Document:

Development Agreement

 Exhibit 10.5 
  
 DEVELOPMENT AGREEMENT 
 BETWEEN 
 BiopolyMed, Inc. 
 And 
 Phage Biotechnology, Inc. 
  
 This Development Agreement (Agreement) is dated the 7th day of May, 2004, by and between BiopolyMed, Inc., 711 Korea Techno Complex, 126-16,5-ga,
Ananm-dong, Sungbuk-gu, Seoul, Korea 136-701, (“BPM”), and Phage Biotechnology, Inc., 14272 Franklin Avenue, Suite 110, Tustin, California 92780, (Phage) (together “The Parties”). 
  
 WHEREAS, the Parties desire to immediately develop a PEGylated alpha
Interferon 2b for use and sale in the United States of America (USA) and other global markets; and, 
  
 WHEREAS, Phage may desire to develop further PEGylated Products for use and sale in the USA and other global markets; and, 
  
 WHEREAS, BPM has know-how and intellectual property rights necessary to carry
out the terms of the Agreement; and, 
  
 WHEREAS, the parties
desire to enter into exclusive worldwide license agreements of selected PEGylated Products; and, 
  
 WHEREAS, the first phase of development of a PEGylated alpha Interferon 2b product has been completed; and 
  
 WHEREAS, the Parties wish to formalize their understanding with respect to
this Project. 
  
 NOW, THEREFORE, for valuable consideration as
described below, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows: 
  

	I.	DEFINITIONS 

  
 “PEGylated Product(s)” shall mean all products modified by the addition of polyethylene glycol, which are developed, manufactured, marketed,
used and/or sold in accordance with the terms of this Agreement. 
  
 “Licensed Information” shall mean all confidential or proprietary information, trade secrets and know how owned or controlled by BPM relating to PEGylation of products or any other technology that is necessary to carry out the
terms of the Agreement. 
  
 “Net Sales” shall mean
gross sales of the PEGylated Products anywhere in the world, less all sales, use, value added and excise taxes, duties and consular fees and other similar governmental charges; transportation and delivery charges or allowances; customary trade,
quantity, cash and other discounts and rebates; credits or rebates for returned goods and goods not accepted by the customer; commissions to agents; and uncollected accounts receivable, which are over 180 days past due and are recorded on the books
of Phage as a bad debt in accordance with generally accepted accounting principles. 
  

 - 1 - 

	II.	GRANT OF LICENSE 

  

	 	A.	BPM hereby grants to Phage (i) an exclusive worldwide license to make, have made, use, market, import, have imported, offer to sell, and sell all the PEGylated Products for
which actual development has occurred pursuant to this Agreement; and (ii) an exclusive worldwide license to the Licensed Information with respect to the five PEGylated Products described below. 

  

	 	B.	The grant of rights in II.A. above includes the right to sublicense in whole or in part all rights granted to Phage by BPM. 

  

	III.	DEVELOPMENT OF PEGYLATED PRODUCTS 

  

	 	A.	It is Phage’s desire to have a long term and mutually beneficial relationship with BPM whereby BPM will PEGylate additional products for Phage. Phage wishes a business
relationship based upon trust and respect, where BPM knows it will be treated fairly. The following Agreement will cover PEGylated products developed and provided by BPM. PEGylated products in this Agreement mean the modification of proteins at a
carboxyl group by polyethylene glycol. 

  

	 	B.	The first product to be developed is PEGylated alpha Interferon 2b. This interferon (IFN) is manufactured with Phage’s proprietary technology. The development of
PEG-a-IFN-2b has completed Phase One (defined below). BPM has already been paid the $100,000 due at the completion of Phase One for PEG-a-IFN-2b. The four additional PEGylated products named in Section D below, may be developed at Phage’s discretion, in an order determined by Phage after
consultation with BPM. 

  

	 	C.	With this in mind, the following basic framework covers the PEGylation of the first five products for Phage by BPM. 

  

	 	1)	Phase One 

  

	 	a)	BPM will conduct the PEGylation of the peptide product, which will be selected and provided by Phage, and will characterize the PEGylated Product by physicochemical methods
including HPLC, SDS-PAGE, in vitro activity assay, and pharmacokinetics in rats or other suitable model host within a 1-6 month period (or other mutually agreed upon term) from the first payment in subpart c) below. BPM’s PEGylated Product will
be compared to commercially available PEGylated product, if available. 

  

	 	b)	BPM will provide Phage with a suitable aliquot of the PEGylated Products for Phage to test by SDS-PAGE and cell-based activity. Phase One will be considered complete once Phage
reviews and determines that BPM’ s PEGylated Product meets Phage’s standards for commercial feasibility. 

  

	 	c)	Payment schedule will be $50,000 at the start of the Phase One and $50,000 at the completion of Phase One. The total budget for Phase One is $100,000. 

  

	 	d)	If, after the completion of Phase One, Phage desires further collaboration with BPM, Phage will provide written notice to BPM sufficient to initiate Phase Two within two months.

