Exhibit 10.5


 


AMENDMENT TO NONQUALIFIED STOCK OPTION
AGREEMENT


 


This AMENDMENT
TO NONQUALIFIED STOCK OPTION AGREEMENT (this “Amendment”), dated as of June     ,
2016, is made and entered into by and between PhaseRx, Inc., a Delaware corporation (the “Company”),
and                    
(the “Participant”). Terms used in this Amendment with initial capital letters that are not otherwise
defined herein shall have the meanings ascribed to such terms in the Nonqualified Stock Option Agreement by and between the Company
and the Participant, dated June 1, 2016 (the “Option Agreement”), and in the PhaseRx 2016 Long-Term
Incentive Plan.


 


WHEREAS, pursuant to the Option
Agreement, the Company granted an option (the “Option”) to the Participant to purchase a total of            
(            ) full shares of Common Stock of the Company
at an Option Price equal to $5.08 per share; and


 


WHEREAS,
Section 23 of the Option Agreement provides that the Option Agreement can be amended by a writing signed by the parties thereto,
and the Company and the Participant now desire to amend the Option Agreement to revise the vesting provisions that would apply
in connection with a Change in Control.


 


NOW, THEREFORE,
in accordance with the terms of the Option Agreement, and for good and valuable consideration, the sufficiency of which is hereby
acknowledged, the Company and the Participant agree as follows:


 


		1.	Section 3 of the Option Agreement is
                                         amended by deleting the last paragraph of said Section and replacing it with the following
                                         new paragraph as follows:



 


In the event that a Change in
Control occurs and either (i) this Agreement is not assumed by the surviving corporation or its parent, or the surviving corporation
or its parent does not substitute its own option for this Stock Option or (ii) the Participant incurs a Termination of Service
without Cause (as defined herein) in connection with or within twelve (12) months following the Change in Control, then the total
Optioned Shares not previously vested shall become fully vested and exercisable upon the effective date of the Change in Control
or the date of the Participant’s Termination of Service, as applicable. For purposes of this Agreement, a Termination of
Service without Cause shall include the failure to reelect a Participant as an Outside Director if such Participant was an Outside
Director immediately prior to the Change in Control.


 


		2.	Section 4(b) of the Option Agreement
                                         is amended by deleting said Section in its entirety and replacing it with the following
                                         new Section 4(b) as follows:



 


b.         For
purposes of this Agreement, “Cause” means the Participant’s Termination of Service by the Company
because of: (i) the Participant’s conviction of, or plea of nolo contendere to, a felony or crime involving moral turpitude
or (ii) the Participant’s breach of fiduciary duty which involves personal profit. Notwithstanding the foregoing, in the
case of any Participant who has entered into an agreement with the Company or any Subsidiary that contains the definition of “cause”
(or any similar definition), then during the term of such agreement the definition contained in such agreement shall be the applicable
definition of “cause” under the Agreement as to such Participant if such agreement expressly so provides.


 




     


     


    

 


		3.	The Option Agreement, except as modified
                                         by this Amendment, shall remain in full force and effect.



  


*******


 




    2


     


    

 


IN WITNESS WHEREOF,
the Company and the Participant have executed, or caused to be executed, this Amendment effective as of the day and year first
written above.


 


	 	PhaseRx,
    Inc.
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:
	 	 	 
	 	THE PARTICIPANT
	 	 	 
	 	[Name]