any time and from time to time, prepay the outstanding amount hereof in whole or in part, without premium or penalty.

“Event of Default” shall mean the occurrence or existence of any one or more of the following:

1. The Borrower shall fail to pay when due, as set forth in the Transfer Agreement, any amount of principal or other amount payable hereunder.

2. The Borrower defaults in the performance of, or compliance with, or is in breach of, any term or condition contained in this Note, or defaults in the performance of, or compliance with, or is in breach of any material term or condition contained in, the Collateral Documents (as defined in the Security Agreement), as determined by Lender in its reasonable discretion, or any levy upon, seizure or attachment of any of the Collateral (as defined in the Security Agreement) occurs, and such default is not cured within fifteen (15) days of written notice thereof to Borrower.

3. The Borrower or any other Person shall contest in any manner the validity or enforceability of this Note, the Transfer Agreement or the Collateral Documents, or the Borrower or any other Person shall deny that it has any liability or obligation thereunder; or any of the Collateral Documents for any reason, except to the extent permitted by the terms thereof.

4. The Borrower or BioDelivery Sciences International, Inc., a Delaware corporation and parent of Borrower (“Guarantor”) shall admit in writing its inability to, or shall fail generally or be generally unable to, pay its debts (including its payrolls) as such debts become due, or shall make a general assignment for the benefit of creditors; or the Borrower or Guarantor shall file a voluntary petition in bankruptcy or a petition or answer seeking reorganization, to effect a plan or other arrangement with creditors or any other relief under the Bankruptcy Reform Act of 1978, as amended or recodified from time to time (the “Bankruptcy Code”) or under any other state or federal law relating to bankruptcy or reorganization granting relief to debtors, whether now or hereafter in effect, or shall file an answer admitting the jurisdiction of the court and the material allegations of any involuntary petition filed against the Borrower or Guarantor pursuant to the Bankruptcy Code or any such other state or federal law;

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***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential

treatment are being requested are denoted with “***”.

or the Borrower or Guarantor shall be adjudicated a bankrupt, or shall make an assignment for the benefit of creditors, or shall apply for or consent to the appointment of any custodian, receiver or trustee for all or any substantial part of the Borrower’s or Guarantor’s property, or shall take any action to authorize any of the actions or events set forth above in this subparagraph 4; or an involuntary petition seeking any of the relief specified in this subparagraph 4 shall be filed against the Borrower or Guarantor and shall not be dismissed within 90 days; or any order for relief shall be entered against the Borrower or Guarantor in any involuntary proceeding under the Bankruptcy Code or any such other state or federal law referred to in this subparagraph 4.

5. The Borrower or Guarantor shall (i) liquidate, wind up or dissolve (or suffer any liquidation, wind-up or dissolution), except to the extent expressly permitted by this Note, (ii) suspend its operations other than in the ordinary course of business, or (iii) take any action to authorize any of the actions or events set forth above in this subparagraph 5.

6. Guarantor defaults in the performance of or compliance with or is in breach of any term or condition contained in the Guaranty or any Guaranty or any other document or instrument relating thereto shall for any reason be revoked or invalidated, or otherwise cease to be in full force and effect, or any Guarantor or any other Person shall contest in any manner the validity or enforceability thereof or deny that it has any further liability or obligation thereunder.

7. The Collateral Documents shall cease to create a valid and perfected first priority Lien in any of the Collateral purported to be covered thereby.

If any Event of Default shall occur, the Lender may (i) declare the entire unpaid principal amount of this Note and all other amounts payable hereunder to be forthwith due and payable, whereupon all unpaid principal under this Note and all such other amounts shall become and be forthwith due and payable, without presentment, demand, protest, notice of intent to accelerate, notice of acceleration or other legal requirement of any kind, all of which are hereby expressly waived by the Borrower, provided that upon the occurrence of an actual or deemed entry of an order for relief with respect to the Borrower under the Bankruptcy Code, the result which would otherwise occur only upon giving of notice by the Lender to the Borrower as specified above shall occur automatically, without the giving of any such notice; and (ii) whether or not the actions referred to in clause (i) have been taken, exercise any or all of the Lender’s rights and remedies under the Collateral Documents and any Guaranty, and proceed to enforce all other rights and remedies available to the Lender under applicable law.

No amendment or waiver of any provision of this Note, nor any consent to any departure by the Borrower therefrom, shall in any event be effective unless the same shall be in writing and signed by the Lender and then such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

All notices and other communications provided for hereunder shall, unless otherwise stated herein, be in writing (including by facsimile) and mailed (by certified or registered mail), sent or delivered to the respective parties hereto at or to the following addresses

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***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential

treatment are being requested are denoted with “***”.

or facsimile numbers (or at or to such other address or facsimile number as shall be designated by any party in a written notice to the other parties hereto):

All such notices and communications shall be effective (i) if delivered by hand, sent by certified or registered mail or sent by an overnight courier service, when received; and (ii) if sent by facsimile transmission, when sent.

This Note, the Transfer Agreement and the Collateral Documents reflect the entire agreement between Borrower and Lender with respect to the matters set forth therein and supersede any prior agreements, commitments, drafts, communication, discussions and understandings, oral or written, with respect thereto.

No failure on the part of the Lender to exercise, and no delay in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, remedy, power or privilege preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights and remedies under this Note are cumulative and not exclusive of any rights, remedies, powers and privileges that may otherwise be available to the Lender.

Time is of the essence for the performance of each and every obligation under this Note.

Whenever possible, each provision of this Note shall be interpreted in such manner as to be effective and valid under all applicable laws and regulations. If, however, any provision of this Note shall be prohibited by or invalid under any such law or regulation in any jurisdiction, it shall, as to such jurisdiction, be deemed modified to conform to the minimum requirements of such law or regulation, or, if for any reason it is not deemed so modified, it shall be ineffective and invalid only to the extent of such prohibition or invalidity without affecting the remaining provisions of this Note, or the validity or effectiveness of such provision in any other jurisdiction.

The Borrower agrees to pay on demand all documented costs and expenses of the Lender, and documented fees and disbursements of counsel, in connection with (i) any amendments, modifications or waivers of the terms hereof, (ii) any Default or Event of Default, (iii) the enforcement or attempted enforcement of, and preservation of any rights under, this

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***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential

treatment are being requested are denoted with “***”.

Note, and (iv) any out-of-court workout or other refinancing or restructuring or in any bankruptcy case, including, without limitation, any and all losses, and documented costs and expenses sustained by the Lender as a result of any failure by the Borrower to perform or observe its obligations contained herein. In addition, the Borrower agrees to indemnify the Lender against and hold it harmless from any and all present and future stamp, transfer, documentary and other such taxes, levies, fees, assessments and other charges made by any jurisdiction by reason of the execution, delivery, performance and enforcement of this Note.

This Note shall be binding upon, inure to the benefit of and be enforceable by the Borrower, the Lender and the Lender’s respective successors and assigns.

The Borrower shall not have the right to assign its rights and obligations hereunder or any interest herein or therein, without Lender’s prior written consent. The Lender may sell, assign, transfer or grant participations in all or any portion of the Lender’s rights and obligations hereunder. In the event of any such assignment the assignee shall be deemed the “Lender” for all purposes of this Note and any other documents and instruments relating hereto with respect to the rights and obligations assigned to it. The Borrower agrees that in connection with any such transfer or assignment, the Lender may deliver to the prospective participant or assignee financial statements and other relevant information relating to the Borrower.

This Note is secured by certain collateral (the “Collateral”) more specifically described in the Security Agreement between the Borrower and the Lender of even date herewith, any other agreement pursuant to which the Borrower, any Guarantor or any other Person provides a Lien on its assets in favor of the Lender and all filings, documents and agreements made or delivered pursuant thereto.

THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (AS PERMITTED BY SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW), WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW RULE THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE INTERNAL LAWS OF THE STATE OF NEW YORK TO THE RIGHTS AND DUTIES OF THE PARTIES.

THE BORROWER AND, BY ITS ACCEPTANCE HEREOF, THE LENDER, HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS NOTE.

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***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential

treatment are being requested are denoted with “***”.

IN WITNESS WHEREOF, the Borrower has duly executed this Note, as of the date first above written.

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Exhibit 10.3

SECURITY AGREEMENT

THIS SECURITY AGREEMENT (this “Agreement”), dated as of August 2, 2006, is made between Arius Two, Inc., a Delaware corporation (“Debtor”) and QLT USA, Inc., a Delaware corporation (“Secured Party”).

Debtor and Secured Party hereby agree as follows:

SECTION 1. Definitions; Interpretation .

(a) All capitalized terms used in this Agreement and not otherwise defined herein shall have the meanings assigned to them in the Intellectual Property Assignment Agreement dated August 2, 2006, between Debtor and Secured Party (the “Transfer Agreement”).

(b) As used in this Agreement, the following terms shall have the following meanings:

“ Collateral ” means all of Debtor’s right, title, and interest in and to the Purchased Assets, that certain BEMA License Agreement, entered into of even date herewith, between Debtor and Arius Pharmaceuticals, Inc. (“Arius”), granting Arius certain exclusive rights with respect to the Purchased Assets, that certain First Amendment Agreement, entered into of even date herewith, between Debtor and Arius amending the aforementioned license) and that certain Sublicensing Consent, entered into of even date herewith, between Debtor, Arius and CDC IV, LLC (“CDC”) permitting Arius to grant certain rights to Meda AB (such Sublicensing Consent, together with the BEMA License Agreement, the First Amendment Agreement and any subsequent amendments thereto, the “New License Agreement”), and all products, accounts, contract rights, proceeds and supporting obligations of any and all of the foregoing, whether now owned or hereafter acquired.

“ Collateral Documents ” means collectively this Agreement, the Patent and Trademark Security Agreement, the Loan Documents and all other certificates, documents, agreements and instruments delivered to Secured Party under the Note or in connection with the Obligations.

“ Event of Default ” has the meaning set forth in Section 7.

“ Lien ” means any mortgage, deed of trust, pledge, security interest, assignment, deposit arrangement, charge or encumbrance, lien (statutory or other), or other preferential arrangement (including, without limitation, any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing or any agreement to give any security interest).

“ Loan Documents ” means the Transfer Agreement, the Note and the Guaranty.

“ Note ” means that certain Secured Promissory Note dated August 2, 2006 made by Debtor in favor of Secured Party, as amended, modified, renewed, extended or replaced from time to time.

“ Obligations ” means the indebtedness, liabilities and other obligations of Debtor to Secured Party, created under, arising out of or in connection with the Note or any other Collateral Document, including, without limitation, all unpaid principal of the Note, all interest accrued thereon, all fees and all other amounts payable by Debtor to Secured Party thereunder or in connection therewith, whether now existing or hereafter arising, and whether due or to become due, absolute or contingent, liquidated or unliquidated, determined or undetermined, and including interest that accrues after the commencement by or against Debtor of any bankruptcy or insolvency proceeding naming such Person as the debtor in such proceeding.

“ Permitted Liens ” has the meaning set forth on Exhibit A .

“ Person ” means an individual, corporation, partnership, joint venture, trust, unincorporated organization, governmental agency or authority, or any other entity of whatever nature.

“ UCC ” means the Uniform Commercial Code as the same may, from time to time, be in effect in the State of Delaware.

(c) Where applicable and except as otherwise defined herein, terms used in this Agreement shall have the meanings assigned to them in the UCC.

(d) In this Agreement, (i) the meaning of defined terms shall be equally applicable to both the singular and plural forms of the terms defined; and (ii) the captions and headings are for convenience of reference only and shall not affect the construction of this Agreement.

SECTION 2. Security Interest . As security for the payment and performance of the Obligations, Debtor hereby grants to Secured Party a security interest in the Collateral. This Agreement shall create a continuing security interest in the Collateral which shall remain in effect until terminated in accordance with Section 23 hereof.

SECTION 3. Financing Statements and other Action .

(a) Debtor hereby authorizes Secured Party to file at any time and from time to time any financing statements describing the Collateral, and Debtor shall execute and deliver to Secured Party, and Debtor hereby authorizes Secured Party to file (with or without Debtor’s signature), at any time and from time to time, all amendments to financing statements, assignments, continuation financing statements, termination statements, account control agreements, and other documents and instruments, in form reasonably satisfactory to Secured Party, as Secured Party may reasonably request, to perfect and continue perfected, maintain the priority of or provide notice of the security interest of Secured Party in the Collateral and to accomplish the purposes of this Agreement including, but not limited to, a Patent and Trademark Security Agreement to be filed with the any relevant patent and trademark office or equivalent authority or agency. Without limiting the generality of the foregoing, Debtor ratifies and authorizes the filing by Secured Party of any financing statements filed prior to the date hereof.

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(b) Debtor will not create any chattel paper without placing a legend on the chattel paper acceptable to Secured Party indicating that Secured Party has a security interest in the chattel paper.

SECTION 4. Representations and Warranties . Debtor represents and warrants to Secured Party that:

(a) Debtor is duly organized, validly existing and in good standing under the law of the jurisdiction of its organization and has all requisite power and authority to execute, deliver and perform its obligations under the Collateral Documents.

(b) The execution, delivery and performance by Debtor of the Collateral Documents have been duly authorized by all necessary action of Debtor, and the Collateral Documents constitute the legal, valid and binding obligations of Debtor, enforceable against Debtor in accordance with its terms.

(c) No consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal, state or local governmental authority on the part of Debtor is required in connection with the consummation of the transactions contemplated by this Agreement and the other Collateral Documents. Debtor is not in violation or default of any provision of its Certificate of Incorporation or Bylaws, or in any material respect of any instrument, judgment, order, writ, decree or contract to which it is a party or by which it is bound, or, to its knowledge, of any provision of any federal or state statute, rule or regulation which is applicable to Debtor. The execution, delivery and performance of this Agreement and the other Collateral Documents and the consummation of the transactions contemplated hereby and thereby will not result in any such violation of any provision of Debtor’s Certificate of Incorporation or bylaws, or be in conflict with or constitute, with or without the passage of time and giving of notice, either a default under any such provision, instrument, judgment, order, writ, decree or contract or an event that results in the creation of any lien, charge or encumbrance upon any of the Collateral or the suspension, revocation, impairment, forfeiture or non-renewal of any material permit, license, authorization or approval applicable to Debtor, its business or operations or any of its assets or properties.

(d) All patents and patent applications, trademarks, service marks and trade names (whether registered or unregistered), and applications for registration of such trademarks, service marks and trade names, included in the Collateral as of the Effective Date, are set forth in Schedule 1 .

SECTION 5. Covenants . So long as any of the Obligations remain unsatisfied, Debtor agrees that:

(a) Debtor shall appear in and defend any action, suit or proceeding which may affect to a material extent its title to, or right or interest in, or Secured Party’s right or interest in, the Collateral, and shall do and perform all reasonable acts that may be necessary and appropriate to maintain, preserve and protect the Collateral.

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(b) Debtor shall comply in all material respects with all laws, regulations and ordinances, and all policies of insurance, relating in a material way to the possession, operation, maintenance and control of the Collateral.

(c) Debtor shall give prompt written notice to Secured Party (and in any event not later than 30 days following any change described below in this subsection) of: (i) any change in the location of Debtor’s chief executive office or principal place of business; (ii) any change in its name; (iii) any changes in its identity or structure in any manner which might make any financing statement filed hereunder incorrect or misleading; (iv) any change in its registration as an organization (or any new such registration); or (v) any change in its jurisdiction of organization; provided that Debtor shall not change its jurisdiction of organization to a jurisdiction outside of the United States.

(d) Debtor shall keep the Collateral free of all Liens except Permitted Liens.

(e) Debtor shall pay and discharge all taxes, fees, assessments and governmental charges or levies imposed upon it with respect to the Collateral prior to the date on which penalties attach thereto, except to the extent such taxes, fees, assessments or governmental charges or levies are being contested in good faith by appropriate proceedings.

(f) Debtor shall maintain and preserve its legal existence, its rights to transact business and all other rights, franchises and privileges necessary or desirable in the normal course of its business and operations and the ownership of the Collateral, except in connection with any transactions expressly permitted by the Collateral Documents.

