Exhibit 10.1

JOINT PATENT AGREEMENT

February 28, 2007

This Joint Patent Agreement (the “Agreement”) entered into as of the 28th day of
February 2007 (the “Effective Date”) between CardioVascular BioTherapeutics,
Inc. (“CARDIO”), whose principal place of business is at 1635 Village Center
Circle, Suite 250, Las Vegas, NV 89134, and Phage Biotechnology Corporation
(“PHAGE”), whose principal place of business is at 1635 Village Center Circle,
Suite 260, Las Vegas, NV 89134.

WHEREAS, CARDIO plans to develop and commercialize therapeutic methods related
to the induction of angiogenesis or wound healing by administration of
Fibroblast Growth Factor (“FGF”); and,

WHEREAS, PHAGE plans to develop and commercialize recombinant DNA methods for
producing peptides/proteins; and

WHEREAS, CARDIO and PHAGE entered into a Joint Patent Ownership and License
Agreement dated as of August 16, 2004, which was later amended and restated as
of May 23, 2006 (the “Joint Ownership Agreement”), for consideration the
sufficiency of which was acknowledged in each agreement, pursuant to which PHAGE
granted CARDIO a fifty percent (50%) ownership interest in certain patents and
patent applications listed in the Joint Ownership Agreement, as well as certain
future patent rights, and the parties acknowledged that CARDIO would have
exclusive rights within a defined Field, while PHAGE would have exclusive rights
outside that Field; and

WHEREAS, CARDIO and PHAGE now wish to enter a new agreement superseding the
Joint Ownership Agreement so as to specify those future patents and patent
applications that are to be subject to joint ownership and so as to restate the
licenses granted in the Joint Ownership Agreement; and

WHEREAS, CARDIO and PHAGE acknowledge that the jointly owned and cross-licensed
rights are key to the parties’ respective plans for development and
commercialization and wish to further clarify the parties’ respective rights and
provide for continued access to the necessary rights in the event of insolvency;

NOW THEREFORE, in consideration of the supersession of the Joint Ownership
Agreement, the grant of ownership interests in future patent applications
herein, the patent licenses restated herein, the continuing security interests
granted herein and other valuable considerations, the sufficiency of which is
acknowledged, the parties agree as follows:

 

  1. Supersession of Joint Ownership Agreement. As of the Effective Date, the
Joint Ownership Agreement is superseded.

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2. Definitions.

2.1 “Field” shall encompass any angiogenic or wound healing compositions,
(including in particular, but without limitation, all FGF species, fragments,
derivatives, and analogs thereof, nucleic acid sequences encoding angiogenic or
wound healing proteins/peptides), vectors and host cells comprising said DNA
sequences, methods of making the angiogenic or wound healing compositions, and
methods of inducing angiogenesis or wound healing employing the said
compositions. CARDIO-developed devices and methods of use thereof for delivery
of angiogenic or wound healing compositions are NOT included within the Field,
and are NOT subject to joint ownership or any other terms of this Agreement.

2.2 “Territory” shall mean worldwide.

2.3 “Jointly Owned Patent Applications” shall mean the pending Foreign Patent
Applications listed below, including any foreign national patent applications
which claim priority to the Foreign Patent Applications and any Future Patent
Applications, including any continuations, divisionals, re-exams, reissues and
continuations-in-part and any other forms of related applications, that claim
domestic or international priority to any of the Issued United States or foreign
patents, or pending international or foreign patent applications, specifically
listed by patent or application number herein.

(a) Issued US Patents:

(i) U.S. 6,268,178 entitled “Phage-Dependent Super-Production of Biologically
Active Protein and Peptides;” and

(ii) U.S. 6,642,026 entitled “Method of Producing Biologically Active Human
Acidic Fibroblast Growth Factor and its Use in Promoting Angiogenesis.”

