Document:

License Agreement

 EXHIBIT 10.18 
  
 LICENSE AGREEMENT 
  
 Made as of this 19th day of January, 2004 (hereinafter referred to as “Effective Date”) by and between FUJISAWA PHARMACEUTICAL CO., LTD., a
corporation organized and existing pursuant to the laws of Japan and having its registered office at 4-7, Doshomachi 3-chome, Chuo-ku, Osaka 541-8514, Japan (hereinafter referred to as “FUJISAWA”) and Insmed Incorporated, a corporation
organized and existing pursuant to the laws of the State of Virginia, U.S.A. and having its principal office at 4851 Lake Brook Drive, Glen Allen, VA 23060, U.S. (hereinafter referred to as “INSMED”). 
  
 WITNESSETH THAT: 
  
 WHEREAS, INSMED has been developing a pharmaceutical product known as Insulin-like Growth Factor-1 (“IGF-I”),
including, but not limited to, its combination with its Binding Protein 3 (“rhIGF-I/rhIGFBP-3”); 
  
 WHEREAS, FUJISAWA owns a certain patent rights relating to IGF-I; and 
  
 WHEREAS, INSMED desires to obtain, and FUJISAWA is willing to grant to INSMED, a certain license under such FUJISAWA patent
rights. 
  
 NOW, THEREFORE, in consideration of the mutual
promises, covenants and agreements hereinafter set forth, both parties to this Agreement mutually agree as follows: 
  
 ARTICLE 1. DEFINITIONS 
  

	1-1	“AFFILIATE(S)” shall mean any corporation, partnership or other business entity that is controlled by, controls, or is under common control with a party to this Agreement.
For the purpose hereof, “control” shall mean the direct or beneficial ownership of no less than fifty percent (50%) of the voting stock or other ownership interest of such corporation, partnership or other business entity, or the
possession, directly or indirectly, of the power to direct or cause direction of the management and policies of such corporation, partnership, or other business entity. 

  

	1-2	“COMPASSIONATE USE” shall mean treatment use of an investigational new drug (as described in 21 CFR §312.34) or emergency use of an investigational new drug (as
described in 21 CFR §312.36), or such similar use exemption from the need for formal regulatory approval in the applicable jurisdiction outside of the United States. 

  

	1-3	“LICENSED PATENT RIGHTS” shall mean (a) the patents and patent applications listed in EXHIBIT A attached hereto and any continuations, divisions, reexaminations or
reissues thereof, and any registration, revalidation or other equivalents based thereon, and (b) any patent extensions, and supplementary or complementary protection certificates or applications therefor based thereon. 

	1-4	“TERRITORY” shall mean all countries and territories worldwide in which LICENSED PATENT RIGHTS halving a VALID CLAIM exist but excluding Japan. 

 

	1-5	“LICENSED PRODUCT” shall mean any and all finished pharmaceutical product(s) which contains IGF-I (“IGF-I PRODUCT”), including, but not limited to,
rhIGF-I/rhIGFBP-3, as the therapeutic or prophylactic active ingredient and which when developed, made, used, labeled, promoted, distributed or sold would, but for the license granted hereunder, infringe a VALID CLAIM. 

  

	1-6	“NET SALES” shall mean the gross amounts invoiced by INSMED and/or by its AFFILIATE(S) or sub-licensee(s) on account of sales of LICENSED PRODUCT used for the TREATMENT of
INDICATIONS to non-affiliated third parties in the TERRITORY, less (i) quantity or cash discounts actually allowed or taken; (ii) freight, postage and insurance invoiced to the customer; (iii) customs duties and excise, value added and other taxes
directly related to the sale to the extent applicable and not reimbursable and not including income tax; (iv) amounts repaid or credited by reason of rejection or return of goods with respect to LICENSED PRODUCT; and (v) third-party rebates and
allowances on account of the sale of LICENSED PRODUCT to the extent actually allowed. 

  

	1-7	“INDICATIONS” shall mean any and all insulin resistant diabetes claimed in the LICENSED PATENT RIGHTS which are [REDACTED] and (vi) other indications which both parties
agree from time to time to be included within the scope of the claims of the LICENSED PATENT RIGHTS by good faith scientific and legal judgment. 