(g) If and when Debtor shall obtain rights to any new patents, trademarks, service marks, trade names, or otherwise acquire or become entitled to the benefit of, or apply for registration of, any of the foregoing, which are based upon or derived from the Collateral, Debtor (i) shall promptly notify Secured Party thereof and (ii) hereby authorizes Secured Party to modify, amend, or supplement Schedule 1 and from time to time to include any of the foregoing and make all necessary or appropriate filings with respect thereto.

SECTION 6. Rights of Secured Party; Authorization; Appointment .

(a) At the request of Secured Party, upon the occurrence and during the continuance of any Event of Default, all remittances received by Debtor with respect to the Collateral shall be held in trust for Secured Party and, in accordance with Secured Party’s instructions, remitted to Secured Party or deposited to an account of Secured Party in the form received (with any necessary endorsements or instruments of assignment or transfer).

(b) At the request of Secured Party, upon the occurrence and during the continuance of any Event of Default, Secured Party shall be entitled to receive all distributions and payments of any nature received by Debtor with respect to any Collateral, and all such distributions or payments received by the Debtor shall be held in trust for Secured Party and, in accordance with Secured Party’s instructions, remitted to Secured Party or deposited to an account designated by Secured Party in the form received (with any necessary endorsements or instruments of assignment or transfer).

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(c) Secured Party shall have the right to, in the name of Debtor, or in the name of Secured Party or otherwise, upon notice to but without the requirement of assent by Debtor, and Debtor hereby constitutes and appoints Secured Party (and any of Secured Party’s officers, employees or agents designated by Secured Party) as Debtor’s true and lawful attorney-in-fact, with full power and authority to: (i) sign and file any of the financing statements and other documents and instruments which must be executed or filed to perfect or continue perfected, maintain the priority of or provide notice of Secured Party’s security interest in the Collateral and (ii) execute any and all such other documents and instruments, and do any and all acts and things for and on behalf of Debtor, which Secured Party may reasonably deem necessary or advisable to maintain, protect, realize upon and preserve the Collateral and Secured Party’s security interest therein and to accomplish the purposes of this Agreement. Secured Party agrees that, except upon and during the continuance of an Event of Default, it shall not exercise the power of attorney, or any rights granted to Secured Party, pursuant to clause (ii). The foregoing power of attorney is coupled with an interest and irrevocable so long as the Obligations have not been paid and performed in full.

SECTION 7. Events of Default . Any of the following events which shall occur and be continuing shall constitute an “Event of Default”:

(a) Any Event of Default under the Note.

(b) Any levy upon, seizure or attachment of any of the Collateral which shall not have been rescinded or withdrawn.

SECTION 8. Remedies .

(a) Upon the occurrence and during the continuance of any Event of Default, Secured Party may declare any of the Obligations to be immediately due and payable and shall have, in addition to all other rights and remedies granted to it in this Agreement, the Note or any other Document, all rights and remedies of a secured party under the UCC and other applicable laws. Without limiting the generality of the foregoing, to the extent permitted by Applicable Law, (i) Secured Party may peaceably and without notice enter any premises of Debtor, take possession of any the Collateral, remove or dispose of all or part of the Collateral on any premises of such Debtor or elsewhere, or, in the case of equipment, render it nonfunctional, and otherwise collect, receive, appropriate and realize upon all or any part of the Collateral, and demand, give receipt for, settle, renew, extend, exchange, compromise, adjust, or sue for all or any part of the Collateral, as Secured Party may determine; (ii) Secured Party may require any Debtor to assemble all or any part of the Collateral and make it available to Secured Party at any place and time designated by Secured Party; (iii) Secured Party may secure the appointment of a receiver of the Collateral or any part thereof (to the extent and in the manner provided by applicable law); (iv) Secured Party may sell, resell, lease, use, assign, license, sublicense, transfer or otherwise dispose of any or all of the Collateral in its then condition or following any commercially reasonable preparation or processing (utilizing in connection therewith any of Debtor’s assets, without charge or liability to Secured Party therefor) at public or private sale, by one or more contracts, in one or more parcels, at the same or different times, for cash or credit, or for future delivery without assumption of any credit risk, all as Secured Party deems advisable; provided, however, that in the event of the exercise by Secured Party of any of its rights under

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this Section 8, any sale or transfer of the Collateral shall be subject to the terms and conditions of the New License Agreement and the New License Agreement shall not be terminated as a result of any such exercise; provided , further, however , that Debtor shall be credited with the net proceeds of sale only when such proceeds are finally collected by Secured Party. Secured Party shall have the right upon any such public sale, and, to the extent permitted by law, upon any such private sale, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption, which right or equity of redemption Debtor hereby releases, to the extent permitted by law. Secured Party shall give Debtor such notice of any private or public sales as may be required by the UCC or other applicable law.

(b) Solely for the purpose of enabling Secured Party to exercise its rights and remedies under this Section 8 or otherwise in connection with this Agreement, Debtor hereby grants to Secured Party an irrevocable, non-exclusive and assignable license (exercisable without payment or royalty or other compensation to Debtor) to use, license or sublicense any intellectual property Collateral, provided that (i) rights under such license shall only be exercised upon an Event of Default and (ii) Secured Party’s rights under this Section 8(b) shall terminate upon termination of this Agreement in accordance with Section 23.

(c) Secured Party shall not have any obligation to clean up or otherwise prepare the Collateral for sale. Secured Party has no obligation to attempt to satisfy the Obligations by collecting them from any other Person liable for them, and Secured Party may release, modify or waive any Collateral provided by any other Person to secure any of the Obligations, all without affecting Secured Party’s rights against Debtor. Debtor waives any right it may have to require Secured Party to pursue any third Person for any of the Obligations. Secured Party may comply with any applicable state or federal law requirements in connection with a disposition of the Collateral and compliance will not be considered adversely to affect the commercial reasonableness of any sale of the Collateral. Secured Party may sell the Collateral without giving any warranties as to the Collateral. Secured Party may specifically disclaim any warranties of title or the like. This procedure will not be considered adversely to affect the commercial reasonableness of any sale of the Collateral. If Secured Party sells any of the Collateral upon credit, Debtor will be credited only with payments actually made by the purchaser, received by Secured Party and applied to the indebtedness of the purchaser. In the event the purchaser fails to pay for the Collateral, Secured Party may resell the Collateral and Debtor shall be credited with the proceeds of the sale.

(d) To the extent Debtor uses the proceeds of any of the Obligations to purchase Collateral, Debtor’s repayment of the Obligations shall apply on a “first-in, first-out” basis so that the portion of the Obligations used to purchase a particular item of Collateral shall be paid in the chronological order the Debtor purchased the Collateral.

(e) The cash proceeds actually received from the sale or other disposition or collection of Collateral, and any other amounts received in respect of the Collateral the application of which is not otherwise provided for herein, shall be applied first , to the payment of the reasonable costs and expenses of Secured Party in exercising or enforcing its rights hereunder and in collecting or attempting to collect any of the Collateral, and to the payment of all other amounts payable to Secured Party pursuant to Section 12 hereof; and second , to the payment of the Obligations. Any surplus thereof which exists after payment and performance in full of the

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Obligations shall be promptly paid over to Debtor or otherwise disposed of in accordance with the UCC or other applicable law. Debtor shall remain liable to Secured Party for any deficiency which exists after any sale or other disposition or collection of Collateral.

(f) If, and solely to the extent, in the exercise of its rights under this Section 8, the Secured Party requests, in its sole discretion, but without any obligation to do so, Debtor to assign all of its right, title and interest in and to the New License Agreement to Secured Party, Secured Party agrees that such assignment shall not result in the termination of Meda’s rights under the New License Agreement as set forth in that certain license and development agreement to be entered into between Guarantor, Arius and Meda (the “Sublicense Agreement”), even if the rights of Arius and CDC are terminated under the New License Agreement (including, without limitation, rendering an exclusive license non-exclusive) with respect to the Fentanyl Product (as defined in the Sublicense Agreement), and Meda shall continue the undisturbed enjoyment of its rights under, and subject to the terms and conditions of (including the right of termination in the event of a default by Meda), the Sublicense Agreement. Meda shall be deemed a third-party beneficiary solely with respect to this Section 8(f) and Secured Party agrees not to revise the terms of this Section 8(f) in a manner adverse to Meda, without Meda’s prior written consent, which consent shall not be unreasonably withheld.

SECTION 9. Certain Waivers . Debtor waives, to the fullest extent permitted by law, (a) any right of redemption with respect to the Collateral, whether before or after sale hereunder, and all rights, if any, of marshalling of the Collateral or other collateral or security for the Obligations; (b) any right to require Secured Party (i) to proceed against any Person, (ii) to exhaust any other collateral or security for any of the Obligations, (iii) to pursue any remedy in Secured Party’s power, or (iv) to make or give any presentments, demands for performance, notices of nonperformance, protests, notices of protests or notices of dishonor in connection with any of the Collateral; and (c) all claims, damages, and demands against Secured Party arising out of the repossession, retention, sale or application of the proceeds of any sale of the Collateral

SECTION 10. Notices . All notices or other communications hereunder shall be in writing (including by facsimile transmission or by email) and mailed, sent or delivered to the respective parties hereto at or to their respective addresses, facsimile numbers or email addresses set forth below their names on the signature pages hereof, or at or to such other address, facsimile number or email address as shall be designated by any party in a written notice to the other parties hereto. All such notices and other communications shall be deemed to be delivered when a record (within the meaning of the UCC) has been (a) delivered by hand; (b) sent by mail upon the earlier of the date of receipt or five business days after deposit in the mail, first class (or air mail as to communications sent to or from the United States); (c) sent by facsimile transmission; or (iv) sent by email. Electronic mail may be used only for routine communications, such as distribution of informational documents or documents for execution by the parties thereto, and may not be used for any other purpose.

SECTION 11. No Waiver; Cumulative Remedies . No failure on the part of Secured Party to exercise, and no delay in exercising, any right, remedy, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, remedy, power or privilege preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights and remedies under this Agreement are cumulative and not exclusive of any rights, remedies, powers and privileges that may otherwise be available to Secured Party.

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SECTION 12. Costs and Expenses; Indemnification .

(a) Debtor agrees to pay on demand: all reasonable, documented costs and expenses of Secured Party, and the fees and disbursements of counsel, in connection with the enforcement or proper attempted enforcement of, and preservation of any rights or interests under, this Agreement and the Note, including in any out-of-court workout or other refinancing or restructuring or in any bankruptcy case, and the protection, sale or collection of, or other realization upon, any of the Collateral, including all reasonable, documented expenses of taking, collecting, holding, sorting, handling, preparing for sale, selling, or the like, and other such expenses of sales and collections of Collateral.

(b) Debtor hereby agrees to indemnify and defend Secured Party, any affiliate thereof, and their respective directors, officers, employees, agents, counsel and other advisors (each an “Indemnified Person”) against, and hold each of them harmless from, any and all liabilities, obligations, losses, claims, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever, including the reasonable fees and disbursements of counsel to an Indemnified Person, which may be imposed on or incurred by any Indemnified Person, or asserted against any Indemnified Person by any third party or by Debtor, in any way relating to or arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement or any agreement or instrument contemplated hereby, the performance by the parties hereto of their respective obligations hereunder or thereunder, the transactions contemplated hereby or the Collateral, or (ii) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by Debtor (the “Indemnified Liabilities”); provided that Debtor shall not be liable to any Indemnified Person for any portion of such Indemnified Liabilities to the extent they are found by a final decision of a court of competent jurisdiction to have resulted from such Indemnified Person’s gross negligence or willful misconduct. If and to the extent that the foregoing indemnification is for any reason held unenforceable, Debtor agrees to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law.

(c) Any amounts payable to Secured Party under this Section 12 or otherwise under this Agreement if not paid upon demand shall bear interest from the date of such demand until paid in full, at the default rate of interest set forth in the Note.

SECTION 13. Binding Effect . This Agreement shall be binding upon, inure to the benefit of and be enforceable by Debtor, Secured Party and their respective successors and assigns and shall bind any Person who becomes bound as a debtor to this Agreement.

SECTION 14. Governing Law . This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of New York (as permitted by Section 5-1401 of the New York General Obligations Law), without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of New York to the rights and duties of the parties, except as required by mandatory

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provisions of law and to the extent the validity or perfection of the security interests hereunder, or the remedies hereunder, in respect of any Collateral are governed by the law of a jurisdiction other than New York.

SECTION 15. Entire Agreement . This Agreement contains the entire agreement of the parties with respect to the subject matter hereof and supersedes any prior agreements, commitments, drafts, communications, discussions and understandings, oral or written, with respect thereto.

SECTION 16. Amendment/Waivers . No amendment or waiver of any provision of this Agreement, nor any consent to any departure by Debtor therefrom, shall in any event be effective unless the same shall be in writing and signed by Secured Party and then such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

SECTION 17. Severability . Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under all applicable laws and regulations. If, however, any provision of this Agreement shall be prohibited by or invalid under any such law or regulation in any jurisdiction, it shall, as to such jurisdiction, be deemed modified to conform to the minimum requirements of such law or regulation, or, if for any reason it is not deemed so modified, it shall be ineffective and invalid only to the extent of such prohibition or invalidity without affecting the remaining provisions of this Agreement, or the validity or effectiveness of such provision in any other jurisdiction.

SECTION 18. Counterparts . This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement. Signatures to this Agreement may be transmitted by facsimile and such signatures shall be deemed to be originals.

SECTION 19. Time is of the Essence . Time is of the essence with respect to every provision of this Agreement.

SECTION 20. No Presumption . The parties acknowledge that each party and its counsel have participated in the negotiation and preparation of this Agreement. This Agreement shall be construed without regard to any presumption or other rule requiring construction against the party causing the Agreement to be drafted.

SECTION 21. WAIVER OF JURY TRIAL . THE DEBTOR AND, BY ITS ACCEPTANCE HEREOF, THE SECURED PARTY, HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT.

SECTION 22. Limitation on Interest . It is the intention of the parties hereto to conform strictly to applicable usury laws. Accordingly, all agreements between Debtor and Secured Party with respect to the Note are hereby expressly limited so that in no event, whether by reason of acceleration of maturity or otherwise, shall the amount paid or agreed to be paid to Secured Party or charged by Secured Party for the use, forbearance or detention of the money to be lent

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hereunder or otherwise, exceed the maximum amount allowed by law. If, at the time of performance, fulfillment of any provision of the Loan Documents shall involve transcending the limit of validity prescribed by applicable law, then, ipso facto, the obligation to be fulfilled shall be reduced to the limit of such validity. If Secured Party shall ever receive as interest an amount which would exceed the highest lawful rate, the receipt of such excess shall be deemed a mistake and (a) shall be canceled automatically or (b) if paid, such excess shall be (i) credited against the principal amount of the Loan to the extent permitted by applicable law or (ii) rebated to Debtor if it cannot be so credited under applicable law. Furthermore, all sums paid or agreed to be paid under the Loan Documents for the use, forbearance, or detention of money shall to the extent permitted by applicable law be amortized, prorated, allocated, and spread throughout the full term of the Note until payment in full so that the rate or amount of interest on account of the Note does not exceed the maximum lawful rate of interest from time to time in effect and applicable to the Note for so long as the Note is outstanding. The terms and provisions of this Section shall control and supersede every other provision of the Collateral Documents.

SECTION 23. Termination . Upon payment and performance in full of all Obligations, the security interest created under this Agreement shall terminate and Secured Party shall promptly execute and deliver to Debtor such documents and instruments reasonably requested by Debtor as shall be necessary to evidence termination of all security interests given by Debtor to Secured Party hereunder.

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

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EXHIBIT A

PERMITTED LIENS

“Permitted Liens” means the following:

1. Any liens arising under this Security Agreement or any other Collateral Documents;

2. Licenses or sublicenses granted under any intellectual property rights included in the Collateral in the ordinary course of Debtor’s business; provided, such licenses and sublicenses are part of the Collateral.

SCHEDULE 1

to the Security Agreement

1. Patents and Patent Applications .

See Schedule A attached.

