Armata Pharmaceuticals, Inc. (Form: 10-Q, Received: 08/14/2019 16:08:52)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2019


◻	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________________ to _______________________

Commission file number: 001‑37544

ARMATA PHARMACEUTICALS, INC.

(Exact name of registrant as specified in its charter)


Washington	91‑1549568
(State or other jurisdiction of	(I.R.S. Employer Identification Number)
incorporation or organization)

4503 Glencoe Avenue
Marina del Rey, CA	90292
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (310) 665-2928

Former name, former address and former fiscal year, if changed since last report: AmpliPhi Biosciences Corporation

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	ARMP	NYSE American

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company as defined in Rule 12b‑2 of the Exchange Act. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b‑2 of the Exchange Act.


Large accelerated filer ◻	Accelerated filer ◻
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Exchange Act).

Yes ◻ No ☒

The number of shares of the registrant’s Common Stock, par value $0.01 per share, outstanding at August 9, 2019 was 9 ,958,546 .

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TABLE OF CONTENTS


		Page

PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)

	Consolidated Balance Sheets	3

	Consolidated Statements of Operations and Comprehensive Los s	4

	Consolidated Statements of Stockholders’ Equity	5

	Consolidated Statements of Cash Flows	7

	Condensed Notes to Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24

Item 4.	Controls and Procedures	24

PART II. OTHER INFORMATION		24

Item 1.	Legal Proceedings	24

Item 1A.	Risk Factors	25

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	46

Item 3.	Defaults upon Senior Securities	46

Item 4.	Mine Safety Disclosures	46

Item 5.	Other Information	46

Item 6.	Exhibits	47

SIGNATURES		50

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Armata Pharmaceuticals, Inc.

Consolidated Balance Sheets


	June 30, 2019		December 31, 2018
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	13,192,000	$	9,663,000
Prepaid expenses and other current assets		1,010,000		697,000
Total current assets		14,202,000		10,360,000
Restricted cash		700,000		800,000
Property and equipment, net		3,432,000		3,249,000
Operating lease right-of-use asset		2,700,000		—
In-process research and development		10,256,000		—
Goodwill		3,490,000		—
Other assets		136,000		136,000
Total assets	$	34,916,000	$	14,545,000

Liabilities and stockholders’ equity
Current liabilities
Accounts payable and accrued liabilities	$	1,768,000	$	536,000
Accrued compensation		1,833,000		191,000
Deferred rent		—		335,000
Current portion of operating lease liabilities		1,264,000		—
Deferred asset acquisition consideration		769,000		970,000
Total current liabilities		5,634,000		2,032,000
Deferred rent, net of current portion		—		810,000
Operating lease liabilities, net of current portion		2,413,000		—
Deferred asset acquisition consideration, net of current portion		1,162,000		2,892,000
Asset acquisition derivative liability		—		1,117,000
Deferred tax liability		3,077,000		—
Total liabilities		12,286,000		6,851,000

Stockholders’ equity
Common stock, $0.01 par value; 217,000,000 shares authorized; 9,958,546 and 5,069,633 issued and outstanding at June 30, 2019 and December 31, 2018, respectively.		99,000		51,000
Additional paid-in capital		168,509,000		145,685,000
Accumulated deficit		(145,978,000)		(138,042,000)
Total stockholders’ equity		22,630,000		7,694,000
Total liabilities and stockholders’ equity	$	34,916,000	$	14,545,000

See accompanying condensed notes to consolidated financial statements.

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Armata Pharmaceuticals, Inc.

Consolidated Statements of Operations and Comprehensive Loss


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2019		2018		2019		2018
	(Unaudited)		(Unaudited)		(Unaudited)		(Unaudited)

Revenue	$	—	$	—	$	—	$	—
Operating expenses
Research and development		3,076,000		2,286,000		5,137,000		4,473,000
Acquired in-process research and development		—		—		—		6,767,000
General and administrative		2,082,000		557,000		3,462,000		1,196,000
Total operating expenses		5,158,000		2,843,000		8,599,000		12,436,000
Loss from operations		(5,158,000)		(2,843,000)		(8,599,000)		(12,436,000)
Other income (expense)
Interest income		28,000		58,000		76,000		110,000
Interest expense		(230,000)		(281,000)		(536,000)		(369,000)
Other income (expense)		4,000		—		4,000		—
Change in fair value of derivative liabilities		1,157,000		(101,000)		1,117,000		(135,000)
Total other income (expense), net		959,000		(324,000)		661,000		(394,000)
Loss before income taxes		(4,199,000)		(3,167,000)		(7,938,000)		(12,830,000)
Income tax benefit		—		—		—		—
Net loss	$	(4,199,000)	$	(3,167,000)	$	(7,938,000)	$	(12,830,000)
Unrealized gain on investments		—		7,000		—		7,000
Comprehensive loss	$	(4,199,000)	$	(3,160,000)	$	(7,938,000)	$	(12,823,000)
Per share information:
Net loss per share, basic	$	(0.56)	$	(0.68)	$	(1.30)	$	(2.76)
Weighted average shares outstanding, basic		7,505,097		4,652,777		6,086,816		4,652,777
Net loss per share, diluted	$	(0.69)	$	(0.68)	$	(1.38)	$	(2.76)
Weighted average shares outstanding, diluted		7,720,977		4,652,777		6,452,413		4,652,777

See accompanying condensed notes to consolidated financial statements.

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Armata Pharmaceuticals, Inc.

Consolidated Statements of Stockholders’ Equity

Three Months Ended June 30, 2018 and 2019


	Stockholders’ Equity
	Common Stock
				Additional				Other		Total
				Paid-in		Accumulated		Comprehensive		Stockholders’
	Shares	Amount		Capital		Deficit		Income/(Loss)		Equity
Balances, March 31, 2018	5,082,177	$	51,000	$	145,665,000	$	(131,003,000)	$	(7,000)	$	14,706,000
Grant of restricted stock awards	—										—
Forfeiture of restricted stock awards	(13,630)										—
Stock-based compensation					13,000						13,000
Net loss							(3,167,000)				(3,167,000)
Unrealized gain on available-for-sale securities									7,000		7,000
Balances, June 30, 2018	5,068,547	$	51,000	$	145,678,000	$	(134,170,000)	$	—	$	11,559,000

Balances, March 31, 2019	5,069,633	$	51,000	$	145,685,000	$	(141,781,000)	$	—	$	3,955,000
Forfeiture of restricted stock awards	(8,467)										—
Issuance of common stock and conversion of deferred consideration for asset acquisition	516,976		5,000		1,457,000						1,462,000
Issuance of common stock in connection with reverse merger	2,389,135		23,000		10,687,000		2,000				10,712,000
Sale of common stock, net of issuance costs	1,991,269		20,000		9,955,000						9,975,000
Stock-based compensation					725,000						725,000
Net loss							(4,199,000)				(4,199,000)
Balances, June 30, 2019	9,958,546	$	99,000	$	168,509,000	$	(145,978,000)	$	—	$	22,630,000

See accompanying condensed notes to consolidated financial statements.

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Armata Pharmaceuticals, Inc.

Consolidated Statements of Stockholders’ Equity

Six Months Ended June 30, 2018 and 2019


	Stockholders’ Equity
	Common Stock
				Additional				Other		Total
				Paid-in		Accumulated		Comprehensive		Stockholders’
	Shares	Amount		Capital		Deficit		Income/(Loss)		Equity
Balances, December 31, 2017	5,073,669	$	51,000	$	145,639,000	$	(121,340,000)	$	(7,000)	$	24,343,000
Grant of restricted stock awards	12,331										—
Forfeiture of restricted stock awards	(17,453)										—
Stock-based compensation					39,000						39,000
Net loss							(12,830,000)				(12,830,000)
Unrealized gain on available-for-sale securities									7,000		7,000
Balances, June 30, 2018	5,068,547	$	51,000	$	145,678,000	$	(134,170,000)	$	—	$	11,559,000

Balances, December 31, 2018	5,069,633	$	51,000	$	145,685,000	$	(138,042,000)	$	—	$	7,694,000
Forfeiture of restricted stock awards	(8,467)										—
Issuance of common stock and conversion of deferred consideration for asset acquisition	516,976		5,000		1,457,000						1,462,000
Issuance of common stock in connection with reverse merger	2,389,135		23,000		10,687,000		2,000				10,712,000
Sale of common stock, net of issuance costs	1,991,269		20,000		9,955,000						9,975,000
Stock-based compensation					725,000						725,000
Net loss							(7,938,000)				(7,938,000)
Balances, June 30, 2019	9,958,546	$	99,000	$	168,509,000	$	(145,978,000)	$	—	$	22,630,000

See accompanying condensed notes to consolidated financial statements.

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Armata Pharmaceuticals, Inc.

Consolidated Statements of Cash Flows


	Six Months Ended June 30,
	2019		2018
	(Unaudited)		(Unaudited)
Operating activities:
Net loss	$	(7,938,000)	$	(12,830,000)
Adjustments required to reconcile net loss to net cash used in operating activities:
Acquired in-process research and development		—		5,691,000
Depreciation		683,000		802,000
Stock-based compensation		725,000		39,000
Non-cash interest expense		536,000		369,000
Change in fair value of derivative liability		(1,117,000)		135,000
Amortization of premiums of available-for-sale securities		—		33,000
Loss on sale of property and equipment		—		145,000
Changes in operating assets and liabilities:
Accounts payable and accrued expenses		(599,000)		(133,000)
Accrued compensation		(351,000)		392,000
Deferred rent		(168,000)		(144,000)
Prepaid expenses and other current assets		(57,000)		89,000
Net cash used in operating activities		(8,286,000)		(5,412,000)
Investing activities:
Purchases of available-for-sale securities		—		(3,392,000)
Proceeds from sales and maturities of available-for-sale securities		—		13,016,000
Purchases of property and equipment		(268,000)		(329,000)
Proceeds from sale of property and equipment		—		65,000
Cash acquired in reverse merger transaction		3,008,000		—
Net cash provided by investing activities		2,740,000		9,360,000
Financing activities:
Payment of deferred consideration for asset acquisition		(1,000,000)		—
Proceeds from sale of common stock, net of offering costs		9,975,000		—
Net cash provided by financing activities		8,975,000		—
Net increase in cash, cash equivalents and restricted cash		3,429,000		3,948,000
Cash, cash equivalents and restricted cash, beginning of period		10,463,000		12,276,000
Cash, cash equivalents and restricted cash, end of period	$	13,892,000	$	16,224,000
Supplemental schedule of non-cash financing activities:
Issuance of common stock in reverse merger transaction	$	10,710,000	$	—
Conversion of deferred asset acquisition consideration upon reverse merger	$	1,462,000	$	—
Property and equipment included in accounts payable	$	113,000	$	—

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same amounts shown in the consolidated statement of cash flows :


	Six months ended June 30,
	2019		2018
Cash and cash equivalents	$	13,192,000	$	15,424,000
Restricted cash		700,000		800,000
Cash, cash equivalents and restricted cash	$	13,892,000	$	16,224,000

See accompanying condensed notes to consolidated financial statements.

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Armata Pharmaceuticals, Inc.

Condensed Notes to Consolidated Financial Statements

(Unaudited)

1. Organization and Description of the Business

Armata Pharmaceuticals, Inc. (“Armata”, and together with its subsidiaries referred to herein as, the “Company”) is a clinical-stage biotechnology company focused on the discovery and development of precisely targeted bacteriophage therapeutics for the treatment of antibiotic-resistant infections using its proprietary bacteriophage-based technology. The Company was created as a result of a business combination between C3J Therapeutics, Inc. (“C3J”) and AmpliPhi Biosciences Corporation (“AmpliPhi”) that closed on May 9, 2019, where Ceres Merger Sub, Inc., a wholly-owned subsidiary of AmpliPhi, merged with and into C3J (the ”Merger”), with C3J surviving the Merger as a wholly-owned subsidiary of AmpliPhi. In the Merger, each share of C3J common stock outstanding immediately prior to the Merger was converted into the right to receive approximately .6906 shares of AmpliPhi common stock. The shares were then adjusted further to account for a reverse split of AmpliPhi common stock at a reverse split ratio of 1‑for‑14. All share and per share amounts have been retrospectively adjusted to give effect to the exchange of C3J common stock and the reverse split of AmpliPhi common stock.

Immediately prior to the closing of the Merger, AmpliPhi changed its name to Armata Pharmaceuticals, Inc. Armata’s common stock is traded on the NYSE American exchange under the ticker symbol “ARMP.”

Immediately following the Merger, certain existing C3J shareholders purchased $10.0 million in Armata common stock. After the Merger and such concurrent private placement, the former C3J security holders owned approximately 76% of the aggregate number of shares of Armata’s common stock and the security holders of AmpliPhi as of immediately prior to the Merger owned approximately 24% of the aggregate number of shares of Armata’s common stock. In addition, upon closing of the Merger, five of the seven members of the board of directors were appointed by C3J.

In connection with the Merger, C3J was considered the accounting acquirer of AmpliPhi because C3J’s shareholders retained a majority control of ownership of the Company subsequent to the Merger. In addition, the seven-member board of directors of the combined company include five members established by C3J. Therefore, the historical financial statements presented herein prior to the closing of the Merger are the historical financial statements of C3J.

C3J’s predecessor, C3 Jian, Inc., was incorporated under the laws of the State of California on November 4, 2005. On February 26, 2016, as part of a reorganization transaction, C3 Jian, Inc. merged with a wholly owned subsidiary of C3J, and as part of this process, C3 Jian, Inc. was converted to a limited liability company organized under the laws of the State of California named C3 Jian, LLC. Prior to the Merger, C3J was privately held and was financed principally through a series of equity financings.

2. Liquidity

The Company has prepared its consolidated financial statements on a going concern basis, which assumes that the Company will realize its assets and satisfy its liabilities in the normal course of business. However, the Company has incurred net losses since its inception and has negative operating cash flows. These circumstances raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of the uncertainty concerning the Company’s ability to continue as a going concern.

As of June 30, 2019, the Company had cash and cash equivalents of $ 13.2 million. Considering the Company’s current cash resources, management believes the Company’s existing resources will be sufficient to fund the Company’s planned operations through the first quarter of 2020. For the foreseeable future, the Company’s ability to continue its operations is dependent upon its ability to obtain additional capital.

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3. Significant Accounting Policies

Basis of Presentation

The consolidated financial statements include the accounts of Armata and its wholly-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. The accompanying unaudited consolidated financial statements of the Company should be read in conjunction with the audited financial statements and accompanying notes thereto as of and for the year ended December 31, 2018 included in the Proxy Statement on Schedule 14A of AmpliPhi, filed with the U.S. Securities and Exchange Commission on April 4, 2019, as amended. The accompanying unaudited financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial statements. Any reference in the Notes to applicable guidance is meant to refer to authoritative U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”).

In the opinion of management, the accompanying consolidated financial statements include all adjustments that are of a normal and recurring nature and that are necessary for the fair presentation of the Company’s financial position and the results of its operations and cash flows for the periods presented. Interim results are not necessarily indicative of results for the full year or any future period.

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in its consolidated financial statements and accompanying notes. On an ongoing basis, management evaluates these estimates and judgments, which are based on historical and anticipated results and trends, and on various other assumptions that management believes to be reasonable under the circumstances. By their nature, estimates are subject to an inherent degree of uncertainty and, as such, actual results may differ from management’s estimates.

Fair Value of Financial Instruments

The carrying amounts of cash equivalents, other current assets, accounts payable, and accrued liabilities approximate fair value because of the short-term nature of these instruments.

In-Process Research and Development (“IPR&D”) and Acquired IPR&D

IPR&D assets are intangible assets with indefinite lives and are not subject to amortization. The Company’s IPR&D assets represent capitalized incomplete research projects that the Company acquired through the Merger. Such assets are initially measured at their acquisition-date fair values and are subject to impairment testing at least annually until completion or abandonment of research and development efforts associated with the projects. Upon successful completion of each project, the Company makes a determination as to the then remaining useful life of the intangible asset and begins amortization.

The Company expenses acquired IPR&D in connection with an asset acquisition when there is no alterative future use. Acquired IPR&D expense of $6.8 million consists of the estimated fair value of the assets acquired and consideration given in connection with the acquisition of certain synthetic phage assets in 2018 from Synthetic Genomics, Inc. (“SGI”). As the assets acquired were in the research and development phase and were determined to not have any alternative future use, it was expensed as acquired IPR&D.

Goodwill

Goodwill, which has an indefinite useful life, represents the excess of purchase consideration over fair value of net assets acquired. The Company’s goodwill as of June 30, 2019 is associated with AmpliPhi’s business prior to the Merger. Goodwill is not subject to amortization and is required to be tested for impairment at least on an annual basis. The Company tests goodwill for impairment as of December 31 of each year. The Company determines whether

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goodwill may be impaired by comparing the carrying value of the single reporting unit, including goodwill, to the fair value of the reporting unit. If the fair value is less than the carrying amount, a more detailed analysis is performed to determine whether goodwill is impaired. The impairment loss, if any, is measured as the excess of the carrying value of the goodwill over the implied fair value of the goodwill and is recorded in the Company’s consolidated statements of operations.

Derivative Liabilities

Derivative liabilities are accounted for in accordance with the applicable accounting guidance provided in ASC 815 – Derivatives and Hedging based on the specific terms of the agreements. Derivative liabilities are recorded at fair value at each reporting period with any change in fair value recognized as a component of change in fair value of asset acquisition derivative liability in the consolidated statements of operations and comprehensive loss. The Company has a zero derivative liability balance at June 30, 2019 as the liability of $1.1 million at December 31, 2018 was settled upon the Merger.

Net Loss per Share

Net earnings or loss per share (“EPS”) is calculated in accordance with the applicable accounting guidance provided in ASC 260, Earnings per Share. Basic EPS is calculated by dividing net income or loss by the weighted-average number of common shares outstanding. Options, warrants, unvested share-based payment awards and convertible securities are excluded from the basic EPS calculation, and considered within the diluted EPS calculation. Diluted EPS as of June 30, 2019 included a numerator adjustment to remove the gain related to the change in fair value of derivative liabilities of $1.2 million and $1.1 million for the three and six months ended June 30, 2019, respectively. Additionally, diluted EPS for the three and six month periods ended June 30, 2019 included an adjustment to the weighted-average shares outstanding to appropriately weight the 516,976 issuance of shares to SGI as discussed in Note 10.


	Three Months Ended		Six Months Ended
	June 30,		June 30,
	2019	2018	2019	2018
Options	1,346,516	153,306	1,346,516	153,306
Restricted stock awards	408,389	415,770	408,389	415,770
Warrants	1,854,262	—	1,854,262	—
Total	3,609,167	569,076	3,609,167	569,076

Research and Development Expenses

Research and development (“R&D”) costs consist primarily of direct and allocated salaries, incentive compensation, stock-based compensation and other personnel-related costs, facility costs, and third-party services. Third party services include studies and clinical trials conducted by clinical research organizations. R&D activities are expensed as incurred. The Company records accruals for estimated ongoing clinical trial expenses. When evaluating the adequacy of the accrued liabilities, the Company analyzes progress of the studies, including the phase or completion of events, invoices received and contracted costs. Judgments and estimates are made in determining the accrued balances at the end of the reporting period.

Recent Accounting Pronouncements Not Yet Adopted

In November 2018, FASB issued ASU 2018-18, Clarifying the Interaction between Topic 808 and Topic 606 . The objective of the standard is to clarify the interaction between Topic 808, Collaborative Arrangements , and Topic 606, Revenue from Contracts with Customers . Currently, Topic 808 does not provide comprehensive recognition or measurement guidance for collaborative arrangements, and the accounting for those arrangements is often based on an analogy to other accounting literature or an accounting policy election. Similarly, aspects of Topic 606 have resulted in uncertainty in practice about the effect of the revenue standard on the accounting for collaborative arrangements. The standard will become effective beginning on January 1, 2020, with early adoption permitted. We are currently evaluating

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the guidance to determine the potential impact on our financial condition, results of operations, cash flows, and financial statement disclosures.

Recently Adopted Accounting Standards

In February 2016, the FASB issued ASU No. 2016‑02, Leases (Topic 842) , which amends the FASB Accounting Standards Codification and creates Topic 842, "Leases." The new topic supersedes Topic 840, "Leases," and increases transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and requires disclosures of key information about leasing arrangements. The Company has elected to adopt ASU 2016‑02 retrospectively at January 1, 2019 using a simplified transition option that allows companies to initially apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings or accumulated deficit. We have also elected to adopt the package of practical expedients permitted in ASC Topic 842. Accordingly, we are continuing to account for our existing operating lease as an operating lease under the new guidance, without reassessing whether the agreements contain a lease under ASC 842. All of our leases at the adoption date were operating leases for facilities and did not include any non-lease components.

As a result of the adoption of ASU 2016‑02, on January 1, 2019 we recognized (i) a lease liability of approximately $3.8 million, which represents the present value of our remaining lease payments using an estimated incremental borrowing rate of 15%, and (ii) a right-of-use asset of approximately $2.7 million. There was no cumulative-effect adjustment to accumulated deficit. Lease expense is not expected to change materially as a result of the adoption of ASU 2016‑02.

In June 2018, the FASB issued ASU No. 2018‑07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting , which amends the FASB Accounting Standards Codification in order to simplify the accounting for share-based payments granted to nonemployees for goods and services. Under the ASU, most of the guidance on such payments to nonemployees will be aligned with the requirements for share-based payments granted to employees. The guidance mandates the modified retrospective approach and is effective for annual and interim reporting periods beginning after December 31, 2018, with early adoption permitted. The Company elected to early adopt this ASU as of June 30, 2018 and the adoption did not have an impact on the Company’s consolidated financial statements.

4. Fair Value Measurements

The guidance regarding fair value measurements prioritizes the inputs used in measuring fair value and establishes a three-tier value hierarchy that distinguishes among the following:

Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access.

Level 2—Valuations based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and models for which all significant inputs are observable, either directly or indirectly.

Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

The Company estimates the fair values of derivative liabilities utilizing Level 3 inputs. No derivative liabilities have been transferred between the classification levels. Estimating the fair values of derivative liabilities requires the use of

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significant and subjective inputs that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors.

The recurring fair value measurements of the Company’s liabilities at June 30, 2019 and December 31, 2018 consisted of the following:


	Quoted Prices in
	Active Markets		Significant Other		Significant
	for Identical		Observable Inputs		Unobservable
	Items (Level 1)		(Level 2)		Inputs (Level 3)		Total
June 30, 2019
Assets
Money market funds	$	3,166,000	$	—	$	—	$	3,166,000
Total assets	$	3,166,000	$	—	$	—	$	3,166,000

December 31, 2018
Assets
Money market funds	$	9,430,000	$	—	$	—	$	9,430,000
Total assets	$	9,430,000	$	—	$	—	$	9,430,000

Liabilities
Asset acquisition derivative liability	$	—	$	—	$	1,117,000	$	1,117,000
Total liabilities	$	—	$	—	$	1,117,000	$	1,117,000

The following table sets forth a summary of changes in the fair value of the Company’s liabilities:


	Asset
	Acquisition
	Derivative
	Liability
Balance, December 31, 2018	$	1,117,000
Changes in estimated fair value		(1,117,000)
Balance, June 30, 2019	$	—

We estimated the fair value of this derivative by forecasting the timing and likelihood of the events occurring and discounting the probability adjusted payments using an appropriate discount based on market interest rates and our own non-performance risk as required by ASC 820 – Fair Value Measurement . There is no longer a potential payment requirement associated with the derivative liability subsequent to the Merger. Accordingly, the fair value of the derivative liability was reduced to zero with the associated change recorded in other income.