(iii) U.S. 6,773,899 entitled “Phage-Dependent Super-Production of Biologically
Active Protein and Peptides”;

(iv) U.S. 6,794,162, entitled “Phage-Dependent Super-Production of Biologically
Active Protein and Peptides;”

(b) Foreign Patent Applications

(i) International Patent Applications. All foreign patent applications related
to the above-referenced U.S. patents and applications and claiming priority to
the following international patent applications under the Patent Cooperation
Treaty (PCT):

A. International Patent Application No. PCT/US00/40020, published as
International Publication No. WO 00/71731 A2 on November 30, 2000 entitled
“Phage-Dependent Super-Production of Biologically Active Protein and Peptides”

B. International Patent Application No. PCT/US01/25537, published as
International Publication No. WO 02/14471 A2 on February 21, 2002 entitled
“Method of Producing Biologically Active Human Acidic Fibroblast Growth Factor
and its Use in Promoting Angiogenesis”

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C. International Patent Application No. PCT/US01/25477, published as
International Publication No. WO 02/14468 A2 on February 21, 2002, entitled
“Phage-Dependent Super-Production of Biologically Active Protein and Peptides;”

(ii) Foreign National or Regional Patent Applications. Following is a list of
foreign national and regional patent applications, issued or pending as of
February 28, 2007, which claim priority to the International Patent Applications
mentioned above.

 

No.

  

Appl. No.

  

Patent No.

  

Filing Date

  

Country

  

Title

  

Status

1

   00932819.6    1180153    May 24, 2000    AT   

Phage-Dependent Super-Production

Of Biologically Active Protein And

Peptides

   Issued

2

   00932819.6    1180153    May 24, 2000    BE   

Phage-Dependent Super-Production

Of Biologically Active Protein And

Peptides

   Issued

3

   00932819.6    1180153    May 24, 2000    CH   

Phage-Dependent Super-Production

Of Biologically Active Protein And

Peptides

   Issued

4

   00932819.6    1180153    May 24, 2000    DE   

Phage-Dependent Super-Production

Of Biologically Active Protein And

Peptides

   Issued

5

   00932819.6    1180153    May 24, 2000    EP   

Phage-Dependent Super-Production

Of Biologically Active Protein And

Peptides

   Issued

6

   00932819.6    1180153    May 24, 2000    FR   

Phage-Dependent Super-Production

Of Biologically Active Protein And

Peptides

   Issued

7

   00932819.6    1180153    May 24, 2000    UK   

Phage-Dependent Super-Production

Of Biologically Active Protein And

Peptides

   Issued

8

   00932819.6    1180153    May 24, 2000    IE   

Phage-Dependent Super-Production

Of Biologically Active Protein And

Peptides

   Issued

9

   00932819.6    1180153    May 24, 2000    LI   

Phage-Dependent Super-Production

Of Biologically Active Protein And

Peptides

   Issued

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10   

2000-

620108

      May 24, 2000    JP   

Phage-Dependent Super-Production

Of Biologically Active Protein And

Peptides

   Pending

11

  

2001

284914

  

2001

284914

   August 15, 2001    AU   

Phage-Dependent Super-Production Of Biologically Active Protein And

Peptides

   Issued

12

   2419203       August 15, 2001    CA   

Phage-Dependent Super-Production Of Biologically Active Protein And

Peptides

   Pending

13

   01964014.3       August 15, 2001    EP   

Phage-Dependent Super-Production Of Biologically Active Protein And

Peptides

   Pending

14

  

2002-

519596

      August 15, 2001    JP    Phage-Dependent Super-Production
Of Biologically Active Protein And Peptides    Pending

15

  

2003-

7002240

      August 15, 2001    KR    Phage-Dependent Super-Production
Of Biologically Active Protein And Peptides    Pending

16

  

2001

288256

  

2001

288256

   August 15, 2001    AU    Method of Producing Biologically
Active Human Acidic Fibroblast Growth Factor and its Use in Promoting
Angiogenesis    Issued

17

   2419338       August 15, 2001    CA    Method of Producing Biologically
Active Human Acidic Fibroblast Growth Factor and its Use in Promoting
Angiogenesis    Pending

18

   01967977.8       August 15, 2001    EP    Method of Producing Biologically
Active Human Acidic Fibroblast Growth Factor and its Use in Promoting
Angiogenesis    Pending

19

  

2002-

519599

      August 15, 2001    JP    Method of Producing Biologically
Active Human Acidic Fibroblast Growth Factor and its Use in Promoting
Angiogenesis    Pending

20

  

2003-

7002239

      August 15, 2001    KR    Method of Producing Biologically
Active Human Acidic Fibroblast Growth Factor and its Use in Promoting
Angiogenesis    Pending

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(c) Future Patent Applications:

All U.S. and foreign patent applications, including continuations, divisionals,
re-exams, reissues and continuations-in-part, and any other forms of related
applications, that claim domestic or international priority to any of the issued
United States or foreign patents, or pending United States, international, or
foreign patent applications, specifically listed by patent or application number
in Section 2.3.