2. Trademarks, Service Marks and Trade Names and Trademark, Service Mark and Trade Name Applications .

BEMA, solely with respect to the jurisdictions outside the United States

Exhibit 10.4

PATENT AND TRADEMARK SECURITY AGREEMENT

This PATENT AND TRADEMARK SECURITY AGREEMENT (this “Agreement”), dated as of August 2, 2006, is entered into between Arius Two, Inc., a Delaware corporation (“Grantor”), which has a mailing address at 2501 Aerial Center Parkway, Suite 205, Morrisville, North Carolina 25760, and QLT USA, Inc., a Delaware corporation (“Lender”), having its principal executive office at 2579 Midpoint Drive, Fort Collins, Colorado 80525.

RECITALS

A. The Grantor, as borrower, and the Lender have entered into that certain Intellectual Property Assignment Agreement (the “Transfer Agreement”), and Secured Promissory Note dated as of August 2, 2006 (the “Note”) (all capitalized terms used in this Agreement and not otherwise defined herein having the meanings assigned to them in the Transfer Agreement);

B. Grantor is the owner of certain intellectual property, identified below, in which Grantor is granting a security interest to Lender;

C. It is a condition precedent under the Transfer Agreement that the Grantor enter into this Agreement and grant to the Lender the security interests hereinafter provided to secure the obligations of the Grantor described below

NOW THEREFORE, the parties hereto mutually agree as follows:

1. GRANT OF SECURITY INTEREST.

To secure the complete and timely payment and performance of all Obligations (as defined in the Security Agreement, dated as of August 2, 2006, between the Grantor and the Lender (the “Security Agreement”)), and without limiting any other security interest Grantor has granted to Lender, Grantor hereby grants, assigns, and conveys to Lender a security interest in Grantor’s entire right, title, and interest, whether now owned or hereafter acquired, in and to the following (the “Collateral”):

(i) All of Grantor’s right to the Ex-US BEMA Marks and trademark registrations related thereto, including but not limited to those listed on Exhibit A , as the same may be updated hereafter from time to time, and all trademark rights with respect thereto throughout the Ex-US Territory (as defined in the Transfer Agreement), including all proceeds thereof (including license royalties and proceeds of infringement suits), and rights to renew and extend such trademarks and trademark rights; and

(ii) All of Grantor’s right, title, and interest, in and to Ex-US BEMA Patent Rights, including but not limited to those listed on Exhibit B , as the same may be updated hereafter from time to time, and all patent rights with respect thereto throughout the Ex-US Territory, including all proceeds thereof (including license royalties and proceeds of infringement suits), foreign filing rights, and rights to extend such patents and patent rights

(iii) the entire goodwill of or associated with the businesses now or hereafter conducted by Grantor connected with and symbolized by any of the aforementioned properties and assets;

(iv) all commercial tort claims associated with or arising out of any of the aforementioned properties and assets;

(v) all accounts, all intangible intellectual or other similar property and other general intangibles associated with or arising out of any of the aforementioned properties and assets and not otherwise described above, including all license payments and payments under insurance (whether or not the Lender is the loss payee thereof) or any indemnity, warranty or guaranty payable by reason of loss or damage to or otherwise with respect to the foregoing Collateral; and

(vi) All products, proceeds and supporting obligations of or with respect to any and all of the foregoing Collateral.

2. AFTER-ACQUIRED PATENT OR TRADEMARK RIGHTS.

If Grantor shall obtain rights to any new trademarks, any new patentable inventions or become entitled to the benefit of any patent application or patent for any reissue, division, or continuation, of any patent, in each case in the Ex-US Territory and in connection with, derived from, or arising out of, the Ex-US BEMA Technology, the Ex-US BEMA Marks or the Ex-US Products, the provisions of this Agreement shall automatically apply thereto. Grantor shall give prompt notice in writing to Lender with respect to any such new trademarks or patents, or renewal or extension of any trademark registration. Without limiting Grantor’s obligation under this Section 2, Grantor authorizes Lender to modify this Agreement by amending Exhibits A or B to include any such new patent or trademark rights. Notwithstanding the foregoing, no failure to so modify this Agreement or amend Exhibits A or B shall in any way affect, invalidate or detract from Lender’s continuing security interest in all Collateral, whether or not listed on Exhibit A or B .

3. GENERAL PROVISIONS.

3.1 Rights Under Security Agreement . This Agreement has been granted in conjunction with the security interest granted to Lender under the Security Agreement. The rights and remedies of Lender with respect to the security interests granted herein are without prejudice to, and are in addition to those set forth in the Security Agreement, all terms and provisions of which are incorporated herein by reference.

3.2 Successors . The benefits and burdens of this Agreement shall inure to the benefit of and be binding upon the respective successors and permitted assigns of the parties; provided that Grantor may not transfer any of the Collateral or any of its rights or obligations hereunder, without the prior written consent of Lender, except as specifically permitted by the Note or the Security Agreement.

3.3 Amendment; No Conflict . This Agreement is subject to modification only by a writing signed by the parties, except as provided in Section 2 of this Agreement. To the extent

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that any provision of this Agreement conflicts with any provision of the Security Agreement, the provision giving Lender greater rights or remedies shall govern, it being understood that the purpose of this Agreement is to add to, and not detract from, the rights granted to Lender under the Security Agreement.

3.4 Governing Law . This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of New York (as permitted by Section 5-1401 of the New York General Obligations Law), without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of New York to the rights and duties of the parties, except as required by mandatory provisions of law and to the extent the validity or perfection of the security interests hereunder, or the remedies hereunder, in respect of any Collateral are governed by the law of a jurisdiction other than New York.

3.5 Waiver of Jury Trial . THE GRANTOR AND, BY ITS ACCEPTANCE HEREOF, THE LENDER, HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT.

3. TERMINATION. Upon payment and performance in full of all Obligations (as defined in that certain Security Agreement between the parties of even date herewith), the security interest created under this Agreement shall terminate and Lender shall promptly execute and deliver to Grantor such documents and instruments reasonably requested by Grantor as shall be necessary to evidence termination of all security interests given by Grantor to Lender hereunder.

IN WITNESS WHEREOF, the parties have executed this Agreement on the date first written above.

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Exhibit A

BEMA

Exhibit 10.5

GUARANTY

THIS GUARANTY (“Guaranty”), dated as of August 2, 2006, is made by BioDelivery Sciences International, Inc., a Delaware corporation (“Guarantor”), in favor of QLT USA, Inc., a Delaware corporation (“Lender”).

W I T N E S S E T H:

WHEREAS, Arius Two, Inc., a Delaware corporation and wholly-owned subsidiary of Guarantor (hereinafter referred to as the “Company” or “Borrower”), has promised to pay Lender $2,000,000 in accordance with the terms of the Intellectual Property Assignment Agreement dated August 2, 2006 between the Company and Lender (the “Transfer Agreement”) and the Secured Promissory Note dated August 2, 2006, executed by the Company in favor of Lender (the “Note” and together with the Transfer Agreement and the other Collateral Documents, the “Loan Documents”) in connection with the Transfer Agreement;

WHEREAS, in order to induce Lender to enter into the Transfer Agreement and extend credit to the Company, Guarantor has agreed to guarantee the indebtedness and other obligations of the Company to Lender; and

WHEREAS, Guarantor owns 100% of the outstanding stock of the Company and as such will derive direct and indirect economic benefits from the Transfer Agreement and the extension of credit to the Company;

NOW, THEREFORE, in consideration of the premises and the covenants hereinafter contained, and to induce Lender to enter into, and extend credit under, the Transfer Agreement, it is agreed as follows:

1. DEFINITIONS .

Capitalized terms used herein shall have the meanings assigned to them in the Transfer Agreement, unless otherwise defined herein.

“Collateral” shall have the meaning set forth in the Security Agreement.

“Collateral Documents” shall have the meaning set forth in the Security Agreement.

“Taxes” means any present and future taxes, levies, imposts, duties, fees, assessments, charges, deductions or withholdings and all liabilities with respect thereto, excluding income and franchise taxes (and any equivalents thereof) imposed on Guarantor.

References herein to this “Guaranty” shall mean this Guaranty, including all amendments, modifications and supplements and any annexes, exhibits and schedules to any of the foregoing, and shall refer to this Guaranty as the same may be in effect at the time such reference becomes operative.

2. THE GUARANTY .

2.1 Guaranty of Obligations of Borrower . Guarantor hereby unconditionally guarantees to Lender, and its respective successors, endorsees, transferees and assigns, the prompt payment (whether at stated maturity, by acceleration or otherwise) and performance of the obligations of Borrower to Lender under the Loan Documents (hereinafter the “ Obligations ”). Guarantor agrees that this Guaranty is a guaranty of payment and performance and not of collection, and that its obligations under this Guaranty shall be primary, absolute and unconditional, irrespective of, and unaffected by:

(a) the genuineness, validity, regularity, enforceability or any future amendment of, or change in this Guaranty, any other Loan Document or any other agreement, document or instrument to which any Person is a party thereto and/or Guarantor is or may become a party;

(b) the absence of any action to enforce this Guaranty or any other Loan Document or the waiver or consent by Lender with respect to any of the provisions thereof;

(c) the existence, value or condition of, or failure to perfect Lender’s lien against, any Collateral for the Obligations or any action, or the absence of any action, by Lender in respect thereof (including, without limitation, the release of any such security);

(d) the insolvency of Borrower; or

(e) any other action or circumstances which might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor other than payment and performance in full of the Obligations,

it being agreed by Guarantor that its obligations under this Guaranty shall not be discharged until the Obligations are paid in full (the “Termination Date”). Guarantor shall be regarded, and shall be in the same position, as Borrower with respect to the Obligations. Guarantor agrees that any notice or directive given at any time to Lender which is inconsistent with the waiver in the immediately preceding sentence shall be null and void and may be ignored by Lender, and, in addition, may not be pleaded or introduced as evidence in any litigation relating to this Guaranty for the reason that such pleading or introduction would be at variance with the written terms of this Guaranty, unless Lender has specifically agreed otherwise in writing. It is agreed among Guarantor and Lender that the foregoing waivers are of the essence of the transaction contemplated by the Loan Documents and that, but for this Guaranty and such waivers, Lender would decline to enter into the Loan Documents.

(f) Notwithstanding any provision to the contrary contained herein, in the Transfer Agreement or in any other of the Loan Documents, to the extent the obligations of Guarantor hereunder, or liens or security interests granted by Guarantor to secure its obligations hereunder shall be adjudicated (or would, but for the existence of this provision be adjudicated) to be invalid or unenforceable for any reason (including, without limitation, because of Section 548 of Chapter 11 of the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent

Conveyance Act or similar statute or common law), then the obligations of Guarantor under this Guaranty and the right to recover proceeds from the enforcement of liens or security interests granted by Guarantor shall be limited to the maximum amount that is permissible under applicable law (whether federal or state and including, without limitation, the Bankruptcy Code).

2.2 Demand by Lender . In addition to the terms of the Guaranty set forth in Section 2.1 hereof, and in no manner imposing any limitation on such terms, it is expressly understood and agreed that, if, at any time, the outstanding principal amount of the Obligations under the Transfer Agreement and the Note (including all accrued interest thereon) is declared to be immediately due and payable, then Guarantor shall, upon notice of such acceleration, without further demand, pay to Lender the entire outstanding Obligations due and owing to Lender. Payment by Guarantor shall be made to Lender in immediately available funds to an account, designated by Lender or at the address set forth herein for the giving of notice to Lender or at any other address that may be specified in writing from time to time by Lender, and shall be credited and applied to the Obligations.

2.3 Enforcement of Guaranty . In no event shall Lender have any obligation (although it is entitled, at its option) to proceed against Borrower or any Collateral pledged to secure Obligations before seeking satisfaction from the Guarantor, and Lender may proceed, prior or subsequent to, or simultaneously with, the enforcement of Lender’s rights hereunder, to exercise any right or remedy which they may have against any Collateral, as a result of any lien it may have as security for all or any portion of the Obligations.

2.4 Waiver . In addition to the waivers contained in Section 2.1 hereof, Guarantor waives and agrees that it shall not at any time insist upon, plead or in any manner whatever claim or take the benefit or advantage of, any appraisal, valuation, stay, extension, marshaling of assets or redemption laws, or exemption, whether now or at any time hereafter in force, which may delay, prevent or otherwise affect the performance by Guarantor of its obligations under, or the enforcement by Lender of, this Guaranty. Guarantor hereby waives diligence, presentment and demand (whether for non-payment or protest or of acceptance, maturity, extension of time, change in nature or form of the obligations, acceptance of further security, release of further security, composition or agreement arrived at as to the amount of, or the terms of, the obligations, notice of adverse change in Borrower’s financial condition or any other fact which might increase the risk to Guarantor) with respect to any of the obligations or all other demands whatsoever and waives the benefit of all provisions of law which are in conflict with the terms of this Guaranty. Guarantor represents, warrants and agrees that, as of the date of this Guaranty, its obligations under this Guaranty are not subject to any offsets or defenses against Lender or Borrower of any kind. Guarantor further agrees that its obligations under this Guaranty shall not be subject to any counterclaims, offsets or defenses against Lender or against Borrower of any kind which may arise in the future.

2.5 Benefit of Guaranty . The provisions of this Guaranty are for the benefit of Lender and its respective successors, transferees, endorsees and assigns, and nothing herein contained shall impair, as between Borrower and Lender, the obligations of Borrower under the Loan Documents. In the event all or any part of the Obligations are transferred, endorsed or assigned by Lender to any Person or Persons, any reference to “Lender” herein shall be deemed to refer equally to such Person or Persons.

2.6 Modification of Obligations, Etc . Guarantor hereby acknowledges and agrees that Lender may, subject to the terms of the Transfer Agreement, Note, and other Collateral Documents, at any time or from time to time, with or without the consent of, or notice to, Guarantor:

(a) change or extend the manner, place or terms of payment of, or renew or alter all or any portion of, the Obligations;

(b) take any action under or in respect of the Loan Documents in the exercise of any remedy, power or privilege contained therein or available to it at law, equity or otherwise, or waive or refrain from exercising any such remedies, powers or privileges;

(c) amend or modify, in any manner whatsoever, the Loan Documents (except this Guaranty);

(d) extend or waive the time for Borrower’s performance of, or compliance with, any term, covenant or agreement on its part to be performed or observed under the Loan Documents, or waive such performance or compliance or consent to a failure of, or departure from, such performance or compliance;

(e) take and hold Collateral for the payment of the Obligations guaranteed hereby or sell, exchange, release, dispose of, or otherwise deal with, any property pledged, mortgaged or conveyed, or in which Lender has been granted a lien, to secure any Obligations;

(f) release anyone who may be liable in any manner for the payment of any amounts owed by Guarantor or Borrower to Lender;

(g) modify or terminate the terms of any intercreditor or subordination agreement pursuant to which claims of other creditors of Guarantor or Borrower are subordinated to the claims of Lender; and/or

(h) apply any sums by whomever paid or however realized to any amounts owing by Guarantor or Borrower to Lender in such manner as Lender shall determine in its discretion;

Lender shall not incur any liability to Guarantor as a result thereof, and no such action shall impair or release the Obligations of Guarantor under this Guaranty, except for Lender’s intentional bad faith actions or omissions.

2.7 Reinstatement . This Guaranty shall remain in full force and effect and continue to be effective should any petition be filed by or against Borrower or Guarantor for liquidation or reorganization, should Borrower or Guarantor become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of Borrower’s or Guarantor’s assets, and shall continue to be effective or be reinstated, as the case

may be, if at any time payment and performance of the Obligations, or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by Lender, whether as a “voidable preference”, “fraudulent conveyance”, or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the Obligations shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

2.8 Subrogation. Notwithstanding anything to the contrary in this Guaranty, or in any Loan Document and until the Obligations shall be satisfied in full and this Guaranty terminated, Guarantor (on behalf of itself and its successors and assigns (including any surety)), shall not have, and Guarantor shall not directly or indirectly exercise:

(a) any rights at law or in equity to subrogation, to reimbursement, to exoneration, to contribution, to indemnification, to set off or to any other rights that could accrue to a surety against a principal, to a guarantor against a principal, to a guarantor against a maker or obligor, to an accommodation party against the party accommodated, to a holder or transferee against a maker, or to the holder of any claim against any Person, and which Guarantor may have or hereafter acquire against Borrower in connection with or as a result of Guarantor’s execution, delivery and/or performance of this Guaranty, or any other documents to which Guarantor is a party or otherwise; and

(b) acknowledges and agrees (i) that this Section 2.8 is intended to benefit Lender and shall not limit or otherwise effect Guarantor’s liability hereunder or the enforceability of this Guaranty, and (ii) Lender and its respective successors and assigns are intended third party beneficiaries of the waivers and agreements set forth in this Section 2.8 .