  

 - 2 - 

	 	2)	Phase Two 

  

	 	a)	Upon BPM’s acknowledgement in writing of its obligation to initiate Phase Two, Phage will pay BPM $50,000. 

  

	 	b)	Thirty (30) days later BPM will receive a second $50,000 payment from Phage. 

  

	 	c)	BPM will cooperate with Phage to manufacture at least 1 g of the selected PEGylated Product in Phage’s facility in California by providing both expertise and manpower as needed
at Phage’s expense. GMP-quality peptide and PEG will be also obtained to manufacture this lot of drug at Phage’s expense. 

  

	 	d)	After 1g of the selected PEGylated Product is successfully made as reasonably determined by Phage, Phage will make a payment of $250,000 to BPM. (Total budget for Phase Two:
$350,000) 

  

	 	3)	Phase Three 

  

	 	a)	To the extent that Phage pursues development of the PEGylated Product beyond Phase Two, Phage will pay BPM the following amounts at the respective stages of development (Total
budget for Phase Three: $2,000,000): 

  

	 	i.	Start of U.S. FDA Phase I study (or equivalent in European Union or Japan only): $20,000 

  

	 	ii.	Start of U.S. FDA Phase II study (or equivalent in European Union or Japan only): $30,000 

  

	 	iii.	Start of U.S. FDA Phase III study (or equivalent in European Union or Japan only): $100,000 

  

	 	iv.	Six Months after start of U.S. FDA Phase III study (or equivalent in European Union or Japan only) if such study remains ongoing: $100,000 

  

	 	v.	Completion of U.S. FDA Phase III (or equivalent in European Union or Japan only), if result of trial is successful as reasonably determined by Phage: $250,000

  

	 	vi.	Approval of New Drug Application (NDA) for the product by U.S. FDA (or equivalent in European Union or Japan only): $1,500,000 

  

	 	D.	Phage may wish to develop additional PEGylated Products pursuant to this Agreement. Accordingly, Phage, at its discretion, may provide BPM with written notice within 3 months after
either completion of Phase One or Phase Two as described in III C to initiate Phase One for the next Phage protein under the terms and conditions set forth herein with respect to the following protein products: 

  

	 	1)	PEGylated G-CSF 

  

	 	2)	PEGylated Human Growth Hormone 

  

	 	3)	PEGylated beta Interferon 

  

 - 3 - 

	 	4)	PEGylated single chain Antibody 

  

	 	E.	For any additional PEGylated Products not listed in parts IIIB and IIID, Phase One may be initiated by mutual agreement of the parties, under the same terms described herein.

  

	IV.	SCHEDULE OF PAYMENT 

  

	 	A.	In addition to the payments listed above, Phage will pay BPM up to a maximum of $10,000,000 US dollars per PEGylated Product for the rights described herein. Payment of this amount
is conditioned on the successful commercial sale of each product and will be at the rate of 1% of Phage’s Net Sales (defined above), up to a maximum of $10,000,000 US dollars per PEGylated Product. With the understanding that such payments are
designed to compensate BPM for know-how rendered at any time, Phage will continue to pay BPM up to a maximum of $10,000,000 US dollars per PEGylated Product even if no patents issue on the PEGylated Products. 

  

	 	B.	The payments shall be paid 90 days after the close of each Phage fiscal quarter and shall be paid 80% to BPM and 20% to Dr. Sung-Hou Kim. When and if the $10 million total in
payments are paid with respect to a particular PEGylated Product (e.g. PEG-a-IFN-2b), Phage will have purchased and paid for use of the Licensed Information, and there shall be nothing more owed to anyone for that particular PEGylated
Product. 

  

	V.	MISCELLANEOUS 

  

	 	A.	The rights and obligations of this Agreement are not assignable without the prior written consent of the other party, except that either party may transfer the Agreement as part of
a sale of all or substantially all of the party or its assets and that Phage may execute or transfer the Agreement to another entity controlled by Phage. This Agreement shall inure to the benefit of and shall be binding on the parties’
successors and permitted assigns. 

  

	 	B.	Phage and BPM agree that confidential information may be delivered by each to the other for implementing this Agreement. Both parties agree to use such confidential information
solely in accordance with, and in furtherance of, this Agreement. Both Phage and BPM agree to not disclose, or permit to be disclosed, such confidential information without the prior written consent of the other party. Phage agrees to keep this
Agreement confidential, except as may be required to implement the Agreement. In all cases, disclosure to any third party requires that both parties be notified prior to such disclosure. This agreement on non-disclosure of the Agreement and related
confidential information shall continue until such time when both Phage and the BPM mutually agree that public dissemination of the Agreement and other confidential information is in their interests. This paragraph does not prohibit the Parties from
making disclosures required for legal, regulatory or customary business purposes. 