  

	1-8	“TREATMENT” shall mean, with respect to a particular indication or other medical condition, the cure, reduction, mitigation, preventing, slowing or halting the progress
of, or otherwise management of such indication or medical condition or the symptoms thereof. 

  

	1-9	“VALID CLAIM” shall mean a claim of any patent or published patent application within LICENSED PATENT RIGHTS which has not been withdrawn, cancelled or disclaimed, or
finally rejected or held invalid by a court of competent jurisdiction in an unappealed or unappealable decision. 

  
 ARTICLE 2. LICENSE GRANT 
  

	2-1	FUJISAWA hereby grants to INSMED a co-exclusive license under LICENSED PATENT RIGHTS, to develop, make, have made, use, label, promote, distribute and sell LICENSED PRODUCT in the
TERRITORY. 

  

	    	As used above, the term “co-exclusive” shall mean that FUJISAWA reserves the right to manufacture, use, import, label, promote, distribute and sell LICENSED PRODUCT in the
TERRITORY under LICENSED PATENT RIGHTS by itself or through its AFFLIATE(S) and to grant the similar license as the one granted to INSMED hereunder to one more third party other than FUJISAWA’s AFFILIATE(S) and INSMED. 

	2-2	INSMED shall be entitled to grant sub-licenses under such license in the TERRITORY to AFFILIATE(S) and, with the prior written approval of FUJISAWA to third-party(ies), which
approval will not be unreasonably withheld. 

  
 ARTICLE 3. CONSIDERATION 
  
 [REDACTED] ARTICLE 
  
 4.
ACCOUNTING 
  

	4-1	INSMED shall, and shall cause its AFFILIATE(S) or sub-licensee(s) to, keep true and correct records of NET SALES in sufficient detail to enable determination and verification of
[REDACTED] payable to FUJISAWA hereunder and shall deliver to FUJISAWA written statements thereof in such form as FUJISAWA shall instruct on or before the sixtieth (60th) day following the end of each calendar quarter (or any part thereof in the first or last calendar quarter) for said calendar quarter of this Agreement and at
the same time shall pay to FUJISAWA, or to whomever FUJISAWA shall otherwise direct in writing from time to time, the amount of such [REDACTED] shown to be due converted into Japanese Yen or other currency which FUJISAWA otherwise directs from time
to time at the rate of exchange prevailing on the day of the remittance of the [REDACTED] in question, by wire transfer to an account in a bank designated by FUJISAWA, or in such other form and/or manner as FUJISAWA may reasonably request in
advance. 

  

	4-2	Any income or other tax which INSMED is required to pay or withhold on behalf of FUJISAWA with respect to [REDACTED] payable to FUJISAWA under this Agreement shall be deducted from
the amount of such [REDACTED] due; provided, however, that in regard to any such deduction INSMED shall give FUJISAWA such assistance as may reasonably be necessary to enable or assist FUJISAWA to claim exemption therefrom and shall upon request
give FUJISAWA proper evidence from time to time as to the payment of said taxes. 

  

	4-3	Upon FUJISAWA’s request, INSMED shall permit such records as referred to in Article 4-1 hereof to be examined by an independent certified public accountant, appointed by
FUJISAWA and reasonably acceptable to INSMED, to verify the amount of [REDACTED] payable hereunder for not more than two (2) previous years. The independent certified public accountant chosen must sign an appropriate confidentiality agreement or
similar document prior to such examination. The cost of such examination shall be borne by FUJISAWA except that, if such examination reveals that [REDACTED], the costs shall be borne by INSMED. Said independent certified public accountant shall
treat as confidential, and shall not disclose to FUJISAWA, any information other than information which shall be given to FUJJSAWA pursuant to any provision of this Agreement. 

 ARTICLE 5. PATENT WARRANTY AND INFRINGEMENT 
  

	5-1	Nothing in this Agreement shall be construed as a warranty or representation by FUJISAWA as to the validity or scope of any LICENSED PATENT RIGHTS. 