5. The Merger

On May 9, 2019, the Company completed the Merger (see Note 1). On the date of the Merger, AmpliPhi had, and the Company currently has, IPR&D related to the development of AP-SA01 (formerly known as AB-SA01 prior to the Merger), a phage combination for the treatment of Staphylococcus aureus infections, and had tested such product in patients through single-patient expanded access guidelines established by U.S. and Australian regulatory agencies. Further, AmpliPhi had, and the Company currently has, a workforce that is considered to have the necessary skills, knowledge, and experience to perform a process, that when applied to IPR&D is critical to the ability to convert it into outputs. Based on this evaluation, the Company determined that the Merger should be accounted for as a business combination pursuant to Financial Accounting Standards Board Accounting Standards Codification Topic 805, Business Combinations (“ASC 805”).

In connection with the Merger, the Company allocated the total purchase consideration of $10.7 million in stock to the net assets and liabilities acquired, including identifiable intangible assets and related deferred tax liability, based on

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their respective fair values at the acquisition date. The Company recognizes deferred tax liabilities for indefinite-lived intangible assets in accordance with ASC 740, Income Taxes.

The following table summarizes the preliminary allocation of the purchase price to the fair value of the respective assets and liabilities acquired (in thousands). The purchase price allocations were prepared on a preliminary basis and are subject to change as additional information becomes available concerning the fair value and tax basis of the assets acquired and liabilities assumed. Any measurement period adjustments to the purchase price allocation will be made as soon as practicable but no later than one year from the date of acquisition.


Cash and cash equivalents	$	3,008,000
Prepaid expenses		257,000
Property and equipment		708,000
Right of use asset		271,000
In-process research and development (1)		10,256,000
Total assets		14,500,000
Accounts payable		(4,004,000)
Other long term liabilities		(199,000)
Deferred tax liability		(3,077,000)
Net assets acquired		7,220,000
Purchase price		10,710,000
Goodwill (2)	$	3,490,000

(1) IPR&D relates to AP-SA01, a bacteriophage product candidate for the treatment of Staphylococcus aureus infections in patients with bacteremia. The valuation of this asset was prepared by an independent third party based on estimated discounted cash flows based on probability-weighted future development expenditures and revenue streams provided by the Company’s management.

(2) Goodwill represents the excess of the purchase price over the valuation of the fair value of tangible and identified intangible assets, less liabilities, acquired.

In addition, the Company incurred and expensed costs directly related to the Merger totaling approximately $1.1 million, of which approximately $0.5 and $1.1 million was incurred in the three and six months ended June 30, 2019, and is included in general and administrative expenses in the consolidated statement of operations and comprehensive loss.

Since the closing date of the Merger, the results of AmpliPhi’s operations have been included in the Company’s consolidated financial statements. Selected amounts related to AmpliPhi’s business included in the Company’s consolidated statements of operations for the three months ended June 30, 2019, are as follows:


Research and development expenses	$	749,000
General and administrative expenses	$	730,000
Net loss	$	(1,475,000)

The unaudited pro forma information in the table below summarizes the combined results of operations of AmpliPhi with those of the Company as though these entities were combined as of January 1, 2018. The results of operations for the three and six months ended June 30, 2019, are based on the unaudited financial statements prepared for the three and six months ended June 30, 2019, and for the year ended December 31, 2018, are based on the Company’s audited financial statements. This unaudited pro forma information is summarized as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Revenue	$	-	$	-	$	-	$	-

Net loss	$	(5,976,000)	$	(5,885,000)	$	(13,413,000)	$	(18,354,000)

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The pro forma financial information as presented above is for informational purposes only and is not indicative of the consolidated results of operations of future periods or the results of operations that would have been achieved had the acquisition had taken place on January 1, 2018 .

6. Balance Sheet Details

Property and Equipment

Property and equipment as of June 30, 2019 and December 31, 2018 consisted of the following:


	June 30, 2019		December 31, 2018
Laboratory equipment	$	9,204,000	$	6,990,000
Furniture and fixtures		627,000		627,000
Office and computer equipment		347,000		260,000
Leasehold improvements		3,513,000		3,266,000
Total		13,691,000		11,143,000
Less: accumulated depreciation		(10,259,000)		(7,894,000)
Property and equipment, net	$	3,432,000	$	3,249,000

Depreciation expense totaled $335,000 and $401,000 for the three month periods ended June 30, 2019 and 2018, respectively. Depreciation expense totaled $683,000 and $802,000 for the six month periods ended June 30, 2019 and 2018, respectively.

7. Stockholders’ Equity

Warrants

At June 30, 2019, outstanding warrants to purchase shares of common stock are as follows:


Shares Underlying
Outstanding	Exercise		Expiration
Warrants	Price		Date
2,980	$	1,505.00	March 16, 2020
2,246	$	567.00	March 31, 2021
597,881	$	21.00	May 10, 2022
1,249,955	$	5.60	October 16, 2023
1,200	$	1,680.00	None
1,854,262

8. Equity Incentive Plans

Stock Award Plans

The Company maintains a 2016 Equity Incentive Plan (the “2016 Plan”), which provides for the issuance of incentive share awards in the form of non-qualified and incentive stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards and performance-based stock awards. The awards may be granted by the Company’s Board of Directors to its employees, directors and officers and to consultants, agents, advisors and independent contractors who provide services to the Company or to a subsidiary of the Company. The exercise price for stock options must not be less than the fair market value of the underlying shares on the date of grant. Stock options expire no later than ten years from the date of grant and generally vest and typically become exercisable over a four-year period following the date of grant. Upon the exercise of stock options, the Company issues the resulting shares from shares reserved for issuance under the 2016 Plan. Under the 2016 Plan, the number of shares authorized for issuance automatically increases annually beginning January 1, 2017 and through January 1, 2026. The 2016 Plan was most

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recently amended and restated by the Board of Directors effective as of May 8, 2019 to reflect (i) the name change of AmpliPhi Biosciences Corporation to “Armata Pharmaceuticals, Inc.”, and (ii) the one-for-fourteen reverse stock split.

In connection with the Merger, the Company assumed the C3J Jian, Inc. Amended 2006 Stock Option Plan (the “Assumed 2006 Plan”) and the C3J Therapeutics, Inc. 2016 Stock Plan (the “Assumed 2016 Plan”). These plans provided for stock option and restricted stock awards (“RSAs”) to C3J employees in years prior to the merger with AmpliPhi. The number of shares subject to each outstanding stock option and RSA under those assumed plans, along with the exercise price of stock options, were equitably adjusted pursuant to the terms of the plans to reflect the impact of the Merger and the one-for-fourteen reverse stock split, in each case in a manner intended to preserved the then-current intrinsic value of the awards. No additional awards will be made under either plan. The assumed C3J stock options were substantially vested and expensed as of the merger date. Vesting of the assumed C3J RSAs is based on the occurrence of a public liquidity event, or a change in control. In the event of a public liquidity event, service or milestone based vesting schedules begins. Service periods are generally two to four years. In the event of a change in control, 100% vesting occurs upon the closing of such an event. The merger with AmpliPhi constituted a public liquidity event and triggered the start of vesting of RSAs.

Stock-based Compensation

The Company estimates the fair value of stock options with performance and service conditions using the Black-Scholes valuation model. Compensation expense related to stock options granted is measured at the grant date based on the estimated fair value of the award and is recognized on the accelerated attribution method over the requisite service period.

The assumptions used in the Black-Scholes model are presented below:


	Six Months Ended June 30,
	2019		2018
Risk-free interest rate	2.20 to 2.21	%	-	%
Expected volatility	89 to 90	%	-	%
Expected term (in years)	5.75 to 6.25		-
Expected dividend yield	0	%	-	%

The risk-free interest rate is based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant. Expected volatility is based on the historical volatility of Armata and peer companies’ common stock. The expected term represents the period that the Company expects its stock options to be outstanding. The expected term assumption is estimated using the simplified method set forth in the SEC Staff Accounting Bulletin 110, which is the mid-point between the option vesting date and the expiration date. For stock options granted to parties other than employees or directors, the Company elects, on a grant by grant basis, to use the expected term or the contractual term of the option award. The Company has never declared or paid dividends on its common stock and has no plans to do so in the foreseeable future. Forfeitures are recognized as a reduction of stock-based compensation expense as they occur.

The table below summarizes the total stock-based compensation expense included in the Company’s consolidated statements of operations for the periods presented:


	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018

Research and development	$	251,000	$	2,000	$	251,000	$	7,000
General and administrative		473,000		11,000		474,000		32,000
Total stock-based compensation	$	724,000	$	13,000	$	725,000	$	39,000

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Stock option transactions during the six months ended June 30, 2019 are presented below:


				Weighted
				Average
		Weighted		Remaining
		Average		Contractual	Aggregate
		Exercise		Term	Intrinsic
	Shares	Price		(Years)	Value
Outstanding at December 31, 2018	136,463	$	36.31	5.02		—
Assumed in the Merger	52,602		56.60			—
Granted	1,157,825		3.15			996,000
Forfeited/Cancelled	(374)		147.35			—
Outstanding at June 30, 2019	1,346,516	$	8.56	9.11	$	996,000
Vested and expected to vest at June 30, 2019	1,346,516	$	8.56	9.11	$	996,000
Exercisable at June 30, 2019	179,202	$	41.92	4.09	$	—

Restricted stock award transactions under the Assumed 2016 Plan during the six months ended June 30, 2019 are presented below:


			Weighted Avg
			Grant Date
	Shares		Fair Value
Outstanding at December 31, 2018		416,856	$	29.17
Granted		—		—
Forfeited/Cancelled		(8,467)		25.14
Outstanding at June 30, 2019		408,389	$	29.25

The aggregate intrinsic value of options at June 30, 2019 is based on the Company’s closing stock price on that date of $4.01 per share. As of June 30, 2019, there was $ 11.5 million of total unrecognized compensation expense related to unvested stock options and RSAs, which the Company expects to recognize over the weighted average remaining period of 2.3 years.

Shares Reserved For Future Issuance

As of June 30, 2019, the Company had reserved shares of its common stock for future issuance as follows:


		Shares Reserved
Stock options outstanding		1,346,516
Employee stock purchase plan		5,462
Available for future grants under the 2016 Plan		4,102
Warrants outstanding		1,854,262
Total shares reserved		3,210,342

9 . Commitments and Contingencies

From time to time, the Company may be involved in disputes, including litigation, relating to claims arising out of operations in the normal course of business. Any of these claims could subject the Company to costly legal expenses and, while management generally believes that there is adequate insurance to cover many different types of liabilities, the Company’s insurance carriers may deny coverage or policy limits may be inadequate to fully satisfy any damage awards or settlements. If this were to happen, the payment of any such awards could have a material adverse effect on the consolidated results of operations and financial position. Additionally, any such claims, whether or not successful, could damage the Company’s reputation and business. The Company is currently not a party to any legal proceedings, the adverse outcome of which, in management’s opinion, individually or in the aggregate, would have a material adverse effect on our consolidated results of operations or financial position.

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Between April 15 and April 25, 2019, three putative class action lawsuits (captioned Midgarden v. AmpliPhi Biosciences Corp., et al., No. 19-cv-0684 (S.D. Cal. filed Apr. 15, 2019); Henning v. AmpliPhi Biosciences Corp., et al., No. 19-cv-0728 (S.D. Cal. filed Apr. 19, 2019); and Plumley v. AmpliPhi Biosciences Corp., et al., No. 19-cv-0617 (W.D. Wash. filed Apr. 25, 2019)) were filed in federal court against us and our board of directors related to the Merger. The lawsuits assert violations of Section 14(a) of the Securities Exchange Act of 1934 and Rule 14a-9 promulgated thereunder against all defendants, and assert violations of Section 20(a) of the Securities Exchange Act of 1934 as to the individual defendants. The plaintiffs contend that the Company’s Definitive Proxy Statement on Schedule 14A, filed on April 4, 2019 (the “April 2019 Proxy Statement”), omitted or misrepresented material information regarding the Merger. The complaints sought injunctive relief, rescission, or rescissory damages and an award of plaintiffs’ costs, including attorneys’ fees and expenses. On May 1, 2019, we amended the April 2019 Proxy Statement to provide additional disclosure to our shareholders. Each of the above cases have since been dismissed.

10. Synthetic Genomics Asset Acquisition

On February 28, 2018, C3J completed an acquisition of certain synthetic phage assets (the “synthetic phage assets”) from “SGI” for consideration consisting of $8.0 million in cash and $27.0 million in equity. The cash payments consisted of: $1.0 million paid at closing on February 28, 2018, $1.0 million at one year from closing, $1.0 million at two years from closing, and $5.0 million at three years from closing (the payments due on the one, two, three year anniversary are collectively the “time-based payment obligation”). The equity payment (the “equity payment” and, together with the time-based payment obligation, the “deferred purchase price arrangement”) is due upon the earlier of the initial public offering of shares of C3J’s common stock pursuant to an effective registration statement under the Securities Act of 1933, as amended, the sale of all or substantially all of C3J’s assets to a third party, or a consolidation or merger into a third party. The agreement provides that the number of shares to be issued or the consideration to be paid will be determined based upon the per share price in connection with C3J’s initial public offering, the value of consideration received in a sale of the synthetic phage assets to a third party, or the value of consideration received in a consolidation or merger with a third party.

On December 20, 2018, in contemplation of the Merger (see Note 5), the deferred purchase price arrangement was amended. Under the amended agreement, the purchase consideration consisted of (i) closing consideration of $1.0 million paid on February 28, 2018, (ii) cash payments of $1.0 million on January 31, 2019, $1.0 million on January 31, 2020, and $2.0 million on January 31, 2021, (iii) an issuance of that number of shares of C3J’s common stock equal to ten percent of C3J’s fully-diluted capitalization, excluding options and restricted stock awards, immediately prior to the closing of the Merger, and (iv) potential milestone payments of up to $39.5 million related to the development and relevant regulatory approval of products utilizing bacteriophage from the synthetic phage assets acquired from SGI (the “milestone payment obligation”).

In January 2017, FASB issued ASU 2017‑01, Clarifying the Definition of a Business . A key provision within ASU 2017‑01 is the single or similar asset threshold. When substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the acquired set is not a business. The Company adopted this standard effective January 1, 2017.

The synthetic phage assets acquired consisted primarily of phage know-how, research program materials and the related intellectual properties that had been under development by SGI. In connection with the SGI transaction, the Company became a party to a collaboration agreement with Merck, and a grant from National Institutes of Health, and the National Institute of Allergy and Infectious Diseases.

The Company considered the items included in the acquired synthetic phage assets and concluded that substantially all of the fair value of the assets acquired and consideration given to SGI constituted the purchase of a single asset. Based on ASU 2017‑01, the acquisition was an asset acquisition, specifically an in process research and development asset. Under guidance in ASC 730, in process research and development assets acquired in connection with asset acquisitions are expensed unless there is an alternative future use. As the asset acquired from SGI does not have an alternative future use, the $6.8 million fair value of the asset and consideration transferred for the asset acquired was expensed in full in the consolidated statement of operations and comprehensive loss.

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The equity payment was determined to be a derivative liability in accordance with ASC 815, Derivatives and Hedging and was initially recorded at its fair value of $2.8 million. Throughout 2018 and until May 9, 2019, the derivative liability was adjusted to its fair value based upon a payment probability assessment and marked-to-market at the end of each period (see Note 4). The time-based payment obligation was recorded as a liability at its amortized cost of $2.9 million and impacts interest expense based on the effective interest method based on its contractual life in accordance with ASC 835, Interest . Following the December 20, 2018 amendment to the deferred purchase price arrangement, the Company considered the probability of the reduction to the share issuance consideration in estimating the fair value of the derivative liability.

The Company determined the changes to the deferred purchase price arrangement met the definition of a troubled debt restructuring under ASC 470‑60, Troubled Debt Restructurings by Debtors , as the Company was experiencing financial difficulties and SGI granted a concession. The amendments to the terms of the equity payment resulted in an adjustment to the fair value of the derivative liability, resulting in a $2.0 million gain, which is included in the change in fair values of derivative liabilities within the consolidated statement of operations and comprehensive loss for the year ended December 31, 2018. Other than the gain resulting from the change in fair value of a derivative liability required to be remeasured to fair value with changes in fair value recognized in earnings in accordance with ASC 815, no gain on restructuring was recorded because the future, undiscounted cash flows of the time-based payment obligation exceed the carrying amount of the liability. The net carrying amount at the date of the restructuring does not include any contingently payable amounts. Prospectively, the time-based payment obligations will continue to be carried at amortized cost and will impact interest expense using the effective interest method based on its contractual life in accordance with ASC 835 and potential payments under the milestone payment obligation will be accrued once probable of being incurred in accordance with ASC 450, Contingencies . For the six months periods ended June 30, 2019 and 2018, the Company recognized $536,000 and $369,000, respectively, of interest expense related to the time-based payment obligations.

In connection with the Merger, the Company converted its equity payment obligation to SGI by issuing 516,976 shares of C3J’s common stock in connection with the amended agreement, after considering the Merger exchange ratio and reverse stock split in the manner described above. Through May 9, 2019, the derivative liability associated with the equity payment was updated for its estimated market value. Upon closing of the Merger, the fair value of the derivative liability was estimated at zero as the equity payment is no longer required to be made in the future. The change in fair value is reflected in other income.

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q, our audited financial statements and notes thereto as of and for the year ended December 31, 2018 included in our Definitive Proxy Statement on Schedule 14A, filed on April 4, 2019 (the “April 2019 Proxy Statement”) with the U.S. Securities and Exchange Commission, as subsequently amended on April 15, 2019 and May 1, 2019, and our Current Report on Form 8-K, initially filed on May 10, 2019 (as subsequently amended on July 24, 2019, the “May 2019 8-K”).

Our predecessor, C3 Jian, Inc., was incorporated under the laws of the state of California on November 4, 2005. On February 26, 2016, as part of a reorganization transaction, C3 Jian, Inc. merged with a wholly owned subsidiary of C3J Therapeutics, Inc. (“C3J”), and as part of this process, C3 Jian, Inc. was converted to a limited liability company organized under the laws of the State of California named C3 Jian, LLC. On May 9, 2019, C3J completed a reverse merger with AmpliPhi Biosciences Corporation, a bacteriophage development stage company (“AmpliPhi”), where Ceres Merger Sub, Inc., a wholly-owned subsidiary of AmpliPhi, merged with and into C3J (the ”Merger”). Following the completion of the Merger, and a $10.0 million concurrent private placement financing, the former C3J shareholders owned approximately 76% of our common stock and the former AmpliPhi shareholders owned approximately 24% of our common stock.

Immediately prior to the Merger, AmpliPhi completed a 1-for-14 reverse stock split and changed its name to Armata Pharmaceuticals, Inc. Our common stock is traded on the NYSE American exchange under the symbol “ARMP.” We are headquartered in Marina Del Rey, CA, in a 35,000 square-foot research and development facility built for product development with capabilities spanning from bench to clinic. In addition to microbiology, synthetic biology, formulation, chemistry and analytical laboratories, the facility is equipped with two licensed GMP drug manufacturing suites enabling the production, testing and release of clinical material.

Statements contained in this report that are not statements of historical fact are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, without limitation, statements concerning product development plans, commercialization of our products, the expected market opportunity for our products, the use of bacteriophages and synthetic phages to kill bacterial pathogens, having resources sufficient to fund our operations through the first quarter of 2020, future funding sources, general and administrative expenses, clinical trial and other research and development expenses, costs of manufacturing, costs relating to our intellectual property, capital expenditures, the expected benefits of our targeted phage therapies strategy, the potential market for our products, tax credits and carry-forwards, and litigation-related matters. Words such as “believe,” “anticipate,” “plan,” “expect,” “intend,” “will,” “goal,” “potential” and similar expressions are intended to identify forward-looking statements, though not all forward-looking statements necessarily contain these identifying words. These statements are subject to risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth below under Part II, Item 1A, “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. These forward-looking statements speak only as of the date on which they were made, and we undertake no obligation to update any forward-looking statements.

Overview

We are a clinical-stage biotechnology company focused on the development of precisely targeted bacteriophage therapeutics for the treatment of antibiotic-resistant infections using our proprietary bacteriophage-based technology. Bacteriophages or “phages” have a powerful and highly differentiated mechanism of action that permits them to bind to and kill specific bacteria. We believe that phages represent a promising means to treat bacterial infections, especially those that have developed resistance to current standard of care therapies, including the so-called multidrug-resistant or “superbug” strains of bacteria. We are a leading developer of phage therapeutics which are uniquely positioned to address the growing worldwide threat of antibiotic-resistant bacterial infections.

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We are combining our proprietary approach and expertise in identifying, characterizing and developing both naturally-occurring and engineered (synthetic) bacteriophages with our proprietary phage-specific GMP manufacturing capabilities to advance a broad pipeline of high-quality bacteriophage product candidates. We believe that synthetic phage, engineered using advances in sequencing and synthetic biology techniques, represent a promising means to treat bacterial infections, especially those that have developed resistance to current antibiotic therapies, including the multidrug-resistant or “superbug” bacterial pathogens.

Our phage product candidates aim to address areas of significant unmet clinical need, by targeting key antibiotic-resistant bacteria including those on the World Health Organization’s global priority pathogens list. We currently have a product candidate (our product candidate known as AP-SA01, previously referred to as AB-SA01) in clinical development for the treatment of Staphylococcus aureus (“ S. aureus ”) infections, including methicillin-resistant S. aureus . AP-SA01 is produced using our proprietary phage-specific GMP manufacturing capabilities. The three natural phage that comprise the product candidate were chosen for their ability to cover approximately 95% of S. aureus clinical isolates, including multidrug-resistant strains. Human exposure obtained from two previously completed Phase 1 studies, and through the single-patient expanded access program in the United States and in Australia, indicate that AP-SA01 is generally well-tolerated. We are also developing and advancing phage product candidates, both natural and synthetic, for Pseudomonas aeruginosa (“ P. aeruginosa ”). Our synthetic Pseudomonas phage program highlights several key attributes of phage engineering that will serve to enhance clinical and commercial prospects of phage therapy. These attributes include expanded host range, which reduces the number of phages in a cocktail and facilitates manufacturing, improved potency which is a fundamental drug property that can translate into improved clinical efficacy, and importantly, biofilm disruption, which is a critical aspect of serious infections that needs to be addressed.

In partnership with Merck, known as MSD outside of the United States and Canada, we are developing proprietary synthetic phage candidates to target an undisclosed infectious disease agent.

In addition to our more advanced pipeline programs, we have phage discovery efforts underway to target other major pathogens of infectious disease (including ESKAPE pathogens) and preventable infectious disease of the microbiome.

We are committed to conducting formal randomized clinical trials required for the Food and Drug Administration (“FDA”) approval in order to move toward commercialization of alternatives to traditional antibiotics and provide a potential method of treating patients suffering from drug-resistant bacterial infections. In support of this, in August 2018 we had a productive pre-IND meeting with the FDA regarding proposed clinical development of AP-SA01 for the treatment of patients with S. aureus bacteremia, and for the treatment of patients with a hip or knee prosthetic joint infection due to S. aureus . Based on feedback from the FDA no additional nonclinical data are required to proceed with the proposed randomized clinical trials. We are advancing the AP-SA01 program with key opinion leaders to map out the most productive clinical path, and we are actively seeking and intend to continue to seek non-dilutive financing and/or collaborations to support AP-SA01 clinical studies. Related to our Pseudomonas phage product candidates that we are developing for the treatment of respiratory infections including hospitalized pneumonia and cystic fibrosis, we intend to present our proposed clinical study design in a pre-IND meeting in late 2019.

The following chart summarizes the status of our phage product candidate development programs:

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We have generally incurred net losses since our inception and our operations to date have been primarily limited to research and development and raising capital. As of June 30, 2019, we had an accumulated deficit of $146.0 million. We anticipate that a substantial portion of our capital resources and efforts in the foreseeable future will be focused on completing the development and obtaining regulatory approval of our product candidates.

We currently expect to use our existing cash and cash equivalents for the continued research and development of our product candidates, including through our targeted phage therapies strategy, and for working capital and other general corporate purposes. We expect to continue to incur significant and increasing operating losses at least for the next several years. We do not expect to generate product revenue unless and until we successfully complete development and obtain marketing approval for at least one of our product candidates.