  

	 	C.	Phage will have the right, but not the duty, to bring suit or otherwise enforce the Patents owned by BPM with respect to selected PEGylated Products for which actual development has
occurred pursuant to this Agreement. Such enforcement will be at Phage’s expense. BPM agrees to be joined as a party in any such suit. BPM will on request provide Phage with reasonable assistance in the enforcement of the Licensed Patents.
Phage will reimburse the reasonable out of pocket expenses including reasonable attorney’s fees incurred by BPM in providing such assistance. 

  

	 	D.	BPM represents and warrants that it owns PCT and Korean patent applications related to the PEGylation of products at the carboxyl group and that BPM has the right to enter into this
Agreement. BPM also represents and warrants that there are no outstanding assignments, grants, licenses, encumbrances, obligations or agreements which are inconsistent with or which might adversely affect the rights granted to Phage under this
Agreement. 

  

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	 	E.	Regarding the national phase of the above-described PCT application, BPM will have the right to file applications in all countries that BPM chooses. Any additional countries in
which Phage wishes to file will be added by BPM at Phage’s expense. BPM will cooperate with Phage in prosecuting and maintaining the patent application and any resulting patents. In the event BPM elects not to continue to maintain any such
applications or patents, Phage will have the right, but not the obligation, to continue or maintain such applications or patents at its own expense. 

  

	 	F.	Phage, at its own expense and discretion, may apply for patent protection with respect to the PEGylated Products developed in accordance with this Agreement and will be the owner of
such patent applications and issued patents, filed anywhere in the world after the effective date of this Agreement. If Phage elects to seek patent protection with respect to the PEGylated Products, the earliest the patent application will be
submitted is after the completion of Phase 2 (the preparation of 1 gram of the PEGylated Product), unless a reasonable legal issue arises that would endanger the patent. In this case, BPM and Phage can mutually agree to file the patent application
at an earlier time. BPM and its employees will cooperate with Phage as necessary to affect such ownership, such as through execution of assignments. 

  

	 	G.	No modification or waiver of any of the terms of this Agreement shall bind either party unless in writing signed by duly authorized representatives of both Phage and BPM.

  

	 	H.	This Agreement constitutes the entire agreement and understanding between the parties relating to the subject matter of the Agreement and supersedes all prior writings,
negotiations, representations or understandings with respect hereto. 

  

	 	  	This Agreement is governed by the laws of the State of California. The parties will attempt to amicably resolve any dispute, but in the event that they cannot amicably do so, any
dispute will be resolved by binding arbitration before JAMS or equivalent organization in Orange County, CA. 

  

	 	J.	All notices required by this Agreement shall be in writing and may be sent by electronic facsimile to the following: 

  

			
	BioployMed, Inc. Contact:	  	Phage Biotechnology, Inc. Contact:
	Myung Park, Ph.D.	  	Jack Jacobs, Ph.D.
	Seoul, Korea	  	Tustin, California
	Ph 82-2-929-7725	  	Ph 714-368-1520
	Fax 82-2-929-7825	  	Fax 714-368-1517
	Sung-Hou Kim, Ph.D.	  	Phage Attorney:
	220 Calvin Laboratory	  	Daniel Altman
	University of CA, Berkeley	  	Knobbe, Martens, Olson & Bear, LLP
	Berkeley, CA 94720	  	2040 Main Street, Fourteenth Floor
	Ph. 510-486-4333	  	Irvine, CA 92614
	Fax 510-486-5272	  	Ph. (949)760-0404

  

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 Approval and Signatures 
  
 BiopolyMed, Inc., through and by its Chairman, Myung Park, Ph.D., has reviewed this Agreement and hereby approves its terms
and certifies that he/she has the authority to execute this Agreement on behalf of BPM. 
  

					
			
	/S/    M. PARK        	 	 	 	 Date 5/13/2004

	Myung Park, Ph.D., Chairman	 	 	 	 
	BiopolyMed, Inc.	 	 	 	 

  
 Phage Biotech, Inc.
through and by its Chief Operating Officer, Jack Jacobs, Ph.D., has reviewed this Agreement and hereby approves its terms and certifies that he/she has the authority to execute this Agreement on behalf of Phage Biotechnology, Inc. 
  

					
			
	/S/    JACK
JACOBS        	 	 	 	 Date 5/10/04

	Jack Jacobs, Ph.D., COO	 	 	 	 
	Phage Biotech, Inc.	 	 	 	 

  
 Sung-Hou Kim, Ph.D.
has reviewed this Agreement and hereby approves its terms. 
  

					
			
	/S/    SUNG-HOU
KIM        	 	 	 	 Date 5/14/04

	Sung-Hou Kim, Ph.D.	 	 	 	 

  

 - 6 -Industrial Sublease Lease Agreement, dated August 24, 2004

 Exhibit 10.6(a) 
  
 SUBLEASE AGREEMENT 
  
 between 
  
 THE REGENTS OF THE UNIVERSITY OF CALIFORNIA 
  
 and 
  
 PHAGE
BIOTECHNOLOGY CORPORATION 
  
 August 24, 2004 

 SUBLEASE AGREEMENT 
  
 THIS SUBLEASE AGREEMENT (“Sublease”), dated August 24, 2004, is by and between THE REGENTS OF THE UNIVERSITY OF CALIFORNIA, a
California corporation (“Sublandlord”), and PHAGE BIOTECHNOLOGY CORPORATION (“Subtenant”). 
  