2.4 “Jointly Owned Patents” shall mean the Issued US Patents listed above,
patents issued on the Foreign National or Regional Patent Applications listed
above, and any patents that issue directly from any Jointly Owned Patent
Application.

2.5 “Patent Rights” shall mean the rights to make, use, practice, sell, offer to
sell, and import the Products and/or Processes covered by any issued, unexpired
claim of a Jointly Owned Patent or a pending claim of a Jointly Owned Patent
Application.

2.6 “Product” shall mean any product which:

(a) is covered in whole or in part by an issued, unexpired claim of a Jointly
Owned Patent or a pending claim of a Jointly Owned Patent Application; or

(b) is manufactured by using a process which is covered in whole or in part by
an issued, unexpired claim of a Jointly Owned Patent or a pending claim of a
Jointly Owned Patent Application.

2.7 “Process” shall mean any process which is covered in whole or in part by an
issued, unexpired claim of a Jointly Owned Patent or a pending claim of a
Jointly Owned Patent Application.

2.8 “Affiliate” means, with respect to any person or entity, any other person or
entity which, directly or indirectly, controls, is controlled by or is under
common control with such entity. The various forms of the term “control”, as
used in the immediately preceding sentence, means the right to exercise,
directly or indirectly, more than fifty percent (50%) of the voting rights
attributable to the equity of the subject entity or the possession, directly or
indirectly, of power to direct or cause the direction of management or policies
of the subject entity.

2.9 “Confidential Information” as used herein means any and all information
provided by either PHAGE or CARDIO or either of their Affiliates (the
“Provider”) to the other party to this Agreement or its Affiliates (the
“Recipient”) regarding the technology, business, operations and/or assets of the
Provider, and shall include drawings, product requirements, designs, plans,
ideas, formulae, compositions, blends, processes, know-how, processes and
techniques, systems, research and

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development information, proposals, technical data, financial and accounting
data, business and marketing plans, and customer and supplier lists and related
information; or information relating to devices, methods, apparatus, research,
yields or specifications; provided that, notwithstanding the foregoing, the term
“Confidential Information” shall not include (a) information which is or becomes
a part of the public domain through no act or omission of the Recipient;
(b) information which was in the Recipient’s lawful possession prior to the
disclosure and had not been obtained by the Recipient either directly or
indirectly from the disclosing party; (c) information which is lawfully
disclosed to the Recipient by a third party without restriction on disclosure;
or (d) information which the Recipient can show, through documented evidence, to
have been independently developed by the Recipient.

2.10 “Liabilities” shall mean any and all obligations, liabilities and
indebtedness of PHAGE or CARDIO or to any parent, affiliate or subsidiary of
PHAGE or CARDIO of any and every kind and nature, howsoever created, arising or
evidenced and howsoever owned, held or acquired, whether now or hereafter
existing, whether now due or to become due, whether primary, secondary, direct,
indirect, absolute, contingent or otherwise (including, without limitation,
obligations of performance), whether several, joint or joint and several, and
whether arising or existing under written or oral agreement or by operation of
law.

3. Patent Assignments.

To the extent that Future Patent Applications are not already the subject of one
or more preexisting assignments perfecting joint title in PHAGE and CARDIO,
PHAGE and CARDIO agree that all such Future Patent Applications will be assigned
by the respective inventors to PHAGE and CARDIO jointly, with each party having
a fifty percent (50%) ownership interest. PHAGE and CARDIO anticipate that these
inventors will be under a contractual or employment-based obligation to assign
either to PHAGE or to CARDIO. PHAGE and CARDIO agree to compel such inventors to
execute any documents that may be necessary to effectuate the joint assignment
to PHAGE and CARDIO. Upon such assignment, a jointly assigned Future Patent
Application shall be included in the defined Jointly Owned Patent Applications.