We may also use a portion of our existing cash and cash equivalents for the potential acquisition of, or investment in, product candidates, technologies, formulations or companies that complement our business, although we have no current understandings, commitments or agreements to do so. Our existing cash and cash equivalents will not be sufficient to enable us to complete all necessary development of any potential product candidates. Accordingly, we will be required to obtain further funding through one or more other public or private equity offerings, debt financings, collaboration, strategic financing, grants or government contract awards, licensing arrangements or other sources. Adequate additional funding may not be available to us on acceptable terms, or at all. If we are unable to raise capital when needed or on acceptable terms, we may be required to defer, reduce or eliminate significant planned expenditures, restructure, curtail or eliminate some or all of our development programs or other operations, dispose of assets, enter into arrangements that may require us to relinquish rights to certain of our product candidates, technologies or potential markets, file for bankruptcy or cease operations altogether. Any of these events could have a material adverse effect on our business, financial condition and results of operations and result in a loss of investment by our stockholders.

Results of Operations

As a result of the Merger, C3J was considered the accounting acquirer of AmpliPhi because C3J’s shareholders retained a majority control of ownership of the combined company subsequent to the Merger; therefore, the historical financial statements presented herein prior to the closing of the Merger are the historical financial statements of C3J.

Comparison of three and six months ended June 30, 2019 and 2018

Research and Development

Research and development expenses for the three months ended June 30, 2019 and 2018 were $3.1 million and $2.3 million, respectively. The increase of $0.8 million was primarily related to a $0.6 million increase in personnel expenses resulting from the Merger.

Research and development expenses for the six months ended June 30, 2019 and 2018 were $5.1 million and $4.5 million, respectively. The increase of $0.6 million was primarily related to an increase in personnel expenses resulting from the Merger.

Acquired In-Process Research and Development

Acquired in-process research and development (“IPR&D”) expense of $6.8 million for the six months ended June 30, 2018 consists of the estimated fair value of the assets acquired and consideration given in connection with the acquisition of the synthetic phage assets. As the assets acquired were in the research and development phase and were determined to not have any alternative future use, it was expensed as acquired IPR&D. There was no such expense for the three and six months ended June 30, 2019.

General and Administrative

General and administrative expenses for the three months ended June 30, 2019 and 2018 were $2.1 million and $0.6 million, respectively. The increase of $1.5 million was primarily due to a $0.7 million increase in professional fees

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(legal, audit and investment banking) associated with the Merger, a $0.6 million increase in personnel and stock compensation costs, and a $0.1 million increase in insurance costs.

General and administrative expenses for the six months ended June 30, 2019 and 2018 were $3.5 million and $1.2 million, respectively. The increase of $2.3 million was primarily due to a $1.4 million increase in professional fees (legal, audit and investment banking) associated with the Merger, a $0.6 million increase in personnel and stock compensation costs, and a $0.1 million increase in insurance costs.

Other Income (Expense)

For the three and six month periods ended June 30, 2019, we recorded a noncash gain of $1.2 million upon the settlement of the derivative liability as a result of the issuance of equity in connection with the SGI asset acquisition coinciding with the closing of the Merger. See Note 10 to our consolidated financial statements.

We recorded noncash interest expense of $536,000 and $369,000 for the six months ended June 30, 2019 and 2018, respectively, as a result of interest accretion on the time-based cash payments due in connection with the SGI asset acquisition. The increase was due to the obligations being outstanding for a longer time period in 2019 as the obligations began on February 28, 2018. Noncash interest expense for the three month periods ended June 30, 2019 and 2018 was $230,000 and $281,000, respectively. The decrease was due to $1.0 million of the obligations being paid in January 2019.

Income Taxes

There was no income tax benefit for the three and six months ended June 30, 2019 or for the three and six months ended June 30, 2018.

Liquidity, Capital Resources and Financial Condition

We have prepared our consolidated financial statements on a going concern basis, which assumes that we will realize our assets and satisfy our liabilities in the normal course of business. However, we have incurred net losses since our inception and have negative operating cash flows. These circumstances raise substantial doubt about our ability to continue as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of the uncertainty concerning our ability to continue as a going concern.

As of June 30, 2019, we had unrestricted cash and cash equivalents of $13.2 million. Considering our current cash resources, management believes our existing resources will be sufficient to fund our planned operations through the first quarter of 2020. For the foreseeable future, our ability to continue its operations is dependent upon our ability to obtain additional capital.

Operating activities

Net cash used in operating activities for the six months ended June 30, 2019 was $8.3 million, as compared to $5.4 million for the six months ended June 30, 2018. The increase of $2.9 million was due to a $3.0 million increase in general, administrative and research and development expenses as described above as well as a $1.2 million decrease in accounts payable and accrued expenses, offset in part by payments for IPR&D of $1.1 million in 2018.

Investing activities

Net cash provided by investing activities was $2.7 million and $9.4 million for the six months ended June 30, 2019 and 2018, respectively. During the six months ended June 30, 2018, the cash provided was primarily due to a $9.6 million net maturity and sale of investment securities offset in part by $264,000 in net capital equipment purchases. During the six months ended June 30, 2019, the cash provided was approximately $3.0 million acquired in connection with the Merger, offset in part by capital equipment purchases of $268,000.

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Financing activities

Net cash provided by financing activities for the six months ended June 30, 2019 was comprised of net cash proceeds of $10.0 million from a common stock sale coinciding with the Merger, offset in part by a payment of $1.0 million in deferred consideration related to the time-based payment obligation in connection with the SGI asset acquisition.

Future Capital Requirements

We will need to raise additional capital in the future to continue to fund our operations. Our future funding requirements will depend on many factors, including:

the costs and timing of our research and development activities;

the progress and cost of our clinical trials and other research and development activities;

manufacturing costs associated with our targeted phage therapies strategy and other research and development activities;

the terms and timing of any collaborative, licensing, acquisition or other arrangements that we may establish;

whether and when we receive future Australian tax rebates, if any;

the costs and timing of seeking regulatory approvals;

the costs of filing, prosecuting and enforcing any patent applications, claims, patents and other intellectual property rights; and

the costs of lawsuits involving us or our product candidates.

We may seek to raise capital through a variety of sources, including:

the public equity market;

private equity financings;

collaborative arrangements, government grants or strategic financings;

licensing arrangements; and

public or private debt.

Any additional fundraising efforts may divert our management team from their day to day activities, which may adversely affect our ability to develop and commercialize our product candidates. Our ability to raise additional funds will depend, in part, on the success of our product development activities, including our targeted phage therapies strategy and any clinical trials we initiate, regulatory events, our ability to identify and enter into in-licensing or other strategic arrangements, and other events or conditions that may affect our value or prospects, as well as factors related to financial, economic and market conditions, many of which are beyond our control. We cannot be certain that sufficient funds will be available to us when required or on acceptable terms. If we are unable to secure additional funds on a timely basis or on acceptable terms, we may be required to defer, reduce or eliminate significant planned expenditures, restructure, curtail or eliminate some or all of our development programs or other operations, dispose of technology or assets, pursue an acquisition of our company by a third party at a price that may result in a loss on investment for our stockholders, enter into arrangements that may require us to relinquish rights to certain of our product candidates,

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technologies or potential markets, file for bankruptcy or cease operations altogether. Any of these events could have a material adverse effect on our business, financial condition and results of operations. Moreover, if we are unable to obtain additional funds on a timely basis, there will be substantial doubt about our ability to continue as a going concern and increased risk of insolvency and loss of investment by our stockholders. To the extent that additional capital is raised through the sale of equity or convertible debt securities, the issuance of such securities could result in dilution to our existing stockholders.

Off-Balance Sheet Arrangements

As of June 30, 2019, we did not have off-balance sheet arrangements.

Recent Accounting Pronouncements

Refer to Note 3 of the condensed consolidated notes to the consolidated financial statements contained elsewhere in this report.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company as defined by Rule 12b‑2 of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and are not required to provide the information required under this item.

Item 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a‑15(e) and 15d‑15(e) under the Exchange Act, as of the end of the period covered by this quarterly report on Form 10Q. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable and not absolute assurance of achieving the desired control objectives and management necessarily applies its judgment in evaluating the cost benefit relationship of possible controls and procedures. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2019.

Changes in Internal Control over Financial Reporting

On May 9, 2019, we completed the Merger, and our management is in the process of evaluating any related changes to our internal control over financial reporting as a result of this transaction. An evaluation was also performed under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of any change in our internal control over financial reporting that occurred during our last fiscal quarter and that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Except for any changes relating to this integration, that evaluation did not identify any change in our internal control over financial reporting that occurred during our latest fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

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The lawsuits asserted violations of Section 14(a) of the Securities Exchange Act of 1934 and Rule 14a-9 promulgated thereunder against all defendants, and asserted violations of Section 20(a) of the Securities Exchange Act of 1934 as to the individual defendants. The plaintiffs contended that the April 2019 Proxy Statement, omitted or misrepresented material information regarding the Merger. The complaints sought injunctive relief, rescission, or rescissory damages and an award of plaintiffs’ costs, including attorneys’ fees and expenses. On May 1, 2019, we amended the April 2019 Proxy Statement to provide additional disclosure to our shareholders. Each of the above cases have since been dismissed.

In addition, from time to time, we are a party to certain litigation that is either judged to be not material or that arises in the ordinary course of business. We intend to vigorously defend our interests in these matters. We expect that the resolution of these matters will not have a material adverse effect on our business, financial condition or results of operations. However, due to the uncertainties inherent in litigation, no assurance can be given as to the outcome of these proceedings.

Item 1A. Risk Factors

You should consider carefully the following information about the risks described below, together with the other information contained in this Quarterly Report and in our other public filings, including the April 2019 Proxy Statement and May 2019 8-K, in evaluating our business. If any of the following risks actually occur, our business, financial condition, results of operations, and future growth prospects would likely be materially and adversely affected. In these circumstances, the market price of our common stock would likely decline.

Risks Related to Our Financial Condition and Need for Additional Capital

There is substantial doubt about our ability to continue as a going concern, which may affect our ability to obtain future financing and may require us to curtail our operations. We will need to raise additional capital to support our operations.

The audited financial statements and accompanying notes thereto as of and for the year ended December 31, 2018 included in the Proxy Statement on Schedule 14A of AmpliPhi filed with the U.S. Securities and Exchange Commission on April 4, 2019, as amended included disclosures and an opinion from our independent registered public accounting firm stating that our recurring losses and negative cash flows from operations raise substantial doubt about our ability to continue as a going concern. Our financial statements as of December 31, 2018 and June 30, 2019 were prepared under the assumption that we will continue as a going concern and do not include any adjustments that might result from the outcome of this uncertainty. At June 30, 2019, we had cash and cash equivalents of $13.2 million, and we have had recurring losses from operations and negative operating cash flows since inception.

We will need to raise additional capital to support our operations and product development activities. In the near term, we expect to continue to fund our operations, if at all, primarily through equity and debt financings in the future We may also seek funds through arrangements with collaborators, grant agencies or others that may require us to relinquish rights to the product candidates that we might otherwise seek to develop or commercialize independently. If we are unable to secure additional funds when needed or on acceptable terms, we may be required to defer, reduce or eliminate significant planned expenditures, restructure, curtail or eliminate some or all of our development programs or other operations, dispose of technology or assets, pursue an acquisition of our company by a third party at a price that may result in a loss on investment for our stockholders, enter into arrangements that may require us to relinquish rights to certain of our product candidates, technologies or potential markets, file for bankruptcy or cease operations altogether. Any of these events could have a material adverse effect on our business, financial condition and results of operations.

While we believe that our existing resources will be sufficient to fund our planned operations through the first quarter of 2020, we cannot provide assurances that our estimates are accurate, that our plans will not change or that changed circumstances will not result in the depletion of our capital resources more rapidly than we currently anticipate. Developing drugs and conducting clinical trials is expensive. Our future funding requirements will depend on many factors, including:

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the costs and timing of our research and development activities;

the progress and cost of our clinical trials and other research and development activities;

manufacturing costs associated with our targeted phage therapies strategy and other research and development activities;

the terms and timing of any collaborative, licensing, acquisition or other arrangements that we may establish;

whether and when we receive future Australian tax rebates, if any;

the costs and timing of seeking regulatory approvals;

the costs of filing, prosecuting, defending and enforcing any patent applications, claims, patents and other intellectual property rights; and

the costs of lawsuits involving us or our product candidates.

In addition, raising additional capital through the sale of securities could cause significant dilution to our stockholders. Any additional fundraising efforts may divert our management from their day to day activities, which may adversely affect our ability to develop and commercialize our product candidates. Our ability to raise additional funds will depend, in part, on the success of our product development activities, including our targeted phage therapies strategy and any clinical trials we initiate, regulatory events, our ability to identify and enter into in-licensing or other strategic arrangements, and other events or conditions that may affect our value or prospects, as well as factors related to financial, economic and market conditions, many of which are beyond our control. There can be no assurances that sufficient funds will be available to us when required or on acceptable terms, if at all.

We have incurred losses since our inception and anticipate that we will continue to incur significant losses for the foreseeable future, and our future profitability is uncertain.

As of June 30, 2019, our accumulated deficit was $146.0 million and we expect to incur losses for the foreseeable future. We have devoted, and will continue to devote for the foreseeable future, substantially all of our resources to research and development of our product candidates. For the years ended December 31, 2018 and 2017, we had losses from operations of $17.7 million and $15.5 million, respectively. Additional information regarding our results of operations may be found in our consolidated financial statements and in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Item 2 in this report.

Clinical trials and activities associated with discovery research are costly. We do not expect to generate any revenue from the commercial sales of our product candidates in the near term, and we expect to continue to have significant losses for the foreseeable future.

Our ability to generate meaningful revenue and achieve profitability depends on successfully completing the development of, and obtaining the regulatory approvals necessary to, commercialize our product candidates. If any of our product candidates fail in clinical trials or if any of our product candidates do not gain regulatory approval, or if any of our product candidates, if approved, fail to achieve market acceptance, we may never become profitable. Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods. Our ability to generate future revenues from product sales depends heavily on our success in:

completing research and preclinical and clinical development of our product candidates;

seeking and obtaining regulatory and marketing approvals for product candidates for which we complete clinical trials;

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developing a sustainable, scalable, reproducible, and transferable manufacturing process for our product candidates;

launching and commercializing product candidates for which we obtain regulatory and marketing approval, either by establishing a sales force, marketing and distribution infrastructure, or by collaborating with a partner;

obtaining market acceptance of any approved products;

addressing any competing technological and market developments;

implementing additional internal systems and infrastructure, as needed;

identifying and validating new product candidates;

negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter;

maintaining, protecting and expanding our portfolio of intellectual property rights, including patents, trade secrets and know-how; and

attracting, hiring and retaining qualified personnel.

Even if one or more of the product candidates that we develop is approved for commercial sale, we anticipate incurring significant costs associated with commercializing any approved product. Our expenses could increase beyond expectations if we are required by the FDA, the European Medicines Agency (“EMA”), or other foreign regulatory authorities to perform clinical trials and other studies in addition to those that we currently anticipate. Even if we are able to generate revenues from the sale of any approved products, we may not become profitable and may need to obtain additional funding to continue operations.

The 2017 comprehensive tax reform bill could adversely affect our business and financial condition.

On December 22, 2017, President Trump signed into law new legislation that significantly revises the Internal Revenue Code of 1986, as amended. The newly enacted federal income tax law, among other things, contains significant changes to corporate taxation, including reduction of the corporate tax rate from a top marginal rate of 35% to a flat rate of 21%, limitation of the tax deduction for interest expense to 30% of adjusted earnings (except for certain small businesses), limitation of the deduction for net operating losses to 80% of current year taxable income and elimination of net operating loss carrybacks, one time taxation of offshore earnings at reduced rates regardless of whether they are repatriated, immediate deductions for certain new investments instead of deductions for depreciation expense over time, and modifying or repealing many business deductions and credits (including reducing the business tax credit for certain clinical testing expenses incurred in the testing of certain drugs for rare diseases or conditions). Notwithstanding the reduction in the corporate income tax rate, the overall impact of the new federal tax law is uncertain and our business and financial condition could be adversely affected. In addition, it is uncertain if and to what extent various states will conform to the newly enacted federal tax law.

Taxing authorities could reallocate our taxable income among our subsidiaries, which could increase our overall tax liability.

We are organized in the United States, and we currently have subsidiaries in the United Kingdom, Australia and Slovenia. If we succeed in growing our business, we expect to conduct increased operations through our subsidiaries in various tax jurisdictions pursuant to transfer pricing arrangements between us and our subsidiaries. If two or more affiliated companies are located in different countries, the tax laws or regulations of each country generally will require that transfer prices be the same as those between unrelated companies dealing at arm’s length and that appropriate documentation is maintained to support the transfer prices. While we believe that we operate in compliance with

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applicable transfer pricing laws and intend to continue to do so, our transfer pricing procedures are not binding on applicable tax authorities.

If tax authorities in any of these countries were to successfully challenge our transfer prices as not reflecting arm’s length transactions, they could require us to adjust our transfer prices and thereby reallocate our income to reflect these revised transfer prices, which could result in a higher tax liability to us. In addition, if the country from which the income is reallocated does not agree with the reallocation, both countries could tax the same income, resulting in double taxation. If tax authorities were to allocate income to a higher tax jurisdiction, subject our income to double taxation or assess interest and penalties, it would increase our consolidated tax liability, which could adversely affect our financial condition, results of operations and cash flows.

Maintaining and improving our financial controls and the requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain qualified board members.

As a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act and the rules of the NYSE American. The requirements of these rules and regulations increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and place strain on our personnel, systems and resources. The Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business and financial condition.

The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. Ensuring that we have adequate internal financial and accounting controls and procedures in place is a costly and time-consuming effort that needs to be re-evaluated frequently.

We currently do not have an internal audit group, and we may need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge. Implementing any appropriate changes to our internal controls may require specific compliance training for our directors, officers and employees, entail substantial costs to modify our existing accounting systems, and take a significant period of time to complete. Such changes may not, however, be effective in maintaining the adequacy of our internal controls, and any failure to maintain that adequacy, or consequent inability to produce accurate financial statements on a timely basis, could increase our operating costs and could materially impair our ability to operate our business. Moreover, effective internal controls are necessary for us to produce reliable financial reports and are important to help prevent fraud.

In accordance with NYSE American rules, we are required to maintain a majority independent board of directors. The various rules and regulations applicable to public companies make it more difficult and more expensive for us to maintain directors’ and officers’ liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to maintain coverage. If we are unable to maintain adequate directors’ and officers’ insurance, our ability to recruit and retain qualified officers and directors will be significantly curtailed.

If we fail to maintain proper and effective internal control over financial reporting, our ability to produce accurate financial statements on a timely basis could be impaired and our public reporting may be unreliable.

We are required to maintain internal control over financial reporting adequate to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our consolidated financial statements in accordance with generally accepted accounting principles. We do not expect that our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. Over time, controls may become inadequate because changes in conditions or deterioration in the degree of compliance with policies or procedures may occur. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. Material weaknesses in our internal controls have been identified in the past, and we cannot assure you that significant deficiencies or material weaknesses in our internal control over financial reporting will not be identified in the future.

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If we are unable to maintain effective controls and procedures, or identify any future material weaknesses, the accuracy and timing of our financial reporting may be adversely affected, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports and we may experience a loss of public confidence, which could have an adverse effect on our business, financial condition and the market price of our common stock.

Risks Related to the Combined Company

The integration of C3J and AmpliPhi will require significant resources and may not be successful.

There is no history of C3J and AmpliPhi as a combined company. As a result, there can be no guarantee that the two companies will operate together successfully as a combined company. Integration of the companies and consolidation of their operations will require considerable management time, which could result in the diversion of management resources from other important matters.

The failure to integrate successfully the merged businesses in the expected timeframe could adversely affect the combined company’s future results.

The failure to integrate successfully and to manage successfully the challenges presented by the integration process may result in the failure to achieve some or all of the anticipated benefits of the Merger.

Potential difficulties that may be encountered in the integration process include the following:

using the combined company’s cash and other assets efficiently to develop the business of the combined company;

appropriately managing the liabilities of the combined company;

potential unknown or currently unquantifiable liabilities associated with the Merger and the operations of the combined company; and

performance shortfalls at one or both of the companies as a result of the diversion of management’s attention caused by integrating the companies’ operations.

Because the Merger resulted in an ownership change under Section 382 of the Internal Revenue Code for AmpliPhi, AmpliPhi’s pre-Merger net operating loss carryforwards and certain other tax attributes will be subject to limitations. The net operating loss carryforwards and other tax attributes of C3J may also be subject to limitations as a result of ownership changes.

If a corporation undergoes an “ownership change” within the meaning of Section 382 of the Internal Revenue Code of 1986, as amended, such corporation’s net operating loss carryforwards and certain other tax attributes arising from before the ownership change are subject to limitations on use after the ownership change. In general, an ownership change occurs if there is a cumulative change in the corporation’s equity ownership by certain stockholders that exceeds fifty percentage points over a rolling three-year period. Similar rules may apply under state tax laws. The Merger resulted in an ownership change for AmpliPhi and, accordingly, AmpliPhi’s net operating loss carryforwards and certain other tax attributes may be subject to limitations (or disallowance) on their use after the Merger. C3J’s net operating loss carryforwards may also be subject to limitation as a result of prior shifts in equity ownership and/or the Merger. Additional ownership changes in the future could result in additional limitations on our net operating loss carryforwards. Consequently, even if we achieve profitability, we may not be able to utilize a material portion of our net operating loss carryforwards and other tax attributes, which could have a material adverse effect on cash flow and results of operations.

As of December 31, 2018, we had federal net operating loss carryforwards of approximately $61.3 million.

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Risks Related to Our Business

We have limited operating history, have incurred significant operating losses since inception and expects to incur significant operating losses for the foreseeable future. We may never become profitable or, if achieved, be able to sustain profitability.

To date, we have funded its operations primarily through private placement offerings of equity securities. As of June 30, 2019, we had cash and cash equivalents of $13.2 million. We have incurred significant operating losses since our inception and expect to incur significant losses for the foreseeable future as we continue our development programs for our product candidates.

We currently generate no revenue from product sales, and may never be able to commercialize our product candidates, or other future product candidates. We do not currently have the required approvals to market our product candidates and we may never receive them. We may not be profitable even if we or any of our future development partners succeed in commercializing any of ’our product candidates. Because of the numerous risks and uncertainties associated with developing and commercializing ’our product candidates, we are unable to predict the extent of any future losses or when it will become profitable, if at all.

Our single-patient expanded access strategy may not be successful, which in turn could adversely affect our business.

In the past, our targeted phage therapies strategy involved providing phage therapy under single-patient expanded access guidelines to patients outside of clinical trials with antibiotic-resistant infections who have few or no other therapeutic options. However, this program is subject to numerous risks and uncertainties, including the following:

We have not established a cost reimbursement structure or otherwise entered into an arrangement that would at least offset our manufacturing costs for our phage therapies that may be administered to patients under single-patient expanded access guidelines. Increasing demand for our phage therapies in single-patient expanded access cases could result in significant costs to us.

Responding to single-patient expanded access requests could divert attention of our personnel and use manufacturing resources that could otherwise be deployed in other development program activities.

Single-patient expanded access treatment data may not establish proof-of-concept, and the FDA or other regulatory authorities may not accept single-patient expanded access data as sufficient clinical validation in support of our regulatory approval efforts, which could materially delay and increase the costs of our product development and commercialization activities.

Patient access to phage therapy has been provided on an individual basis where physicians will make an application or post-treatment notification to the applicable regulatory authorities on a patient-by-patient basis. This can impose a significant administrative burden on participating physicians, who may be resistant to navigating a process with which they are unfamiliar. We may be unable to identify in a timely manner a sufficient number of patients who are eligible for expanded access emergency treatment and we may be unable to identify in a timely manner a sufficient number of physicians who are interested in providing experimental therapy to such patients, which may limit our ability to provide bacteriophage therapeutics under our expanded access program and to collect data from such cases.

