Exhibit 10.16
GUARANTY
THIS GUARANTY
(“Guaranty”), dated as of September 5, 2007, is
made by BioDelivery Sciences International, Inc., a Delaware
corporation (“Guarantor”), in favor of QLT USA,
Inc., a Delaware corporation (“Lender”).
WITNESSETH:
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 $4,000,000 in
accordance with the terms of the Intellectual Property Assignment
Agreement dated September 5, 2007 between the Company and
Lender (the “Transfer Agreement”) and the Secured
Promissory Note dated September 5, 2007, 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