 BACKGROUND 
  
 A. The
Irvine Company, as Landlord, and The Regents of the University of California, as Tenant, executed a lease dated November 8, 2000 (the “Master Lease”) for certain space (“Premises”) located at 101 Theory Drive, Suite 200,
Irvine, California. By the terms of the Master Lease, the space described in paragraph I of this Sublease and in section I of the Master Lease was leased to The Regents of the University of California for a term of sixty (60) months, subject to
earlier termination as provided in the Master Lease. A copy of the Master Lease is attached to this Sublease as Exhibit C. 
  
 B. Sublandlord desires to sublease to Subtenant the Premises currently occupied by Sublandlord under the terms of the Master Lease, and Subtenant desires to lease the
Premises from Sublandlord. 
  
 WHEREFORE, INTENDING TO BE LEGALLY BOUND HEREBY,
Sublandlord and Subtenant agree as follows: 
  
 1. Leasing and Description of
Property. Subject to the terms, conditions and covenants set forth in this Sublease and the Master Lease, Sublandlord hereby leases to Subtenant, and Subtenant hereby leases from Sublandlord, the Premises containing approximately 11,091 rentable
square feet, as more particularly described in Exhibit A attached hereto (the “Subleased Premises”). Subtenant shall be deemed to occupy 100% of the Premises (the “Subleased Percentage”). Capitalized terms not otherwise defined
herein shall have the meanings ascribed to them in the Master Lease. 
  
 2.
Term. This Sublease shall commence on September 1, 2004, and shall end on August 31, 2006 or the date on which the Master Lease terminates, whichever first occurs. 
  
 3. Payment to Sublandlord. 
  
 3.1 Rent. Subtenant shall pay to Sublandlord, as Basic Rent, for the Subleased Premises, the following monthly amounts for the periods of time as indicated:

 $31,055.00 per month from September 1, 2004 through August 31, 2005 
 $32,718.00 per month from September 1, 2005 through August 31, 2006. 
  
 3.2 Operating Expenses. Subtenant shall pay to Sublandlord, as Additional Rent, 100% of the Operating Expenses for the Premises as
defined in Section 4.2 of the Master Lease and in the same amount as billed to Sublandlord by Landlord. 
  
 3.3 Utilities Subtenant shall be responsible for paying for all utilities furnished to the Premises and complying with all the provisions of Section 6.1 of the Master Lease. 
  
 3.4 Tenant Improvements Subtenant shall pay to Sublandlord, as Additional Rent, three
thousand four hundred eighty nine dollars and fifteen cent ($3,489.15) per month, as Subtenant’s contribution to tenant 

 
improvements in the Subleased Premises. Such payment shall be due and payable on the first day of each calendar month during the term of the lease.

  
 3.5 Security Deposit Subtenant shall deposit with Sublandlord,
prior to the commencement of the Term, the sum of $165,000.00 as security for Subtenant’s full, faithful and timely performance of Subtenant’s obligations hereunder, including, but not limited to the payment of Rent. If Subtenant fails to
pay Basic Rent or any other charges hereunder or otherwise defaults with respect to any provision of this Sublease, Sublandlord may, but shall not be obligated to, apply, use or retain all or any portion of such deposit for the payment of Rent or of
any charge to which Sublandlord may be obligated as a result of Subtenant’s default, or to compensate Sublandlord for any loss or damage permitted by law. If Sublandlord so uses or applies all or any portion of such deposit, Subtenant shall,
within ten (10) days after written notice from Sub landlord, deposit cash with Sublandlord in an amount sufficient to restore such deposit to the full amount stated above. Subtenant’s failure to so restore shall be a material breach of
this lease. Subtenant shall not be entitled to interest upon such deposit, nor shall Sublandlord be required to segregate or hold such deposit separate from Sublandlord’s general accounts. If Subtenant fully performs the provisions of this
Lease applicable to Subtenant, Sublandlord shall refund the unused portion of such deposit, if any, to Subtenant within 30 days after termination of this Sublease. Alternatively, Subtenant may elect, by written notice to Sublandlord, to apply such
deposit to Subtenant’s rent obligations for the final two (2) months of the Term with the balance of such deposit to be refunded as provided above. 
  
 3.6 Time and Place of Payment. Rent shall be payable to Sublandlord in advance on the first day of each calendar month during the term, commencing on
September 1, 2004. Rent shall be paid to Sublandlord at the University of California Irvine, Research and Graduate Studies, 155 Administration Building, Irvine, CA 92697. 
  
 3.7 Sublease Guarantee. Subtenant agrees to provide a Guaranty of Performance in the form as shown on the attached Exhibit 0,
executed by CardioVascular BioTherapeutics. 
  