  

	5-2	In the event that either party shall become aware of infringement of LICENSED PATENT RIGHTS by any third party in the TERRITORY, it shall immediately so inform the other party.
FUJISAWA may, but shall not be obligated to, institute action for any of such infringement of LICENSED PATENT RIGHTS. In this event INSMED shall give all reasonable assistance except for financial assistance to FUJISAWA, and may, if accepted by
FUJISAWA, join such suit with its own counsel at its own expense and seek its own damages and other relief. If FUJISAWA does not institute any infringement proceedings against said third party within ninety (90) days after confirming that said third
party appears to be infringing LICENSED PATENT RIGHTS, then INSMED may institute such infringement proceedings against said third party at its expense. In such event, FUJISAWA shall give all reasonable assistance except for financial assistance to
INSMED and may join such suit with its own counsel at its own expense and seek its own damages and other relief. If neither party chooses to join the other, any amounts payable by said third party as a result of such proceedings shall belong to the
party which has instituted such proceedings. 

  
 ARTICLE 6. DEVELOPMENT AND MARKETING 
  

	6-1	INSMED shall use reasonable commercial efforts to develop and market LICENSED PRODUCT for the INDICATIONS in the TERRITORY and, upon the request of FUJISAWA, shall promptly provide
written information as to its development and commercial activities in that respect in the TERRITORY. FUJISAWA shall maintain such information in confidence to the extent it is and remains not publicly available and to the extent it is not required
to be disclosed by law or in pursuance of any dispute resolution proceedings under Article 10-4 hereof. 

  

	6-2	INSMED desires to make available pharmaceutical product(s) which contains IGF-I, including, but not limited to, rhIGF-I/ rhIGFBP-3, for COMPASSIONATE USE in patients for serious or
immediately life-threatening conditions for which no comparable or satisfactory alternative therapy is available. Accordingly, if after [REDACTED] following the Effective Date, FUJISAWA receives a written request for IGF-I PRODUCT for the
COMPASSIONATE USE in a patient with said conditions in the TERRITORY and upon FUJISAWA’s written request to INSMED, INSMED, following a reasonable amount of time required to make the IGF-I PRODUCT, agrees to use its reasonable commercial
efforts, taking into consideration all available pertinent information including safety and efficacy issues, to make IGF-1 PRODUCT directly available to the physician(s) treating 

	    	such patient, in each case only for so long as there is no ongoing controlled clinical trial in the country where such COMPASSIONATE USE is being provided using a LICENSED PRODUCT
for which the patient would be eligible and only until such time as an IGF-I PRODUCT is commercially available. 

  

	6-3	Upon request by either party after INSMED launch of a LICENSED PRODUCT, both parties hereto shall discuss in good faith and agree on how to determine which sales of the LICENSED
PRODUCT should be included in the NET SALES. 

  
 ARTICLE 7. INDEMNIFICATION 
  

	7-1	INSMED agrees to defend, indemnify and hold FUJISAWA, its AFFILIATE(S) and their respective officers, employees and agents harmless from all claims, losses, damages or expenses
(including reasonable attorneys’ fees) arising as a result of (a) actual or asserted violations of any applicable law or regulation by INSMED, its AFFILIATE(S) or sub-licensees, especially, but not limited to those by virtue of which LICENSED
PRODUCT manufactured, distributed or sold shall be alleged or determined to be adulterated, misbranded, mislabeled or otherwise not in compliance with any applicable law or regulation; (b) claims for bodily injury, death or property damage (all
including compensation for pain and suffering if asserted) attributable to the manufacture, distribution, sale or use of LICENSED PRODUCT by INSMED, its AFFILIATE(S) or sub-licensee(s) or (c) a LICENSED PRODUCT recall ordered by a governmental
agency or required by a confirmed product failure as reasonably determined by the parties hereto. 

  

	7-2	In case of a claim or indemnification under this Article 7, FUJISAWA shall promptly notify INSMED in writing and INSMED shall assume the defense against such claim with counsel
mutually satisfactory to the parties, provided, however, that FUJISAWA shall have the right to retain its own counsel. 

  
 ARTICLE 8. TERM AND TERMINATION 
  

	8-1	This Agreement shall become effective on the Effective Date and shall, unless terminated earlier in accordance with this Article 8, continue in force until expiration, revocation or
invalidation of the last valid patent within LICENSED PATENT RIGHTS. 