4. License Grant

4.1 Within the Field. PHAGE hereby grants to CARDIO a non-revocable,
royalty-bearing (subject to Section 11), exclusive right within the Territory to
the Patent Rights in the Field, including the right to sublicense to third
parties within the Field, provided that any third party sublicensee shall be
subject to all of CARDIO’s obligations under Sections 14, 15, 17 and 18.

4.2 Outside the Field. CARDIO hereby grants to PHAGE a non-revocable, royalty
free, exclusive right within the Territory to the Patent Rights in all other
fields outside of the Field, including the right to sublicense to third parties
outside of the Field. The license is royalty free as agreed between the parties
in exchange for PHAGE’s grant to CARDIO of a fifty percent (50%) ownership
interest in the Jointly Owned Patents.

5. KBDC License. CARDIO’s rights and obligations under this agreement are
subject to a pre-existing agreement between CARDIO and Korea Biotechnology
Development Co., Ltd. (“KBDC”) granting exclusive rights to manufacture and
market certain Products within the Field in the territories of Korea, China and
Taiwan.

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6. Grant of Security Interest.

6.1 As security for the payment of PHAGE’s Liabilities to CARDIO under this
Agreement, including performance of all contractual obligations, PHAGE hereby
grants to CARDIO a continuing security interest in the Jointly Owned Patents and
Jointly Owned Patent Applications. PHAGE agrees to execute: (i) a UCC-1
financing statement to evidence and perfect this security interest; and (ii) any
other documents reasonably requested by CARDIO to permit creation of an
enforceable, perfected security interest (collectively, the “CARDIO Security
Documentation”). PHAGE hereby appoints CARDIO as its attorney-in-fact to
execute, file and otherwise deliver the CARDIO Security Documentation on PHAGE’s
behalf, provided that CARDIO, as applicable, must give contemporaneous notice to
PHAGE of the filing, and give PHAGE a copy of any filed CARDIO Security Document
within thirty (30) days of receiving a stamped copy.

6.2 As security for the payment of CARDIO’s Liabilities to PHAGE under this
Agreement, including performance of all contractual obligations, CARDIO hereby
grants to PHAGE a continuing security interest in the Jointly Owned Patents and
Jointly Owned Patent Applications. CARDIO agrees to execute: (i) a UCC-1
financing statement to evidence and perfect this security interest; and (ii) any
other documents reasonably requested by PHAGE to permit creation of an
enforceable, perfected security interest (collectively, the “PHAGE Security
Documentation”). CARDIO hereby appoints PHAGE as its attorney-in-fact to
execute, file and otherwise deliver the PHAGE Security Documentation on CARDIO’s
behalf, provided that PHAGE, as applicable, must give contemporaneous notice to
CARDIO of the filing, and give CARDIO a copy of any filed PHAGE Security
Document within thirty (30) days of receiving a stamped copy.

7. Rights Upon Insolvency. The parties acknowledge that each party reposes trust
and confidence in the other within the meaning of Sections 365(c) and (f) of the
United States Bankruptcy Code (“Bankruptcy Code”) so that, in the event of the
bankruptcy of (i) PHAGE, CARDIO will be excused from accepting performance of
PHAGE’s obligations under this Agreement from anyone other than an assignee
approved in writing by CARDIO; or (ii) CARDIO, PHAGE will be excused from
accepting performance of CARDIO’s obligations under this Agreement from anyone
other than an assignee approved in writing by PHAGE.

The parties agree that each party is a “licensee of intellectual property” as
that term is defined in §365(n) of the Bankruptcy Code and will continue to have
all of the rights relating to technology licensed hereunder as provided in this
Agreement, at its election, notwithstanding any bankruptcy by the other party,
even if PHAGE or CARDIO attempts to reject this Agreement as an “executory
contract” under the Bankruptcy Code.