2.9 Election of Remedies . If Lender may, under applicable law, proceed to realize benefits under any of the Loan Documents giving Lender a lien upon any Collateral owned by Borrower, either by judicial foreclosure or by non-judicial sale or enforcement, Lender may, at its sole option, determine which of such remedies or rights it may pursue without affecting any of such rights and remedies under this Guaranty. If, in the exercise of any of its rights and remedies, Lender shall forfeit any of its rights or remedies, including its right to enter a deficiency judgment against Borrower, whether because of any applicable laws pertaining to “election of remedies” or the like, Guarantor hereby consents to such action by Lender and waives any claim based upon such action, even if such action by Lender shall result in a full or partial loss of any rights of subrogation which Guarantor might otherwise have had but for such action by Lender. Any election of remedies which results in the denial or impairment of the right of Lender to seek a deficiency judgment against Borrower shall not impair Guarantor’s obligation to pay the full amount of the Obligations. In the event Lender shall bid at any foreclosure or trustee’s sale or at any private sale permitted by law or the Loan Documents, Lender may bid all or less than the amount of the Obligations and the amount of such bid need not be paid by Lender but shall be credited against the Obligations. The amount of the successful bid at any such sale shall be presumptively deemed to be the fair market value of the collateral and the difference between such bid amount and the remaining balance of the Obligations shall be presumptively deemed to be the amount of the Obligations guaranteed under this Guaranty,

notwithstanding that any present or future law or court decision or ruling may have the effect of reducing the amount of any deficiency claim to which Lender might otherwise be entitled but for such bidding at any such sale.

2.10 Funds Transfers . If Guarantor receives cash proceeds as a result of any transaction or event as a result of which Borrower is required to make a mandatory prepayment with respect to the Obligations under the terms of the Loan Documents (including any issuance or sale of Guarantor’s Stock or any sale of its assets), Guarantor shall distribute to the Borrower an amount equal to such cash proceeds that are required to be applied to the mandatory prepayment required under the terms of the Loan Documents.

2.11 Subordination of Guaranty . Notwithstanding anything to the contrary contained in this Guaranty or in the Loan Documents, Lender agrees that until Borrower’s obligations to Laurus Master Fund, Ltd., a Cayman Islands company (“Laurus”) have been paid in full under (i) that certain Securities Purchase Agreement dated as of February 22, 2005 by and between Laurus and the Guarantor (as amended, restated, modified and/or supplemented from time to time, the “February 2005 Purchase Agreement”) regarding the purchase and sale of a Secured Convertible Term Note issued to Laurus by Guarantor on February 22, 2005, (ii) the “Related Agreements” under and as defined in the February 2005 Purchase Agreement (as amended, restated, modified and/or supplemented from time to time, the “February 2005 Related Agreements” and together with the February 2005 Purchase Agreement, the “February 2005 Laurus Documents), (iii) that certain Securities Purchase Agreement, dated as of May 31, 2005, by and between Laurus and the Guarantor (as amended, restated, modified and/or supplemented from time to time, the “May 2005 Purchase Agreement”) regarding the purchase and sale of a Secured Convertible Term Note issued to Laurus by Guarantor on May 31, 2005 and (iv) the “Related Agreements” under and as defined in the May 2005 Purchase Agreement (as amended, restated, modified and/or supplemented from time to time, the “May 2005 Related Agreements” and together with the May 2005 Purchase Agreement, the “May 2005 Laurus Documents) (the February 2005 Laurus Documents and the May 2005 Laurus Documents shall collectively be referred to as the “Laurus Debt Documents”), this Guaranty granted by Guarantor to Lender shall be subordinate in all respects to the liens, security interest, and rights of Laurus under the Laurus Debt Documents (which liens, security interests and rights do not include a lien, security interest or right in or to the Collateral) regardless of the order or time of UCC filings or any other filings or recordings, the order or time of granting of any such security interests or rights, or the physical possession of any assets of Guarantor or Arius Pharmaceuticals, Inc. (“Arius”), in each case until the obligations under the Laurus Debt Documents have been paid in full. In addition, until the obligations under the Laurus Debt Documents have been paid in full, Lender shall not take any enforcement action, or exercise any other right or remedy, available to Lender with respect to this Guaranty, whether available pursuant to law, equity or contract; provided, however, that, notwithstanding the foregoing, the subordination of Lender’s rights under this Guaranty to the liens, security interests and rights of Laurus under the Laurus Debt Documents, as set forth in this Section 2.11, shall not be deemed to prohibit Lender from, and Lender shall have the right to, (1) declare a breach or default of BDSI under this Guaranty and (2) exercise any right or remedy available to Lender, whether available pursuant to law, equity or contract, under the Collateral Documents, excluding this Guaranty, with respect to Borrower. The Lender and the Guarantor hereby agree that no amendment, supplementation or other modification may be made to this Section 2.11 without the prior written consent of Laurus.

3. FURTHER ASSURANCES .

Guarantor agrees, upon the reasonable written request of Lender, to execute and deliver to Lender, from time to time, any additional instruments or documents reasonably considered necessary by Lender to cause this Guaranty to be, become or remain valid and effective in accordance with its terms.

4. PAYMENTS FREE AND CLEAR OF TAXES .

All payments required to be made by Guarantor hereunder shall be made to Lender free and clear of, and without deduction for, any and all present and future Taxes. If Guarantor shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder, (a) the sum payable shall be increased as much as shall be necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 4 ) Lender, as applicable, receive an amount equal to the sum they would have received had no such deductions been made, (b) Guarantor shall make such deductions, and (c) Guarantor shall pay the full amount deducted to the relevant taxing or other authority in accordance with applicable law. Within thirty (30) days after the date of any payment of Taxes, Guarantor shall furnish to Lender the original or a certified copy of a receipt evidencing payment thereof. Guarantor shall indemnify and, within ten (10) days of demand therefor, pay Lender for the full amount of Taxes (including any Taxes imposed by any jurisdiction on amounts payable under this Section 4 ) paid by Lender, as appropriate, and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally asserted.

5. OTHER TERMS .

5.1 Entire Agreement . This Guaranty, together with the other Loan Documents, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements relating to a guaranty of the loans under the Loan Documents and/or the Obligations.

5.2 Headings . The headings in this Guaranty are for convenience of reference only and are not part of the substance of this Guaranty.

5.3 Severability . Whenever possible, each provision of this Guaranty shall be interpreted in such a manner to be effective and valid under applicable law, but if any provision of this Guaranty shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Guaranty.

5.4 Notices . Whenever it is provided herein that any notice, demand, request, consent, approval, declaration or other communication shall or may be given to or served upon any of the parties by any other party, or whenever any of the parties desires to give or serve upon another any such communication with respect to this Guaranty, each such notice, demand, request, consent, approval, declaration or other communication shall be in writing and shall be addressed to the party to be notified as follows:

or at such other address as may be substituted by notice given as herein provided. The giving of any notice required hereunder may be waived in writing by the party entitled to receive such notice. Every notice, demand, request, consent, approval, declaration or other communication hereunder shall be deemed to have been validly served, given or delivered (i) upon the earlier of actual receipt and five (5) Business Days after the same shall have been deposited with the United States mail, registered or certified mail, return receipt requested, with proper postage prepaid, (ii) upon transmission, when sent by telecopy or other similar facsimile transmission (with such telecopy or facsimile promptly confirmed by delivery of a copy by personal delivery or United States mail as otherwise provided in this Section 4.4 ), (iii) one (1) Business Day after deposit with a reputable overnight carrier with all charges prepaid, or (iv) when delivered, if hand-delivered by messenger.

5.5 Successors and Assigns . This Guaranty and all obligations of Guarantor hereunder shall be binding upon the successors and assigns of Guarantor (including a debtor-in-possession on behalf of Guarantor) and shall, together with the rights and remedies of Lender, for the benefit of Lender, hereunder, inure to the benefit of Lender, all future holders of any instrument evidencing any of the Obligations and their respective successors and assigns. No sales of participations, other sales, assignments, transfers or other dispositions of any agreement governing or instrument evidencing the Obligations or any portion thereof or interest therein shall in any manner affect the rights of Lender hereunder. Guarantor may not assign, sell, hypothecate or otherwise transfer any interest in or obligation under this Guaranty without the prior written consent of Lender, provided that, notwithstanding the foregoing, Guarantor shall be entitled to assign, sell, hypothecate, or transfer its interest in or obligations under this Guaranty.

5.6 No Waiver; Cumulative Remedies; Amendments . Lender shall not, by any act, delay, omission or otherwise, be deemed to have waived any of its rights or remedies hereunder, and no waiver shall be valid unless in writing, signed by Lender and then only to the extent therein set forth. A waiver by Lender of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which Lender would otherwise have had on any future occasion. No failure to exercise nor any delay in exercising on the part of Lender, any right, power or privilege hereunder, shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or future exercise thereof or the exercise of any other right, power or privilege. The rights and remedies hereunder provided are cumulative and may be exercised singly or concurrently, and are not exclusive of any rights and remedies provided by law. None of the terms or provisions of this Guaranty may be waived, altered, modified, supplemented or amended except by an instrument in writing, duly executed by Lender and Guarantor.

5.7 Termination . This Guaranty is a continuing guaranty and shall remain in full force and effect until the Termination Date. Upon payment and performance in full of the Obligations (other than contingent indemnification obligations as to which no claim has been asserted), Lender shall deliver to Guarantor such documents as Guarantor may reasonably request to evidence such termination.

5.8 Counterparts . This Guaranty may be executed in any number of counterparts, each of which shall collectively and separately constitute one and the same agreement.

6. GOVERNING LAW. THIS GUARANTY AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.

7. WAIVER OF JURY TRIAL . BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT DISPUTES ARISING HEREUNDER OR RELATING HERETO BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, AMONG LENDER AND GUARANTOR ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED IN CONNECTION WITH, THIS GUARANTY OR THE TRANSACTIONS RELATED HERETO.

IN WITNESS WHEREOF, the parties hereto have executed and delivered this Guaranty as of the date first above written.

Exhibit 10.6

A SSIGNMENT OF PATENTS AND TRADEMARKS

WHEREAS, QLT USA, Inc., a Delaware corporation, with offices at 2579 Midpoint Drive, Fort Collins, CO 80525 (“ ASSIGNOR ”), owns certain patent applications and/or registrations, as listed in Exhibit A attached hereto and incorporated herein by this reference (“ PATENTS ”), and trademarks, including applications and registrations, as listed on Exhibit B attached hereto and incorporated herein by this reference (the “ MARKS ”); and

WHREAS, Arius Two, Inc., a Delaware corporation, with offices at 2501 Aerial Center parkway, Suite 205, Morrisville, North Carolina 27560 (“ ASSIGNEE ”), desires to acquire all of the right, title and interest in, to and under the PATENTS and to the MARKS in accordance with the terms of that certain Intellectual Property Assignment Agreement dated August 2, 2006 (the “Transfer Agreement”);

NOW, THEREFORE , in consideration of the sum of One Dollar ($1.00) and other good and valuable consideration paid by ASSIGNEE to ASSIGNOR, the receipt and sufficiency of which hereby is acknowledged, ASSIGNOR does hereby: (1) sell, assign, transfer and convey unto ASSIGNEE all right, title and interest in and to the PATENTS, including all divisions, continuations, continuations-in-part, reexaminations, substitutions, reissues, extensions and renewals of the applications and registrations for the PATENTS (and the right to apply for any of the foregoing); all rights to causes of action and remedies related thereto (including, without limitation, the right to sue for past, present or future infringement, misappropriation or violation of rights related to the foregoing); and any and all other rights and interests arising out of, in connection with or in relation to the PATENTS, and (2) transfer, convey and assign to ASSIGNEE all right, title and interest throughout the world (excluding the United States of America, its territories and possessions (including the Commonwealth of Puerto Rico)) in and to the MARKS, together with all goodwill associated therewith, effective upon ASSIGNOR’S receipt of all payments due hereunder.

In the event of any conflict or inconsistency between the terms of the Transfer Agreement and the terms hereof, the terms of the Transfer Agreement shall govern.

I N W ITNESS W HEREOF , ASSIGNOR has caused this Assignment to be duly executed by an authorized officer on this 2nd day of August, 2006.

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 .

“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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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:

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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;

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]

5

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

SIGNATURE PAGE TO BEMA ACQUISITION CONSENT, AMENDMENT, AND WAIVER

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.

SIGNATURE PAGE TO LETTER AGREEMENT

Exhibit 10.9

CONSENT AND WAIVER AGREEMENT

THIS CONSENT AND WAIVER AGREEMENT (the “Consent”) is entered into as of the 2nd day of August, 2006, by and among Laurus Master Fund, Ltd., a Cayman Islands company (“Laurus”), BioDelivery Sciences International, Inc., a Delaware corporation (“BDSI”), Arius Pharmaceuticals, Inc., a Delaware corporation (“Arius”) and Arius Two, Inc., a Delaware corporation (“A2”).

WHEREAS, (i) BDSI and Laurus are parties to that certain Securities Purchase Agreement, dated as of February 22, 2005 (as amended, restated, modified and/or supplemented from time to time, the “February 2005 Purchase Agreement”), (ii) BDSI, certain subsidiaries of BDSI and Laurus are parties to certain of the “Related Agreements” under and as defined in the February 2005 Purchase Agreement (as amended, restated, modified and/or supplemented from time to time, the “February 2005 Related Agreements” and, together with the February 2005 Purchase Agreement, the “February 2005 Documents”), (iii) BDSI and Laurus are parties to that certain Securities Purchase Agreement, dated as of May 31, 2005 (as amended, restated, modified and/or supplemented from time to time, the “May 2005 Purchase Agreement”), and (iv) BDSI, certain subsidiaries of BDSI and Laurus are parties to certain of the “Related Agreements” under and as defined in the May 2005 Purchase Agreement (as amended, restated, modified and/or supplemented from time to time, the “May 2005 Related Agreements” and, together with the May 2005 Purchase Agreement, the “May 2005 Documents”; the February 2005 Documents and the May 2005 Documents are collectively referred to herein as the “Laurus Documents” and each, a “Laurus Document”), ;

WHEREAS, BDSI and its wholly-owned subsidiary A2 intend to consummate a transaction with QLT USA, Inc., a Delaware corporation (“QLT”) in which A2 shall acquire BEMA assets described more fully in that certain Intellectual Property Assignment Agreement, and related documents and agreements (as each are in effect on the date hereof, the “BEMA Transfer Agreements”) attached hereto as Exhibit A and incorporated by this reference.

WHEREAS, certain provisions of the BEMA Transfer Agreements shall require the waiver and consent of Laurus under the terms of the Laurus Documents to effect the purposes of the BEMA Transfer Agreements and ensure proper future performance thereunder; and

WHEREAS, Laurus is willing to grant such consents and/or waivers and enter into this Consent, in order to permit A2 to acquire the assets described in the BEMA Transfer Agreements.

NOW, THEREFORE, in consideration of the premises, and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereby agree as follows:

1. Laurus Consent and Waiver. In connection with and subject to the execution of the BEMA Transfer Agreements, Laurus hereby grants the following limited consents and waivers in connection with the execution of the BEMA Transfer Agreements:

2. Covenants. BDSI and Arius hereby covenant and agree that in consideration of the grant by Laurus of the waivers and consents contained herein, such companies shall not, and shall not permit any of their respective subsidiaries to:

3. Governing Law . All questions concerning the construction, validity and interpretation of this Agreement will be governed by and construed in accordance with the internal law (and not the law of conflicts) of New York applicable to contracts made and performed in such state, without regard to principles of conflicts of laws (other than the principles set forth in Section 5-1401 of the General Obligations Law of the State of New York).

4. Counterparts, etc . This Agreement may be executed in any number of counterparts, each of which shall constitute an original but all of which when taken together shall constitute but one agreement. One or more counterparts of this Agreement may be delivered via telefacsimile, with the intent that any such counterpart have the effect of an original counterpart hereof. Following the execution hereof, this Agreement shall be a February 2005 Related Agreement and a May 2005 Related Agreement.