  

	8-2	FUJISAWA may terminate this Agreement following sixty (60) days written notice (the “NOTICE PERIOD”) to INSMED in the event that (a) INSMED fails to make any payment which
is due under Article 3 hereof, within the NOTICE PERIOD; or (b) INSMED commits a breach of any other obligation of this Agreement which is not cured within the NOTICE PERIOD; or (c) INSMED goes into liquidation, a receiver or a trustee be appointed
for the property or estate of INSMED, or INSMED makes an assignment for the benefit of creditors, and whether any of the aforesaid events be the outcome of the voluntary act of INSMED, or otherwise (d) INSMED directly or indirectly contests the
validity of any LICENSED PATENT RIGHTS or does not, within thirty (30) days following execution of this Agreement, irrevocably withdraw any and all proceedings previously filed attacking the validity of LICENSED PATENT RIGHTS.

	8-3	INSMED shall have the right to terminate this AGREEMENT at anytime following sixty (60) days written notice of termination to FUJISAWA. 

  

	8-4	Termination of this Agreement shall not affect any rights or obligations accrued prior to the effective date of such termination, specifically INSMED’s obligation to make
payments according to the provisions of this Agreement. 

  
 ARTICLE 9. NOTICES 
  
 Any
notice required by this Agreement shall be sent by registered or certified air mail or delivered by courier or transmitted by facsimile or other electronic means, then confirmed by air mail, to the following: 
  
 To FUJISAWA: 
  
 FUJISAWA PHARMACEUTICAL CO., LTD. 
 4-7, Doshomachi 3-chome, Chuo-ku, 
 Osaka 541-8514, Japan, Attn.: 
 Director, Legal Affairs Facsimile No.: 
 81-6-6206-7929 
  
 To INSMED: 
  
 INSMED INCORPORATED 
 4851 Lake Brook Drive, Glen 
 Allen, VA 23060,
U. S.A. Attn.: 
 Executive Vice President 
 Facsimile No.: (804) 565-3510 
  
 Such notice shall be effective on the third business day following express mailing or on the day following transmission if transmitted by electronic means. The above address may be changed by notice to the other party as provided in this
Article. 
  
 ARTICLE 10. MISCELLANEOUS

  

	10-1	This Agreement, together with the EXHIBIT A hereto, constitutes the entire agreement between the parties relating to the subject matter thereof. It may not be modified except in
writing signed by both parties. 

  

	10-2	In the event further lawful performance of this Agreement or any part thereof by either party shall be rendered impossible by or as a consequence of any law, order or act of any
government or political subdivision thereof having jurisdiction over such party, or by acts of public enemies, war, strikes or other labor disturbances, fires, floods, acts of Gods or any causes of like or different kind beyond the control of the
parties including acts, omissions or delays of the other party, the parties hereto shall be excused from any failure to perform any obligation hereunder to the extent such failure attributable to such causes. 

	10-3	This Agreement shall be governed by and interpreted in accordance with the laws of Japan. 

  

	10-4	In case any dispute arises out of this Agreement, the parties will endeavor to settle such dispute amicably between themselves. In the event that the parties fail to agree, any such
dispute shall be finally settled by arbitration administered by and according to the Rules of Conciliation and Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with said Rules. Such
arbitration shall be in the English language and shall take place in Richmond, VA (U.S.A.) if demanded by FUJISAWA and in Osaka (Japan) if demanded by INSMED. 

  

	10-5	Any waiver on the part of either party hereto of a right or interest hereunder shall not imply the waiver of any other right or interest, or subsequent waiver.

  

	10-6	The illegality, invalidity or unenforceability of any clause or part of this Agreement shall not affect the legality, validity or enforceability of the remainder. If any such clause
or part is found by any competent court or authority to be illegal, invalid or unenforceable, the parties agree that they will substitute provisions in form as similar to the offending provisions as is possible without thereby rendering them
illegal, invalid or unenforceable. 