8. Right of First Refusal.

8.1 As to CARDIO. In the event that PHAGE files a voluntary petition for
bankruptcy pursuant to title 11 of the United States Code (the “Bankruptcy
Code”) or is the subject of an involuntary bankruptcy petition pursuant to the
Bankruptcy Code, if at any time during such a bankruptcy proceeding PHAGE shall
receive an offer from any party to purchase PHAGE’s ownership interests in any
of the Jointly Owned Patents or Jointly Owned Patent Applications, or PHAGE’s
rights as a licensee or licensor of the Patent Rights under this Agreement,
which offer PHAGE intends to accept, then PHAGE shall deliver to CARDIO a copy
of said offer or proposed contract (with the name

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of the proposed purchaser deleted, if PHAGE so desires), and CARDIO shall have
the right, for a period of fourteen (14) days after delivery of such offer or
contract, to purchase such ownership interests or license rights on the same
terms and provisions as set forth in such offer or contract. CARDIO shall
exercise this right, if at all, by delivering its written notice of exercise to
PHAGE on or before the expiration of said fourteen (14) day period. Upon such an
exercise, PHAGE and CARDIO shall proceed to close in accordance with such
contract. PHAGE shall have and retain any and all of its rights under this
Agreement applicable to the period prior to such closing. If CARDIO does not so
exercise its right of first refusal with respect to such offer or contract
within said 14 day period, then PHAGE shall be free to consummate the
transaction in accordance with the terms of such offer or contract, and any
amendments thereto which do not vary any of the material business terms in any
significant degree. If PHAGE shall fail to consummate such transaction within
one hundred eighty (180) days after PHAGE’s notice to CARDIO (or later, if the
offer or contract contained a later closing date), then this right of first
refusal shall again apply to any further offer which PHAGE intends to accept.

(a) Nothing herein shall be deemed to prevent or prohibit PHAGE’s first
accepting the offer or proposed contract with the proposed purchaser, expressly
subject to CARDIO’s right of first refusal, and then proceeding to notify CARDIO
as set forth above.

(b) All information or copies of offers or contracts submitted to CARDIO
hereunder shall be treated by CARDIO as strictly confidential, and shall not be
disclosed to any other party, other than CARDIO’s professional advisors.

8.2 As to PHAGE. In the event that CARDIO files a voluntary petition for
bankruptcy pursuant to title 11 of the United States Code (the “Bankruptcy
Code”) or is the subject of an involuntary bankruptcy petition pursuant to the
Bankruptcy Code, if at any time during such a bankruptcy proceeding CARDIO shall
receive an offer from any party to purchase CARDIO’s ownership interests in any
of the Jointly Owned Patents or Jointly Owned Patent Applications, or CARDIO’s
rights as a licensee or licensor of the Patent Rights under this Agreement,
which offer CARDIO intends to accept, then CARDIO shall deliver to PHAGE a copy
of said offer or proposed contract (with the name of the proposed purchaser
deleted, if CARDIO so desires), and PHAGE shall have the right, for a period of
fourteen (14) days after delivery of such offer or contract, to purchase such
ownership interests or license rights on the same terms and provisions as set
forth in such offer or contract. PHAGE shall exercise this right, if at all, by
delivering its written notice of exercise to CARDIO on or before the expiration
of said fourteen (14) day period. Upon such an exercise, CARDIO and PHAGE shall
proceed to close in accordance with such contract. CARDIO shall have and retain
any and all of its rights under this Agreement applicable to the period prior to
such closing. If PHAGE does not so exercise its right of first refusal with
respect to such offer or contract within said 14 day period, then CARDIO shall
be free to consummate the transaction in accordance with the terms of such offer
or contract, and any amendments thereto which do not vary any of the material
business terms in any significant degree. If CARDIO shall fail to consummate
such transaction within one hundred eighty (180) days after CARDIO’s notice to
PHAGE (or later, if the offer or contract contained a later closing date), then
this right of first refusal shall again apply to any further offer which CARDIO
intends to accept.

(a) Nothing herein shall be deemed to prevent or prohibit CARDIO’s first
accepting the offer or proposed contract with the proposed purchaser, expressly
subject to PHAGE’s right of first refusal, and then proceeding to notify PHAGE
as set forth above.

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(b) All information or copies of offers or contracts submitted to PHAGE
hereunder shall be treated by PHAGE as strictly confidential, and shall not be
disclosed to any other party, other than PHAGE’s professional advisors.

9. Technical Development Services.

9.1 Scope. PHAGE agrees to provide technical development services to CARDIO for
the development and regulatory approvals of FGF, including, but not limited to,
lab work, testing, and production of FGF for clinical trials, all at the
direction and request of CARDIO.