 4. Use of Subleased Premises.

  
 4.1 Use Restrictions. Subtenant shall use the Subleased Premises for
only general office and medical research laboratory purposes and for no other purpose without the prior written consent of Sublandlord. 
  
 5. Quiet Possession. As long as Subtenant keeps and performs the covenants of this sublease, Subtenant shall at all times during the Term of this Sublease
peaceably and quietly have, hold and enjoy the subleased Premises, without suit, trouble or hinderance from Sublandlord or any person claiming under Sublandlord. 
  
 6. Condition of Subleased Premises. 
  
 6.1. Compliance with Laws. Sublandlord has received no notice that the construction, the current and proposed uses, and the operation of the Building are not in
full compliance with applicable building and seismic codes, environmental, zoning and land use laws, and other applicable local, state and federal laws, regulations and ordinances, except as follows: none. 
  
 6.2. Hazardous Substance. Subtenant covenants and agrees not to suffer, permit, use,
introduce or maintain in, on, under or about any portion of the Subleased Premises, any asbestos, polychlorinated biphenyls, or any other hazardous or toxic materials, wastes and substances which are defined, determined or identified as such
(including petroleum products if they are defined, determined or identified as such) in any federal, state or local laws, rules or regulations (whether now existing or hereafter enacted or promulgated) or any judicial or administrative orders or
judgments, except for such materials, wastes or substances as are customarily used in connection with Subtenant’s use of the Subleased Premises in accordance with this Sublease, and Subtenant agrees that such materials, wastes and substances
will only be used in compliance with all applicable environmental laws. Consistent with Section 25359.7 of the California Health and Safety Code, Sublandlord hereby represents and warrants to Subtenant that without any independent
investigation, Sublandlord does not know, or have any reasonable cause to believe, that any release of hazardous substance has come to be located on or beneath the Building or its immediate vicinity. 

 7. Applicability of Master Lease. This Sublease is subject and subordinate to the terms and conditions of the Master
Lease. 
  
 8. Assumption. Subtenant hereby expressly assumes and agrees to perform
and comply with all the obligations required to be kept or performed by the Sublandlord under the provisions of the Master Lease to the extent that they are applicable to the Subleased Premises. In the event of any default by Subtenant under this
Sublease, or of any of the obligations assumed by Subtenant under the Master Lease, Sublandlord shall have the same rights and remedies against Subtenant as there are to the Landlord under the Master Lease. 
  
 9. Other Obligations of Parties. 
  
 9.1 Continuation of Master Lease: The Parties will take all reasonable actions to
maintain the Master Lease during the entire term of this Sublease, and will not perform any act, or omit to perform any act, which would result in a default under the Master Lease, Subject to Section 2 of this Sublease, Sublandlord agrees not
to terminate the Master Lease or to modify the Master Lease in a manner which would materially, adversely affect Subtenant’s rights hereunder without the prior written consent of Subtenant. Any modification made without that consent shall, at
Subtenant’s election, be null and void and shall have no effect on the rights of Subtenant under this Sublease. 
  
 9.2 Maintenance, Services and Utilities. Sublandlord will provide (or cause to be provided) to the Subleased Premises all of the services to be furnished by the
Landlord under Article VT of the Master Lease. 
  
 10. Indemnification.

  
 10.1 Sublandlord’s Obligation. Sublandlord shall indemnify, defend and
hold harmless Subtenant, its officers, agents, partners, and employees from and against any claims, damages, costs, expenses, or liabilities (collectively “Claims”) arising out of or in any way connected with Sublandlord’s performance
under this Sublease including, without limitation, Claims for loss or damage to any property, or for death or injury to any person or persons, but only in proportion to and to the extent that such Claims arise from the negligent or wrongful acts or
omissions of Sub landlord, its officers, agents, or employees. 
  
 10.2
Subtenant’s Obligation. Subtenant shall indemnify, defend and hold harmless Landlord and Sublandlord and their respective officers, agents, owners, partners and employees from and against any Claims arising out of or in any way connected with
Subtenant’s performance under this Sublease including, without limitation, Claims for loss or damage to any property or for death or injury to any person or persons, but only in proportion to and to the extent that such Claims arise from the
negligent or wrongful acts or omissions of Subtenant, its officers, agents, partners, .contractors, subcontractors of any tier or employees or result from a condition of the Subleased Premises. 
  
 11. Insurance. 
  
 11.1 Sublandlord’s Insurance. Sublandlord, at its sole cost and expense, shall insure its activities in connection with this Sublease
and obtain, keep in force and maintain insurance as follows: 
  

	 	a.	General Liability Self-Insurance Program (contractual liability included) with minimum limits as follows: 

  

	 	1.	Each Occurrence $2 million 

  

	 	2.	Products/Completed Operations Aggregate $2 million 

  

	 	3.	Personal and Advertising Injury $2 million 

  

	 	4.	General Aggregate $5 million 

  

	 	b.	Business Automobile Liability Self-Insurance Program for owned, non-owned, or hired automobiles with a combined single limit of not less than Two Million dollars ($2,000,000) per
occurrence, 

	 	c.	Property, Fire and Extended Coverage Self-Insurance Program in an amount equal to one hundred percent (100%) of the full replacement value of the Building (excluding land and
the footings, foundations and installations below the basement level) and the costs of demolition and debris removal. 