In September 2018, we received the official minutes from our August 2018 Type B pre-IND meeting with the FDA regarding our AP-SA01 bacteriophage therapy product candidate. The FDA expressed general agreement with our proposed clinical trial designs and, based on the current FDA feedback, no additional clinical or nonclinical data are required to proceed with two proposed randomized clinical trials. The first such clinical trial would be a Phase 1/2 randomized, controlled clinical trial to evaluate the safety and efficacy of AP-SA01, administered intravenously with the best available antibiotic therapy, compared to placebo plus best available antibiotic therapy, in approximately 100 patients with S. aureus bacteremia. The second such clinical trial would be a Phase 1/2 randomized, controlled clinical trial to evaluate the safety and efficacy of AP-SA01, administered by intra-articular injection and then intravenously with

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the best available antibiotic therapy, compared to placebo plus the best available antibiotic therapy, in approximately 100 patients with a hip or knee prosthetic joint infection due to S. aureus as an adjunct to surgical treatment. We are actively seeking and intend to continue to seek non-dilutive financing and explore other opportunities to conduct these clinical trials of AP-SA01. However, there can be no assurance that such non-dilutive financing or other opportunities will be available to us on a timely basis, on favorable terms, or at all. We may also choose to conduct one or more smaller-scale clinical trials of similar design as an alternative to conducting the approximately 100 patient clinical trials described above in an effort to reduce clinical trial expenditures. It is possible that results from such smaller-scale clinical trials may not be viewed by the FDA or other regulatory agencies as sufficient for the advancement of AP-SA01 into Phase 2 trials, including potentially registrational Phase 2 trials, due to the smaller trial populations even if the trial results are otherwise positive, which in turn could result in the FDA or other regulatory agencies requiring us to conduct additional studies beyond those that would have been required if we had conducted trials of approximately 100 patients as proposed in our August 2018 Type B pre-IND meeting.

Results from preclinical studies and Phase 1 or 2 clinical trials of our product candidates or from single-patient expanded access treatments may not be predictive of the results of later stage clinical trials.

Preclinical studies, including studies of our product candidates in animal disease models, may not accurately predict the result of human clinical trials of those product candidates. In particular, promising animal studies suggesting the efficacy of prototype phage products in the treatment of bacterial infections, such as P. aeruginosa and S. aureus, may not predict the ability of these products to treat similar infections in humans. Despite promising data in our completed Phase 1 clinical trials, our phage technology may be found not to be efficacious in treating bacterial infections alone or in combination with other agents, when studied in later-stage clinical trials.

In addition, we have used our bacteriophage technology in the area of targeted medicine under single-patient expanded access guidelines, which permit the use of phage therapy outside of clinical trials, in the United States and Australia. Despite prior single-patient expanded access successes, no assurance can be given that we will have similar single-patient expanded access treatment successes in the future. Single-patient expanded access is a term that is used to refer to the use of an investigational drug or therapy outside of a clinical trial to treat a patient with a serious or immediately life-threatening disease or condition who has no comparable or satisfactory alternative treatment options. Regulators often allow single-patient expanded access on a case-by-case basis for an individual patient or for defined groups of patients with similar treatment needs. In some countries, such as Australia, the treating physician can administer treatment under single-patient expanded access guidelines without pre-approval from the applicable regulatory authority.

To satisfy FDA or foreign regulatory approval standards for the commercial sale of our product candidates, we must demonstrate in adequate and controlled clinical trials that our product candidates are safe and effective. Success in early clinical trials, including Phase 1 and Phase 2 trials, or in our single-patient expanded access program does not ensure that later clinical trials will be successful. Our initial results from early stage clinical trials or our single-patient expanded access program also may not be confirmed by later analysis or subsequent larger clinical trials. A number of companies in the pharmaceutical industry have suffered significant setbacks in advanced clinical trials, even after obtaining promising results in earlier clinical trials and most product candidates that commence clinical trials are never approved for commercial sale.

We are seeking to develop antibacterial agents using bacteriophage and synthetic phage technology, a novel approach, which makes it difficult to predict the time and cost of development. No bacteriophage products have been approved in the United States or elsewhere.

We are developing our product candidates with bacteriophage and synthetic phage technology. We have not, nor to our knowledge has any other company, received regulatory approval from the FDA or equivalent foreign agencies for a pharmaceutical drug based on this approach. While in vitro studies have characterized the behavior of bacteriophages in cell cultures and there exists a body of literature regarding the use of phage therapy in humans, the safety and efficacy of phage therapy in humans has not been extensively studied in well-controlled modern clinical trials. Most of the prior research on phage-based therapy was conducted in the former Soviet Union prior to and immediately after World War II and lacked appropriate control group design or lacked control groups at all. Furthermore, the standard of care has

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changed substantially during the ensuing decades since those studies were performed, diminishing the relevance of prior claims of improved cure rates. We cannot be certain that our approach will lead to the development of approvable or marketable drugs.

Developing phage-based therapies on a commercial scale will also require developing new manufacturing processes and techniques. We and our third-party collaborators may experience delays in developing manufacturing capabilities for our product candidates, and may not be able to do so at the scale required to efficiently conduct the clinical trials required to obtain regulatory approval of our product candidates, or to manufacture commercial quantities of our products, if approved.

In addition, the FDA or other regulatory agencies may lack experience in evaluating the safety and efficacy of drugs based on these approaches, which could lengthen the regulatory review process, increase our development costs and delay or prevent commercialization of our product candidates.

Delays in our clinical trials could result in us not achieving anticipated developmental milestones when expected, increased costs and delay our ability to obtain regulatory approval for and commercialize our product candidates.

Delays in our ability to commence or enroll patients for our clinical trials could result in us not meeting anticipated clinical milestones and could materially impact our product development costs and delay regulatory approval of our product candidates. Planned clinical trials may not be commenced or completed on schedule, or at all. Clinical trials can be delayed for a variety of reasons, including:

delays in the development of manufacturing capabilities for our product candidates to enable their consistent production at clinical trial scale;

failures in our internal manufacturing operations that result in our inability to consistently and timely produce bacteriophages in sufficient quantities to support our clinical trials;

the availability of financial resources to commence and complete our planned clinical trials;

delays in reaching a consensus with clinical investigators on study design;

delays in reaching a consensus with regulatory agencies on trial design or in obtaining regulatory approval to commence a trial;

delays in obtaining clinical materials;

slower than expected patient recruitment for participation in clinical trials;

failure by clinical trial sites, other third parties, or us to adhere to clinical trial agreements;

delays in reaching agreement on acceptable clinical trial agreement terms with prospective sites or obtaining institutional review board approval; and

adverse safety events experienced during our clinical trials.

If we do not successfully commence or complete our clinical trials on schedule, the price of our common stock may decline.

Completion of clinical trials depends, among other things, on our ability to enroll a sufficient number of patients, which is a function of many factors, including:

the therapeutic endpoints chosen for evaluation;

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the eligibility criteria defined in the protocol;

the perceived benefit of the product candidate under study;

the size of the patient population required for analysis of the clinical trial’s therapeutic endpoints;

our ability to recruit clinical trial investigators and sites with the appropriate competencies and experience;

our ability to obtain and maintain patient consents; and

competition for patients from clinical trials for other treatments.

We may experience difficulties in enrolling patients in our clinical trials, which could increase the costs or affect the timing or outcome of these clinical trials. This is particularly true with respect to diseases with relatively small patient populations.

We have not completed formulation development of our product candidates.

The development of our bacteriophage product candidates requires that we isolate, select and combine a number of bacteriophages that target the desired bacteria for that product candidate. The selection of bacteriophages for any of our product candidates is based on a variety of factors, including without limitation the ability of the selected phages, in combination, to successfully kill the targeted bacteria, the degree of cross-reactivity of the individual phages with the same part of the bacterial targets, the ability of the combined phages to satisfy regulatory requirements, our ability to manufacture sufficient quantities of the phages, intellectual property rights of third parties, and other factors. While we have selected initial formulations of AP-SA01 for the treatment of S. aureus infections, there can be no assurance that these initial formulations will be the final formulations of AP-SA01 for commercialization if approved. If we are unable to complete formulation development of our product candidates in the time frame that we have anticipated, then our product development timelines, and the regulatory approval of our product candidates, could be delayed.

Our product candidates must undergo rigorous clinical testing, such clinical testing may fail to demonstrate safety and efficacy and any of our product candidates could cause undesirable side effects, which would substantially delay or prevent regulatory approval or commercialization.

Before we can obtain regulatory approval for a product candidate, we must undertake extensive clinical testing in humans to demonstrate safety and efficacy to the satisfaction of the FDA or other regulatory agencies. Clinical trials of new drug candidates sufficient to obtain regulatory marketing approval are expensive and take years to complete.

We cannot be certain of successfully completing clinical testing within the time frame we have planned, or at all. We may experience numerous unforeseen events during, or as a result of, the clinical trial process that could delay or prevent us from receiving regulatory approval or commercializing our product candidates, including the following:

our clinical trials may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical and/or preclinical testing or to abandon programs;

the results obtained in earlier stage clinical testing may not be indicative of results in future clinical trials;

clinical trial results may not meet the level of statistical significance required by the FDA or other regulatory agencies;

we, or regulators, may suspend or terminate our clinical trials if the participating patients are being exposed to unacceptable health risks; and

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our product candidates may have unintended or undesirable effects on patients that may delay or preclude regulatory approval of our product candidates or limit their commercial use, if approved.

We must continue to develop manufacturing processes for our product candidates and any delay in or our inability to do so would result in delays in our clinical trials.

We are developing novel manufacturing processes for our product candidates at our facilities in Marina Del Rey (near Los Angeles), California and in Ljubljana, Slovenia. The manufacturing processes for our product candidates, and the scale up of such processes for clinical trials, is novel, and there can be no assurance that we will be able to complete this work in a timely manner, if at all. Any delay in the development or scale up of these manufacturing processes could delay the start of clinical trials and harm our business. Our facility in Slovenia must also undergo ongoing inspections by JAZMP, the agency that regulates and supervises pharmaceutical products in Slovenia, for compliance with their and the EMA’s, current good manufacturing practice regulations (“cGMP regulations”), before the respective product candidates can be approved for use in clinical trials or commercialization. In the event these facilities do not receive a satisfactory cGMP inspection for the manufacture of our product candidates, we may need to fund additional modifications to our manufacturing process, conduct additional validation studies, or find alternative manufacturing facilities, any of which would result in significant cost to us as well as a delay of up to several years in obtaining approval for such product candidate.

Our manufacturing facility will be subject to ongoing periodic inspection by the FDA and European regulatory authorities, including JAZMP, for compliance with U.S. and European cGMP regulations. Compliance with these regulations and standards is complex and costly, and there can be no assurance that we will be able to comply. Any failure to comply with applicable regulations could result in sanctions being imposed (including fines, injunctions and civil penalties), failure of regulatory authorities to grant marketing approval of our product candidates, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of product candidates or products, operating restrictions and criminal prosecution.

We may conduct clinical trials for our products or product candidates outside the United States and the FDA may not accept data from such trials.

We completed an investigator-sponsored clinical trial of AP-SA01 at the University of Adelaide in Australia for CRS in December 2016. Although the FDA may accept data from clinical trials conducted outside the United States, acceptance of such study data by the FDA is subject to certain conditions. For example, the study must be well designed and conducted and performed by qualified investigators in accordance with ethical principles. The study population must also adequately represent the U.S. population, and the data must be applicable to the U.S. population and U.S. medical practice in ways that the FDA deems clinically meaningful. Generally, the patient population for any clinical studies conducted outside of the United States must be representative of the population for whom we intend to label the product in the United States. In addition, such studies would be subject to the applicable local laws and FDA acceptance of the data would be dependent upon its determination that the studies also complied with all applicable U.S. laws and regulations. There can be no assurance the FDA will accept data from trials conducted outside of the United States. If the FDA does not accept any such data, it would likely result in the need for additional trials, which would be costly and time consuming and delay aspects of our business plan.

We may need to license additional intellectual property rights.

The development and commercialization of phage-based antibacterial agents may require us to obtain rights to intellectual property from third parties. We may also determine that it is necessary or advisable to license other intellectual property from third parties. There can be no assurance that such intellectual property rights would be available on commercially reasonable terms, if at all.

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We are subject to significant regulatory approval requirements, which could delay, prevent or limit our ability to market our product candidates.

Our research and development activities, preclinical studies, clinical trials and the anticipated manufacturing and marketing of our product candidates are subject to extensive regulation by the FDA and other regulatory agencies in the United States and by comparable authorities in Europe and elsewhere. There can be no assurance that our manufacturing facilities will satisfy the requirements of the FDA or comparable foreign authorities. We require the approval of the relevant regulatory authorities before we may commence commercial sales of our product candidates in a given market. The regulatory approval process is expensive and time-consuming, and the timing of receipt of regulatory approval is difficult to predict. Our product candidates could require a significantly longer time to gain regulatory approval than expected, or may never gain approval. We cannot be certain that, even after expending substantial time and financial resources, we will obtain regulatory approval for any of our product candidates. A delay or denial of regulatory approval could delay or prevent our ability to generate product revenues and to achieve profitability.

Changes in regulatory approval policies during the development period of any of our product candidates, changes in, or the enactment of, additional regulations or statutes, or changes in regulatory review practices for a submitted product application may cause a delay in obtaining approval or result in the rejection of an application for regulatory approval.

Regulatory approval, if obtained, may be made subject to limitations on the indicated uses for which we may market a product. These limitations could adversely affect our potential product revenues. Regulatory approval may also require costly post-marketing follow-up studies. In addition, the labeling, packaging, adverse event reporting, storage, advertising, promotion and record-keeping related to the product will be subject to extensive ongoing regulatory requirements. Furthermore, for any marketed product, its manufacturer and its manufacturing facilities will be subject to continual review and periodic inspections by the FDA or other regulatory authorities. Failure to comply with applicable regulatory requirements may, among other things, result in fines, suspensions of regulatory approvals, product recalls, product seizures, operating restrictions and criminal prosecution.

Failure to comply with health and data protection laws and regulations could lead to government enforcement actions (which could include civil or criminal penalties), private litigation and/or adverse publicity and could negatively affect our operating results and business.

We and any potential collaborators may be subject to federal, state and foreign data protection laws and regulations (i.e., laws and regulations that address privacy and data security). In the United States, numerous federal and state laws and regulations, including federal health information privacy laws, state data breach notification laws, state health information privacy laws and federal and state consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act), that govern the collection, use, disclosure and protection of health-related and other personal information could apply to our operations or the operations of our collaborators. In addition, we may obtain health information from third parties (including research institutions from which we obtain clinical trial data) that are subject to privacy and security requirements under the HIPAA, as amended by HITECH. Depending on the facts and circumstances, we could be subject to criminal penalties if we knowingly obtain, use, or disclose individually identifiable health information maintained by a HIPAA-covered entity in a manner that is not authorized or permitted by HIPAA.

International data protection laws, including Regulation 2016/679, known as the General Data Protection Regulation (GDPR) may also apply to health-related and other personal information obtained outside of the United States. The GDPR went into effect on May 25, 2018. The GDPR introduced new data protection requirements in the European Union, as well as potential fines for noncompliant companies of up to the greater of €20 million or 4% of annual global revenue. The regulation imposes numerous new requirements for the collection, use and disclosure of personal information, including more stringent requirements relating to consent and the information that must be shared with data subjects about how their personal information is used, the obligation to notify regulators and affected individuals of personal data breaches, extensive new internal privacy governance obligations and obligations to honor expanded rights of individuals in relation to their personal information (e.g., the right to access, correct and delete their data). In addition, the GDPR includes restrictions on cross-border data transfer. The GDPR will increase our responsibility and liability in relation to personal data that we process, and we may be required to put in place additional mechanisms to ensure compliance with the new EU data protection rules. Further, the United Kingdom’s vote in favor of

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exiting the EU, often referred to as Brexit, has created uncertainty with regard to data protection regulation in the United Kingdom. In particular, it is unclear whether the United Kingdom will enact data protection legislation equivalent to the GDPR and how data transfers to and from the United Kingdom will be regulated.

In addition, California recently enacted legislation that has been dubbed the first “GDPR-like” law in the United States. Known as the California Consumer Privacy Act, it creates new individual privacy rights for consumers (as that word is broadly defined in the law) and places increased privacy and security obligations on entities handling personal data of consumers or households. When it goes into effect on January 1, 2020, the CCPA will require covered companies to provide new disclosures to California consumers, provide such consumers new ways to opt-out of certain sales of personal information, and allow for a new cause of action for data breaches. Legislators have stated that amendments will be proposed to the CCPA before it goes into effect, but it remains unclear what, if any, modifications will be made to this legislation or how it will be interpreted. As currently written, the CCPA may impact (possibly significantly) our business activities and exemplifies the vulnerability of our business to the evolving regulatory environment related to personal data and protected health information.

Compliance with U.S. and international data protection laws and regulations could require us to take on more onerous obligations in our contracts, restrict our ability to collect, use and disclose data, or in some cases, impact our ability to operate in certain jurisdictions. Failure to comply with U.S. and international data protection laws and regulations could result in government enforcement actions (which could include civil or criminal penalties), private litigation and/or adverse publicity and could negatively affect our operating results and business. Moreover, clinical trial subjects about whom we or our potential collaborators obtain information, as well as the providers who share this information with us, may contractually limit our ability to use and disclose the information. Claims that we have violated individuals’ privacy rights, failed to comply with data protection laws, or breached our contractual obligations, even if we are not found liable, could be expensive and time consuming to defend and could result in adverse publicity that could harm our business.

A variety of risks associated with our international operations could materially adversely affect our business.

In addition to our U.S. operations, we have operations and subsidiaries in the United Kingdom, Australia and Slovenia. We face risks associated with our international operations, including possible unfavorable regulatory, pricing and reimbursement, political, tax and labor conditions, which could harm our business. We are subject to numerous risks associated with international business activities, including:

compliance with differing or unexpected regulatory requirements for the development, manufacture and, if approved, commercialization of our product candidates;

difficulties in staffing and managing foreign operations;

foreign government taxes, regulations and permit requirements;

U.S. and foreign government tariffs, trade restrictions, price and exchange controls and other regulatory requirements;

anti-corruption laws, including the Foreign Corrupt Practices Act;

economic weakness, including inflation, natural disasters, war, events of terrorism or political instability in particular foreign countries;

fluctuations in currency exchange rates, which could result in increased operating expenses and reduced revenues, and other obligations related to doing business in another country;

compliance with tax, employment, immigration and labor laws, regulations and restrictions for employees living or traveling abroad;

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workforce uncertainty in countries where labor unrest is more common than in the United States;

production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad;

changes in diplomatic and trade relationships; and

challenges in enforcing our contractual and intellectual property rights, especially in those foreign countries that do not respect and protect intellectual property rights to the same extent as the United States.

These and other risks associated with our international operations may materially adversely affect our business, financial condition and results of operations.

We do not have a sales force and do not currently have plans to develop one.

The commercial success of any of our product candidates will depend upon the strength of sales and marketing efforts for them. We do not have a sales force and have no experience in sales, marketing or distribution. To successfully commercialize our product candidates, we will need to develop such a capability ourselves or seek assistance from a third party with a large distribution system and a large direct sales force. We may be unable to put such a plan in place. In addition, if we arrange for others to market and sell our products, our revenues will depend upon the efforts of those parties. Such arrangements may not succeed. Even if one or more of our product candidates is approved for marketing, if we fail to establish adequate sales, marketing and distribution capabilities, independently or with others, our business will be materially harmed.

Our success depends in part on attracting, retaining and motivating our personnel.

Our success depends on our continued ability to attract, retain and motivate highly qualified management, clinical and scientific personnel and on our ability to develop and maintain important relationships with leading academic institutions, clinicians and scientists. Our success will depend on our ability to retain and motivate personnel and hire additional qualified personnel when required. Competition for qualified personnel in the biotechnology field is intense. We face competition for personnel from other biotechnology and pharmaceutical companies, universities, public and private research institutions and other organizations. We also face competition from other more well-funded and well-established businesses and we may also be viewed as a riskier choice from a job stability perspective due to our relative newer status than longer existing biotech and pharmaceutical companies. We may not be able to attract and retain qualified personnel on acceptable terms given the competition for such personnel. If we are unsuccessful in our retention, motivation and recruitment efforts, we may be unable to execute our business strategy.

We must manage a geographically dispersed organization.

While we are a small company, we currently have operations in the United States, Australia and Slovenia. In the future, we may also locate facilities in other locations based on proximity to personnel with the expertise needed to research, develop and manufacture phage-based therapeutics, costs of operations or other factors. Managing our organization across multiple locations and multiple time zones may reduce our efficiency, increase our expenses and increase the risk of operational difficulties in the execution of our plans.

Our business and operations might be adversely affected by security breaches, including any cybersecurity incidents.

We depend on the efficient and uninterrupted operation of our computer and communications systems, which we use for, among other things, sensitive company data, including our financial data, intellectual property and other proprietary business information.

While certain of our operations have business continuity and disaster recovery plans and other security measures intended to prevent and minimize the impact of IT-related interruptions, our IT infrastructure and the IT infrastructure of

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our consultants, contractors and vendors are vulnerable to damage from cyberattacks, computer viruses, unauthorized access, electrical failures and natural disasters or other catastrophic events. We could experience failures in our information systems and computer servers, which could result in an interruption of our normal business operations and require substantial expenditure of financial and administrative resources to remedy. System failures, accidents or security breaches can cause interruptions in our operations and can result in a material disruption of our targeted phage therapies, bacteriophage product candidates and other business operations. The loss of data from completed or future studies or clinical trials could result in delays in our research, development or regulatory approval efforts and significantly increase our costs to recover or reproduce the data. To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liabilities and the development of our product candidates could be delayed or otherwise adversely affected.

Even though we believe we carry commercially reasonable business interruption and liability insurance, we might suffer losses as a result of business interruptions that exceed the coverage available under our insurance policies or for which we do not have coverage. For example, we are not insured against terrorist attacks or cyberattacks. Any natural disaster or catastrophic event could have a significant negative impact on our operations and financial results. Moreover, any such event could delay the development of our product candidates.

Risks Related to Our Reliance on Third Parties

We will rely on third parties to conduct our clinical trials, and their failure to perform their obligations in a timely or competent manner may delay development and commercialization of our product candidates.

We expect to use third parties, such as clinical research organizations, to assist in conducting our clinical trials. However, we may face delays outside of our control if these parties do not perform their obligations in a timely or competent fashion or if we are forced to change service providers. This risk is heightened for clinical trials conducted outside of the United States, where it may be more difficult to ensure that clinical trials are conducted in compliance with FDA requirements. Any third party that we hire to conduct clinical trials may also provide services to our competitors, which could compromise the performance of their obligations to us. If we experience significant delays in the progress of our clinical trials and in our plans to submit Biologics License Applications, the commercial prospects for product candidates could be harmed and our ability to generate product revenue would be delayed or prevented.

Risks Related to Our Intellectual Property

We are dependent on patents and proprietary technology. If we fail to adequately protect this intellectual property or if we otherwise do not have exclusivity for the marketing of our products, our ability to commercialize products could suffer.

Our commercial success will depend in part on our ability to obtain and maintain patent protection sufficient to prevent others from marketing our product candidates, as well as to defend and enforce these patents against infringement and to operate without infringing the proprietary rights of others. Protection of our product candidates from unauthorized use by third parties will depend on having valid and enforceable patents cover our product candidates or their manufacture or use, or having effective trade secret protection. If our patent applications do not result in issued patents, or if our patents are found to be invalid, we will lose the ability to exclude others from making, using or selling the inventions claimed therein. We have a limited number of patents and pending patent applications.