[The next page is the signature page.]

This Consent and Waiver is executed by the undersigned effective as of August 2, 2006.

EXHIBIT A

BEMA TRANSFER AGREEMENTS (each agreement to be attached to this Exhibit A)

Exhibit 10.10

CONFIDENTIAL TREATMENT REQUESTED

WITH RESPECT TO CERTAIN PORTIONS HEREOF

DENOTED WITH “***”

SECOND AMENDMENT AGREEMENT

This SECOND AMENDMENT AGREEMENT (the “Amendment”) is entered this August 2, 2006 (the “Second Amendment Date”) by QLT USA, Inc. (formerly Atrix Laboratories, Inc.) (“QLT USA”), a Delaware corporation, and Arius Pharmaceuticals, Inc. (“Arius”).

WHEREAS, Arius and QLT USA are parties to that certain License Agreement, dated May 27, 2004, as amended July 14, 2005 (such License Agreement, as amended, the “License”);

WHEREAS, Arius Two, Inc. (“Buyer”), an affiliate of Arius, intends to acquire all right, title, and interest to certain BEMA-related assets outside the United States, as described in that certain Intellectual Property Assignment Agreement, entered into by Buyer and QLT USA as of even date herewith, and its related documents and exhibits (such acquisition, the “Ex-US Acquisition”; such agreement, the “Acquisition Agreement”);

WHEREAS, it is a condition to the Ex-US Acquisition, that Arius and QLT USA execute and deliver this Amendment;

WHEREAS, the *** (each as defined in the License) have been terminated or have expired;

WHEREAS, Section 7.01(b) of the License provides that the cost to maintain and protect the BEMA Patent Rights and the Marks in the Territory shall be at Arius’ cost and expense beginning on the date upon which Arius is the sole entity having any rights whatsoever to the BEMA Patent Rights and the Marks; and

WHEREAS, QLT USA wishes to transfer the cost and responsibility of filing, prosecuting and maintaining the BEMA Patents, including but not limited to those claiming Improvements, and the Marks to Arius.

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 Amendment agree as follows:

1. Definitions . Any capitalized terms not separately defined in this Amendment shall have the meaning provided in the License.

2. Amendments to Reflect Ex-US Acquisition . Effective as of the Second Amendment Date, the License shall be amended such that all definitions therein, and all right, title, claim,

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential

treatment are being requested are denoted with “***”.

interest, obligation and duty of the parties (including CDC IV, LLC (“CDC”, as assignee of Clinical Development Capital LLC) under the License shall only pertain to, concern, and be effective with respect to, the United States, whether or not any specific clause, section or portion of the License (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,” provided that, notwithstanding the foregoing, (i) the provisions of Section 12.10 of the License, and QLT USA’s obligations thereunder, shall continue to apply throughout the entire world following the Second Amendment Date without taking into account the above-described limitation of the applicability of the terms and provisions of the License to the United States or limitation of any relevant definitions under the License to the United States and (ii) for purposes of clarification, but not limitation, Arius shall have, following the Effective Date, no performance obligations under Section 3.02(e) of the License with respect to any jurisdictions outside the United States.

2.1. Waiver . For the avoidance of doubt and in consideration of the Ex-US Acquisition and the execution of, and consent to, this Second Amendment, each of Arius and QLT USA (each a “party” for purposes of this Section 2.1), hereby releases, acquits and absolutely and forever discharges the other parties hereto, their affiliates, and its and their officers, directors, employees, agents, successors and assigns from any and all claims (including royalty or indemnification claims), debts, liabilities, demands, damages, accounts, recordings, obligations, costs, attorneys’ fees, expenses, liens, actions and causes of action of every kind and nature, character and description, whether now known or unknown, suspected or unsuspected, whether or not heretofore brought before any arbitrator, local, state or federal court, agency or other forum, arising out of or related to the License Agreement solely with respect to the Ex-US Territory, whether occurring prior to or after the Second Amendment Date. The foregoing sentence shall not constitute a waiver or release of any party’s rights and obligations under the Acquisition Agreement and the transactions contemplated thereby.

2.2 Prior Consent and Amendment Agreement . QLT USA, Arius, and CDC agree that (i) upon the assignment of the Purchased Assets (as defined in the Acquisition Agreement) to Arius Two under the Acquisition Agreement, the covenants of CDC under Section 10 of that certain Consent and Amendment Agreement between QLT USA, Arius, and CDC, dated July 14, 2005 (the “Original CDC Consent”), shall apply only with respect to the United States 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 USA and Arius, dated August 2, 2006) or (ii) contemplated by any sublicense agreement granting a sublicense thereunder by Arius or CDC, transfer”.

2

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential

treatment are being requested are denoted with “***”.

3. Transfer of Responsibility for BEMA Patents and Marks to Arius . Section 7.01 of the License is hereby amended by inserting the following as the second paragraph thereof:

“Notwithstanding the foregoing, beginning on the Second Amendment Date, Arius shall thereafter be responsible, in Atrix’s name, for maintaining and protecting the BEMA Patent Rights and the Marks in the Territory, including but not limited to, if and as elected by Arius in its sole discretion, defending any interference actions initiated by or in the United States Patent and Trademark office with respect to the BEMA Patents; provided however, that such maintenance and protection shall, with respect to all costs and expenses incurred with respect to such maintenance and protection following the Second Amendment Date, be at Arius’ cost and expense. Such filings and prosecution shall be by counsel of Arius’ choosing, under the primary control and direction of Arius, and shall be in the name of Atrix. Notwithstanding the foregoing, upon written request by Arius and upon Atrix’s prior written consent, such consent not to be unreasonably withheld, Atrix shall (i) provide such assistance as may be necessary to enable Arius to prosecute and obtain new patents related to any Improvements made by either Party and (ii) take all actions and execute all documents necessary to effect the purposes of this paragraph, with the cost and expense of such assistance to be borne by Arius. In the event that Arius desires to abandon any of the BEMA Patent Rights and/or the Marks, or if Arius later declines responsibility for the BEMA Patent Rights and/or the Marks, which Arius shall be free to do at any time, in its sole discretion, Arius shall provide reasonable prior written notice to Atrix of its intention to abandon or decline responsibility. In the event that Arius provides such notice to Atrix, then Atrix will thereafter have the right to prosecute and maintain the same at its own cost to the extent that Atrix desires to do so in its sole discretion. Arius may, at its cost and expense and in its sole discretion, maintain and protect any other trademarks, logo, design and/or tradedress for the Product in the Territory. In addition, Arius may, in its sole discretion and at its sole cost and expense, file, prosecute, and maintain, in the name of Atrix any patents or patent applications with respect to the BEMA Patent Rights in all countries in the Territory to the extent not yet filed as of Second Amendment Date. Arius shall keep Atrix advised of its activities under this paragraph by forwarding to Atrix copies of all material official correspondence (including, but not limited to, applications, office actions, responses, etc.) relating thereto, and shall provide Atrix an opportunity to comment on any proposed responses, voluntary amendments, submissions, or other actions of any kind to be made with respect to BEMA Patent Rights, the Marks or any Improvements.”

4. Indemnification Obligations of the Parties . Section 11.01 of the Agreement is hereby amended in its entirety to read as follows:

Section 11.01 Arius Indemnified by Atrix . Atrix shall indemnify and hold Arius, its Affiliates, and their respective employees, directors and officers, harmless from and against any liabilities or obligations, damages, losses, claims, encumbrances, costs or expenses (including attorneys’ fees) (any or all of the foregoing herein referred to as “Loss”) insofar as a Loss or actions in respect thereof occurs subsequent to the Execution Date, does not arise out of, or result from, the negligence of or actions of Arius, and

3

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential

treatment are being requested are denoted with “***”.

arises out of or is based upon (a) any misrepresentation or breach of any of the warranties, covenants or agreements made by Atrix in this Agreement; or (b) Atrix’s co-promoting activities, if any, under Section 9.01. Atrix’s obligations to indemnify Arius hereunder shall not apply to the extent any such Loss arises out of or is based on the: (x) inactions or actions of Arius, its Affiliates or sublicensees for which Arius is obligated to indemnify Atrix under Section 11.02 or (y) the negligence or wrongdoing of Arius, its Affiliates or sublicensees.

5. Section 11.02 of the Agreement is hereby amended in its entirety to read as follows:

Section 11.02 Atrix Indemnified by Arius . Arius shall indemnify and hold Atrix, its Affiliates, and their respective employees, directors and officers, harmless from and against any Loss insofar as such Loss or actions in respect thereof occurs subsequent to the Execution Date, does not arise out of, or result from, the negligence of or actions of Atrix, and arises out of or is based upon (a) any misrepresentation or breach of any of the warranties, covenants or agreements made by Arius in this Agreement; (b) Arius’ use of the Marketing Authorizations in the marketing, sale, distribution or promotion of the Product or the Demonstration Samples; (c) Arius’ or its sublicensee’s manufacture, development, marketing, use, handling, storage, sale, distribution or promotion of the Product or the Demonstration Samples; (d) any product liability claim that is brought against Atrix by any Third Party due to the use of the Product in the Territory except to the extent Arius may be indemnified with respect thereto pursuant to the Supply Agreement; (e) any claims that the Marks, any Product (as a result of the use of BEMA Technology therein) or its manufacture (as a result of the use of the BEMA Technology therein), use, marketing, sale, promotion, distribution, manufacture, shipment or sale infringes the patent, trademark or proprietary right or any other published intellectual property right of a Third Party; or (f) Arius’ prosecution of a Third Party infringement claim pursuant to Section 7.03. Arius’ obligations to indemnify Atrix hereunder shall not apply to the extent any such Loss arises out of or is based on the: (x) inactions or actions of Atrix, its Affiliates or sublicensees for which Atrix is obligated to indemnify Arius under Section 11.01 or (y) the negligence or wrongdoing of Atrix, its Affiliates or sublicensees.

6. ***.

7. Amended License to Continue in Full Force and Effect. To the extent that the terms of the License are varied by this Amendment, such variations shall be deemed to be lawfully made amendments to the License pursuant to Section 15.11 thereof. Except as modified by this Amendment, the License shall remain unchanged and in full force and effect.

8. Effective Date of this Amendment . This Amendment shall not become effective until CDC, in its capacity as a third-party beneficiary to certain terms and provisions contained in the License, has consented to the changes set forth in this Amendment in a separate written agreement. The failure of CDC to provide such consent shall render this Amendment void ab initio.

4

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential

treatment are being requested are denoted with “***”.

9. Governing Law . This Amendment shall be governed by, and construed and enforced in accordance with, the laws of the State of Colorado, excluding its choice of law provisions.

10. Counterparts . This Amendment 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 Amendment may be transmitted via facsimile and such signatures shall be deemed to be originals.

[Signature page to follow.]

5

IN WITNESS WHEREOF, the parties have executed and delivered this Amendment as of the Second Amendment Date.

CDC IV, LLC, as a third party beneficiary of the License, and as a party to Section 2.2 of the Second Amendment, hereby consents to the transactions contemplated by, and agrees to the provisions contained in Section 2.2 of this Second Amendment.

Exhibit 10.11

CONFIDENTIAL TREATMENT REQUESTED

WITH RESPECT TO CERTAIN PORTIONS HEREOF

DENOTED WITH “***”

BEMA LICENSE AGREEMENT

This BEMA License Agreement (the “Agreement”) is made as of August 2, 2006 (the “Effective Date”) by and between Arius Two, Inc., a Delaware corporation with its principal office at 2501 Aerial Center Parkway, Suite 205, Morrisville, North Carolina 27560 USA (“Arius Two”), and Arius Pharmaceuticals, Inc., a Delaware corporation with a mailing address at 2501 Aerial Center Parkway, Suite 205, Morrisville, North Carolina 27560 USA (“Arius”). Arius Two and Arius are sometimes referred to collectively herein as the “Parties” or singly as a “Party.”

R E C I T A L S

WHEREAS , Arius Two wishes to grant to Arius, and Arius wishes to obtain from Arius Two, an exclusive license in all jurisdictions outside the United States, 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

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.

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential

treatment are being requested are denoted with “***”.

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

“ API ” means an active pharmaceutical ingredient.

“ 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 Competent Authorities and including trade association guidelines, where applicable.

“ 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).

2

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential

treatment are being requested are denoted with “***”.

“ 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.

“ 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.

3

***CONFIDENTIAL TREATMENT REQUESTED***

Note: The portions hereof for which confidential

treatment are being requested are denoted with “***”.

“ 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.

“ 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.

“ 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 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.

“ 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.

“ 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: *** .

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treatment are being requested are denoted with “***”.

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.

***

“ 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.

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“ 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.

“ 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, ***;

(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

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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. The two appraisers so selected (the “Initial Appraisers”) shall appraise the value of the shares purchased by the sublicensee or partner as of the date of such purchase. *** .

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 4.02, 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.

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treatment are being requested are denoted with “***”.

“ Territory ” means all countries and jurisdictions outside the United States (as defined below).

“ 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.

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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.

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 3.01(a) and 3.02, 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 thirty (30) days subsequent to the notice provided to Arius, provide CDC an opportunity to remedy such failure to perform within *** of the expiration of the thirty (30) day notice to Arius. No remedy available to Arius Two under Section 2.01(a) shall be effective prior to the lapse of such ninety (90) day 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.

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(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 Competent Authorities in any one country of *** , 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 14.12 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 .

(a) 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 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 Territory, any additional applications, and the results of any such studies.

Section 2.03 INTENTIONALLY OMITTED .

Section 2.04 Regulatory and Clinical Documentation .

(a) Subject to Sections 2.01, 3.01, 3.03 and 13.05, 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.

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(b) Arius shall maintain Books and Records in connection with Product Development of the Fentanyl Product in the Territory an 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 14.12, and Arius shall promptly provide copies of such Books and Records to Arius Two upon written request.

(c) Any 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, to the extent required under the CDC Agreement, CDC, 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 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 ten business days 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, 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 3.01(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 BEMA Fentanyl, cure of such default by CDC, each of Arius and CDC shall enter into separate agreements with Arius Two in a form

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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 3.01(e)(B), 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 Two’s costs and expenses incurred in satisfying its obligations, if and as requested by Arius, pursuant to Sections 2.02(a) and 3.01(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:

Arius Two shall keep complete and accurate books and records pertaining to the Development Costs incurred 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 14.12, but only to the extent reasonably necessary to confirm the accuracy of the calculation of the Development Costs.

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ARTICLE III

LICENSE

Section 3.01 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 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 3.01(b). Subject to the terms of this Agreement, Arius shall have the right to assign this Agreement, on the basis set forth in Section 14.02. 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.

(b) Subject to the terms of this Agreement, Arius shall have the right to grant a sublicense 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. Further, any such sublicense agreement (or 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 30 days 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 3.01(c) shall not conflict with this Agreement and shall impose on the co-marketer 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

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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 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 notwithstanding, Arius shall, *** .

Section 3.02 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 3.01(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 3.02, and Arius Two reserves all rights to use the Marks except as otherwise expressly granted to Arius pursuant to this Agreement. Arius shall use the Marks in the exact form set forth on Exhibit B , attached hereto, including the “ ^® ” symbol or “™” 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 3.03 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 3.03(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 13.02 or 13.03 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 Improvements made by 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.

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(b) For the avoidance of doubt and except as specifically set forth in this Agreement, Arius shall have no right, title or interest 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 3.04 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:

(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:

(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

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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 60% 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 Royalty Payments on Sublicensee Sales . Arius shall pay to Arius Two Royalties equal to *** % of any Sublicense Revenue.

Section 4.03 INTENTIONALLY OMITTED.

Section 4.04 Reports and Payments .

(a) Arius, on behalf of itself and each sublicensee, shall furnish to Arius Two a quarterly written report showing in reasonably specific detail, on a Product by Product basis, (i) the calculation of Net Sales; (ii) Royalties payable in United States’ Dollars, if any, which shall have accrued based upon such Net Sales; (iii) gross amounts invoiced for Product and deductions therefrom in accordance with the definition of Net Sales; (iv) withholding taxes, if any, required by law to be deducted with respect to such sales; (v) the dates of the First Commercial Sales of any Product in the Territory during the reporting period; and (vi) the exchange rates used to determine the amount of United States’ Dollars payable (each, a “Royalty Statement“). Royalty Statements shall be due no later than *** following the close of each calendar quarter.