  

	10-7	INSMED shall not assign, or otherwise transfer any right or obligation under this Agreement without the prior written consent of FUJISAWA. However, INSMED may assign, or otherwise
transfer any right or obligation under this Agreement without the prior written consent of FUJISAWA, if (I) such assignment or transfer is accompanied by a sale or other transfer of INSMED’s entire business or that portion of INSMED’s
business which includes in its entirety the product line related to the LICENSED PATENT RIGHTS and/or LICENSED PRODUCT, (II) such assignee agrees in writing to be bound by the terms and conditions of this Agreement and (III) INSMED notifies FUJISAWA
in writing prior to such sale or transfer. 

  

	10-8	Neither party shall hold itself out to third parties as possessing any power or authority to enter into any contract or commitment on behalf of the other party. It is not intended
that this Agreement shall be construed under any circumstance to create any agency, joint venture, partnership or employer/employee relationship. Each party is an independent contractor of the other party. 

  

	10-9	Except as required by applicable laws or regulations, no public announcement, press release or disclosure to a third party concerning this Agreement or its terms shall be made by
either party hereto without the prior written consent and approval of the other party. 

  

	10-10	This Agreement may be executed in any number of counterparts, each of which shall be deemed an original but all of such together shall constitute one and the same instrument.

  
 IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be executed in their names by their properly and duly authorized officers or representatives as of the Effective Date. 
  

					
	FUJISAWA PHARMACEUTICAL CO., LTD.	 	INSMED INCORPORATED
		
	 /s/ Hatsuo Aoki, Ph.D.

	 	 /s/ Geoffrey Allan

	Name: Hatsuo Aoki, Ph.D.	 	Name: Geoffrey Allan
	Title: President and CEO	 	Title: Chairman and CEO

 EXHIBIT A 
  
 LICENSED PATENT RIGHTS LIST 
  

							
	Country	 	USA	 	Patent No. 5674845	 	Expiry Date Oct.   7, 2014
	Country	 	Austria	 	Patent No. 0490955	 	Expiry Date Sep. 10, 2010
	Country	 	Belgium	 	Patent No. 0490955	 	Expiry Date Sep. 10, 2010
	Country	 	Switzerland	 	Patent No. 0490955	 	Expiry Date Sep. 10, 2010
	Country	 	Denmark	 	Patent No. 0490955	 	Expiry Date Sep. 10, 2010
	Country	 	France	 	Patent No. 0490955	 	Expiry Date Sep. 10, 2010
	Country	 	Great Britain	 	Patent No. 0490955	 	Expiry Date Sep. 10, 2010
	Country	 	Italy	 	Patent No. 0490955	 	Expiry Date Sep. 10, 2010
	Country	 	Luxembourg	 	Patent No. 0490955	 	Expiry Date Sep. 10, 2010
	Country	 	Netherlands	 	Patent No. 0490955	 	Expiry Date Sep. 10, 2010
	Country	 	Germany	 	Patent No. 69027217.0	 	Expiry Date Sep. 10, 2010
	Country	 	Spain	 	Patent No. 90913512.1	 	Expiry Date Sep. 10, 2010
	Country	 	Sweden	 	Patent No. 90913512.1	 	Expiry Date Sep. 10, 2010Joint Patent Ownership and License Agreement

 EXHIBIT 10.2 
  
 JOINT PATENT OWNERSHIP AND LICENSE AGREEMENT 
  
 This written Agreement (the “Agreement”) memorializes the oral agreement entered into and made effective the 16th
day of August 2004 (the “Effective Date”) between CardioVascular BioTherapeutics, Inc. (“CARDIO”), whose principal place of business is at 1700 West Horizon Parkway, Suite 100, Henderson, Nevada 89102, and Phage Biotechnology
Corporation (“PHAGE”), whose principal place of business is at 1700 West Horizon Parkway, Suite 100, Henderson, Nevada 89102. 
  