The patent positions of biotechnology companies can be uncertain and involve complex legal and factual questions. This is due to inconsistent application of policy and changes in policy relating to examination and enforcement of biotechnology patents to date on a global scale. The laws of some countries may not protect intellectual property rights to the same extent as the laws of countries having well-established patent systems, and those countries may lack adequate rules and procedures for defending our intellectual property rights. Also, changes in either patent laws or in interpretations of patent laws may diminish the value of our intellectual property. We are not able to guarantee that all of our patent applications will result in the issuance of patents and we cannot predict the breadth of claims that may be allowed in our patent applications or in the patent applications we may license from others.

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Central provisions of The Leahy-Smith America Invents Act, or the America Invents Act went into effect on September 16, 2012 and on March 16, 2013. The America Invents Act includes a number of significant changes to U.S. patent law. These changes include provisions that affect the way patent applications are being filed, prosecuted and litigated. For example, the America Invents Act enacted proceedings involving post-issuance patent review procedures, such as inter partes review (“IPR”), and post-grant review, that allow third parties to challenge the validity of an issued patent in front of the United States Patent and Trademark Office (“U.S. PTO”) Patent Trial and Appeal Board. Each proceeding has different eligibility criteria and different patentability challenges that can be raised. IPRs permit any person (except a party who has been litigating the patent for more than a year) to challenge the validity of the patent on the grounds that it was anticipated or made obvious by prior art. Patents covering pharmaceutical products have been subject to attack in IPRs from generic drug companies and from hedge funds. If it is within six months of the issuance of the challenged patent, a third party can petition the U.S. PTO for post-grant review, which can be based on any invalidity grounds and is not limited to prior art patents or printed publications.

In post-issuance proceedings, U.S. PTO rules and regulations generally tend to favor patent challengers over patent owners. For example, unlike in district court litigation, claims challenged in post-issuance proceedings are given their broadest reasonable meaning, which increases the chance a claim might be invalidated by prior art or lack support in the patent specification. As another example, unlike in district court litigation, there is no presumption of validity for an issued patent, and thus, a challenger’s burden to prove invalidity is by a preponderance of the evidence, as opposed to the heightened clear and convincing evidence standard. As a result of these rules and others, statistics released by the U.S. PTO show a high percentage of claims being invalidated in post-issuance proceedings. Moreover, with few exceptions, there is no standing requirement to petition the U.S. PTO for inter partes review or post-grant review. In other words, companies that have not been charged with infringement or that lack commercial interest in the patented subject matter can still petition the U.S. PTO for review of an issued patent. Thus, even where we have issued patents, our rights under those patents may be challenged and ultimately not provide us with sufficient protection against competitive products or processes.

The degree of future protection for our proprietary rights is uncertain because legal means afford only limited protection and may not adequately protect our rights or permit us to gain or keep our competitive advantage. For example:

we might not be the first to file patent applications for our inventions;

others may independently develop similar or alternative product candidates to any of our product candidates that fall outside the scope of our patents;

our pending patent applications may not result in issued patents;

our issued patents may not provide a basis for commercially viable products or may not provide us with any competitive advantages or may be challenged by third parties;

others may design around our patent claims to produce competitive products that fall outside the scope of our patents;

we may not develop additional patentable proprietary technologies related to our product candidates; and

we are dependent upon the diligence of our appointed agents in national jurisdictions, acting for and on our behalf, which control the prosecution of pending domestic and foreign patent applications and maintain granted domestic and foreign patents.

An issued patent does not guarantee us the right to practice the patented technology or commercialize the patented product. Third parties may have blocking patents that could be used to prevent us from commercializing our patented products and practicing our patented technology. Our issued patents and those that may be issued in the future may be challenged, invalidated or circumvented, which could limit our ability to prevent competitors from marketing the same

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or related product candidates or could limit the length of the term of patent protection of our product candidates. Moreover, because of the extensive time required for development, testing and regulatory review of a potential product, it is possible that, before any of our product candidates can be commercialized, any related patent may expire or remain in force for only a short period following commercialization, thereby reducing any advantage of the patent. Patent term extensions may not be available for these patents.

We rely on trade secrets and other forms of non-patent intellectual property protection. If we are unable to protect our trade secrets, other companies may be able to compete more effectively against us.

We rely on trade secrets to protect certain aspects of our technology, including our proprietary processes for manufacturing and purifying bacteriophages. Trade secrets are difficult to protect, especially in the pharmaceutical industry, where much of the information about a product must be made public during the regulatory approval process. Although we use reasonable efforts to protect our trade secrets, our employees, consultants, contractors, outside scientific collaborators and other advisors may unintentionally or willfully disclose our information to competitors. Enforcing a claim that a third party illegally obtained and is using our trade secret information is expensive and time-consuming, and the outcome is unpredictable. In addition, courts outside the United States may be less willing to or may not protect trade secrets. Moreover, our competitors may independently develop equivalent knowledge, methods and know-how.

If we are sued for infringing intellectual property rights of third parties or if we are forced to engage in an interference proceeding, it will be costly and time-consuming, and an unfavorable outcome in that litigation or interference would have a material adverse effect on our business.

Our ability to commercialize our product candidates depends on our ability to develop, manufacture, market and sell our product candidates without infringing the proprietary rights of third parties. Numerous United States and foreign patents and patent applications, which are owned by third parties, exist in the general field of anti-infective products or in fields that otherwise may relate to our product candidates. If we are shown to infringe, we could be enjoined from use or sale of the claimed invention if we are unable to prove that the patent is invalid. In addition, because patent applications can take many years to issue, there may be currently pending patent applications, unknown to us, which may later result in issued patents that our product candidates may infringe, or which may trigger an interference proceeding regarding one of our owned or licensed patents or applications. There could also be existing patents of which we are not aware that our product candidates may inadvertently infringe or which may become involved in an interference proceeding.

The biotechnology and pharmaceutical industries are characterized by the existence of a large number of patents and frequent litigation based on allegations of patent infringement. For so long as our product candidates are in clinical trials, we believe our clinical activities fall within the scope of the exemptions provided by 35 U.S.C. Section 271(e) in the United States, which exempts from patent infringement liability activities reasonably related to the development and submission of information to the FDA. As our clinical investigational drug product candidates progress toward commercialization, the possibility of a patent infringement claim against us increases. While we attempt to ensure that our active clinical investigational drugs and the methods we employ to manufacture them, as well as the methods for their use we intend to promote, do not infringe other parties’ patents and other proprietary rights, we cannot be certain they do not, and competitors or other parties may assert that we infringe their proprietary rights in any event.

We may be exposed to future litigation based on claims that our product candidates, or the methods we employ to manufacture them, or the uses for which we intend to promote them, infringe the intellectual property rights of others. Our ability to manufacture and commercialize our product candidates may depend on our ability to demonstrate that the manufacturing processes we employ and the use of our product candidates do not infringe third-party patents. If third-party patents were found to cover our product candidates or their use or manufacture, we could be required to pay damages or be enjoined and therefore unable to commercialize our product candidates, unless we obtained a license. A license may not be available to us on acceptable terms, if at all.

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Risks Related to Our Industry

If our competitors are able to develop and market products that are more effective, safer or more affordable than ours, or obtain marketing approval before we do, our commercial opportunities may be limited.

Competition in the biotechnology and pharmaceutical industries is intense and continues to increase. Some companies that are larger and have significantly more resources than we do are aggressively pursuing antibacterial development programs, including traditional therapies and therapies with novel mechanisms of action. In addition, other companies are developing phage-based products for non-therapeutic uses, and may elect to use their expertise in phage development and manufacturing to try to develop products that would compete with ours.

We also face potential competition from academic institutions, government agencies and private and public research institutions engaged in the discovery and development of drugs and therapies. Many of our competitors have significantly greater financial resources and expertise in research and development, preclinical testing, conducting clinical trials, obtaining regulatory approvals, manufacturing, sales and marketing than we do. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established pharmaceutical companies.

Our competitors may succeed in developing products that are more effective, have fewer side effects and are safer or more affordable than our product candidates, which would render our product candidates less competitive or noncompetitive. These competitors also compete with us to recruit and retain qualified scientific and management personnel, establish clinical trial sites and patient registration for clinical trials, as well as to acquire technologies and technology licenses complementary to our programs or advantageous to our business. Moreover, competitors that are able to achieve patent protection, obtain regulatory approvals and commence commercial sales of their products before we do, and competitors that have already done so, may enjoy a significant competitive advantage.

The Generating Antibiotics Incentives Now Act is intended to provide incentives for the development of new, qualified infectious disease products. These incentives may result in more competition in the market for new antibiotics, and may cause pharmaceutical and biotechnology companies with more resources than we have to shift their efforts towards the development of products that could be competitive with our product candidates.

There is a substantial risk of product liability claims in our business. If we do not obtain sufficient liability insurance, a product liability claim could result in substantial liabilities.

Our business exposes us to significant potential product liability risks that are inherent in the development, manufacturing and marketing of human therapeutic products. Regardless of merit or eventual outcome, product liability claims may result in:

delay or failure to complete our clinical trials;

withdrawal of clinical trial participants;

decreased demand for our product candidates;

injury to our reputation;

litigation costs;

substantial monetary awards against us; and

diversion of management or other resources from key aspects of our operations.

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If we succeed in marketing products, product liability claims could result in an FDA investigation of the safety or efficacy of our products, our manufacturing processes and facilities or our marketing programs. An FDA investigation could also potentially lead to a recall of our products or more serious enforcement actions, or limitations on the indications, for which they may be used, or suspension or withdrawal of approval.

We have product liability insurance that covers our clinical trials up to a $10.0 million annual per claim and aggregate limit. We intend to expand our insurance coverage to include the sale of commercial products if marketing approval is obtained for our product candidates or any other compound that we may develop. However, insurance coverage is expensive and we may not be able to maintain insurance coverage at a reasonable cost or at all, and the insurance coverage that we obtain may not be adequate to cover potential claims or losses.

Even if we receive regulatory approval to market our product candidates, the market may not be receptive to our product candidates upon their commercial introduction, which would negatively affect our ability to achieve profitability.

Our product candidates may not gain market acceptance among physicians, patients, healthcare payors and the medical community. The degree of market acceptance of any approved products will depend on a number of factors, including:

the effectiveness of the product;

the prevalence and severity of any side effects;

potential advantages or disadvantages over alternative treatments;

relative convenience and ease of administration;

the strength of marketing and distribution support;

the price of the product, both in absolute terms and relative to alternative treatments; and

sufficient third-party coverage or reimbursement.

If our product candidates receive regulatory approval but do not achieve an adequate level of acceptance by physicians, healthcare payors and patients, we may not generate product revenues sufficient to attain profitability.

Foreign governments tend to impose strict price controls, which may adversely affect our future profitability.

In some foreign countries, particularly in the European Union, prescription drug pricing is subject to governmental control. In these countries, pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a product. To obtain reimbursement or pricing approval in some countries, we may be required to conduct a clinical trial that compares the cost-effectiveness of our product candidate to other available therapies. If reimbursement of our products is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our profitability will be negatively affected.

We may incur significant costs complying with environmental laws and regulations, and failure to comply with these laws and regulations could expose us to significant liabilities.

Our research and development activities use biological and hazardous materials that are dangerous to human health and safety or the environment. We are subject to a variety of federal, state and local laws and regulations governing the use, generation, manufacture, storage, handling and disposal of these materials and wastes resulting from these materials. We are also subject to regulation by the Occupational Safety and Health Administration (“OSHA”), state and federal environmental protection agencies and to regulation under the Toxic Substances Control Act. OSHA, state governments

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or federal Environmental Protection Agency, may adopt regulations that may affect our research and development programs. We are unable to predict whether any agency will adopt any regulations that could have a material adverse effect on our operations. We have incurred, and will continue to incur, capital and operating expenditures and other costs in the ordinary course of our business in complying with these laws and regulations.

Although we believe our safety procedures for handling and disposing of these materials comply with federal, state and local laws and regulations, we cannot entirely eliminate the risk of accidental injury or contamination from the use, storage, handling or disposal of hazardous materials. In the event of contamination or injury, we could be held liable for any resulting damages, and any liability could significantly exceed our insurance coverage.

The uncertainty associated with pharmaceutical reimbursement and related matters may adversely affect our business.

Market acceptance and sales of any one or more of our product candidates will depend on reimbursement policies and may be affected by future healthcare reform measures in the United States and in foreign jurisdictions. Government authorities and third-party payers, such as private health insurers and health maintenance organizations, decide which drugs they will cover and establish payment levels. We cannot be certain that reimbursement will be available for any of our product candidates. Also, we cannot be certain that reimbursement policies will not reduce the demand for, or the price paid for, our products. If reimbursement is not available or is available on a limited basis, we may not be able to successfully commercialize any product candidates that we develop.

In the United States, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (the “MMA”), changed the way Medicare covers and pays for pharmaceutical products. The legislation established Medicare Part D, which expanded Medicare coverage for outpatient prescription drug purchases by the elderly but provided authority for limiting the number of drugs that will be covered in any therapeutic class. The MMA also introduced a new reimbursement methodology based on average sales prices for physician-administered drugs.

The United States and several foreign jurisdictions are considering, or have already enacted, a number of legislative and regulatory proposals to change the healthcare system in ways that could affect its ability to sell its products profitably. Among policy makers and payers in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access to healthcare. In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives. we expect to experience pricing pressures in connection with the sale of any products that we develop due to the trend toward managed healthcare, the increasing influence of health maintenance organizations, and additional legislative proposals.

In March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act (collectively, the “ACA”), became law in the United States, which substantially changed the way healthcare is financed by both governmental and private insurers. While we cannot predict what impact on federal reimbursement policies this legislation will have in general or on our business specifically, the ACA and any amendments thereto may result in downward pressure on pharmaceutical reimbursement, which could negatively affect market acceptance of, and the price we may charge for, our products that receive regulatory approval. We also cannot predict the impact of ACA and its amendments on us as many of the ACA, as amended, requires the promulgation of detailed regulations implementing the statutory provisions, which have not yet been fully implemented.

Risks Related to Our Common Stock

The price of our common stock has been and may continue to be volatile.

As of June 30, 2019, we had outstanding common warrants to purchase an aggregate of 1,854,262 shares of our common stock at a weighted-average exercise price of $14.74 per share We also have outstanding options to exercise 1,346,516 shares of our common stock at a weighted-average exercise price of $8.56 per share. Although we cannot determine when these warrants or options will ultimately be exercised, it is reasonable to assume that such warrants and options will be exercised only if the exercise price is below the market price of our common stock. To the extent any of

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our outstanding warrants or options are exercised, additional shares of our common stock will be issued that will generally be eligible for resale in the public market (subject to limitations under Rule 144 under the Securities Act for certain of our warrants and with respect to shares held by our affiliates), which will result in dilution to our security holders. The issuance of additional securities could also have an adverse effect on the market price of our common stock.

Provisions of Washington law and our current articles of incorporation and bylaws may discourage another company from acquiring us and may prevent attempts by our stockholders to replace or remove our current management.

Provisions of Washington law and our current articles of incorporation and bylaws may discourage, delay or prevent a merger or acquisition that stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares. In addition, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace or remove our board of directors. These provisions include:

authorizing the issuance of “blank check” preferred stock without any need for action by stockholders;

providing for a classified board of directors with staggered terms;

requiring supermajority stockholder voting to effect certain amendments to our articles of incorporation and bylaws; and

establishing advance notice requirements for nominations for election to our board of directors or for proposing matters that can be acted on by stockholders at stockholder meetings.

In addition, because we are incorporated in Washington, we are governed by the provisions of Chapter 23B.19 of the Washington Business Corporation Act, which, among other things, restricts the ability of stockholders owning 10% or more of our outstanding voting stock from merging or combining with us. These provisions could discourage potential acquisition attempts and could reduce the price that investors might be willing to pay for shares of our common stock in the future and result in the market price being lower than it would without these provisions.

Although we believe these provisions collectively provide for an opportunity to receive higher bids by requiring potential acquirers to negotiate with our board of directors, they would apply even if an offer may be considered beneficial by some stockholders. In addition, these provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management

We have never paid dividends on our common stock, and we do not anticipate paying any cash dividends on our common stock in the foreseeable future.

We have never declared or paid cash dividends on our common stock. We do not anticipate paying any cash dividends on our common stock in the foreseeable future. We currently intend to retain all available funds and any future earnings to fund the development and growth of our business. As a result, capital appreciation, if any, of our common stock will be our stockholders’ sole source of gain for the foreseeable future.

If securities or industry analysts do not publish research or publish unfavorable research about our business, our stock price and trading volume could decline.

The trading market for our common stock will depend in part on the research and reports that securities or industry analysts publish about us or our business. We currently have two securities analysts and may never obtain additional research coverage by other securities and industry analysts. If no additional securities or industry analysts commence coverage of our company, the trading price for our stock could be negatively impacted. If we obtain additional securities or industry analyst coverage and if one or more of the analysts who covers us downgrades our stock or publishes inaccurate or unfavorable research about our business, our stock price would likely decline. If one or more of these

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analysts ceases coverage of us or fails to publish reports on us regularly, demand for our stock could decrease, which could cause our stock price and trading volume to decline.

We are an “emerging growth company” and we cannot be certain if the reduced disclosure requirements applicable to “emerging growth companies” will make our common stock less attractive to investors.

We are an “emerging growth company,” as defined under the JOBS Act. For so long as we are an “emerging growth company,” we intend to take advantage of certain exemptions from reporting requirements that are applicable to other public companies that are not “emerging growth companies” including, but not limited to, compliance with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

We could be an “emerging growth company” for up to five years, although we may lose such status earlier, depending on the occurrence of certain events. We will remain an “emerging growth company” until the earliest to occur of (i) the last day of the fiscal year (a) following the fifth anniversary of our initial public offering conducted after we became a reporting company under the Exchange Act pursuant to our registration statement on Form 10 (File No. 000‑23930), (b) in which we have total annual gross revenue of at least $1.07 billion or (c) in which we are deemed to be a “large accelerated filer” under the Exchange Act, which means that the market value of our common stock that is held by non-affiliates exceeds $700 million as of June 30th of the prior year, and (ii) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.

We cannot predict if investors will find our common stock less attractive or our company less comparable to certain other public companies because we will rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

Under the JOBS Act, “emerging growth companies” can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards, and, therefore, will be subject to the same new or revised accounting standards as other public companies that are not “emerging growth companies.”

Sales of a substantial number of shares of our common stock in the public market by our existing stockholders could cause our stock price to decline.

Sales of a substantial number of shares of our common stock in the public market or the perception that these sales might occur, could depress the market price of our common stock and could impair our ability to raise capital through the sale of additional equity securities. We are unable to predict the effect that sales may have on the prevailing market price of our common stock.

Future sales and issuances of our common stock or rights to purchase common stock by us, including pursuant to our equity incentive plans, could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to decline.

We are generally not restricted from issuing additional common stock, including any securities that are convertible into or exchangeable for, or that represent the right to receive, common stock. The market price of our common stock could decline as a result of sales of common stock or securities that are convertible into or exchangeable for, or that represent the right to receive, common stock or the perception that such sales could occur.

We expect that significant additional capital will be needed in the future to continue our planned operations, including conducting clinical trials, commercialization efforts, expanded research and development activities and costs associated with operating as a public company. To the extent we raise additional capital by issuing equity or convertible

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securities, our stockholders may experience substantial dilution. We may sell common stock, convertible securities or other equity securities in one or more transactions at prices and in a manner we determine from time to time. If we sell common stock, convertible securities or other equity securities in more than one transaction, investors may be materially diluted by subsequent sales. Such sales may also result in material dilution to our existing stockholders, and new investors could gain rights superior to our existing stockholders.

Pursuant to our 2016 Equity Incentive Plan (the “2016 Plan”), our management is authorized to grant stock options and other equity-based awards to our employees, directors and consultants. The number of shares available for future grant under the 2016 Plan will automatically increase on January 1 st of each year by up to 5% of all shares of our capital stock outstanding as of December 31 st of the preceding calendar year, subject to the ability of our board of directors to take action to reduce the size of the increase in any given year. In addition, we may grant or provide for the grant of rights to purchase shares of our common stock pursuant to our 2016 Employee Stock Purchase Plan (“ESPP”). The number of shares of our common stock reserved for issuance under the ESPP will automatically increase on January 1 st of each calendar year by the lessor of 1% of the total number of shares of our common stock outstanding on December 31 s t of the preceding calendar year and 30,000 shares, subject to the ability of our board of directors to take action to reduce the size of the increase in any given year. Currently, we plan to register the increased number of shares available for issuance under the 2016 Plan and ESPP each year. Increases in the number of shares available for future grant or purchase may result in additional dilution, which could cause our stock price to decline.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On February 5, 2019, we entered into a share purchase agreement with certain shareholders of C3J, pursuant to which we agreed to sell our common stock, in a private placement immediately following the closing of the Merger, having an aggregate purchase price of $10.0 million (the “Financing”). An aggregate of 1,991,269 shares of our common stock were issued in the Financing at a price of approximately $5.02192 per share. The shares of common stock in the Financing were issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act, and such shares bear appropriate restrictive legends. In addition, the Financing Shares are subject to the provisions of lock-up agreements.

Immediately following the closing of the Merger and the Financing, the former C3J security holders (including the Investors) own approximately 76% of our common stock (of which approximately 20% was comprised of the shares issued in the Financing to the Investors) and the security holders of AmpliPhi as of immediately prior to the Merger owned approximately 24% of our common stock.

In connection with the Financing, we entered into a registration rights agreement, dated May 9, 2019, pursuant to which we agreed to cause the Financing Shares to be registered for resale under the Securities Act.

Item 3. Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits


Number		Description

3.1		Amended and Restated Articles of Incorporation of the registrant, as amended (incorporated by reference to Exhibit 3.1 to the Quarterly Report on Form 10‑Q, filed on November 16, 2015).

3.2		Articles of Amendment to Articles of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K, filed on April 24, 2017).

3.3		Articles of Amendment to Articles of Incorporation of the Registrant (incorporated by reference to Exhibit 3.2 to the Registrant’s Quarterly Report on Form 10-Q, filed on November 8, 2018).

3.4		Articles of Amendment to Amended and Restated Articles of Incorporation of the registrant (incorporated herein by reference to Exhibit 3.1 to the Current Report on Form 8-K, filed on May 10, 2019).

3.5		Amended and Restated Bylaws of the registrant.

3.6		Articles of Merger, dated as of May 9, 2019 (incorporated herein by reference to Exhibit 3.2 to the Current Report on Form 8-K, filed on May 10, 2019).

4.1		Reference is made to Exhibits 3.1 , 3.2 and 3.3 .

4.2		Form of Common Stock Certificate (incorporated herein by reference to Exhibit 4.1 to the Current Report on Form 8-K, filed on May 10, 2019).

4.3		Form of Common Stock Warrant issued to purchasers in March 2015 private placement (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K, filed on March 19, 2015).

4.4		Form of Securities Purchase Agreement (incorporated by reference to Exhibit 99.3 to the Current Report on Form 8‑K, filed on June 1, 2016).

4.5		Form of Warrant to Purchase Common Stock issued to purchasers in May 2017 (incorporated by reference to Exhibit 4.18 to the Registrant’s Registration Statement on Form S‑1 (File No. 333‑217169)).

4.6		Form of Pre-Funded Warrant issued to purchasers in October 2018 underwritten public offering (incorporated by reference to Exhibit 4.18 to the Registrant Registration Statement on Form S‑1 (File No. 333‑226959)).

4.7		Form of Warrant to Purchase Common Stock issued to purchasers in October 2018 underwritten public offering (incorporated by reference to Exhibit 4.19 to the Registrant Registration Statement on Form S‑1 (File No. 333‑226959)).

10.1		Form of Share Purchase Agreement by and among AmpliPhi Biosciences Corporation, C3J Therapeutics, Inc. and certain shareholders of C3J Therapeutics, Inc., dated as of February 5, 2019 (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K, filed with the SEC on February 7, 2019).

10.2		Form of Company Lock-Up Agreement, dated January 3, 2019, by each of the parties named in each agreement therein (incorporated by reference to Exhibit 10.3 to the registrant’s Current Report on Form 8-K, filed with the SEC on May 10, 2019).