(b) All payments hereunder shall be payable in United States Dollars. With respect to each quarter, whenever conversion of payments from any foreign currency shall be required, such conversion shall be made at the rate of exchange reported in The Wall Street Journal on the last business day of the applicable calendar quarter. All payments owed under this Agreement shall be made by wire transfer to a bank account designated by Arius Two, unless otherwise specified in writing by Arius Two.

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(c) In the event that any payment, including contingent payments, due hereunder is not made when due, each such payment shall accrue interest from the date due at the Prime Rate of Interest. The payment of such interest shall not limit Arius Two from exercising any other rights it may have under this Agreement as a consequence of the lateness of any payment.

(d) During the Term and for a period of two years thereafter or as otherwise required in order for Arius to comply with Applicable Law, Arius shall keep complete and accurate records in sufficient detail to permit Arius Two to confirm the completeness and accuracy of: (i) the information presented in each Royalty Statement and all payments due hereunder and (ii) the calculation of Net Sales. Arius Two shall have the right to audit and inspect such records pursuant to the terms of Section 14.12 but only to the extent necessary to: (A) verify the completeness and accuracy of the Royalty Statements; (B) verify the calculation of Net Sales and (C) confirm Royalty payments expenditures for the Products.

(e) All taxes levied on account of the payments accruing to Arius Two under this Agreement shall be paid by Arius Two for its own account, including taxes levied thereon as income to Arius Two. If provision is made in law or regulation for withholding, such tax shall not be deducted from the payment made by Arius to Arius Two hereunder, shall be paid to the proper taxing authority by Arius, and a receipt of payment of such tax shall be secured and promptly delivered to Arius Two. Each Party agrees to reasonably assist the other Party in claiming exemption from such deductions or withholdings under any double taxation or similar agreement or treaty from time to time in force.

(f) Notwithstanding any other provision of this Agreement, if Arius is prevented from paying any payments by virtue of the statutes, laws, codes or governmental regulations of the country from which the payment is to be made, then such payment may be paid by depositing funds in the currency in which it accrued to Arius Two’s account in a bank acceptable to Arius Two in the country whose currency is involved.

ARTICLE V

COMMERCIALIZATION

Section 5.01 Promotion and Marketing Obligations .

(a) Arius, at its own expense, will be responsible for (i) conducting all market research related to the Products and (ii) commercialization of the Products in the Territory (including all sales and marketing activities related to the Product), as may or may not be undertaken by Arius in its sole discretion.

(b) Arius agrees to use Commercially Reasonable Efforts to promote the sale, marketing and distribution of the Fentanyl Product in the Territory. Arius shall promptly advise Arius Two of any issues that materially and adversely affect its ability to market the Fentanyl Product in the Territory. In such event, senior executives of Arius and Arius Two shall meet and in good faith discuss what actions should be taken in light of such issues.

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(c) Subject to the terms and conditions of this Agreement, Arius shall have the right to use any trademark, logo, design and/or trade dress for the Products in the Territory, provided such trademark, logo, design and/or trade dress complies with Applicable Laws.

(d) *** prior to the expected date of the First Commercial Sale and at the beginning of each calendar year thereafter, Arius shall submit to Arius Two in writing an annual marketing, sales and distribution plan for the Fentanyl Product summarizing Arius’ and its Affiliates’ proposed marketing, sales and distribution strategy and tactics for the sale and distribution of the Fentanyl Product in the Territory during such calendar year, or portion thereof, including the expected selling price schedules for Fentanyl Product (including any (i) prompt payment or other trade or quantity discounts which Arius expects to offer and (ii) commission rates or rebates which Arius expects to offer to distributors and agents). In addition, upon the request of Arius Two, Arius shall provide Arius Two with copies of any market research reports relating to Fentanyl Product sales and Fentanyl Product competition in the Territory which Arius or its Affiliates commission or otherwise obtain to the extent permissible by the agency preparing the report. To the extent the foregoing information is contained in plans or reports which contain information about other products or markets, Arius may submit to Arius Two only those excerpts from such plans or reports which relate to the Fentanyl Product and Fentanyl Product competition in the Territory.

Section 5.02 Labeling and Artwork . Arius Two shall be provided with copies of any labeling and proposed changes to the labeling of the Fentanyl Product for Arius Two’s review and comment. The actual cost of implementing such change will be at Arius’ sole cost and expense, including any materials made obsolete by Arius’ changes to the artwork.

ARTICLE VI

REGULATORY COMPLIANCE

Section 6.01 Marketing Authorization Holder . Unless otherwise required by Applicable Laws and subject to the provisions of Section 13.05, Arius shall be the holder of all Marketing Authorizations and Governmental Approvals in the Territory. Each Party agrees that neither it, its Affiliates nor any sublicensee will do anything to intentionally adversely affect a Marketing Authorization.

Section 6.02 Maintenance of Marketing Authorizations . With respect to the Fentanyl Product, Arius agrees, at its sole cost and expense, to maintain such Marketing Authorizations and Government Approvals in the Territory throughout the Term in such manner as is determined by Arius, in its sole reasonable discretion, to be commercially reasonable, including obtaining any variations or renewals thereof.

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Section 6.03 Interaction with Competent Authorities . After the Effective Date, each Party shall provide to the other Party a copy in English of any material correspondence that it submits to or receives from a Competent Authority regarding the Fentanyl Product in the Territory. Such correspondence shall be provided within *** of submission or receipt, as the case may be.

Section 6.04 ADE Reporting and Phase IV Surveillance . Arius shall, at its sole cost and expense, be responsible for all ADE Reporting and Phase IV Surveillance, if and as required by the appropriate regulatory agencies in the Territory.

Section 6.05 Commercial Sale Testing and Reporting . If, after the date of First Commercial Sale, a Competent Authority in the Territory requires additional testing, modification or communication related to approved indications of the Fentanyl Product, then Arius, in consultation with Arius Two, shall design and implement any such testing, modification or communication at its own cost.

Section 6.06 Assistance . Upon receipt of a written request, each Party shall provide reasonable assistance to the other Party, in connection with such Party’s obligations pursuant to this Article VI, subject to reimbursement of all of its pre-approved out-of-pocket costs by the requesting Party.

Section 6.07 Compliance . Arius and Arius Two shall comply with all Applicable Laws as set forth in this Agreement, including the provision of information by Arius and Arius Two to each other necessary for Arius Two and Arius to comply with any applicable reporting requirements. Each Party shall promptly notify the other Party of any comments, responses or notices received from, or inspections by, any applicable Competent Authorities in the Territory, which relate to or may impact the Fentanyl Product or the manufacture of the Fentanyl Product or the sales and marketing of the Fentanyl Product, and shall promptly inform the other Party of any responses to such comments, responses, notices or inspections and the resolution of any issue raised by any Competent Authorities in the Territory with respect to the Fentanyl Product.

Section 6.08 General Regulatory Matters . With respect to the Fentanyl Product, Arius shall provide Arius Two with copies of any materials relating to any regulatory matter in the Territory and, when reasonably practicable, shall provide copies of any documents to be presented to any Competent Authority in the Territory prior to their presentation thereto, so that Arius Two shall have an opportunity to review and comment thereon. All interactions with any Competent Authority in the Territory related to the Fentanyl Product shall be disclosed to Arius Two, provided that such requirement shall not limit Arius’ discretion in interacting with such Competent Authorities in any way.

ARTICLE VII

PATENTS AND TRADEMARKS

Section 7.01 Maintenance of Patents or Marks . Arius shall be responsible, in Arius Two’s name, for maintaining and protecting the BEMA Patent Rights and the Marks in the Territory; provided however, that such maintenance and protection shall, with respect to all costs

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and expenses incurred with respect to such maintenance and protection following the Effective Date, be at Arius’ cost and expense. Such filings and prosecution shall be by counsel of Arius’ choosing, under the primary control and direction of Arius, and shall be in the name of Arius Two. Notwithstanding the foregoing, upon written request by Arius and upon Arius Two’s prior written consent, such consent not to be unreasonably withheld, Arius Two shall (i) provide such assistance as may be necessary to enable Arius to prosecute and obtain new patents related to any Improvements made by either Party and (ii) take all actions and execute all documents necessary to effect the purposes of this paragraph, with the cost and expense of such assistance to be borne by Arius. In the event that Arius desires to abandon any of the BEMA Patent Rights and/or the Marks in the Territory, or if Arius later declines responsibility for the BEMA Patent Rights and/or the Marks in the Territory, which Arius shall be free to do at any time, in its sole discretion, Arius shall provide reasonable prior written notice to Arius Two of its intention to abandon or decline responsibility. In the event that Arius provides such notice to Arius Two, then Arius Two will thereafter have the right to prosecute and maintain the same at its own cost to the extent that Arius Two desires to do so in its sole discretion. Arius may, at its cost and expense and in its sole discretion, maintain and protect any other trademarks, logo, design and/or tradedress for the Product in the Territory. In addition, Arius may, in its sole discretion and at its sole cost and expense, file, prosecute, and maintain, in the name of Arius Two any patents or patent applications with respect to the BEMA Patent Rights in all countries in the Territory to the extent not yet filed as of the date hereof. Arius shall keep Arius Two advised of its activities under this paragraph by forwarding to Arius Two copies of all material official correspondence (including, but not limited to, applications, office actions, responses, etc.) relating thereto, and shall provide Arius Two an opportunity to comment on any proposed responses, voluntary amendments, submissions, or other actions of any kind to be made with respect to BEMA Patent Rights, the Marks or any Improvements in the Territory.

Section 7.02 Cooperation . Each Party shall make available to the other Party or its authorized attorneys, agents or representatives, its employees and, to the extent reasonably practicable, its consultants or agents as are necessary or appropriate to enable such Party to file, prosecute and maintain patent applications for the BEMA Patent Rights for a reasonable period of time sufficient for such Party to obtain the assistance it needs from such personnel. Arius shall be solely responsible for all reasonable, documented costs and expenses incurred in making its attorneys, agents, representatives or consultants available pursuant to the foregoing.

Section 7.03 Prosecution of Infringement . During the Term, each Party shall give prompt notice to the other Party of any Third Party act which may infringe the BEMA Patent Rights, and/or the Marks in the Territory and shall cooperate with the other Party to terminate such infringement. If legal proceedings become necessary, Arius shall have the right to bring and control such action or proceeding, using its choice of counsel, and Arius shall solely bear the cost with respect thereto. The above notwithstanding, without Arius Two’s prior written consent Arius may only settle any such claim so long as the terms of such settlement do not (a) impair Arius Two’s rights under this Agreement, (b) impair Arius Two’s rights in the BEMA Patent Rights and the Marks, or (c) impose any additional costs directly on Arius Two. Arius Two shall provide, at Arius’ expense, such assistance and cooperation to Arius as may be necessary to successfully prosecute any action against such Third Party. Any damages or other monetary awards recovered by Arius shall be applied proportionately first to defray the unreimbursed costs and expenses (including reasonable attorneys’ fees) incurred by Arius and Arius Two in the

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action. If any balance remains, Arius shall pay to Arius Two an amount equal to the Royalty that Arius Two would otherwise be entitled to under this Agreement if such remaining balance was treated as Net Sales. If any balance remains after payment to Arius Two, such balance shall be the property of Arius.

In the event Arius fails to institute proceedings or undertake reasonable efforts to terminate any Third Party infringement of the BEMA Patent Rights within 90 days of the later of: (a) receiving notification from Arius Two of any such infringement or (b) sending notice to Arius Two of such action, Arius Two may take (but shall have no obligation to do so) such action as it deems appropriate, including the filing of a lawsuit against such Third Party. In such event Arius will provide such assistance and cooperation to Arius Two as may be necessary, at Arius Two’s cost and expense.

Section 7.04 Infringement Claimed by Third Parties . In the event a Third Party commences a judicial or administrative proceeding against a Party and such proceeding, other than a proceeding to which Section 7.01 applies, pertains to the BEMA Patent Rights or Marks used in the Territory (the “Third Party Claim“), or threatens to commence such a Third Party Claim, the Party against whom such proceeding is threatened or commenced shall give prompt notice to the other Party. Arius may, using its choice of counsel and at its own cost and expense, defend any and all such Third Party Claims or proceedings, and Arius Two shall, at Arius’ cost and expense, provide such assistance and cooperation to Arius as may be necessary to successfully defend any such Third Party Claims. The above notwithstanding, without Arius Two’s prior written consent, Arius may only settle any such claim so long as the terms of such settlement do not (a) impair Arius Two’s rights hereunder, (b) impair Arius Two’s rights in the BEMA Patent Rights and the Marks, or (c) impose any additional costs directly on Arius Two. The above notwithstanding, if Arius elects not to defend a Third Party Claim that is not based upon, or does not result from, activities of Arius Two or a Third Party under an agreement between Arius Two and such Third Party, or the grant of rights from Arius Two to such Third Party, and involves a material adverse risk to either Party or Net Sales notwithstanding the survivability provisions of Section 13.05(d), the License may be terminated or rendered nonexclusive by Arius Two, in its sole discretion, upon 30 days’ notice to Arius within 30 days of Arius’ election not to defend such Third Party Claim, and Arius Two shall have the right to control the defense of such claims at Arius Two’s cost and expense using counsel of its own choice.

Section 7.05 Payment of Costs and Expenses . Upon its receipt of a reasonably detailed invoice setting forth Arius Two’s reasonable, documented costs and expenses incurred pursuant to any provision of this Article VII, Arius shall pay such costs and expenses within 30 days.

ARTICLE VIII

CONFIDENTIALITY

Section 8.01 Confidentiality . During the Term and for a period of five years thereafter, each Party shall maintain all Confidential Information of the other Party as confidential and shall not disclose any such Confidential Information to any Third Party or use any such Confidential

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Information for any purpose, except (a) as expressly authorized by this Agreement, (b) as required by law, rule, regulation or court order (provided that the disclosing Party shall first notify the other Party, shall use Commercially Reasonable Efforts to obtain confidential treatment of any such information required to be disclosed, and shall disclose only the minimum information required to be disclosed in order to comply), or (c) to its Affiliates, sublicensees, employees, agents, consultants and other representatives to accomplish the purposes of this Agreement, so long as such persons are under an obligation of confidentiality no less stringent than as set forth herein. Each Party may use such Confidential Information only to the extent required to accomplish the purposes of this Agreement. Each Party shall use at least the same standard of care as it uses to protect its own Confidential Information (but not less than a reasonable standard of care) to ensure that its Affiliates, employees, agents, consultants and other representatives do not disclose or make any unauthorized use of the other Party’s Confidential Information. Each Party shall promptly notify the other Party upon discovery of any unauthorized use or disclosure of the other Party’s Confidential Information.

Section 8.02 Disclosure of Agreement. Neither Party shall release to any Third Party or publish in any way any non-public information with respect to the terms of this Agreement without the prior written consent of the other Party, which consent shall not be unreasonably withheld. Notwithstanding the foregoing a Party may disclose the terms of this Agreement to potential investors, lenders, investment bankers and other financial institutions of its choice solely for purposes of financing the business operations of such Party, or, in the case of Arius, to any prospective or actual sublicensee, manufacturer, marketing or other corporate partner, acquirer, or acquisition target; provided such Party only discloses such information under conditions of confidentiality on terms substantially similar to those contained in this Article VIII. Nothing contained in this paragraph shall prohibit either Party from filing this Agreement as required by the rules and regulations of the Securities and Exchange Commission, national securities exchanges (including those located in countries outside of the United States) or the Nasdaq Stock Market; provided the disclosing Party discloses only the minimum information required to be disclosed in order to comply with such requirements, including requesting confidential treatment of this Agreement (after consultation with the other Party) and filing this Agreement in redacted form.

ARTICLE IX

REPRESENTATIONS AND WARRANTIES

Section 9.01 Corporate Power. As of the Effective Date, each Party hereby represents and warrants that such Party is duly organized and validly existing under the laws of the jurisdiction of its incorporation and has full power and authority to enter into this Agreement and the transactions contemplated hereby and to carry out the provisions hereof.

Section 9.02 Due Authorization. As of the Effective Date, each Party hereby represents and warrants that such Party is duly authorized to execute and deliver this Agreement and to perform its obligations hereunder.