9.2 Compensation. CARDIO agrees to pay PHAGE for any Technical Development
Services performed by PHAGE at CARDIO’s direction. Payment for such services
will be limited to PHAGE’s actual cost of service including direct, indirect and
overhead costs, with no profit component. Any such amounts will be billed to
CARDIO on a monthly basis. Payments for Technical Development Services are in
addition to the compensation set forth in Section 10 and the royalties set forth
in Section 11.

10. FGF Manufacturing.

10.1 Scope. If CARDIO so requests, PHAGE will produce FGF in commercial
quantities for CARDIO, including any other Products.

10.2 Compensation. CARDIO shall purchase FGF from PHAGE by paying four percent
(4%) of CARDIO’s net sales price of finished Product to end customer or
distributor.

11. Royalty. In consideration for the grant of the exclusive right to the Patent
Rights in the Field, CARDIO shall pay PHAGE a six percent (6%) royalty on the
net sales price of finished Product to end customer or distributor.

12. Term. Unless terminated under Section 20, the rights and obligations set
forth in this Agreement shall commence as of the effective date of this
Agreement and end upon the later of (a) the expiration of the last to expire
Jointly Owned Patent and (b) the abandonment of the last pending Jointly Owned
Patent Application.

13. Patent Prosecution and Maintenance.

13.1 During the Term of this Agreement, CARDIO and PHAGE will be jointly
responsible for the filing, payment, prosecution and maintenance of all Jointly
Owned Patents and Jointly Owned Patent Applications, irrespective of whether the
inventions resulting in the Jointly Owned Patents and Jointly Owned Patent
Applications were developed jointly or individually by either party. A party
can, at its sole discretion, assign its entire right, title and interest in a
particular Jointly Owned Patent or Jointly Owned Patent Application to the other
party, in which case, the assigning party shall bear no further responsibility
for the filing, payment, prosecution and maintenance of such Jointly Owned
Patent or Jointly Owned Patent Application, and it shall lose its rights in such
Jointly Owned Patent or Jointly Owned Patent Application.

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13.2 The parties shall jointly agree on patent counsel. In the event that the
parties can not agree on patent counsel, each party shall have the right to
appoint its own counsel, pursuant to the Manual of Patent Examining Procedure
(MPEP) § 402.10 with each party bearing the cost of its own patent counsel.

13.3 The parties agree that patent counsel shall implement instructions from
both parties to the extent that such instructions are not inconsistent.

13.4 In the event that the parties cannot agree on instructions for the filing,
payment, prosecution and/or maintenance of a Jointly Owned Patent or Jointly
Owned Patent Application:

(a) for a Jointly Owned Patent or Jointly Owned Patent Application covering an
invention developed by one party, the developing party shall control the
prosecution and/or maintenance of such patent or application;

(b) for a Jointly Owned Patent or Jointly Owned Patent Application covering an
invention jointly developed by both parties, CARDIO shall control the
prosecution and/or maintenance of such patent or application.

14. Patent Infringement. Upon learning of any infringement of any Jointly Owned
Patent by a third party or parties in any country, CARDIO and PHAGE will
promptly inform each other, as the case may be, in writing of that fact and will
supply the other with any available evidence pertaining to the infringement. In
the event that CARDIO and PHAGE mutually agree to bring suit, costs and expenses
shall be shared equally and any recovery in excess of expenses shall be shared
equally. In such event, no settlement, consent, judgment or other voluntary
final disposition of the suit may be entered into without the consent of both
parties, which shall not be unreasonably withheld. In the event that one party
does not agree to take steps to stop the infringement (“non-moving party”), the
other party (“moving party”) shall have the right to bring suit at its own
expense, wherein any recovery shall be solely owned by the party bringing suit,
and that party shall have the right to enter into settlement, consent, judgment
or other voluntary final disposition without the consent of the other party. In
such case, the moving party shall bear all reasonable costs and fees including
attorney fees incurred by the non-moving party as result of being joined in the
suit or otherwise participating in such suit.