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10.3		Form of C3J Lock-Up Agreement, dated January 3, 2019, by each of the parties named in each agreement therein (incorporated by reference to Exhibit 10.4 to the registrant’s Current Report on Form 8-K, filed with the SEC on May 10, 2019).

10.4		Registration Rights Agreement, dated as of May 9, 2019, by and among Armata Pharmaceuticals, Inc. and the Investors. (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K, filed with the SEC on May 10, 2019).

10.5		Employment Agreement, dated October 1, 2018, between C3J Therapeutics, Inc. and Todd R. Patrick (incorporated by reference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K, filed with the SEC on May 10, 2019).

10.6		Amendment to Employment Agreement, dated as of January 16, 2019, between C3J Therapeutics, Inc. and Todd R. Patrick (incorporated by reference to Exhibit 10.3 to the registrant’s Current Report on Form 8-K, filed with the SEC on May 10, 2019).

10.7		Form of Director Appointment Letter (incorporated by reference to Exhibit 10.4 to the registrant’s Current Report on Form 8-K, filed with the SEC on May 10, 2019).

10.8		Armata Pharmaceuticals, Inc. 2016 Equity Incentive Plan, as amended (incorporated by reference to Exhibit 99.1 to the registrant’s Registration Statement on Form S-8, filed with the SEC on June 10, 2019).

10.9		Form of Stock Option Grant Notice, Option Agreement and Notice of Exercise under the Armata Pharmaceuticals, Inc. 2016 Equity Incentive Plan.

10.10		Armata Pharmaceuticals, Inc. 2016 Employee Stock Purchase Plan.

10.11		Research Collaboration and Option to License Agreement, effective as of May 24, 2017, by and between Synthetic Genomics, Inc. and Merck Sharp & Dohme Corp. *

10.12		Asset Purchase Agreement, dated as of February 14, 2018, by and between C3J Therapeutics, Inc., Synthetic Genomics, Inc. and Synthetic Genomics Vaccines, Inc., as amended by Amendment to Asset Purchase Agreement, made and entered into as of December 20, 2018. *

10.13		Form of Company Support Agreement, dated January 3, 2019, by and between C3J Therapeutics and each of the parties named in each agreement therein (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K, filed with the SEC on January 4, 2019).

10.14		Form of C3J Therapeutics Support Agreement, dated January 3, 2019, by and between the registrant and each of the parties named in each agreement therein (incorporated by reference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K, filed with the SEC on January 4, 2019).

31.1		Certification of Principal Executive Officer required by Rule 13a‑14(a) or Rule 15d‑14(a) .

31.2		Certification of Principal Financial Officer required by Rule 13a‑14(a) or Rule 15d‑14(a).

32.1		Certification of Principal Executive Officer Required by Rule 13a‑14(b) or Rule 15d‑14(b) and 18 U.S.C. 1350.

32.2		Certification of Principal Financial Officer Required by Rule 13a‑14(b) or Rule 15d‑14(b) and 18 U.S.C. 1350.

101.INS		XBRL Instance Document.

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101.SCH		XBRL Taxonomy Extension Schema Document.

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document.

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document.

101.LAB		XBRL Taxonomy Extension Label Linkbase Document.

*Certain identified information in the exhibit has been omitted because it is both (i) not material, and (ii) would likely cause competitive harm if publicly disclosed.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	ARMATA PHARMACEUTICALS, INC.

Date: August 14, 2019		By	/s/ Todd R. Patrick
			Name: Todd R. Patrick
			Title: Chief Executive Officer
			(Principal Executive Officer)

		By	/s/ Steve R. Martin
			Name: Steve R. Martin
			Title: Chief Financial Officer
			(Principal Financial and Accounting Officer)

Exhibit 3.5

AMENDED AND RESTATED BYLAWS

ARMATA PHARMACEUTICALS, INC.


SECTION 1.	OFFICES	1

SECTION 2.	SHAREHOLDERS	1

2.1	Annual Meeting	1

2.2	Special Meetings	1

2.3	Meetings by Communication Equipment	1

2.4	Date, Time and Place of Meeting	1

2.5	Notice of Meeting	1

2.6	Business for Shareholders' Meetings	2
	2.6.1 Business at Annual Meetings	2
	2.6.2 Business at Special Meetings	2
	2.6.3 Notice to Corporation	2

2.7	Waiver of Notice	2

2.8	Fixing of Record Date for Determining Shareholders	3

2.9	Voting Record	3

2.10	Quorum	3

2.11	Manner of Acting	3

2.12	Proxies	3

2.13	Voting of Shares	4

2.14	Voting for Directors	4

2.15	Action by Shareholders Without a Meeting	4

SECTION 3.	BOARD OF DIRECTORS	4

3.1	General Powers	4

3.2	Number and Tenure	4

3.3	Nomination and Election	4
	3.3.1 Nomination	4
	3.3.2 Election	5

3.4	Annual and Regular Meetings	5


3.5	Special Meetings	5

3.6	Meetings by Communications Equipment	5

3.7	Notice of Special Meetings	5
	3.7.1 Personal Delivery	6
	3.7.2 Delivery by Mail	6
	3.7.3 Delivery by Private Carrier	6
	3.7.4 Facsimile Notice	6
	3.7.5 Oral Notice	6

3.8	Waiver of Notice	6
	3.8.1 In Writing	6
	3.8.2 By Attendance	6

3.9	Quorum	6

3.10	Manner of Acting	7

3.11	Presumption of Assent	7

3.12	Action by Board or Committees Without a Meeting	7

3.13	Resignation	7

3.14	Removal	7

3.15	Vacancies	7

3.16	Executive and Other Committees	7
	3.16.1 Creation of Committees	7
	3.16.2 Authority of Committees	8
	3.16.3 Audit Committee	8
	3.16.4 Quorum and Manner of Acting	8
	3.16.5 Minutes of Meetings	8
	3.16.6 Resignation	8
	3.16.7 Removal	8

3.17	Compensation	8

SECTION 4.	OFFICERS	9

4.1	Appointment and Term	9

4.2	Resignation	9

4.3	Removal	9

4.4	Contract Rights of Officers	9

4.5	Chairman of the Board	9

4.6	President	9

4.7	Vice President	9


4.8	Secretary	10

4.9	Treasurer	10

4.10	Salaries	10

SECTION 5.	CONTRACTS, LOANS, CHECKS AND DEPOSITS	10

5.1	Contracts	10

5.2	Loans to the Corporation	10

5.3	Checks and Drafts	10

5.4	Deposits	10

SECTION 6.	CERTIFICATES FOR SHARES AND THEIR TRANSFER	11

6.1	Issuance of Shares	11

6.2	Certificates for Shares	11

6.3	Stock Records	11

6.4	Transfer of Shares	11

6.5	Lost or Destroyed Certificates	11

SECTION 7.	BOOKS AND RECORDS	11

SECTION 8.	ACCOUNTING YEAR	12

SECTION 9.	SEAL	12

SECTION 10.	INDEMNIFICATION	12

10.1	Right to Indemnification	12

10.2	Restrictions on Indemnification	12

10.3	Advancement of Expenses	13

10.4	Right of Indemnitee to Bring Suit	13

10.5	Procedures Exclusive	13

10.6	Nonexclusivity of Rights	13

10.7	Insurance, Contracts and Funding	13

10.8	Indemnification of Employees and Agents of the Corporation	13

10.9	Persons Serving Other Entities	14

SECTION 11.	AMENDMENTS	14

iii

AMENDED AND RESTATED BYLAWS

ARMATA PHARMACEUTICALS, INC.

SECTION 1. OFFICES

The principal office of the corporation shall be located at the principal place of business or such other place as the Board of Directors ("Board") may designate. The corporation may have such other offices, either within or without the state of Washington, as the Board may designate or as the business of the corporation may require from time to time.

SECTION 2. SHAREHOLDERS

2.1 Annual Meeting

The annual meeting of the shareholders shall be held at such place and at such time as the Board of Directors shall prescribe, for the purpose of electing Directors and transacting such other business as may properly come before the meeting. If the day fixed for the annual meeting is a legal holiday at the place of the meeting, the meeting shall be held on the next succeeding business day.

2.2 Special Meetings

The Chairman of the Board, the President or the Board may call special meetings of the shareholders for any purpose. Further, a special meeting of the shareholders shall be held if the holders of not less than 30% of all the votes entitled to be cast on any issue proposed to be considered at such special meeting have dated, signed and delivered to the Secretary one or more written demands for such meeting, describing the purpose or purposes for which it is to be held.

2.3 Meetings by Communication Equipment

Shareholders may participate in any meeting of the shareholders by any means of communication by which all persons participating in the meeting can hear each other during the meeting. Participation by such means shall constitute presence in person at a meeting.

2.4 Date, Time and Place of Meeting

Except as otherwise provided herein, all meetings of shareholders, including those held pursuant to demand by shareholders as provided herein, shall be held on such date and at such time and place, within or without the state of Washington, designated by or at the direction of the Board.

2.5 Notice of Meeting

Written notice stating the place, day and hour of the meeting and, in the case of a special meeting, the purpose or purposes for which the meeting is called shall be given by or at the direction of the Board, the Chairman of the Board, the President or the Secretary to each shareholder entitled to notice of or to vote at the meeting not less than ten nor more than sixty days before the meeting. Such notice may be transmitted by mail, private carrier, personal delivery, telegraph, teletype or communications equipment which transmits a facsimile of the notice to like equipment which receives and reproduces such notice. If these forms of written notice are impractical in the view of the Board, the Chairman of the Board, the President or the Secretary, written notice may be transmitted by an advertisement in a newspaper of general circulation in the area of the corporation's principal office. If such notice is mailed, it shall be deemed effective when deposited in the official government mail, first-class postage prepaid, properly addressed to the shareholder at such shareholder's address as it appears in the corporation's current record of shareholders. Notice given in any other manner shall be deemed effective when dispatched to the shareholder's

address, telephone number or other number appearing on the records of the corporation. Any notice given by publication as herein provided shall be deemed effective five days after first publication.

2.6 Business for Shareholders' Meetings

2.6.1 Business at Annual Meetings

In addition to the election of directors, other proper business may be transacted at an annual meeting of shareholders, provided that such business is properly brought before such meeting. To be properly brought before an annual meeting, business must be (a) brought by or at the direction of the Board or (b) brought before the meeting by a shareholder pursuant to written notice thereof, in accordance with subsection 2.6.3 hereof, and received by the Secretary not fewer than sixty nor more than ninety days prior to the date specified in subsection 2.1 hereof for such annual meeting (or if less than sixty days' notice or prior public disclosure of the date of the annual meeting is given or made to the shareholders, not later than the tenth day following the day on which the notice of the date of the annual meeting was mailed or such public disclosure was made). Any such shareholder notice shall set forth (i) the name and address of the shareholder proposing such business; (ii) a representation that the shareholder is entitled to vote at such meeting and a statement of the number of shares of the corporation which are beneficially owned by the shareholder; (iii) a representation that the shareholder intends to appear in person or by proxy at the meeting to propose such business; and (iv) as to each matter the shareholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting, the language of the proposal (if appropriate), and any material interest of the shareholder in such business. No business shall be conducted at any annual meeting of shareholders except in accordance with this subsection 2.6.1. If the facts warrant, the Board, or the chairman of an annual meeting of shareholders, may determine and declare (x) that a proposal does not constitute proper business to be transacted at the meeting or (y) that business was not properly brought before the meeting in accordance with the provisions of this subsection 2.6.1 and, if, in either case, it is so determined, any such business shall not be transacted. The procedures set forth in this subsection 2.6.1 for business to be properly brought before an annual meeting by a shareholder are in addition to, and not in lieu of, the requirements set forth in Rule 14a-8 under Section 14 of the Securities Exchange Act of 1934, as amended, or any successor provision.

2.6.2 Business at Special Meetings

At any special meeting of the shareholders, only such business as is specified in the notice of such special meeting given by or at the direction of the person or persons calling such meeting, in accordance with subsection 2.5 hereof, shall come before such meeting.

2.6.3 Notice to Corporation

Any written notice required to be delivered by a shareholder to the corporation pursuant to subsection 2.5, subsection 2.6.1 or subsection 2.6.2 hereof must be given, either by personal delivery or by registered or certified mail, postage prepaid, to the Secretary at the corporation's executive offices in the city of Seattle, state of Washington.

2.7 Waiver of Notice

Whenever any notice is required to be given to any shareholder under the provisions of these Bylaws, the Articles of Incorporation or the Washington Business Corporation Act, a waiver thereof in writing, signed by the person or persons entitled to such notice and delivered to the corporation, whether before or after the date and time of the meeting, shall be deemed equivalent to the giving of such notice. Further, notice of the time, place and purpose of any meeting will be deemed to be waived by any shareholder by attendance at such meeting in person or by proxy, unless such shareholder at the beginning of the meeting objects to holding the meeting or transacting business at the meeting.

2.8 Fixing of Record Date for Determining Shareholders

For the purpose of determining shareholders entitled (a) to notice of or to vote at any meeting of shareholders or any adjournment thereof, (b) to demand a special meeting, or (c) to receive payment of any dividend, or in order to make a determination of shareholders for any other purpose, the Board may fix a future date as the record date for any such determination. Such record date shall be not more than seventy days, and in case of a meeting of shareholders not less than thirty days prior to the date on which the particular action requiring such determination is to be taken. If no record date is fixed for the determination of shareholders entitled to notice of or to vote at a meeting, the record date shall be the day immediately preceding the date on which notice of the meeting is first given to shareholders. Such a determination shall apply to any adjournment of the meeting unless the Board fixes a new record date, which it shall do if the meeting is adjourned to a date more than one hundred twenty days after the date fixed for the original meeting. If no record date is set for the determination of shareholders entitled to receive payment of any stock dividend or distribution (other than one involving a purchase, redemption or other acquisition of the corporation's shares) the record date shall be the date the Board authorizes the stock dividend or distribution.

2.9 Voting Record

At least ten days before each meeting of shareholders, an alphabetical list of the shareholders entitled to notice of such meeting shall be made, arranged by voting group and by each class or series of shares therein, with the address of and number of shares held by each shareholder. This record shall be kept at the principal office of the corporation for ten days prior to such meeting, and shall be kept open at such meeting, for the inspection of any shareholder or any shareholder's agent.

2.10 Quorum

A majority of the votes entitled to be cast on a matter by the holders of shares that, pursuant to the Articles of Incorporation or the Washington Business Corporation Act, are entitled to vote and be counted collectively upon such matter, represented in person or by proxy, shall constitute a quorum of such shares at a meeting of shareholders. If less than a majority of such votes are represented at a meeting, a majority of the votes so represented may adjourn the meeting from time to time without further notice if the new date, time or place is announced at the meeting before adjournment. Any business may be transacted at a reconvened meeting that might have been transacted at the meeting as originally called, provided a quorum is present or represented at such meeting. Once a share is represented for any purpose at a meeting other than solely to object to holding the meeting or transacting business at such meeting, it is deemed present for quorum purposes for the remainder of the meeting and any adjournment thereof (unless a new record date is or must be set for the adjourned meeting) notwithstanding the withdrawal of enough shareholders to leave less than a quorum.

2.11 Manner of Acting

If a quorum is present, action on a matter other than the election of Directors shall be approved if the votes cast in favor of the action by the shares entitled to vote and be counted collectively upon such matter exceed the votes cast against such action by the shares entitled to vote and be counted collectively thereon, unless the Articles of Incorporation or the Washington Business Corporation Act requires a greater number of affirmative votes.

2.12 Proxies

A shareholder may vote by proxy executed in writing by the shareholder or by his or her attorney-in-fact or agent. Such proxy shall be effective when received by the Secretary or other officer or agent authorized to tabulate votes. A proxy shall become invalid eleven months after the date of its execution, unless otherwise provided in the proxy. A proxy with respect to a specified meeting shall entitle the holder thereof to vote at any reconvened meeting following adjournment of such meeting but shall not be valid after the final adjournment thereof.

2.13 Voting of Shares

Except as provided in the Articles of Incorporation or in Section 2.14 hereof, each outstanding share entitled to vote with respect to a matter submitted to a meeting of shareholders shall be entitled to one vote upon such matter.

2.14 Voting for Directors

Each shareholder entitled to vote at an election of Directors may vote, in person or by proxy, the number of shares owned by such shareholder for as many persons as there are Directors to be elected and for whose election such shareholder has a right to vote. Unless otherwise provided in the Articles of Incorporation or in Section 3.14 hereof, the candidates elected shall be those receiving the largest number of votes cast, up to the number of Directors to be elected.

2.15 Action by Shareholders Without a Meeting

Any action which could be taken at a meeting of the shareholders may be taken without a meeting if one or more written consents setting forth the action so taken are signed by all shareholders entitled to vote on the action and are delivered to the corporation. If not otherwise fixed by the Board, the record date for determining shareholders entitled to take action without a meeting is the date the first shareholder signs the consent. A shareholder may withdraw a consent only by delivering a written notice of withdrawal to the corporation prior to the time that all consents are in the possession of the corporation. Action taken by written consent of shareholders without a meeting is effective when all consents are in the possession of the corporation, unless the consent specifies a later effective date. Any such consent shall be inserted in the minute book as if it were the minutes of a meeting of the shareholders.

SECTION 3. BOARD OF DIRECTORS

3.1 General Powers

All corporate powers shall be exercised by or under the authority of, and the business and affairs of the corporation shall be managed under the direction of, the Board, except as may be otherwise provided in these Bylaws, the Articles of Incorporation or the Washington Business Corporation Act.

3.2 Number and Tenure

The Board shall be composed of not less than one nor more than nine Directors, the specific number to be set by resolution of the Board or the shareholders. The number of Directors may be changed from time to time by amendment to these Bylaws, but no decrease in the number of Directors shall have the effect of shortening the term of any incumbent Director. Directors need not be shareholders of the corporation or residents of the state of Washington and need not meet any other qualifications. The Board shall be divided into three classes, with such classes to be as equal in number as may be possible, with any Director or Directors in excess of the number divisible by three being assigned to Class 3 and Class 2, as appropriate. At each annual meeting of shareholders the number of Directors equal to the number of Directors in the class whose term expires at the time of such meeting shall be elected to serve until the third ensuing annual meeting of shareholders. Notwithstanding any of the foregoing provisions of this Section 3.2, Directors shall serve until their successors are elected and qualified or until their earlier death, resignation or removal from office or until there is a decrease in the number of Directors.

3.3 Nomination and Election .

3.3.1 Nomination

Only persons who are nominated in accordance with the following procedures shall be eligible for election as Directors. Nominations for the election of Directors may be made (a) by or at the direction of the Board or (b) by any shareholder of record entitled to vote for the election of Directors at such meeting; provided, however, that a shareholder may nominate persons for election as Directors only if written notice (in accordance with subsection

2.6.3 hereof) of such shareholder's intention to make such nominations is received by the Secretary not later than (i) with respect to an election to be held at an annual meeting of the shareholders, not fewer than sixty nor more than ninety days prior to the date specified in subsection 2.1 hereof for such annual meeting (or if less than sixty days' notice or prior public disclosure of the date of the annual meeting is given or made to the shareholders, not later than the tenth day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure was made) and (ii) with respect to an election to be held at a special meeting of the shareholders for the election of Directors, the close of business on the seventh business day following the date on which notice of such meeting is first given to shareholders. Any such shareholder's notice shall set forth (a) the name and address of the shareholder who intends to make a nomination; (b) a representation that the shareholder is entitled to vote at such meeting and a statement of the number of shares of the corporation which are beneficially owned by the shareholder; (c) a representation that the shareholder intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; (d) as to each person the shareholder proposes to nominate for election or re-election as a Director, the name and address of such person and such other information regarding such nominee as would be required in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission had such nominee been nominated by the Board, and a description of any arrangements or understandings, between the shareholder and such nominee and any other persons (including their names), pursuant to which the nomination is to be made; and (e) the consent of each such nominee to serve as a Director if elected. If the facts warrant, the Board, or the chairman of a shareholders' meeting at which Directors are to be elected, shall determine and declare that a nomination was not made in accordance with the foregoing procedure and, if it is so determined, the defective nomination shall be disregarded. The right of shareholders to make nominations pursuant to the foregoing procedure is subject to the rights of the holders of any class or series of stock having a preference over the Common Stock as to dividends or upon liquidation. The procedures set forth in this subsection 3.3 for nomination for the election of Directors by shareholders are in addition to, and not in limitation of, any procedures now in effect or hereafter adopted by or at the direction of the Board or any committee thereof.

3.3.2 Election

At each election of Directors, the persons receiving the greatest number of votes shall be the Directors.

3.4 Annual and Regular Meetings

An annual Board meeting shall be held without notice immediately after and at the same place as the annual meeting of shareholders. By resolution the Board, or any committee thereof, may specify the time and place either within or without the state of Washington for holding regular meetings thereof without notice other than such resolution.

3.5 Special Meetings

Special meetings of the Board or any committee designated by the Board may be called by or at the request of the Chairman of the Board, the President, the Secretary or, in the case of special Board meetings, any one Director and, in the case of any special meeting of any committee designated by the Board, by the Chairman thereof. The person or persons authorized to call special meetings may fix any place either within or without the state of Washington as the place for holding any special Board or committee meeting called by them.

3.6 Meetings by Communications Equipment

Members of the Board or any committee designated by the Board may participate in a meeting of such Board or committee by, or conduct the meeting through the use of, any means of communication by which all Directors participating in the meeting can hear each other during the meeting. Participation by such means shall constitute presence in person at a meeting.

3.7 Notice of Special Meetings

Notice of a special Board or committee meeting stating the place, day and hour of the meeting shall be given to a Director in writing or orally. Neither the business to be transacted at, nor the purpose of, any special meeting need be specified in the notice of such meeting.

3.7.1 Personal Delivery

If notice is given by personal delivery, the notice shall be effective if delivered to a Director at least two days before the meeting.

3.7.2 Delivery by Mail

If notice is delivered by mail, the notice shall be deemed effective if deposited in the official government mail at least five days before the meeting, properly addressed to a Director at his or her address shown on the records of the corporation, with postage thereon prepaid.

3.7.3 Delivery by Private Carrier

If notice is given by private carrier, the notice shall be deemed effective when dispatched to a Director at his or her address shown on the records of the corporation at least three days before the meeting.

3.7.4 Facsimile Notice

If notice is delivered by wire or wireless equipment which transmits a facsimile of the notice, the notice shall be deemed effective when dispatched at least two days before the meeting to a Director at his or her telephone number or other number appearing on the records of the corporation.

3.7.5 Oral Notice

If notice is delivered orally, by telephone or in person, the notice shall be deemed effective if personally given to the Director at least two days before the meeting.

3.8 Waiver of Notice

3.8.1 In Writing

Whenever any notice is required to be given to any Director under the provisions of these Bylaws, the Articles of Incorporation or the Washington Business Corporation Act, a waiver thereof in writing, signed by the person or persons entitled to such notice and delivered to the corporation, whether before or after the date and time of the meeting, shall be deemed equivalent to the giving of such notice. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board or any committee designated by the Board need be specified in the waiver of notice of such meeting.

3.8.2 By Attendance

A Director's attendance at or participation in a Board or committee meeting shall constitute a waiver of notice of such meeting, unless the Director at the beginning of the meeting, or promptly upon his or her arrival, objects to holding the meeting or transacting business at such meeting and does not thereafter vote for or assent to action taken at the meeting.

3.9 Quorum

A majority of the number of Directors fixed by or in the manner provided in these Bylaws shall constitute a quorum for the transaction of business at any Board meeting but, if less than a majority are present at a meeting, a majority of the Directors present may adjourn the meeting from time to time without further notice.

3.10 Manner of Acting

If a quorum is present when the vote is taken, the act of the majority of the Directors present at a Board meeting shall be the act of the Board, unless the vote of a greater number is required by these Bylaws, the Articles of Incorporation or the Washington Business Corporation Act.