Section 9.03 Binding Obligation. As of the Effective Date, each Party hereby represents and warrants that this Agreement is a legal and valid obligation binding upon it and is

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enforceable in accordance with its terms, except that the enforcement of the rights and remedies created hereby is subject to bankruptcy, insolvency, reorganization and similar laws of general application affecting the rights and remedies of creditors and that the availability of the remedy of specific performance or of injunctive relief is subject to the discretion of the court before which any proceeding therefor may be brought. As of the Effective Date, the execution, delivery and performance of this Agreement by such Party does not conflict with any agreement, instrument or understanding, oral or written, to which it is a party or by which it may be bound, nor violate any law or regulation of any court, governmental body or administrative or other agency having authority over it.

Section 9.04 ***

Section 9.05 Limitation on Warranties . Except as expressly set forth in this Agreement, nothing herein shall be construed as a representation or warranty by Arius Two to Arius that the BEMA Technology is not infringed by any Third Party, or that the practice of such rights does not infringe any published intellectual property rights of any Third Party. Neither Party makes any warranties, express or implied, concerning the commercial utility of the Product

Section 9.06 Limitation of Liability . NEITHER PARTY SHALL BE ENTITLED TO RECOVER FROM THE OTHER PARTY ANY SPECIAL, EXEMPLARY OR PUNITIVE DAMAGES (AS SUCH TERMS ARE DEFINED IN BLACK’S LAW DICTIONARY, SIXTH EDITION) IN CONNECTION WITH THIS AGREEMENT OR ANY LICENSE GRANTED HEREUNDER.

ARTICLE X

INDEMNIFICATION AND INSURANCE

Section 10.01 Arius Indemnified by Arius Two . Arius Two shall indemnify and hold Arius, its Affiliates, and their respective employees, directors, and officers, harmless from and against any liabilities or obligations, damages, losses, claims, encumbrances, costs or expenses (including attorneys’ fees) (any or all of the foregoing herein referred to as “Loss”) insofar as a Loss or actions in respect thereof occurs subsequent to the Execution Date, does not arise out of, or result from, the negligence or actions of Arius, and arises out of or is based upon (a) any misrepresentation or breach of any of the warranties, covenants, or agreements made by Arius Two in this Agreement; or (b) any claims that the use, manufacture, sale, or import of the BEMA Technology, any Products, or Marks by Arius Two, its affiliates, or their licensees (other than Arius, its Affiliates, and their licensees), excluding the licensing of rights to Arius under this Agreement and performance of obligations hereunder by Arius Two, infringes or infringed the patent, trademark, or proprietary right or any other published intellectual property right of a Third Party. Arius Two’s obligations to indemnify Arius hereunder shall not apply to the extent any such Loss arises out of or is based on the: (a) inactions or actions of Arius, its Affiliates or sublicensees for which Arius is obligated to indemnify Arius Two under Section 10.02 or (b) the negligence or wrongdoing of Arius, its Affiliates or sublicensees.

Section 10.02 Arius Two Indemnified by Arius . Arius shall indemnify and hold Arius Two, its Affiliates, and their respective employees, directors and officers, harmless from and

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against any Loss insofar as such Loss or actions in respect thereof occurs subsequent to the Effective Date, does not arise out of, or result from, the negligence of or actions of Arius Two, and arises out of or is based upon (a) any misrepresentation or breach of any of the warranties, covenants or agreements made by Arius in this Agreement; (b) Arius’ use of the Marketing Authorizations in the marketing, sale, distribution or promotion of the Product or the Demonstration Samples; (c) Arius’ or its sublicensee’s manufacture, development, marketing, use, handling, storage, sale, distribution or promotion of the Product or the Demonstration Samples; (d) any product liability claim that is brought against Arius Two by any Third Party due to the use of the Product in the Territory except to the extent Arius may be indemnified with respect thereto pursuant to the Supply Agreement; (e) any claims that the use, marketing, sale, promotion, distribution, manufacture, shipment or sale of the Marks or a Product by Arius, its Affiliates, or their licensees infringes the patent, including any willful infringement by Arius or its sublicensees, trademark or proprietary right or any other published intellectual property right of a Third Party; or (f) Arius’ prosecution of a Third Party infringement claim pursuant to Section 7.03. Arius’ obligations to indemnify Arius Two hereunder shall not apply to the extent any such Loss arises out of or is based on the: (i) inactions or actions of Arius Two, its Affiliates or sublicensees for which Arius Two is obligated to indemnify Arius under Section 10.01 or (ii) the negligence or wrongdoing of Arius Two, its Affiliates or sublicensees.

Section 10.03 Prompt Notice Required . No claim for indemnification hereunder shall be valid unless notice of the matter which may give rise to such claim is given in writing by the indemnitee (the “Indemnitee“) to the persons against whom indemnification may be sought (the “Indemnitor“) as soon as reasonably practicable after such Indemnitee becomes aware of such claim, provided that the failure to notify the Indemnitor shall not relieve the Indemnitor from any liability except to the extent that such failure to notify actually adversely impacts the Indemnitor’s ability to defend such claim. Such notice shall state that the Indemnitor is required to indemnify the Indemnitee for a Loss and shall specify the amount of Loss and relevant details thereof. The Indemnitor shall notify Indemnitee no later than 60 days from such notice of its intention to assume the defense of any such claim. In the event the Indemnitor fails to give such notice within that time the Indemnitor shall no longer be entitled to assume such defense.

Section 10.04 Indemnitor May Settle . The Indemnitor shall at its expense, have the right to settle and defend, through counsel reasonably satisfactory to the Indemnitee, any action which may be brought in connection with all matters for which indemnification is available. In such event the Indemnitee of the Loss in question and any successor thereto shall permit the Indemnitor full and free access to its books and records and otherwise fully cooperate with the Indemnitor in connection with such action; provided that this Indemnitee shall have the right fully to participate in such defense at its own expense. The defense by the Indemnitor of any such actions shall not be deemed a waiver by the Indemnitor of its right to assert a claim with respect to the responsibility of the Indemnitor with respect to the Loss in question. The Indemnitor shall have the right to settle or compromise any claim against the Indemnitee without the consent of the Indemnitee provided that the terms thereof: (a) provide for the unconditional release of the Indemnitee; (b) require the payment of compensatory monetary damages by Indemnitor only; (c) expressly state that neither the fact of settlement nor the settlement agreement shall constitute, or be construed or interpreted as, an admission by the Indemnitee of any issue, fact, allegation or any other aspect of the claim being settled and (d) do not materially adversely affect the Indemnitee. No Indemnitee shall pay or voluntarily permit the determination

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of any liability which is subject to any such action while the Indemnitor is negotiating the settlement thereof or contesting the matter, except with the prior written consent of the Indemnitor, which consent shall not be unreasonably withheld or delayed. If the Indemnitor fails to give Indemnitee notice of its intention to defend any such action as provided herein, the Indemnitee involved shall have the right to assume the defense thereof with counsel of its choice, at the Indemnitor’s expense, and defend, settle or otherwise dispose of such action. With respect to any such action which the Indemnitor shall fail to promptly defend, the Indemnitor shall not thereafter question the liability of the Indemnitor hereunder to the Indemnitee for any Loss (including counsel fees and other expenses of defense).

Section 10.05 Insurance . Each Party shall, at its sole cost and expense, obtain and keep in force sufficient comprehensive general liability insurance, including any applicable self-insurance coverage, with bodily injury, death and property damage including contractual liability and product liability coverage.

ARTICLE XI

COVENANTS

Section 11.01 Access to Books and Records . Each Party covenants and agrees that it shall permit the other Party to exercise such Party’s inspection rights as set forth in this Agreement.

Section 11.02 Marketing Expenses . Arius covenants and agrees that, as between Arius and Arius Two, except as otherwise expressly specified in this Agreement, Arius shall be solely responsible for the cost and implementation of all marketing, sales, promotional and related activities concerning the marketing, sale and promotion of the Products.

Section 11.03 Marketing Efforts . Arius covenants and agrees that it will obtain all Governmental Approvals necessary to market and sell the Fentanyl Product in such countries in the Territory as are required by Section 3.01(e) and any additional countries in the Territory in which Arius determines it shall, in its sole discretion, seek to sell Products.

Section 11.04 Compliance . Arius covenants and agrees that it shall comply with all Applicable Laws affecting the use, possession, distribution, advertising and all forms of promotion in connection with the sale and distribution of the Products and the Demonstration Samples in the Territory.

Section 11.05 Reports . Arius covenants and agrees that, except as otherwise specified in this Agreement, Arius shall have the obligation and responsibility for and shall make any and all necessary reports to each Competent Authority in the Territory, and, with respect to the Fentanyl Product, shall provide Arius Two with a complete copy of any such report simultaneously with the submission of the report to each Competent Authority in the Territory.

Section 11.06 Protection of the Marks . The Parties covenant and agree that neither Party nor their Affiliates shall publish, employ nor cooperate in the publication of, any misleading or deceptive advertising material with regard to the Parties, the Marks, or Arius’ trademarks for the Product.

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Section 11.07 Further Actions . Upon the terms and subject to the conditions hereof, each of the Parties hereto shall use its Commercially Reasonable Efforts to (a) take, or cause to be taken, all appropriate action and do, or cause to be done, all things necessary, proper or advisable under Applicable Law or otherwise to consummate and make effective the transactions contemplated by this Agreement, (b) obtain from Competent Authorities in the Territory any consents, licenses, permits, waivers, approvals, authorizations or orders required to be obtained or made by the Parties in connection with the authorization, execution and delivery of this Agreement and the consummation of the transactions contemplated by this Agreement and (c) make all necessary filings, and thereafter make any other required submissions, with respect to this transaction under (i) the Securities Exchange Act of 1934, as amended and the Securities Act of 1933, as amended, and the rules and regulations thereunder and any other applicable federal or state securities laws and (ii) any other Applicable Law. The Parties hereto shall cooperate with each other in connection with the making of all such filings, including by providing copies of all such documents to the other Party’s counsel (subject to appropriate confidentiality restrictions) prior to filing and, if requested, by accepting all reasonable additions, deletions or changes suggested in connection therewith.

Section 11.08 Equitable Relief . The Parties understand and agree that because of the difficulty of measuring economic losses to the non-breaching Party as a result of a breach of the covenants set forth in Article VIII or in this Article XI, and because of the immediate and irreparable damage that may be caused to the non-breaching Party for which monetary damages would not be a sufficient remedy, the Parties agree that the non-breaching Party will be entitled to seek specific performance, temporary and permanent injunctive relief, and such other equitable remedies to which it may then be entitled against the breaching Party. This Section 11.08 shall not limit any other legal or equitable remedies that the non-breaching Party may have against the breaching Party for violation of the covenants set forth in Article VIII or in this Article XI. The Parties agree that the non-breaching Party shall have the right to seek relief for any violation or threatened violation of Article VIII or this Article XI by the breaching Party from any court of competent jurisdiction in any jurisdiction authorized to grant the relief necessary to prohibit the violation or threatened violation of Article VIII or this Article XI. This Section 11.08 shall apply with equal force to the breaching Party’s Affiliates.

Section 11.09 INTENTIONALLY OMITTED.

Section 11.10 Non-competition.

(a) During the Term (as defined in Section 13.01 below), Arius Two shall not, with respect to the Territory, (i) enter into any license or development agreement with any Third Party regarding the BEMA Technology nor (ii) develop, manufacture, sell, market, distribute, or enter into any agreement regarding the development, manufacture, sale, marketing, or distribution of, any form of buccal drug delivery technology or pharmaceutical for buccal delivery (a “Competing Product”) that incorporates the same API, with respect to products incorporating a single API, or combination of APIs, with respect to products incorporating multiple APIs, as Products sold, marketed, manufactured, distributed, or under development by Arius, or subject to an executed agreement between Arius and a third party regarding such sale, marketing, manufacture, distribution, or development of a specific compound or class of related compounds under

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treatment are being requested are denoted with “***”.

the Control of such third party to the extent such sale, marketing, manufacture, distribution or development commences with respect to such compound, or with respect to a class of compounds, the first development candidate or product within such class within 90 days of the date such agreement is executed, at the time Arius Two begins to develop, manufacture, sell, market, or distribute, or first enters into an agreement for the development, manufacture, sale, marketing, or distribution of, such technology or pharmaceutical.

(b) The provisions of Section 11.10(a) shall not apply to any Competing Product developed by any entity with whom Arius Two merges or consolidates, or whose stock, assets, or any material portion thereof are purchased by or issued to Arius Two following any merger, consolidation, sale of substantially all of the outstanding capital stock of Arius Two, or similar transaction, provided that the foregoing exception to Section 11.10(a) contained in this Section 11.10(b) shall only apply to Competing Products developed by such entity prior to such transaction. Further, the provisions of Section 11.10(a) shall not apply at any time following a material breach by Arius of any provision of this Agreement.

ARTICLE XII

PRODUCT RECALL

Section 12.01 Product Recall Determination . If at any time or from time to time, a Competent Authority in the Territory requests Arius to conduct a Product Recall of a Product in the Territory or if a voluntary Product Recall of a Product in the Territory is contemplated by Arius, Arius shall immediately notify Arius Two in writing, and except as otherwise set forth in this Article XII Arius will, at its sole cost and expense, conduct such Product Recall in as expeditious a manner as reasonably possible to preserve the goodwill and reputation of the Product and the goodwill and reputation of the Parties. Notwithstanding the foregoing, Arius may immediately effect any Product Recall in the Territory (A) resulting from any death or life-threatening adverse event associated with any Product (including but not limited to the Fentanyl Product) or (B) required to comply with any regulatory or legal requirements, guidelines, directives, orders, or injunctions with respect to any Product (including but not limited to the Fentanyl Product).

Section 12.02 Product Recall Management. Arius shall have the right to control and/or conduct any Product Recall in the Territory, subject to Section 12.01 with respect to any Product. The Product Recall shall be the sole responsibility of Arius or its Affiliate and shall be carried out by Arius or its Affiliate in as expeditious a manner as reasonably possible to preserve the goodwill and reputation of the Product and the goodwill and reputation of the Parties. Arius and Arius Two (if applicable) shall maintain records of all sales and distribution of Product and customers sufficient to adequately administer a Product Recall, for the period required by Applicable Law and make such records available to the other Party immediately upon request.

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treatment are being requested are denoted with “***”.

Section 12.03 Product Recall Costs . Notwithstanding Section 12.02, the cost and expense of any Product Recall shall be allocated as follows:

(a) if such Product Recall shall be due to the negligence or the breach by Arius Two of its warranties or obligations hereunder or the misconduct of Arius Two, all such costs and expenses shall be borne and paid solely by Arius Two, and Arius Two will reimburse Arius for any such costs and expenses paid by Arius within 10 days of receipt of an invoice for such costs and expenses from Arius, and if not so paid Arius shall have the right to offset such amounts against amounts otherwise due by Arius to Arius Two hereunder;

(b) if such Product Recall shall be due to the negligence or the breach by Arius of its warranties or obligations hereunder or the misconduct of Arius, all such costs and expenses shall be borne and paid solely by Arius, and Arius will reimburse Arius Two for any such costs and expenses paid by Arius Two within 10 days of receipt of an invoice for such costs and expenses from Arius Two, and if not so paid Arius Two shall have the right to offset such amounts against amounts otherwise due by Arius Two to Arius hereunder; and

(c) if such Product Recall is a voluntary Product Recall (i) is due to the negligence or the breach by Arius Two of its warranties or obligations hereunder or the misconduct of Arius Two, all such costs and expenses shall be borne and paid solely by Arius Two, and Arius Two will reimburse Arius for any such costs and expenses paid by Arius within 10 days of receipt of an invoice and appropriate documentation for such costs and expenses from Arius and if not so paid Arius shall have the right to offset such amounts against amounts otherwise due by Arius to Arius Two hereunder or (ii) is due to manufacturer’s defect in a Product manufactured by or for Arius or the negligence or the breach by Arius of its warranties or obligations hereunder or the misconduct of Arius, all such costs and expenses shall be borne and paid solely by Arius, and Arius will reimburse Arius Two for any such costs and expenses paid by Arius Two within 10 days of receipt of an invoice and appropriate documentation for such costs and expenses from Arius Two, and if not so paid Arius Two shall have the right to offset such amounts against amounts otherwise due by Arius Two to Arius hereunder.