 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 owns patents and patent applications covering angiogenic or wound healing peptides/proteins, including FGF, and methods for producing these
peptides/proteins; and 
  
 WHEREAS, CARDIO and PHAGE wish to
jointly own all patents related to FGF and the methods for producing and using FGF, whether such patents are developed jointly or individually by either party; and 
  
 WHEREAS, CARDIO and PHAGE wish to license from one another exclusive rights to practice under the jointly owned patents in
accordance with their respective plans for development and commercialization; and 
  
 WHEREAS, CARDIO and PHAGE entered into a manufacturing license agreement dated March 1, 2000 (the “Manufacturing Agreement); and 
  
 WHEREAS, CARDIO and PHAGE wish to terminate the Manufacturing Agreement and cancel all future obligations and liabilities
that may exist under the Manufacturing Agreement; 
  
 NOW
THEREFORE, in consideration of the cancellation of the Manufacturing Agreement and the patent assignments and licenses granted herein and other valuable considerations, the parties agree as follows: 
  
 1. Termination of Manufacturing Agreement. As of the Effective Date
the Manufacturing Agreement is hereby terminated. The parties agree to cancel any further liabilities or obligations set forth in the Manufacturing Agreement. 
  

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, subject to CARDIO’s
exclusive license to Korea Biotechnology Development Co., Ltd. (“KBDC License”) for the territories of Korea, China and Taiwan as detailed in Section 5. 
  
 2.3 “Patent Rights” shall mean the rights to make, use, practice, sell, offer to sell, and import the Products
and/or Processes claimed in any Issued Patents listed below and any patents that issue directly from the Pending Patent Applications listed below or from any Future Patent Applications, including any continuations, divisionals, re-exams, reissues
and continuations-in-part that claim priority to any of the Issued Patents, Pending Patent Applications and/or Future Patent Applications, and any foreign counterparts thereof: 
  
 Issued Patents: 
  
 1. U.S. 6,268,178 entitled “Phage-Dependent Super-Production of Biologically Active Protein and Peptides;” and 
  
 2. U.S. 6,642,026 entitled “Method of Producing Biologically Active
Human Acidic Fibroblast Growth Factor and its Use in Promoting Angiogenesis.” 
  
 3. U.S. 6,774,889 entitled “Phage-Dependent Super-Production of Biologically Active Protein and Peptides”; 
  
 Pending Patent Applications: 
  
 1. U.S. 09/859,651 (Allowed) entitled “Phage-Dependent Super-Production of Biologically Active Protein and Peptides;” 
  
 2. U.S. 10/280,864 entitled “Method of Producing Biologically Active
Human Acidic Fibroblast Growth Factor and its Use in Promoting Angiogenesis;” 
  
 3. U.S. 10/649,480 entitled “Method of Producing Biologically Active Human Acidic Fibroblast Growth Factor and its Use in Promoting Angiogenesis;” and 
  
 4. All foreign patent applications related to the above-referenced U.S.
patents and applications. 
  
 Future Patent Applications:

  
 All U.S. and foreign patent applications, developed
jointly or independently by either party, which may or may not be related to the above-listed Issued Patents and Pending Patent Applications, but which disclose subject matter encompassed within the Field. 
  

 2 

 2.4 “Product” shall mean any product which: 
  
 (a) is covered in whole or in part by an issued, unexpired claim or a
pending claim contained in the Patent Rights; or 
  
 (b) is
manufactured by using a process which is covered in whole or in part by an issued, unexpired claim or a pending claim contained in the Patent Rights. 
  
 2.5 “Process” shall mean any process which is covered in whole or in part by an issued, unexpired claim or pending claim contained in the Patent
Rights. 
  
 3. Patent Assignments. 
  
 3.1 PHAGE hereby agrees to assign and hereby does assign to CARDIO a 50%
ownership interest in the itemized patents and patent applications (Patent Rights). 
  
 (a) A separate Assignment for these patents and applications for recordation with the U.S. Patent and Trademark Office will accompany this Agreement. 
  
 (b) Future Patent Applications within the Field will be assigned by the respective inventors to PHAGE and CARDIO jointly,
with each party having a 50% ownership interest. 
  
 4.
License Grants. 
  
 4.1
PHAGE hereby grants to CARDIO a non-revocable, royalty-bearing (subject to Section 7.1), exclusive license 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 10, 11, 13 and 14. 
  
 4.2 CARDIO hereby grants to PHAGE a non-revocable, royalty-free, exclusive license 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. 
  
 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. A formal license agreement between CARDIO and KBDC is in preparation. 
  
 6. Technical Development Services/FGF Manufacturing. 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 as directed by CARDIO. If CARDIO so requests,
PHAGE will produce FGF in commercial quantities for CARDIO as well as PRODUCTS. 
  