3.11 Presumption of Assent

A Director of the corporation who is present at a Board or committee meeting at which any action is taken shall be deemed to have assented to the action taken unless (a) the Director objects at the beginning of the meeting, or promptly upon the Director's arrival, to holding the meeting or transacting any business at such meeting, (b) the Director's dissent or abstention from the action taken is entered in the minutes of the meeting, or (c) the Director delivers written notice of the Director's dissent or abstention to the presiding officer of the meeting before its adjournment or to the corporation within a reasonable time after adjournment of the meeting. The right of dissent or abstention is not available to a Director who votes in favor of the action taken.

3.12 Action by Board or Committees Without a Meeting

Any action which could be taken at a meeting of the Board or of any committee created by the Board may be taken without a meeting if one or more written consents setting forth the action so taken are signed by each of the Directors or by each committee member either before or after the action is taken and delivered to the corporation. Action taken by written consent of Directors without a meeting is effective when the last Director signs the consent, unless the consent specifies a later effective date. Any such written consent shall be inserted in the minute book as if it were the minutes of a Board or a committee meeting.

3.13 Resignation

Any Director may resign at any time by delivering written notice to the Chairman of the Board, the President, the Secretary or the Board. Any such resignation is effective upon delivery thereof unless the notice of resignation specifies a later effective date and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

3.14 Removal

Any Director or the entire Board may be removed with or without cause, unless the Articles of Incorporation provide that directors may be removed only for cause, by the holders entitled to elect the Director or Directors whose removal is sought. A Director may be removed only if the number of votes cast to remove the director exceeds the number of votes cast not to remove the director. Such action may only be taken at a special meeting of the shareholders called expressly for the purpose of removing the director and the meeting notice must state that the purpose, or one of the purposes, of the meeting is removal of the director.

3.15 Vacancies

Unless the Articles of Incorporation provide otherwise, any vacancy occurring on the Board may be filled by the shareholders, the Board or, if the Directors in office constitute fewer than a quorum, by the affirmative vote of a majority of the remaining Directors.

3.16 Executive and Other Committees

3.16.1 Creation of Committees

The Board, by resolution adopted by the greater of a majority of the Directors then in office and the number of Directors required to take action in accordance with these Bylaws, may create standing or temporary committees, including an Executive Committee, and appoint members thereto from its own number and invest such committees with such powers as it may see fit, subject to such conditions as may be prescribed by the Board, these Bylaws and applicable law. Each committee must have two or more members, who shall serve at the pleasure of the Board.

3.16.2 Authority of Committees

Each committee shall have and may exercise all of the authority of the Board to the extent provided in the resolution of the Board creating the committee and any subsequent resolutions pertaining thereto and adopted in like manner, except that no such committee shall have the authority to: (a) authorize or approve a distribution except according to a general formula or method prescribed by the Board, (b) approve or propose to shareholders actions or proposals required by the Washington Business Corporation Act to be approved by shareholders, (c) fill vacancies on the Board or any committee thereof, (d) adopt, amend or repeal Bylaws, (e) amend the Articles of Incorporation pursuant to RCW 23B.10.020, (f) approve a plan of merger not requiring shareholder approval, or (g) authorize or approve the issuance or sale or contract for sale of shares, or determine the designation and relative rights, preferences and limitations of a class or series of shares except that the Board may authorize a committee or a senior executive officer of the corporation to do so within limits specifically prescribed by the Board.

3.16.3 Audit Committee

In addition to any committees appointed pursuant to this Section 3.16, there shall be an Audit Committee, appointed annually by the Board, consisting of at least two Directors who are not members of management. It shall be the responsibility of the Audit Committee to review the scope and results of the annual independent audit of books and records of the corporation, to review compliance with all corporate policies which have been approved by the Board and to discharge such other responsibilities as may from time to time be assigned to it by the Board. The Audit Committee shall meet at such times and places as the members deem advisable, and shall make such recommendations to the Board as they consider appropriate.

3.16.4 Quorum and Manner of Acting

A majority of the number of Directors composing any committee of the Board, as established and fixed by resolution of the Board, shall constitute a quorum for the transaction of business at any meeting of such committee but, if less than a majority are present at a meeting, a majority of such Directors present may adjourn the meeting from time to time without further notice. Except as may be otherwise provided in the Washington Business Corporation Act, if a quorum is present when the vote is taken the act of a majority of the members present shall be the act of the committee.

3.16.5 Minutes of Meetings

All committees shall keep regular minutes of their meetings and shall cause them to be recorded in books kept for that purpose.

3.16.6 Resignation

Any member of any committee may resign at any time by delivering written notice thereof to the Chairman of the Board, the President, the Secretary or the Board. Any such resignation is effective upon delivery thereof, unless the notice of resignation specifies a later effective date, and the acceptance of such resignation shall not be necessary to make it effective.

3.16.7 Removal

The Board may remove any member of any committee elected or appointed by it but only by the affirmative vote of the greater of a majority of the Directors then in office and the number of Directors required to take action in accordance with these Bylaws.

3.17 Compensation

By Board resolution, Directors and committee members may be paid their expenses, if any, of attendance at each Board or committee meeting, or a fixed sum for attendance at each Board or committee meeting, or a stated salary as Director or a committee member, or a combination of the foregoing. No such payment shall preclude any

Director or committee member from serving the corporation in any other capacity and receiving compensation therefor.

SECTION 4. OFFICERS

4.1 Appointment and Term

The officers of the corporation shall be those officers appointed from time to time by the Board or by any other officer empowered to do so. The Board shall have sole power and authority to appoint executive officers. As used herein, the term "executive officer" shall mean the President, any Vice President in charge of a principal business unit, division or function or any other officer who performs a policy-making function. The Board or the President may appoint such other officers and assistant officers to hold office for such period, have such authority and perform such duties as may be prescribed. The Board may delegate to any other officer the power to appoint any subordinate officers and to prescribe their respective terms of office, authority and duties. Any two or more offices may be held by the same person. Unless an officer dies, resigns or is removed from office, he or she shall hold office until his or her successor is appointed.

4.2 Resignation

Any officer may resign at any time by delivering written notice thereof to the corporation. Any such resignation is effective upon delivery thereof, unless the notice of resignation specifies a later effective date, and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective.

4.3 Removal

Any officer may be removed by the Board at any time, with or without cause. An officer or assistant officer, if appointed by another officer, may be removed by any officer authorized to appoint officers or assistant officers.

4.4 Contract Rights of Officers

The appointment of an officer does not itself create contract rights.

4.5 Chairman of the Board

If appointed, the Chairman of the Board shall perform such duties as shall be assigned to him or her by the Board from time to time and shall preside over meetings of the Board and shareholders unless another officer is appointed or designated by the Board as Chairman of such meetings.

4.6 President

If appointed, the President shall be the chief executive officer of the corporation unless another officer is so designated by the Board, shall preside over meetings of the Board and shareholders in the absence of a Chairman of the Board, and, subject to the Board's control, shall supervise and control all of the assets, business and affairs of the corporation. In general, the President shall perform all duties incident to the office of President and such other duties as are prescribed by the Board from time to time. If no Secretary has been appointed, the President shall have responsibility for the preparation of minutes of meetings of the Board and shareholders and for authentication of the records of the corporation.

4.7 Vice President

In the event of the death of the President or his or her inability to act, the Vice President (or if there is more than one Vice President, the Vice President who was designated by the Board as the successor to the President, or if no Vice President is so designated, the Vice President first elected to such office) shall perform the duties of the President, except as may be limited by resolution of the Board, with all the powers of and subject to all the

restrictions upon the President. Vice Presidents shall perform such other duties as from time to time may be assigned to them by the President or by or at the direction of the Board.

4.8 Secretary

If appointed, the Secretary shall be responsible for preparation of minutes of the meetings of the Board and shareholders, maintenance of the corporation's records and stock registers and authentication of the corporation's records and shall in general perform all duties incident to the office of Secretary and such other duties as from time to time may be assigned to him or her by the President or by or at the direction of the Board. In the absence of the Secretary, an Assistant Secretary may perform the duties of the Secretary.

4.9 Treasurer

If appointed, the Treasurer shall have charge and custody of and be responsible for all funds and securities of the corporation, receive and give receipts for moneys due and payable to the corporation from any source whatsoever, and deposit all such moneys in the name of the corporation in banks, trust companies or other depositories selected in accordance with the provisions of these Bylaws, and in general perform all of the duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him or her by the President or by or at the direction of the Board. In the absence of the Treasurer, an Assistant Treasurer may perform the duties of the Treasurer. If required by the Board, the Treasurer or any Assistant Treasurer shall give a bond for the faithful discharge of his or her duties in such amount and with such surety or sureties as the Board shall determine.

4.10 Salaries

The salaries of the officers shall be fixed from time to time by the Board or by any person or persons to whom the Board has delegated such authority. No officer shall be prevented from receiving such salary by reason of the fact that he or she is also a Director of the corporation.

SECTION 5. CONTRACTS, LOANS, CHECKS AND DEPOSITS

5.1 Contracts

The Board may authorize any officer or officers, or agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the corporation. Such authority may be general or confined to specific instances.

5.2 Loans to the Corporation

No loans shall be contracted on behalf of the corporation and no evidences of indebtedness shall be issued in its name unless authorized by a resolution of the Board. Such authority may be general or confined to specific instances.

5.3 Checks and Drafts

All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the corporation shall be signed by such officer or officers, or agent or agents, of the corporation and in such manner as is from time to time determined by resolution of the Board.

5.4 Deposits

All funds of the corporation not otherwise employed shall be deposited from time to time to the credit of the corporation in such banks, trust companies or other depositories as the Board may select.

SECTION 6. CERTIFICATES FOR SHARES AND THEIR TRANSFER

6.1 Issuance of Shares

No shares of the corporation shall be issued unless authorized by the Board, or by a committee designated by the Board to the extent such committee is empowered to do so.

6.2 Certificates for Shares

Certificates representing shares of the corporation shall be signed, either manually or in facsimile, by the President or any Vice President and by the Treasurer or any Assistant Treasurer or the Secretary or any Assistant Secretary and shall include on their face written notice of any restrictions which may be imposed on the transferability of such shares. All certificates shall be consecutively numbered or otherwise identified.

6.3 Stock Records

The stock transfer books shall be kept at the principal office of the corporation or at the office of the corporation's transfer agent or registrar. The name and address of each person to whom certificates for shares are issued, together with the class and number of shares represented by each such certificate and the date of issue thereof, shall be entered on the stock transfer books of the corporation. The person in whose name shares stand on the books of the corporation shall be deemed by the corporation to be the owner thereof for all purposes.

6.4 Transfer of Shares

The transfer of shares of the corporation shall be made only on the stock transfer books of the corporation pursuant to authorization or document of transfer made by the holder of record thereof or by his or her legal representative, who shall furnish proper evidence of authority to transfer, or by his or her attorney-in-fact authorized by power of attorney duly executed and filed with the Secretary of the corporation. All certificates surrendered to the corporation for transfer shall be cancelled and no new certificate shall be issued until the former certificates for a like number of shares shall have been surrendered and cancelled.

6.5 Lost or Destroyed Certificates

In the case of a lost, destroyed or mutilated certificate, a new certificate may be issued therefor upon such terms and indemnity to the corporation as the Board may prescribe.

SECTION 7. BOOKS AND RECORDS

The corporation shall:

(a) Keep as permanent records minutes of all meetings of its shareholders and the Board, a record of all actions taken by the shareholders or the Board without a meeting, and a record of all actions taken by a committee of the Board exercising the authority of the Board on behalf of the corporation.

(b) Maintain appropriate accounting records.

(c) Maintain a record of its shareholders, in a form that permits preparation of a list of the names and addresses of all shareholders, in alphabetical order by class of shares showing the number and class of shares held by each; provided, however, such record may be maintained by an agent of the corporation.

(d) Maintain its records in written form or in another form capable of conversion into written form within a reasonable time.

(e) Keep a copy of the following records at its principal office:

1. the Articles of Incorporation and all amendments thereto as currently in effect;

2. the Bylaws and all amendments thereto as currently in effect;

3. the minutes of all meetings of shareholders and records of all action taken by shareholders without a meeting, for the past three years;

4. the financial statements described in RCW 23B.16.200(1) for the past three years;

5. all written communications to shareholders generally within the past three years;

6. a list of the names and business addresses of the current Directors and officers; and

7. the most recent annual report delivered to the Washington Secretary of State.

SECTION 8. ACCOUNTING YEAR

The accounting year of the corporation shall be the calendar year, provided that if a different accounting year is at any time selected by the Board for purposes of federal income taxes, or any other purpose, the accounting year shall be the year so selected.

SECTION 9. SEAL

The Board may provide for a corporate seal which shall consist of the name of the corporation, the state of its incorporation and the year of its incorporation.

SECTION 10. INDEMNIFICATION

10.1 Right to Indemnification

Each person who was, is or is threatened to be made a named party to or is otherwise involved (including, without limitation, as a witness) in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative and whether formal or informal (hereinafter a "proceeding"), by reason of the fact that he or she is or was a Director or officer of the corporation or, that being or having been such a Director or officer or an employee of the corporation, he or she is or was serving at the request of the corporation as a Director, officer, partner, trustee, employee or agent of another corporation or of a partnership, joint venture, trust, employee benefit plan or other enterprise (hereinafter an "indemnitee"), whether the basis of a proceeding is alleged action in an official capacity as such a Director, officer, partner, trustee, employee or agent or in any other capacity while serving as such a Director, officer, partner, trustee, employee or agent, shall be indemnified and held harmless by the corporation against all expense, liability and loss (including counsel fees, judgments, fines, ERISA excise taxes or penalties and amounts to be paid in settlement) actually and reasonably incurred or suffered by such indemnitee in connection therewith, and such indemnification shall continue as to an indemnitee who has ceased to be a Director, officer, partner, trustee, employee or agent and shall inure to the benefit of the indemnitee's heirs, executors and administrators. Except as provided in subsection 10.2 of this Section with respect to proceedings seeking to enforce rights to indemnification, the corporation shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if a proceeding (or part thereof) was authorized or ratified by the Board. The right to indemnification conferred in this Section shall be a contract right.

10.2 Restrictions on Indemnification

No indemnification shall be provided to any such indemnitee for acts or omissions of the indemnitee finally adjudged to be intentional misconduct or a knowing violation of law, for conduct of the indemnitee finally adjudged to be in violation of RCW 23B.08.310, for any transaction with respect to which it was finally adjudged that such indemnitee personally received a benefit in money, property or services to which the indemnitee was not legally entitled or if the corporation is otherwise prohibited by applicable law from paying such indemnification. Notwithstanding the foregoing, if RCW 23B.08.560 or any successor provision of the Washington Business

Corporation Act is hereafter amended, the restrictions on indemnification set forth in this subsection 10.2 shall be as set forth in such amended statutory provision.

10.3 Advancement of Expenses

The right to indemnification conferred in this Section shall include the right to be paid by the corporation the expenses incurred in defending any proceeding in advance of its final disposition (hereinafter an "advancement of expenses"). An advancement of expenses shall be made upon delivery to the corporation of an undertaking (hereinafter an "undertaking"), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal that such indemnitee is not entitled to be indemnified for such expenses under this subsection 10.3.

10.4 Right of Indemnitee to Bring Suit

If a claim under subsection 10.1 or 10.3 of this Section is not paid in full by the corporation within sixty days after a written claim has been received by the corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be twenty days, the indemnitee may at any time thereafter bring suit against the corporation to recover the unpaid amount of the claim. If successful in whole or in part, in any such suit or in a suit brought by the corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. The indemnitee shall be presumed to be entitled to indemnification under this Section upon submission of a written claim (and, in an action brought to enforce a claim for an advancement of expenses, where the required undertaking has been tendered to the corporation) and thereafter the corporation shall have the burden of proof to overcome the presumption that the indemnitee is so entitled.

10.5 Procedures Exclusive

Pursuant to RCW 23B.08.560(2) or any successor provision of the Washington Business Corporation Act, the procedures for indemnification and advancement of expenses set forth in this Section are in lieu of the procedures required by RCW 23B.08.550 or any successor provision of the Washington Business Corporation Act.

10.6 Nonexclusivity of Rights

The right to indemnification and the advancement of expenses conferred in this Section shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, provision of the Articles of Incorporation or Bylaws of the corporation, general or specific action of the Board, contract or otherwise.

10.7 Insurance, Contracts and Funding

The corporation may maintain insurance, at its expense, to protect itself and any Director, officer, partner, trustee, employee or agent of the corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the corporation would have the power to indemnify such person against such expense, liability or loss under the Washington Business Corporation Act. The corporation may enter into contracts with any Director, officer, partner, trustee, employee or agent of the corporation in furtherance of the provisions of this Section and may create a trust fund, grant a security interest or use other means (including, without limitation, a letter of credit) to ensure the payment of such amounts as may be necessary to effect indemnification as provided in this Section.

10.8 Indemnification of Employees and Agents of the Corporation

The corporation may, by action of the Board, grant rights to indemnification and advancement of expenses to employees and agents or any class or group of employees and agents of the corporation (a) with the same scope and effect as the provisions of this Section with respect to the indemnification and advancement of expenses of Directors and officers of the corporation; (b) pursuant to rights granted pursuant to, or provided by, the Washington Business Corporation Act; or (c) as are otherwise consistent with law.

10.9 Persons Serving Other Entities

Any person who, while a Director, officer or employee of the corporation, is or was serving as a Director or officer of another foreign or domestic corporation of which a majority of the shares entitled to vote in the election of its Directors is held by the corporation shall be deemed to be so serving at the request of the corporation and entitled to indemnification and advancement of expenses under subsections 10.1 and 10.3 of this Section.

SECTION 11. AMENDMENTS

The Board shall have the power to adopt, amend or repeal the Bylaws of this corporation subject to approval by a majority of the Continuing Directors as defined in the Articles of Incorporation; provided, however, the Board may not repeal or amend any bylaw that the shareholders have expressly provided may not be amended or repealed by the Board. The shareholders shall also have the power to adopt, amend or repeal the Bylaws of this corporation by the affirmative vote of the holders of not less than two-thirds of the outstanding shares and, to the extent, if any, provided by resolution or resolutions of the Board providing for the issue of a series of Common or Preferred Stock, not less than two-thirds of the outstanding shares entitled to vote thereon, voting as a class.

* * * * *

The foregoing Amended and Restated Bylaws were adopted by the Board on May 9, 2019 and are effective as of May 9, 2019.

Exhibit 10.9

ARMATA PHARMACEUTICALS, INC.

STOCK OPTION GRANT NOTICE

(2016 EQUITY INCENTIVE PLAN)

Armata Pharmaceuticals, Inc. (the “ Company ”), pursuant to its 2016 Equity Incentive Plan (the “ Plan ”), hereby grants to Optionholder an option to purchase the number of shares of the Company’s Common Stock set forth below. This option is subject to all of the terms and conditions as set forth in this Stock Option Grant Notice, in the Option Agreement, the Plan and the Notice of Exercise, all of which are attached hereto and incorporated herein in their entirety. Capitalized terms not explicitly defined herein but defined in the Plan or the Option Agreement will have the same definitions as in the Plan or the Option Agreement. If there is any conflict between the terms in this Stock Option Grant Notice and the Plan, the terms of the Plan will control.

Optionholder:	Erin Butler
Grant Number:	XXXX
Date of Grant:	May 22, 2019
Vesting Commencement Date:	May 22, 2019
Number of Shares Subject to Option:	15,000
Exercise Price (Per Share):	$3.15
Total Exercise Price:	$47,250.00
Expiration Date:	May 22, 2029

Type of Grant: ☒ Incentive Stock Option 1 ☐ Nonstatutory Stock Option

Exercise Schedule : ☒ Same as Vesting Schedule ☐ Early Exercise Permitted

Vesting Schedule : One-fourth ( 1/4 th ) of the shares vest on each anniversary of the Vesting Commencement Date, subject to Optionholder’s Continuous Service as of each such date and the potential vesting acceleration described in Section 1 of the Option Agreement .

Payment: By one or a combination of the following items (described in the Option Agreement):

☒ By cash, check, bank draft or money order payable to the Company

☒ Pursuant to a Regulation T Program if the shares are publicly traded

☒ By delivery of already-owned shares if the shares are publicly traded

☒ If and only to the extent this option is a Nonstatutory Stock Option, and subject to the Company’s consent at the time of exercise, by a “net exercise” arrangement

1 If this is an Incentive Stock Option, it (plus other outstanding Incentive Stock Options) cannot be first exercisable for more than $100,000 in value (measured by exercise price) in any calendar year. Any excess over $100,000 is a Nonstatutory Stock Option.

Additional Terms/Acknowledgements: Optionholder acknowledges receipt of, and understands and agrees to, this Stock Option Grant Notice, the Option Agreement and the Plan. Optionholder acknowledges and agrees that this Stock Option Grant Notice and the Option Agreement may not be modified, amended or revised except as provided in the Plan. Optionholder further acknowledges that as of the Date of Grant, this Stock Option Grant Notice, the Option Agreement, and the Plan set forth the entire understanding between Optionholder and the Company regarding this option award and supersede all prior oral and written agreements, promises and/or representations on that subject with the exception of (i) options previously granted and delivered to Optionholder, (ii) any compensation recovery policy that is adopted by the Company or is otherwise required by applicable law and (iii) the terms of the following written agreement(s) between Optionholder and the Company: _None_________________. By accepting this option, Optionholder consents to receive such documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.


ARMATA PHARMACEUTICALS, INC.			OPTIONHOLDER:

By:

Signature

Title:			Date:
Date:

ATTACHMENTS : Option Agreement, 2016 Equity Incentive Plan and Notice of Exercise

ATTACHMENT I

ARMATA PHARMACEUTICALS, INC.

2016 EQUITY INCENTIVE PLAN

OPTION AGREEMENT

(INCENTIVE STOCK OPTION OR NONSTATUTORY STOCK OPTION)

Pursuant to your Stock Option Grant Notice (“ Grant Notice ”) and this Option Agreement, Armata Pharmaceuticals, Inc. (the “ Company ”) has granted you an option under its 2016 Equity Incentive Plan (the “ Plan ”) to purchase the number of shares of the Company’s Common Stock indicated in your Grant Notice at the exercise price indicated in your Grant Notice. The option is granted to you effective as of the date of grant set forth in the Grant Notice (the “ Date of Grant ”). If there is any conflict between the terms in this Option Agreement and the Plan, the terms of the Plan will control. Capitalized terms not explicitly defined in this Option Agreement or in the Grant Notice but defined in the Plan will have the same definitions as in the Plan.

The details of your option, in addition to those set forth in the Grant Notice and the Plan, are as follows:

1. VESTING. Subject to the provisions contained herein, your option will vest as provided in your Grant Notice. Vesting will cease upon the termination of your Continuous Service. If a Change in Control occurs and within one (1) month prior to, or within twelve (12) months after, the effective time of such Change in Control, your Continuous Service terminates due to an involuntary termination (not including death or Disability) without Cause or due to your voluntary termination with Good Reason, then, as of the date of termination of Continuous Service, the vesting and exercisability of your option will be accelerated in full.

(a) “ Good Reason ” means that one or more of the following are undertaken by the Company (or successor to the Company, if applicable) without your express written consent: (i) a material reduction in your annual base salary; provided, however , that Good Reason will not be deemed to have occurred in the event of a reduction in your annual base salary that is pursuant to a salary reduction program affecting substantially all of the employees of the Company and that does not adversely affect you to a greater extent than other similarly situated employees; (ii) a material reduction in your authority, duties or responsibilities; (iii) any failure by the Company to continue in effect any material benefit plan or program, including incentive plans or plans with respect to the receipt of securities of the Company, in which you were participating immediately prior to the effective date of the Change in Control (hereinafter referred to as “ Benefit Plans ”), or the taking of any action by the Company that would adversely affect your participation in or reduce your benefits under the Benefit Plans or deprive you of any fringe benefit that you enjoyed immediately prior to the effective date of the Change in Control; provided, however , that Good Reason will not be deemed to have occurred if the Company provides for your participation in benefit plans and programs that, taken as a whole, are comparable to the Benefit Plans; (iv) a relocation of your principal place of employment with the Company (or successor to the Company, if applicable) to a place that increases your one-way

commute by more than fifty (50) miles as compared to your then-current principal place of employment immediately prior to such relocation, except for required travel by you on the Company’s business to an extent substantially consistent with your business travel obligations prior to the effective date of the Change in Control; or (v) a material breach by the Company of any provision of the Plan or the Option Agreement or any other material agreement between you and the Company concerning the terms and conditions of your employment or service with the Company.