Section 12.04 Notification of Threatened Action . Throughout the duration of this Agreement and with respect to all Products supplied and purchased under this Agreement after the termination of this Agreement, each Party shall immediately notify the other Party of any information it receives regarding any threatened or pending action, inspection or communication by or from a concerned Competent Authority which may affect the safety or efficacy claims of the Product or the continued marketing of the Product. Upon receipt of such information during the duration of this Agreement, (i) Arius Two shall not take any action whatsoever without Arius’ prior written consent and (ii) Arius shall, when reasonably practicable, provide Arius Two with an opportunity to review and comment on any proposed action to be taken by Arius with respect thereto.

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treatment are being requested are denoted with “***”.

ARTICLE XIII

TERM; DEFAULT AND TERMINARIUS TWOON

Section 13.01 Term . This Agreement shall commence as of the Effective Date and shall expire on the expiration of the last applicable BEMA Patent Right in the Territory, if not terminated earlier pursuant to the terms of this Agreement (the “Term“).

Section 13.02 Termination by Either Party for Cause . Either Party may terminate this Agreement prior to the expiration of the Term upon the occurrence of any of the following:

(a) Upon or after the cessation of operations of the other Party or the bankruptcy, insolvency, dissolution or winding up of the other Party (other than dissolution or winding up for the purposes or reconstruction or amalgamation); or

(b) Upon or after the breach of any material provision of this Agreement by the other Party, if the breaching Party has not cured such breach, if capable of being cured within such time period, within 60 days after written notice thereof by the non-breaching Party; provided, however, (i) if any such breach relates solely to one or more Products, then the non-breaching Party may only terminate this Agreement to the extent it applies to such Product or Products and this Agreement shall remain in effect as it applies to all other Products and (ii) Arius Two shall not be entitled to terminate this Agreement (or any rights hereunder) for any failure of Arius to perform in accordance with the covenants contained in Section 2.01(a) or 3.01(e), except as permitted by Sections 2.01 or 3.01(e), as applicable.

Section 13.03 Termination by Arius Two . Arius Two may terminate this Agreement prior to the expiration of the Term upon the occurrence of any of the following:

(a) Upon the failure by Arius to pay for 30 days from receipt of notice thereof from Arius Two, pursuant to the terms of Section 14.07, any Royalty payment, or portion thereof, pursuant to Section 4.01 or Section 4.02. If any Royalty payment, or portion thereof, pursuant to Section 4.01 or Section 4.02, is the subject of a good faith dispute (a “Disputed Amount“) between Arius and Arius Two, Arius may in its discretion pay any such Disputed Amount to avoid breaching its payment obligations under Section 4.01 or Section 4.02, and in the event such amounts are finally determined not to be due by Arius, Arius Two shall repay, without interest, such amounts determined not to be due.

(b) Upon the occurrence of any material misrepresentation or omission in any Royalty Statement, which misrepresentation or omission is caused by Arius’ willful misconduct, gross negligence or bad faith.

Section 13.04 Remedies . All of the non-breaching Party’s remedies with respect to a breach of this Agreement, including but not limited to a breach of Section 2.01 or Section 3.01, shall be cumulative, and the exercise of one remedy under this Agreement by the non-defaulting Party shall not be deemed to be an election of remedies. These remedies shall include the non-breaching Party’s right to sue for damages for such breach without terminating this Agreement.

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Section 13.05 Effect of Termination .

(a) Upon termination of this Agreement by Arius Two pursuant to Sections 13.02 or 13.03, except as otherwise specified below, (i) Arius shall have no right to practice within the BEMA Patent Rights or use any of the BEMA Technology in the Territory, (ii) all rights, title or interest in, or other incidents of ownership under, the BEMA Technology and the Marks licensed hereunder shall, solely with respect to the Territory, revert to and become the sole property of Arius Two, (iii) Arius shall reimburse Arius Two for costs and expenses reasonably incurred or committed to by Arius Two prior to the effective date of such termination and for which Arius is otherwise obligated to reimburse Arius Two pursuant to this Agreement in connection with the activities performed by Arius Two prior to the effective date of such termination, provided that Arius Two shall use Commercially Reasonable Efforts to minimize such costs and expenses between the termination notice date and the date of termination, (iv) all sublicenses granted and co-marketing and co-promoting agreements executed by Arius pursuant to Sections 3.01(b) and (c) shall promptly be assigned to Arius Two effective as of the date of the termination of this Agreement, and (v) Arius hereby grants and assigns to Arius Two all of Arius’ right, title and interest in, to or under all Governmental Approvals, the Books and Records, the Clinical Documentation, the Results, the Marketing Authorizations to the extent used or useable in the Territory and all other data, reports, studies, analysis or similar items created or obtained by Arius 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 shall, in lieu of the foregoing assignment, grant Arius Two a world-wide, nonexclusive, perpetual, royalty-free, fully-paid license to the foregoing in the Territory for the sole purpose of developing, marketing, and commercializing Products. Arius shall deliver all such assigned items, including any copies thereof, to Arius Two within five days of termination of this Agreement by Arius Two pursuant to Section 13.02 or 13.03 and agrees to take such actions as Arius Two may reasonably request in order to effectuate the assignment or license, as applicable, set forth in this Section 13.05(a). Further, Arius hereby irrevocably appoints Arius Two (which appointment is coupled with an interest) as its attorney in fact to execute and deliver in the name of and on behalf of Arius all documentation necessary to effectuate the assignment or license, as applicable, set forth in this Section 13.05.

(b) Upon termination of this Agreement pursuant to Section 13.01 or by Arius pursuant to Section 13.02, Arius shall receive an irrevocable, exclusive, royalty-free license, with the right to sublicense, market, advertise, promote, distribute, offer for sale, sell and import the Products in the Territory.

(c) Upon termination of this Agreement by Arius Two under Sections 13.02 or 13.03, and at Arius Two’s election, Arius (and/or its Affiliates, if and as applicable) shall either (i) have the right, for a period of three months from the date of termination to distribute and sell all existing inventory of Products and Demonstration Samples, provided that such Products shall be sold at a price no less than 80% of the then current fair market value and that such sales shall be subject to the applicable terms and

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conditions of this Agreement, (ii) sell all remaining inventory of Product and Demonstration Samples to Arius Two at 100% of the purchase price paid by Arius or its Affiliates for such inventory (or, if manufactured by Arius or its Affiliates, the cost and expense of such manufacture) or (iii) destroy all such remaining inventory of Product and Demonstration Samples in accordance with Applicable Law, providing Arius Two with proof of destruction in writing sufficient to comply with Applicable Law. Any sales of Product or Demonstration Samples made by Arius to Arius Two pursuant to clause (ii) in the preceding sentence shall be made by Arius within 30 days of Arius’ receipt of Arius Two’s written notice electing to make such purchase, and shall be shipped to Arius Two appropriately packaged and stored. All transportation costs in connection with such sale, including without limitation, insurance, freight and duties, shall be paid by Arius, provided that Arius Two’s facility is located in the United States. Amounts owed by Arius Two to Arius pursuant to this Section 13.05(c) for the Product or Demonstration Samples sold to Arius Two shall be paid by Arius Two within 10 days after receipt by Arius Two of an appropriately detailed invoice from Arius for the amount so owing to it by Arius Two under this Section 13.05(c).

(d) Except as otherwise provided in this Agreement, expiration or termination of this Agreement shall not relieve the Parties of any obligation accruing prior to such expiration or termination. Except as set forth below or elsewhere in this Agreement, the obligations and rights of the Parties under Sections 2.05, 3.03, 3.04, 9.10, 9.11 and Articles IV, VIII, X, XI, XII and XIV and this Article XIII shall survive expiration or termination of this Agreement.

(e) Subject to the provisions of Section 13.05, within 30 days following the expiration or termination of this Agreement, each Party shall return to the other Party, or destroy, upon the written request of the other Party, any and all Confidential Information of the other Party in its possession and upon a Party’s request, such destruction (or delivery) shall be confirmed in writing to such Party by a responsible officer of the other Party.

Section 13.06 Conditions to Exercise of Certain Termination Rights. Prior to the exercise by Arius Two of any right of termination under Section 13.02 or 13.03 of this Agreement, and simultaneously with the delivery by Arius Two to Arius of any notice of breach under this Agreement, Arius Two shall (i) provide CDC with a copy of such notice simultaneously with the provision of such notice to Arius in accordance and (ii) provide CDC an opportunity to cure such breach within ninety (90) days of such notice if not cured by Arius. Any cure of any such breach by CDC or Arius shall be deemed a cure of such breach by Arius

ARTICLE XIV

MISCELLANEOUS

Section 14.01 No-Solicitation . During the Term, neither Party nor its Affiliates (collectively, the “Initiating Group“) shall, directly or through its representatives, solicit for employment or hire any officer, director or employee of the other Party or its subsidiaries or controlled Affiliates (collectively, the “Other Group“) with whom the Initiating Group has

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contact in connection with, or who otherwise is known by the Initiating Group to participate in, the transactions contemplated by this Agreement, without the prior written consent of the Other Group. The Initiating Group shall not be precluded from hiring any such person who has been terminated by the Other Group prior to commencement of employment discussions between such person and the Initiating Group or its representatives. “Solicitation” shall not include any generalized public advertisement or any other solicitation by the Initiating Group or its representatives that is not specifically directed toward any such employee of the Other Group or toward any group of such employees of the Other Group.

Section 14.02 Assignment . Neither this Agreement nor any rights or obligations hereunder may be assigned or otherwise transferred by either Party without the prior written consent of the other Party (which consent shall not be unreasonably withheld); provided, however, that either Party may assign this Agreement and its rights and obligations hereunder without the other Party’s consent (a) in connection with the transfer or sale of all or substantially all of the business of such Party to which this Agreement relates to another Party, whether by merger, sale of stock, sale of assets or otherwise, or (b) to any Affiliate. Notwithstanding the foregoing, any such assignment to an Affiliate shall not relieve the assigning Party of its responsibilities for performance of its obligations under this Agreement. The rights and obligations of the Parties under this Agreement shall be binding upon and inure to the benefit of the successors and permitted assigns of the Parties. Any assignment not in accordance with this Agreement shall be void.

Section 14.03 Force Majeure . Neither Party shall be held liable or responsible to the other Party nor be deemed to have defaulted under or breached this Agreement for failure or delay in fulfilling or performing any term of this Agreement when such failure or delay is caused by or results from causes beyond the control of the affected Party, including, but not limited to, fire, floods, embargoes, terrorism, war, acts of war (whether war be declared or not), insurrections, riots, civil commotions, strikes, lockouts or other labor disturbances, acts of God or acts, omissions or delays in acting by any governmental authority or the other Party, or for any other reason which is completely beyond the reasonable control of the Party (which shall include, but not be limited to, the imposition or requirement of, or request for, additional studies or the conduct of other preclinical or clinical development work by any governmental authority with respect to Arius’ efforts to obtain Governmental Approval for any Product or proposed Product to the extent that such additional studies or clinical development would not be reasonably foreseeable to a person or entity regularly engaged in seeking Governmental Approval for pharmaceutical products) (collectively a “Force Majeure“); provided that the Party whose performance is delayed or prevented shall continue to use good faith diligent efforts to mitigate, avoid or end such delay or failure in performance as soon as practicable.

Section 14.04 Governing Law . This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of North Carolina, excluding its choice of law provisions.

Section 14.05 Waiver . Except as specifically provided for herein, the waiver from time to time by either of the parties of any of their rights or their failure to exercise any remedy shall not operate or be construed as a continuing waiver of same or of any other of such Party’s rights or remedies provided in this Agreement.

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treatment are being requested are denoted with “***”.

Section 14.06 Severability . In case any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Any provision of this Agreement held invalid or unenforceable in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

Section 14.07 Notices . All notices and other communications provided for herein shall be dated and in writing and shall be deemed to have been duly given (a) on the date of delivery, if delivered personally, by e-mail or by facsimile machine, receipt confirmed, (b) on the following business day, if delivered by a nationally recognized overnight courier service, with receipt acknowledgement requested, or (c) three business days after mailing, if sent by registered or certified mail, return receipt requested, postage prepaid, in each case, to the party to whom it is directed at the following address (or at such other address as any party hereto shall hereafter specify by notice in writing to the other parties hereto):

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Section 14.08 Independent Contractors . It is expressly agreed that Arius Two and Arius shall be independent contractors and that the relationship between the two Parties shall not constitute a partnership or agency of any kind. Neither Arius Two nor Arius shall have the authority to make any statements, representations or commitments of any kind, or to take any action, which shall be binding on the other Party, without the prior written consent of the other Party.

Section 14.09 Rules of Construction . The Parties hereto agree that they have been represented by counsel during the negotiation and execution of this Agreement and, therefore, waive the application of any law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the Party drafting such agreement or document. Whenever the context hereof shall so require, the singular shall include the plural, the male gender shall include the female gender and neuter, and vice versa.

Section 14.10 Publicity . Arius and Arius Two shall consult with each other before issuing any press release with respect to this Agreement or the transactions contemplated hereby and neither shall issue any such press release or make any such public statement without the prior consent of the other, which consent shall not be unreasonably withheld; provided, however, (a) that a Party may, without the prior consent of the other Party, issue such press release or make such public statement as may upon the advice of counsel be required by law or the rules and regulations of the Nasdaq or any other stock exchange, or (b) if it has used reasonable efforts to consult with the other Party prior thereto, (such consent shall be deemed to have been given if the recipient of the press release or public statement fails to respond to the other Party within 48 hours after the recipient’s receipt of such press release or public statement). No such consent of the other Party shall be required to release information which has previously been made public.

Section 14.11 Entire Agreement; Amendment . This Agreement (including the Exhibits attached hereto) sets forth all of the covenants, promises, agreements, warranties, representations, conditions and understandings between the parties hereto with respect to the subject matter hereof and supersedes and terminates all prior agreements and understandings between the Parties. There are no covenants, promises, agreements, warranties, representations conditions or understandings, either oral or written, between the parties other than as set forth herein. No subsequent alteration, amendment, change or addition to this Agreement shall be binding upon the Parties hereto unless reduced to writing and signed by the respective authorized officers of the Parties.

Section 14.12 Inspection Rights . Upon five days prior written notice from either Party (the “Requesting Party“), the Party receiving such notice (the “Audited Party“) shall permit an independent certified public accountant selected by the Requesting Party and reasonably acceptable to the Audited Party to audit and/or inspect only those books and records (including but not limited to financial records) as may be necessary pursuant to the terms of the applicable Section of this Agreement granting the applicable inspection rights to the Requesting Party pursuant to this Section 14.12. Any such independent accounting firm shall be subject to the confidentiality provisions of this Agreement. Subject to the terms of this paragraph, such inspection shall be conducted (a) at the sole cost of the Requesting Party, (b) during the Audited Party’s normal business hours and (c) no more than twice in any 12 month period. If the

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applicable audit involves the calculation of payments to be made by one Party to the other Party and such accounting firm concludes that such calculations erroneously resulted in an overpayment or underpayment by one Party to the other Party (a “Calculation Error“), within 30 days of the date of delivery of such accounting firm’s report concluding that a Calculation Error occurred, the amount overpaid shall be repaid or the amount underpaid shall be augmented as necessary to correct the underpayment or overpayment caused by such Calculation Error, and if such Calculation Error resulted in an overpayment to or an underpayment from the Party responsible for such error, such Party shall pay interest on such amount at the Prime Rate of Interest. Section 14.12(a) notwithstanding, if the Audited Party was responsible for the Calculation Error and such Calculation Error was greater than 5%, the Audited Party shall be solely responsible for the costs associated with the audit.

Section 14.13 Headings . The captions contained in this Agreement are not a part of this Agreement, but are merely guides or labels to assist in locating and reading the several Articles hereof.

Section 14.14 Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Signatures to this Agreement may be transmitted via facsimile and such signatures shall be deemed to be originals.

Section 14.15 Third Party Beneficiary . CDC shall be a third party beneficiary of the provisions of this Agreement that relate specifically to CDC or rights available to CDC.

[Signature page to follow.]

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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed in duplicate by their duly authorized officers as of the Effective Date.

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treatment are being requested are denoted with “***”.