15. Indemnification.

15.1 PHAGE agrees to release, indemnify and hold harmless CARDIO, its Directors,
officers, and employees against any and all losses, expenses, claims, actions,
lawsuits and judgments thereon (including attorney’s fees through the appellate
levels) which may be brought against CARDIO as a result of or arising out of any
negligent act or omission of PHAGE in its manufacture and supply of FGF or other
angiogenic peptides/proteins to CARDIO. CARDIO agrees to release indemnify and
hold harmless PHAGE, its Directors, officers, and employees against any and all
losses, expenses, claims, actions, lawsuits and judgments thereon (including
attorney’s fees through the appellate levels) which may be brought against PHAGE
as a result of or arising out of any negligent act or omission of CARDIO in its
use of the FGF or other angiogenic peptides/proteins that PHAGE manufactures.

15.2 This Agreement to reimburse and indemnify under the circumstances set forth
above shall continue after the termination of this Agreement.

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16. Warranties. CARDIO and PHAGE make NO warranties, express or implied, and
hereby disclaim all such warranties, as to any matter whatsoever, including,
without limitation, the condition of any Product or Process, whether tangible or
intangible, assigned and/or licensed under this Agreement; or the
merchantability, or fitness for a particular purpose of the Product or Process;
or that the use of the Product or Process will not infringe any patent,
copyrights, trademarks, or other rights. CARDIO and PHAGE shall not be liable
for any direct, consequential, or other damages suffered by the other party or
any third parties resulting from the use, production, manufacture, sale, lease,
consumption, or advertisement of the Product or Process. The provisions of this
Section shall continue beyond the termination of this Agreement.

17. Reports and Records.

17.1 Commencing one year after the first sale, CARDIO shall furnish to PHAGE a
report in writing specifying during the preceding calendar quarter:

(a) the amount of Product sold hereunder by CARDIO;

(b) the total billings for all Products sold;

(c) the total royalties due; and

(d) the names and addresses of all sublicensees.

Such reports shall be due within forty five (45) days following the last day of
each calendar quarter in each year during the term of this Agreement. Each such
report shall be accompanied by payment in full of the amount due PHAGE in United
States dollars.

17.2 For a period of three years from the date of each report pursuant to
Section 17.1, CARDIO shall keep records adequate to verify each such report and
accompanying payment made to PHAGE under this Agreement, and an independent
Certified Public Accountant or Accounting Firm selected by PHAGE and acceptable
to CARDIO may have access, on reasonable notice during regular business hours,
not to exceed once per year, to such records to verify such reports and
payments. Such Accountant or Accounting Firm shall not disclose to PHAGE any
information other than that information relating solely to the accuracy of, or
necessity for, the reports and payments made hereunder. The fees and expense of
the Certified Public Accountant or Accounting Firm performing such verification
shall be borne by PHAGE unless in the event that the audit reveals an
underpayment of royalty by more than ten (10%) percent, the cost of the audit
shall be paid by CARDIO.

18. Marking and Standards.

18.1 Prior to the issuance of any Jointly Owned Patent, CARDIO agrees to mark
Products (or their containers or labels) made, sold, or otherwise disposed of by
it under the license granted in this Agreement with a proper patent notice
referencing the patent number of the Jointly Owned Patent as specified under the
patent laws of the United States or applicable jurisdiction.

18.2 If CARDIO elects to make FGF or have FGF made for its use under the terms
of this Agreement, CARDIO further agrees to maintain satisfactory standards in
respect to the nature of the Product manufactured and/or sold by CARDIO. CARDIO
agrees that all Products manufactured and/or sold by it shall be of a quality
which is appropriate to products of the type here involved. CARDIO agrees that
similar provisions shall be included by sublicenses of all tiers.

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19. Confidentiality. Neither CARDIO nor PHAGE will publish, reproduce, disclose
or release any other party’s Confidential Information, in whole or in part, to
any third party (including without limitation to any customer, agent, or
government agency) without the prior written consent of such other party or
being required to do so by a Court of competent jurisdiction. Confidential
Information may be disclosed to sublicensees, subcontractors, and Affiliates of
Recipient provided that such person has a “need to know” and agrees to be bound
by the provisions of this Section. The Recipient will employ at least the same
degree of care in protecting the Provider’s Confidential Information as it
employs in protecting its own confidential information, but not less than a
reasonable degree of care. The Recipient will ensure that Confidential
Information of Provider is disclosed only to those of its employees or the
employees of another party hereto who require access to such information in
connection with this Agreement and who have been advised of the confidentiality
provisions of this Agreement. Recipient will use the Confidential Information
only in connection with this Agreement, and will not otherwise use such
Confidential Information for its own benefit or to the Provider’s detriment.
Upon request by Provider, Recipient will return to Provider all Confidential
Information, including all copies, derivatives, or summaries thereof. In the
event that Recipient or anyone to whom it transmits the Provider’s Confidential
Information pursuant to this Agreement becomes legally compelled by a court of
competent jurisdiction to disclose any Confidential Information, Recipient will
provide Provider with prompt notice so that Provider may seek a protective order
or other appropriate remedy, after which Recipient may disclose such
Confidential Information to the extent required by law.