  

	 	d.	Workers’ Compensation as required by California law. 

  
 The coverages referred to under a. and b. of this paragraph shall include Subtenant as an additional insured. Such a provision shall apply only in proportion to and to
the extent of the negligent acts or omissions of Sublandlord, its officers, agents and employees. Sublandlord, upon the execution of this Sublease, shall furnish Subtenant with certificates of insurance evidencing compliance with all requirements.
Certificates shall provide for thirty (30) days advance written notice to Subtenant of any material modification, change or cancellation of any of the above insurance coverages. 
  
 The coverages required herein shall not limit the liability of Sublandlord. 
  
 11.2 Subtenant’s Insurance. Subtenant, at its sole cost and expense, shall insure its activities in connection with this Sublease and
obtain, keep in force and maintain insurance as follows: 
  

	 	a.	Commercial Form General Liability Insurance (contractual liability included) with minimum limits as follows: 

  

	 	1.	Each Occurrence $2 million 

  

	 	2.	Products/Completed Operations Aggregate $2 million 

  

	 	3.	Personal and Advertising Injury $2 million 

  

	 	4.	General Aggregate $5 million 

  
 If the above insurance is written on a claims-made form, it shall continue for three (3) years following termination of this Lease. The insurance shall have a
retroactive date of placement prior to or coinciding with the Lease Commencement Date. 
  

	 	b.	Business Automobile Liability Insurance for owned, scheduled, non-owned, or hired automobiles with a combined single limit of not less than Two Million dollars ($2,000,000) per
occurrence. 

  

	 	c.	Property, Fire and Extended Coverage Insurance in an amount sufficient to reimburse Subtenant for all of its equipment, trade fixtures, inventory, fixtures and other personal
property located on or in the Premises including leasehold improvements hereinafter constructed or installed. 

  

	 	d.	Workers’ Compensation as required by California law. 

  

	 	e.	Such other insurance in such amounts which from time to time maybe reasonably required by the mutual consent of Subtenant and Sublandlord against other insurable risks relating to
performance. 

  
 The coverages referred to under a. and b. of this
paragraph shall include Sublandlord as an additional insured. Such a provision shall apply only in proportion to and to the extent of the negligent acts or omissions of Subtenant, its officers, partners, agents, and employees. Subtenant, upon the
execution of this Sublease, shall furnish Sublandlord with certificates of insurance evidencing compliance with all requirements. Certificates shall provide for thirty (30) days (ten (10) days for non-payment of premium) advance written
notice to Sublandlord of any material modification, change or cancellation of any of the above insurance coverages. 
  
 The coverages required herein shall not limit the liability of Subtenant. 

 In addition to the above requirements of this Section 11.2, Subtenant shall also comply with all of the requirements
set forth in Exhibit D to the Master Lease. 
  
 11.3 Waivers of Subrogation.
Sublandlord and Subtenant each hereby waive any right of recovery against the other due to loss of or damage to the property of either Sublandlord or Subtenant when such loss of or damage to property arises out of the acts of God or any of the
property perils included in the classification of fire, extended perils (“all risk” as such term is used in the insurance industry) whether or not such perils have been insured, self-insured or non-insured. 
  
 11.4 Exemption of Sublandlord from Liability. Subtenant hereby agrees that Sublandlord shall
not be liable for injury to Subtenant’s business or any loss of income therefrom or for damage to the goods, wares, merchandise or other property of Subtenant, Subtenant’s employees, invitees, customers, or any other person in or about the
Premises, nor shall Sublandlord be liable for injury to the person of Subtenant, Subtenant’s employees, agents or contractors, as a result of any condition of the Premises or the Building, whether such damage or injury is caused by or results
from fire, steam, electricity, gas, water or rain, or from the breakage, leakage, obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures, or from any other cause in or about the
Premises, whether the said damage or injury results from conditions arising in the Premises or in other portions of the building of which the Premises are a part, or from other sources or places and regardless of whether the cause of such damage or
injury or the means of repairing the same is inaccessible to Subtenant. Sublandlord shall not be liable for any damages arising from any act or neglect of any other Subtenant, if any, of the building in which the Premises are located. 
  
 12. Assignment and Subletting. 
  
 12.1 Sublandlord’s Consent Required. Subtenant shall not voluntarily or by operation of law assign, transfer, mortgage, sublet,
or otherwise transfer or encumber all or any part of Subtenant’s interest in this Sublease or in the Sublease Premises, without Sublandlord’s prior written consent, which Sublandlord shall not unreasonably withhold. Sublandlord shall
respond to Subtenant’s request for consent hereunder in a timely manner and any attempted assignment, transfer, mortgage, encumbrance or subletting without such consent shall be void, and shall constitute a breach of this Sublease. 