 3 

 7. Compensation and Royalties. 
  
 7.1 In consideration for PHAGE’s assignment of a 50% ownership interest in all existing Patent Rights within the Field
and its agreement to jointly hold all future Patent Rights within the Field, CARDIO agrees to either (at CARDIO’s sole discretion): 
  
 (a) purchase FGF from PHAGE for 10% of CARDIO’s net sales price of finished Product to end customer or distributor; or 
  
 (b) pay PHAGE a 6% royalty on the net sales price of finished Product to end
customer or distributor, when said finished Product is produced by CARDIO or a third party under the jointly held Patent Rights. 
  
 7.2 CARDIO agrees to pay PHAGE for any Technical Development Services (Section 6) 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, but no profit component. Any such amounts will be billed to CARDIO on a monthly basis. Payments for Technical Development Services are in addition
to compensation/royalties set forth in Section 6.1. 
  
 8.
Term. The rights and obligations set forth in this Agreement shall commence as of the effective date of this Agreement and end upon expiration of the last to expire patents in the Patent Rights, including Future Patent Applications.

  
 9. Patent Prosecution and Maintenance. 
  
 9.1 During the Term of this Agreement, CARDIO and PHAGE will be jointly
responsible for the filing, payment, prosecution and maintenance of all patents and applications within the Field, whether developed jointly or individually by either party. A party can, at its sole discretion, assign its entire right, title and
interest in a particular patent or application within the Field to the other party, in which case, it shall bear no further responsibility for the filing, payment, prosecution and maintenance of such patent or application, and it shall lose its
rights in such patent or application. 
  
 9.2 The parties shall
jointly agree on patent counsel. 
  
 9.3 The parties agree that
patent counsel shall implement instructions from both parties to the extent that such instructions are not inconsistent. 
  
 9.4 In the event that the parties cannot agree on instructions for the filing, payment, prosecution and/or maintenance of a patent or application:

  
 (a) for a patent or application covering an invention
developed by one party, that party shall control the prosecution and/or maintenance of such patent or application; 
  
 (b) for a patent or application covering an invention jointly developed by both parties, Cardio shall control the prosecution and/or maintenance of such
patent or application. 
  

 4 

 10. Patent Infringement. Upon learning of any infringement of Patent Rights by third 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, the other 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. 
  
 11. Indemnification. 
  
 11.1 PHAGE agrees to release, indemnify and hold harmless CARDIO, their
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, their 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. 
  
 11.2 This
Agreement to reimburse and indemnify under the circumstances set forth above shall continue after the termination of this Agreement. 
  
 12. 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. 
  
 13. Reports and Records. 
  
 13.1 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; 
  

 5 

 (c) the total royalties due; and 
  
 (d) the names and addresses of all sublicensees. 
  
 Such reports shall be due within 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. 
  
 13.2 For a period of three years from the date of each report pursuant to Section 13.1, 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. 
  
 14.
Marking and Standards. 
  
 14.1 Prior to the issuance of
any patents within the Patent Rights, 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 as specified under the patent
laws of the United States. 
  
 14.2 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. 
  
 15. Assignability. Neither party shall assign its ownership interest in the Patent Rights to a third party without
the written consent of the other party. If either party desires to transfer its ownership interest in the Patent Rights, the non-transferring party shall have first right of refusal of such ownership interest. Notwithstanding the foregoing, this
Agreement is not assignable by either party or by operation of law, including by acquisition of all assets of either party, without the prior written consent of the other party at its sole discretion. 
  
 16. Assignability. This Agreement is not assignable by either party or
by operation of law, including by acquisition of all assets of either party, without the prior written consent of the other party at its sole discretion. 
  
 17. Binding. This Agreement shall extend to and be binding upon the successors and legal representatives and permitted assigns of CARDIO and PHAGE.

  

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 18. Counterparts. This Agreement may be executed in counterparts, each of which shall constitute
an original copy of the Agreement. 
  
 19. 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. 
  

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 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
	 	CFO
	
	PHAGE BIOTECHNOLOGY CORPORATION
			
	By	 	 	 	/s/    JOHN W. JACOBS
	 	 	 Name
	 	John W. Jacobs
	 	 	 Title
	 	COO

  

 8

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