20. Termination. In the event that PHAGE (i) becomes insolvent; (ii) fails to
pay its debts or perform its obligations in the ordinary course of business as
they mature; (iii) admits in writing its insolvency or inability to pay its
debts or perform its obligations as they mature; or (iv) becomes the subject of
any voluntary composition or general assignment for the benefit of creditors
that is not dismissed with prejudice within thirty (30) days after the
institution of such proceeding, then CARDIO may terminate this Agreement upon
written notice (“Notice”) to PHAGE setting forth the date the termination will
be effective (“Termination Date”). On the Termination Date, PHAGE shall
discontinue all use of the Patent Rights, patents and other rights licensed to
it hereunder and, within five (5) days, shall return all copies of Confidential
Information to CARDIO. All sublicenses duly granted in accordance with the terms
of this Agreement before the Termination Date shall continue in full force and
effect but PHAGE may not grant or renew any sublicenses after the Termination
Date.

21. Assignability. None of the parties shall assign this Agreement or any
rights, including but not limited to the Patent Rights, or duties hereunder
without the written consent of each of the other parties. Neither party shall
assign its ownership interest in the Jointly Owned Patents or Jointly Owned
Patent Applications to a third party without the written consent of the other
party. If either party desires to transfer its ownership interest in the Jointly
Owned Patents or Jointly Owned Patent Applications, the non-transferring party
shall have first right of refusal of such ownership interest. Neither CARDIO nor
PHAGE shall have the right to sublicense any Patent Rights licensed hereunder
beyond the scope of the license granted to CARDIO and PHAGE pursuant to this
Agreement. Each party is relying on the identity, business, business skill and
reputation of the other in entering into this Agreement, and none of the parties
have agreed to allow the other parties to assign its respective interests in
this Agreement nor to grant sublicenses except as specifically provided in this
Agreement. For the purposes of this Agreement, “assignment” is used in its most
expansive form and means the sale, disposition, gift,

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assignment, pledge, hypothecation, creation of security interest or other
transfer, directly or indirectly, voluntary or by operation of law, in whole or
in part, of any right, privilege, benefit, or other interest related in any way
to the parties’ interests in this Agreement. Notwithstanding the foregoing, a
party hereunder may transfer its rights hereunder in connection with a merger or
consolidation or the assignment or other transfer of all or substantially all of
its assets.

22. Equitable Relief. The parties recognize that irreparable injury will result
from a breach of any provision of this Agreement and that money damages will be
inadequate to fully remedy the injury. Accordingly, in the event of a breach or
threatened breach of one or more of the provisions of this Agreement, any party
who may be injured (in addition to any other remedies which may be available to
that party) will be entitled to one or more preliminary or permanent orders
(i) restraining and enjoining any act which would constitute a breach, or
(ii) compelling the performance of any obligation which, if not performed, would
constitute a breach.

23. Binding. This Agreement shall extend to and be binding upon the successors
and legal representatives and permitted assigns of CARDIO and PHAGE.

24. Counterparts. This Agreement may be executed in counterparts, each of which
shall constitute an original copy of the Agreement.

25. Governing Law. This Agreement shall be construed without regard to any
conflict of laws principles, and interpreted in accordance with the laws of the
State of California.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
Effective Date.

 

CARDIOVASCULAR BIOTHERAPEUTICS, INC. By:  

/s/Mickael A. Flaa

Name:   Mickael A. Flaa Title:   Chief Financial Officer PHAGE BIOTECHNOLOGY
CORPORATION By:  

/s/ John W. Jacobs

Name:   John W. Jacobs Title:   Chief Operating Officer