 
 12.2 No Release of Subtenant. Regardless of Sublandlord’s consent, no
subletting or assignment shall release Subtenant of Subtenant’s obligation or alter the primary liability of Subtenant to pay the rent and to perform all other obligations to be performed by Subtenant hereunder. The acceptance of rent by
Sublandlord from any other person shall not be deemed to be a waiver by Sublandlord of any provision hereof. Consent to one assignment or subletting shall not be deemed consent to any subsequent assignment or subletting. In the event of default by
any assignee of Subtenant or any successor of Subtenant, in the performance of any of the terms hereof, Sublandlord may proceed directly against Subtenant without the necessity of exhausting remedies against said assignee. Sublandlord may consent to
subsequent assignments or subletting of this Lease or amendments or modifications to this Lease with assignees of Subtenant, without notifying Subtenant, or any successor of Subtenant, and without obtaining its or their consent thereto and such
action shall not relieve Subtenant of liability under this Lease. 
  
 12.3
Excess of Consideration. If the value of the consideration to be received by Subtenant for such assignment or sublease (after deducting leasing commissions, rental paid during any period in which the Premises were vacant, the unamortized part
of Subtenant’s contribution to tenant improvements, if any, and any other reasonable out-of-pocket expenses of Subtenant incurred in connection with such subleasing or assignment of the Subleased Premises in order to provide occupancy related
services to such assignee or subtenant of a nature commonly provided by landlords of similar space) will exceed the sum of the Base Rent and the Additional Rent, or prorated portion thereof as the case may be, Subtenant shall pay to Sublandlord, as
additional Basic Rent, fifty percent (50%) of the excess of the consideration paid in connection with or pursuant to the assignment or sublease, over the sum of the Basic Rent and the Additional Rent then due applicable to the assigned or
subleased space. 

 12.4 Administrative Fees. In the event Subtenant shall assign or sublet the Premises or request the consent of
Sublandlord to any assignment or subletting or if Subtenant shall request the consent of Sublandlord for any act Subtenant proposes to do, then Subtenant shall pay Sublandlord’s reasonable administrative fees (including attorneys’ fee)
incurred in connection therewith, such fees not to exceed $500.00 for each such request 
  
 13. Negligent Acts or Omissions of Subtenant. Subtenant will pay to Sublandlord the reasonable costs of any repairs or maintenance required as a result of willful, wrongful or negligent acts or omissions of Subtenant, its agents, employees,
or invitees, excepting reasonable wear and tear, damage by casualty and alterations approved by Sublandlord. 
  
 14. Alterations, Mechanics’ Liens. 
  
 14.1
Alterations. No structural alterations or improvements shall be made to the Subleased Premises by Subtenant or at Subtenant’s request without the prior written consent of Sublandlord, which consent shall not be unreasonably withheld. All
proposed alterations shall be subject to satisfaction of the requirements of Article 7.3 of the Master Lease regarding Landlord’s approval. 
  
 14.2 Condition at Termination. Upon termination of this Sublease, Subtenant shall remove any fixtures, machinery and equipment installed in the Subleased Premises
by Subtenant unless mutually agreed otherwise. Subtenant shall repair any damage to the Subleased Premises caused by such removal. Upon termination of this Sublease, Subtenant shall return the Subleased Premises in the same condition as when
delivered to Subtenant, reasonable wear and tear, damage by casualty, and alterations approved by Sublandlord excepted. 
  
 14.3 Mechanics’ Liens. The parties shall keep the Subleased Premises free from any liens arising out of any work performed by, materials furnished to, or
obligations incurred by, the parties. 
  
 15. Default by Subtenant. 
  
 15.1 Default. If any of the following events occur, each such event shall constitute a
material breach of this Sublease, and Sublandlord may, at Sublandlord’s option, exercise any or all rights available to a landlord under the laws of the State of California: 
  

	 	(a)	Subtenant’s default in the payment of Rent when such default continues for a period of fifteen (15) days after written notice, or 

  

	 	(b)	Subtenant fails to perform faithfully or observe any other covenant or undertaking required under this Sublease and such failure continues for a period of thirty (30) days
after written notice thereof However, if the nature of the failure is such that more than 30 days is reasonably required for its cure, then Subtenant shall not be deemed to be in default if Subtenant commences the cure within 30 days and thereafter
diligently pursues the cure to completion, or 

  

	 	(c)	Subtenant is adjudicated bankrupt, or 

  

	 	(d)	Subtenant’s Sublease interest is sold under execution of judgment. 

  
 15.2 Remedies. If this Sublease terminates pursuant to a default by Subtenant hereunder, Sublandlord may immediately enter upon and repossess the Subleased
Premises in accordance with applicable laws and cause any personal property of Subtenant to be removed from the Subleased Premises and stored in any public warehouse at the risk and expense of Subtenant. This provision is not intended as a
limitation on other legal and equitable remedies available to Sublandlord. 
  
 16.
Default By Sublandlord. 
  
 16.1 Default. Sublandlord shall not be in
default unless Sublandlord fails to perform its obligations under this Sublease within a reasonable time, but in no event later than thirty (30) days after 

 
written notice by Subtenant to Sublandlord specifying Sublandlord’s failure to perform such obligations, if the nature of Sublandlord’s obligation
is such that more than thirty (30) days are required for performance, then Sublandlord shall not be in default if Sublandlord commences performance within such thirty (30) day period and thereafter diligently prosecutes the same to
completion. Subtenant’s obligation to provide written notice to Sublandlord of a default by Sublandlord is limited to those instances where Subtenant has actual knowledge of Sublandlord’s default. 
  
 16.2 Remedies. If Sublandlord fails to cure a prospective default within the thirty
(30) day period, or within the extended period allowed under section 16.1, Subtenant shall have the option to cure the default or to terminate this Sublease, in addition to any other remedies at law not inconsistent herewith. Should Subtenant
elect to cure the default itself; all costs associated with such cure, including reasonable attorneys’ fees (if any), shall be reimbursed by Sublandlord to Subtenant within thirty (30) days of receipt of Subtenant’s invoice for said
costs. However, upon Sublandlord’s failure to so reimburse or, at Subtenant’s option, said costs, shall be held from Rent due hereunder. If Sublandlord’s default hereunder prevents Subtenant’s use of the Subleased Premises, there
shall be an abatement of rental payments for the period of such non-use. 
  
 17.
Condemnation. 
  
 If any part of the Subleased Premises is taken
or condemned for a public or quasi-public use, this Sublease shall terminate at the option of Subtenant as of the date title shall vest in the condemnor. 
  
 18. Holding Over, If Subtenant, with Sublandlord’s consent, remains in possession of the Subleased Premises after the Sublease Term or any Extended Term, this
Sublease shall automatically be extended on a month-to-month basis, subject to termination upon thirty (30) days’ written notice by either party, upon all the provisions of this Lease pertaining to the obligations of Subtenant, with the
exception of rent which shall be at 150% of the then current Basic Rent for the initial two months of holdover, and 175% of the Basic Rent for the third and each successive mouth of holdover, but all options and rights of first refusal, if
any, granted upon the terms of this Sublease shall be deemed terminated and be of no further effect during said month to month tenancy. Subtenant shall continue to pay its pro rata share of Additional Rent. 
  
 19. Attorneys’ Fees. If any action or Other proceeding arising out of this Sublease is
commenced by either party to this Sublease concerning the Subleased Premises, then as between Sublandlord and Subtenant, the prevailing party shall be entitled to receive from the other party, in addition to any other relief that may be granted, the
reasonable attorneys’ fees, costs, and expenses incurred in the action or other proceeding by the prevailing party. 
  
 20. Notices. All notices and other communications made pursuant to this Agreement shall be in writing, and shall be deemed properly given or served (a) on the same
day when personally delivered, (b) twenty-four (24) hours after deposit with a recognized overnight courier with tracking capability, or forty-eight (48) hours after being deposited in the United States mail, first class, postage
prepaid, to the parties at the following addresses: 
  
 To Subtenant: 

 
 Phage Biotechnology Corporation 
  
 To Sublandlord: 
  
 University of California Irvine 
 Campus Asset Management 
 750 University Tower 
 Irvine, CA 92697-7475 

 Either party may change its address for the purposes of this paragraph by giving ten (10) days prior written notice
of change to the other parties in the manner provided for in this paragraph. 
  
 21. Binding Effect. This Sublease shall be binding upon and inure to the benefit of the permitted successors and assigns of Sublandlord and Subtenant. 
  

22. Entire Agreement. This Sublease, together with the exhibits hereto and incorporations herein, sets forth the entire agreement relating to the occupancy of the
Subleased Premises by Subtenant. No waiver of any provision of this Sublease or of any breach or default hereunder shall be held or considered to be a waiver of any other provision or of any other breach or default. No agreement or understanding
pursuant to or contemplated by this Sublease and no consent to, change in or modification of, any provision of this Sublease shall be valid unless made in a writing and is signed by the parties herein. 
  
 23. Time of Essence. Time is of the essence of this Sublease. 
  
 24. Consent of Landlord. This Sublease shall not be effective unless and until Landlord has
consented thereto in writing by execution of the form of Landlord’s Consent to Sublease attached hereto as Exhibit B. 
  

									
	 SUBLANDLORD:
	 	 	 	 SUBTENANT:

	THE REGENTS OF THE UNIVERSITY OF CALIFORNIA	 	 	 	 PHAGE BIOTECHNOLOGY CORPORATION

					
	By:	 	/S/    JOSEPH P.
MULLINIX        	 	 	 	By:	 	/S/    JOHN W.
JACOBS        
	 Its:
	 	Senior Vice President Business & Finance	 	 	 	 Its:
	 	COO

  
 Approved as to Form 
  
 Lloyd C. Lee 
 University Counsel of the Regents 
 Of the University of California 

  
 EXHIBIT A 
  
 SUBLEASED PREMISES

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