(b) If any payment or benefit you would receive from the Company or otherwise in connection with a Change in Control or other similar transaction (a “ 280G Payment ”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “ Excise Tax ”), then any such 280G Payment (a “ Payment ”) shall be equal to the Reduced Amount. The “ Reduced Amount ” shall be either (x) the largest portion of the Payment that would result in no portion of the Payment (after reduction) being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the Payment, whichever amount (i.e., the amount determined by clause (x) or by clause (y)), after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in your receipt, on an after-tax basis, of the greater economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in a Payment is required pursuant to the preceding sentence and the Reduced Amount is determined pursuant to clause (x) of the preceding sentence, the reduction shall occur in the manner (the “ Reduction Method ”) that results in the greatest economic benefit for you. If more than one method of reduction will result in the same economic benefit, the items so reduced will be reduced pro rata (the “ Pro Rata Reduction Method ”).

Notwithstanding the foregoing, if the Reduction Method or the Pro Rata Reduction Method would result in any portion of the Payment being subject to taxes pursuant to Section 409A of the Code that would not otherwise be subject to taxes pursuant to Section 409A of the Code, then the Reduction Method and/or the Pro Rata Reduction Method, as the case may be, shall be modified so as to avoid the imposition of taxes pursuant to Section 409A of the Code as follows: (A) as a first priority, the modification shall preserve to the greatest extent possible, the greatest economic benefit for you as determined on an after-tax basis; (B) as a second priority, Payments that are contingent on future events (e.g., being terminated without cause), shall be reduced (or eliminated) before Payments that are not contingent on future events; and (C) as a third priority, Payments that are “deferred compensation” within the meaning of Section 409A of the Code shall be reduced (or eliminated) before Payments that are not deferred compensation within the meaning of Section 409A of the Code.

Unless you and the Company agree on an alternative accounting firm, the accounting firm engaged by the Company for general tax compliance purposes as of the day prior to the effective date of the change of control transaction triggering the Payment shall perform the foregoing calculations. If the accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity or group effecting the change of control transaction, the Company shall appoint a nationally recognized accounting firm to make the determinations required hereunder. The Company shall bear all expenses with respect to the determinations by such accounting firm required to be made hereunder. The Company shall use

commercially reasonable efforts to cause the accounting firm engaged to make the determinations hereunder to provide its calculations, together with detailed supporting documentation, to you and the Company within fifteen (15) calendar days after the date on which your right to a 280G Payment becomes reasonably likely to occur (if requested at that time by you or the Company) or such other time as requested by you or the Company.

If you receive a Payment for which the Reduced Amount was determined pursuant to clause (x) of the first paragraph of this Section 1(b) and the Internal Revenue Service determines thereafter that some portion of the Payment is subject to the Excise Tax, you shall promptly return to the Company a sufficient amount of the Payment (after reduction pursuant to clause (x) of the first paragraph of this Section 1(b) so that no portion of the remaining Payment is subject to the Excise Tax. For the avoidance of doubt, if the Reduced Amount was determined pursuant to clause (y) in the first paragraph of this Section 1(b), you shall have no obligation to return any portion of the Payment pursuant to the preceding sentence.

2. NUMBER OF SHARES AND EXERCISE PRICE. The number of shares of Common Stock subject to your option and your exercise price per share in your Grant Notice will be adjusted for Capitalization Adjustments.

3. EXERCISE RESTRICTION FOR NON-EXEMPT EMPLOYEES. If you are an Employee eligible for overtime compensation under the Fair Labor Standards Act of 1938, as amended (that is, a “ Non-Exempt Employee ”), and except as otherwise provided in the Plan, you may not exercise your option until you have completed at least six (6) months of Continuous Service measured from the Date of Grant, even if you have already been an employee for more than six (6) months. Consistent with the provisions of the Worker Economic Opportunity Act, you may exercise your option as to any vested portion prior to such six (6) month anniversary in the case of (i) your death or disability, (ii) a Corporate Transaction in which your option is not assumed, continued or substituted, (iii) a Change in Control or (iv) your termination of Continuous Service on your “retirement” (as defined in the Company’s benefit plans).

4. EXERCISE PRIOR TO VESTING (“EARLY EXERCISE”). If permitted in your Grant Notice ( i.e. , the “Exercise Schedule” indicates “Early Exercise Permitted”) and subject to the provisions of your option, you may elect at any time that is both (i) during the period of your Continuous Service and (ii) during the term of your option, to exercise all or part of your option, including the unvested portion of your option; provided, however, that:

(a) a partial exercise of your option will be deemed to cover first vested shares of Common Stock and then the earliest vesting installment of unvested shares of Common Stock;

(b) any shares of Common Stock so purchased from installments that have not vested as of the date of exercise will be subject to the purchase option in favor of the Company as described in the Company’s form of Early Exercise Stock Purchase Agreement;

(c) you will enter into the Company’s form of Early Exercise Stock Purchase Agreement with a vesting schedule that will result in the same vesting as if no early exercise had occurred; and

(d) if your option is an Incentive Stock Option, then, to the extent that the aggregate Fair Market Value (determined at the Date of Grant) of the shares of Common Stock with respect to which your option plus all other Incentive Stock Options you hold are exercisable for the first time by you during any calendar year (under all plans of the Company and its Affiliates) exceeds one hundred thousand dollars ($100,000), your option(s) or portions thereof that exceed such limit (according to the order in which they were granted) will be treated as Nonstatutory Stock Options.

5. METHOD OF PAYMENT. You must pay the full amount of the exercise price for the shares you wish to exercise. You may pay the exercise price in cash or by check, bank draft or money order payable to the Company or in any other manner permitted by your Grant Notice, which may include one or more of the following:

(a) Provided that at the time of exercise the Common Stock is publicly traded, pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of Common Stock, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds. This manner of payment is also known as a “broker-assisted exercise”, “same day sale”, or “sell to cover”.

(b) Provided that at the time of exercise the Common Stock is publicly traded, by delivery to the Company (either by actual delivery or attestation) of already-owned shares of Common Stock that are owned free and clear of any liens, claims, encumbrances or security interests, and that are valued at Fair Market Value on the date of exercise. “Delivery” for these purposes, in the sole discretion of the Company at the time you exercise your option, will include delivery to the Company of your attestation of ownership of such shares of Common Stock in a form approved by the Company. You may not exercise your option by delivery to the Company of Common Stock if doing so would violate the provisions of any law, regulation or agreement restricting the redemption of the Company’s stock.

(c) If this option is a Nonstatutory Stock Option, subject to the consent of the Company at the time of exercise, by a “net exercise” arrangement pursuant to which the Company will reduce the number of shares of Common Stock issued upon exercise of your option by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price. You must pay any remaining balance of the aggregate exercise price not satisfied by the “net exercise” in cash or other permitted form of payment. Shares of Common Stock will no longer be outstanding under your option and will not be exercisable thereafter if those shares (i) are used to pay the exercise price pursuant to the “net exercise,” (ii) are delivered to you as a result of such exercise, and (iii) are withheld to satisfy your tax withholding obligations.

6. WHOLE SHARES. You may exercise your option only for whole shares of Common Stock.

7. SECURITIES LAW COMPLIANCE. In no event may you exercise your option unless the shares of Common Stock issuable upon exercise are then registered under the Securities Act or, if not registered, the Company has determined that your exercise and the

issuance of the shares would be exempt from the registration requirements of the Securities Act. The exercise of your option also must comply with all other applicable laws and regulations governing your option, and you may not exercise your option if the Company determines that such exercise would not be in material compliance with such laws and regulations (including any restrictions on exercise required for compliance with Treas. Reg. 1.401(k)-1(d)(3), if applicable).

8. TERM. You may not exercise your option before the Date of Grant or after the expiration of the option’s term. The term of your option expires, subject to the provisions of Section 5(h) of the Plan, upon the earliest of the following:

(a) immediately upon the termination of your Continuous Service for Cause;

(b) three (3) months after the termination of your Continuous Service for any reason other than Cause, your Disability or your death (except as otherwise provided in Section 8(d) below); provided, however, that if during any part of such three (3) month period your option is not exercisable solely because of the condition set forth in Section 7 above, your option will not expire until the earlier of the Expiration Date or until it has been exercisable for an aggregate period of three (3) months after the termination of your Continuous Service; provided further, if during any part of such three (3) month period, the sale of any Common Stock received upon exercise of your option would violate the Company’s insider trading policy, then your option will not expire until the earlier of the Expiration Date or until it has been exercisable for an aggregate period of three (3) months after the termination of your Continuous Service during which the sale of the Common Stock received upon exercise of your option would not be in violation of the Company’s insider trading policy. Notwithstanding the foregoing, if (i) you are a Non-Exempt Employee, (ii) your Continuous Service terminates within six (6) months after the Date of Grant, and (iii) you have vested in a portion of your option at the time of your termination of Continuous Service, your option will not expire until the earlier of (x) the later of (A) the date that is seven (7) months after the Date of Grant, and (B) the date that is three (3) months after the termination of your Continuous Service, and (y) the Expiration Date;

(c) twelve (12) months after the termination of your Continuous Service due to your Disability (except as otherwise provided in Section 8(d)) below;

(d) eighteen (18) months after your death if you die either during your Continuous Service or within three (3) months after your Continuous Service terminates for any reason other than Cause;

(e) the Expiration Date indicated in your Grant Notice; or

(f) the day before the tenth (10th) anniversary of the Date of Grant.

If your option is an Incentive Stock Option, note that to obtain the federal income tax advantages associated with an Incentive Stock Option, the Code requires that at all times beginning on the Date of Grant and ending on the day three (3) months before the date of your option’s exercise, you must be an employee of the Company or an Affiliate, except in the event of your death or Disability. The Company has provided for extended exercisability of your option under certain circumstances for your benefit but cannot guarantee that your option will necessarily be treated as an Incentive Stock Option if you continue to provide services to the

Company or an Affiliate as a Consultant or Director after your employment terminates or if you otherwise exercise your option more than three (3) months after the date your employment with the Company or an Affiliate terminates.

9. EXERCISE.

(a) You may exercise the vested portion of your option (and the unvested portion of your option if your Grant Notice so permits) during its term by (i) delivering a Notice of Exercise (in a form designated by the Company) or completing such other documents and/or procedures designated by the Company for exercise and (ii) paying the exercise price and any applicable withholding taxes to the Company’s Secretary, stock plan administrator, or such other person as the Company may designate, together with such additional documents as the Company may then require.

(b) By exercising your option you agree that, as a condition to any exercise of your option, the Company may require you to enter into an arrangement providing for the payment by you to the Company of any tax withholding obligation of the Company arising by reason of (i) the exercise of your option, (ii) the lapse of any substantial risk of forfeiture to which the shares of Common Stock are subject at the time of exercise, or (iii) the disposition of shares of Common Stock acquired upon such exercise.

(c) If your option is an Incentive Stock Option, by exercising your option you agree that you will notify the Company in writing within fifteen (15) days after the date of any disposition of any of the shares of the Common Stock issued upon exercise of your option that occurs within two (2) years after the Date of Grant or within one (1) year after such shares of Common Stock are transferred upon exercise of your option.

(d) By accepting your option you agree that you will not sell, dispose of, transfer, make any short sale of, grant any option for the purchase of, or enter into any hedging or similar transaction with the same economic effect as a sale, any shares of Common Stock or other securities of the Company held by you, for a period of one hundred eighty (180) days following the effective date of a registration statement of the Company filed under the Securities Act or such longer period as the underwriters or the Company will request to facilitate compliance with FINRA Rule 2711 or NYSE Member Rule 472 or any successor or similar rule s or regulation (the “ Lock-Up Period ”); provided, however , that nothing contained in this Section 9(d) will prevent the exercise of a repurchase option, if any, in favor of the Company during the Lock-Up Period. You further agree to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriters that are consistent with the foregoing or that are necessary to give further effect thereto. In order to enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to your shares of Common Stock until the end of such period. You also agree that any transferee of any shares of Common Stock (or other securities) of the Company held by you will be bound by this Section 9(d). The underwriters of the Company’s stock are intended third party beneficiaries of this Section 9(d) and will have the right, power and authority to enforce the provisions hereof as though they were a party hereto.

10. TRANSFERABILITY. Except as otherwise provided in this Section 10, your option is not transferable, except by will or by the laws of descent and distribution, and is exercisable during your life only by you.

(a) Certain Trusts. Upon receiving written permission from the Board or its duly authorized designee, you may transfer your option to a trust if you are considered to be the sole beneficial owner (determined under Section 671 of the Code and applicable state law) while the option is held in the trust. You and the trustee must enter into transfer and other agreements required by the Company.

(b) Domestic Relations Orders. Upon receiving written permission from the Board or its duly authorized designee, and provided that you and the designated transferee enter into transfer and other agreements required by the Company, you may transfer your option pursuant to the terms of a domestic relations order, official marital settlement agreement or other divorce or separation instrument as permitted by Treasury Regulation 1.421-1(b)(2) that contains the information required by the Company to effectuate the transfer. You are encouraged to discuss the proposed terms of any division of this option with the Company prior to finalizing the domestic relations order or marital settlement agreement to help ensure the required information is contained within the domestic relations order or marital settlement agreement. If this option is an Incentive Stock Option, this option may be deemed to be a Nonstatutory Stock Option as a result of such transfer.

(c) Beneficiary Designation. Upon receiving written permission from the Board or its duly authorized designee, you may, by delivering written notice to the Company, in a form approved by the Company and any broker designated by the Company to handle option exercises, designate a third party who, on your death, will thereafter be entitled to exercise this option and receive the Common Stock or other consideration resulting from such exercise. In the absence of such a designation, your executor or administrator of your estate will be entitled to exercise this option and receive, on behalf of your estate, the Common Stock or other consideration resulting from such exercise.

11. OPTION NOT A SERVICE CONTRACT. Your option is not an employment or service contract, and nothing in your option will be deemed to create in any way whatsoever any obligation on your part to continue in the employ of the Company or an Affiliate, or of the Company or an Affiliate to continue your employment. In addition, nothing in your option will obligate the Company or an Affiliate, their respective shareholders, boards of directors, officers or employees to continue any relationship that you might have as a Director or Consultant for the Company or an Affiliate.

12. WITHHOLDING OBLIGATIONS.

(a) At the time you exercise your option, in whole or in part, and at any time thereafter as requested by the Company, you hereby authorize withholding from payroll and any other amounts payable to you, and otherwise agree to make adequate provision for (including by means of a “same day sale” pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board to the extent permitted by the Company), any sums required to

satisfy the federal, state, local and foreign tax withholding obligations of the Company or an Affiliate, if any, which arise in connection with the exercise of your option.

(b) If this option is a Nonstatutory Stock Option, then upon your request and subject to approval by the Company, and compliance with any applicable legal conditions or restrictions, the Company may withhold from fully vested shares of Common Stock otherwise issuable to you upon the exercise of your option a number of whole shares of Common Stock having a Fair Market Value, determined by the Company as of the date of exercise, not in excess of the minimum amount of tax required to be withheld by law (or such lower amount as may be necessary to avoid classification of your option as a liability for financial accounting purposes). If the date of determination of any tax withholding obligation is deferred to a date later than the date of exercise of your option, share withholding pursuant to the preceding sentence shall not be permitted unless you make a proper and timely election under Section 83(b) of the Code, covering the aggregate number of shares of Common Stock acquired upon such exercise with respect to which such determination is otherwise deferred, to accelerate the determination of such tax withholding obligation to the date of exercise of your option. Notwithstanding the filing of such election, shares of Common Stock shall be withheld solely from fully vested shares of Common Stock determined as of the date of exercise of your option that are otherwise issuable to you upon such exercise. Any adverse consequences to you arising in connection with such share withholding procedure shall be your sole responsibility.

(c) You may not exercise your option unless the tax withholding obligations of the Company and/or any Affiliate are satisfied. Accordingly, you may not be able to exercise your option when desired even though your option is vested, and the Company will have no obligation to issue a certificate for such shares of Common Stock or release such shares of Common Stock from any escrow provided for herein, if applicable, unless such obligations are satisfied.

13. TAX CONSEQUENCES . You hereby agree that the Company does not have a duty to design or administer the Plan or its other compensation programs in a manner that minimizes your tax liabilities. You will not make any claim against the Company, or any of its Officers, Directors, Employees or Affiliates related to tax liabilities arising from your option or your other compensation. In particular, you acknowledge that this option is exempt from Section 409A of the Code only if the exercise price per share specified in the Grant Notice is at least equal to the “fair market value” per share of the Common Stock on the Date of Grant and there is no other impermissible deferral of compensation associated with the option.

14. NOTICES. Any notices provided for in your option or the Plan will be given in writing (including electronically) and will be deemed effectively given upon receipt or, in the case of notices delivered by mail by the Company to you, five (5) days after deposit in the United States mail, postage prepaid, addressed to you at the last address you provided to the Company. The Company may, in its sole discretion, decide to deliver any documents related to participation in the Plan and this option by electronic means or to request your consent to participate in the Plan by electronic means. By accepting this option, you consent to receive such documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

15. GOVERNING PLAN DOCUMENT. Your option is subject to all the provisions of the Plan, the provisions of which are hereby made a part of your option, and is further subject to all interpretations, amendments, rules and regulations, which may from time to time be promulgated and adopted pursuant to the Plan. If there is any conflict between the provisions of your option and those of the Plan, the provisions of the Plan will control. In addition, your option (and any compensation paid or shares issued under your option) is subject to recoupment in accordance with The Dodd–Frank Wall Street Reform and Consumer Protection Act and any implementing regulations thereunder, any clawback policy adopted by the Company and any compensation recovery policy otherwise required by applicable law.

16. OTHER DOCUMENTS. You hereby acknowledge receipt of and the right to receive a document providing the information required by Rule 428(b)(1) promulgated under the Securities Act, which includes the Plan prospectus. In addition, you acknowledge receipt of the Company’s policy permitting certain individuals to sell shares only during certain “window” periods and the Company’s insider trading policy, in effect from time to time.

17. EFFECT ON OTHER EMPLOYEE BENEFIT PLANS. The value of this option will not be included as compensation, earnings, salaries, or other similar terms used when calculating your benefits under any employee benefit plan sponsored by the Company or any Affiliate, except as such plan otherwise expressly provides. The Company expressly reserves its rights to amend, modify, or terminate any of the Company’s or any Affiliate’s employee benefit plans.

18. VOTING RIGHTS. You will not have voting or any other rights as a shareholder of the Company with respect to the shares to be issued pursuant to this option until such shares are issued to you. Upon such issuance, you will obtain full voting and other rights as a shareholder of the Company. Nothing contained in this option, and no action taken pursuant to its provisions, will create or be construed to create a trust of any kind or a fiduciary relationship between you and the Company or any other person.

19. SEVERABILITY. If all or any part of this Option Agreement or the Plan is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity will not invalidate any portion of this Option Agreement or the Plan not declared to be unlawful or invalid. Any Section of this Option Agreement (or part of such a Section) so declared to be unlawful or invalid shall, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid.

20. MISCELLANEOUS .

(a) The rights and obligations of the Company under your option will be transferable to any one or more persons or entities, and all covenants and agreements hereunder will inure to the benefit of, and be enforceable by the Company’s successors and assigns.

(b) You agree upon request to execute any further documents or instruments necessary or desirable in the sole determination of the Company to carry out the purposes or intent of your option.

(c) You acknowledge and agree that you have reviewed your option in its entirety, have had an opportunity to obtain the advice of counsel prior to executing and accepting your option, and fully understand all provisions of your option.

(d) This Option Agreement will be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.

(e) All obligations of the Company under the Plan and this Option Agreement will be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.

* * *

This Option Agreement will be deemed to be signed by you upon the signing by you of the Stock Option Grant Notice to which it is attached.

ATTACHMENT II

2016 EQUITY INCENTIVE PLAN

ATTACHMENT III

NOTICE OF EXERCISE

Armata Pharmaceuticals, Inc.

4503 Glencoe Avenue

Marina Del Rey, CA 90292

Date of Exercise: _______________

This constitutes notice to Armata Pharmaceuticals, Inc. (the “ Company ”) under my stock option that I elect to purchase the below number of shares of Common Stock of the Company (the “ Shares ”) for the price set forth below.

Type of option (check one):	Incentive ☐	Nonstatutory ☐
Stock option dated:	_______________	_______________
Number of Shares as to which option is exercised:	_______________	_______________
Certificates to be issued in name of:	_______________	_______________
Total exercise price:	$______________	$______________
Cash payment delivered herewith:	$______________	$______________
[Value of ________ Shares delivered herewith 2 :	$______________	$______________]
[Value of ________ Shares pursuant to net exercise 3 :	$______________	$______________]
[Regulation T Program (cashless exercise 4 ):	$______________	$______________]

2 Shares must meet the public trading requirements set forth in the option. Shares must be valued in accordance with the terms of the option being exercised, and must be owned free and clear of any liens, claims, encumbrances or security interests. Certificates must be endorsed or accompanied by an executed assignment separate from certificate.

3 The option must be a Nonstatutory Stock Option, and the Company must have established net exercise procedures at the time of exercise, in order to utilize this payment method.

4 Shares must meet the public trading requirements set forth in the option.

By this exercise, I agree (i) to provide such additional documents as you may require pursuant to the terms of the Armata Pharmaceuticals, Inc. 2016 Equity Incentive Plan, (ii) to provide for the payment by me to you (in the manner designated by you) of your withholding obligation, if any, relating to the exercise of this option, and (iii) if this exercise relates to an incentive stock option, to notify you in writing within fifteen (15) days after the date of any disposition of any of the Shares issued upon exercise of this option that occurs within two (2) years after the date of grant of this option or within one (1) year after such Shares are issued upon exercise of this option.

	Very truly yours,

Exhibit 10.10

ARMATA PHARMACEUTICALS, INC.

2016 EMPLOYEE STOCK PURCHASE PLAN

ADOPTED BY THE BOARD OF DIRECTORS: APRIL 21, 2016

APPROVED BY THE SHAREHOLDERS: JUNE 20, 2016

AMENDED BY THE BOARD OF DIRECTORS AND APPROVED BY THE SHAREHOLDERS: MAY 8, 2019

The Plan is hereby amended to reflect (i) the name change of AmpliPhi Biosciences Corporation to “Armata Pharmaceuticals, Inc.”, and (ii) the one-for-fourteen reverse stock split, which were approved by the shareholders and the Board of Directors of AmpliPhi Biosciences Corporation on May 8, 2019.

1. GENERAL; PURPOSE.

(a) The Plan provides a means by which Eligible Employees of the Company and certain designated Related Corporations may be given an opportunity to purchase shares of Common Stock. The Plan permits the Company to grant a series of Purchase Rights to Eligible Employees under an Employee Stock Purchase Plan.

(b) The Company, by means of the Plan, seeks to retain the services of such Employees, to secure and retain the services of new Employees and to provide incentives for such persons to exert maximum efforts for the success of the Company and its Related Corporations.

2. ADMINISTRATION.

(a) The Board will administer the Plan unless and until the Board delegates administration of the Plan to a Committee or Committees, as provided in Section 2(c).

(b) The Board will have the power, subject to, and within the limitations of, the express provisions of the Plan:

(i) To determine how and when Purchase Rights will be granted and the provisions of each Offering (which need not be identical).

(ii) To designate from time to time which Related Corporations of the Company will be eligible to participate in the Plan.

(iii) To construe and interpret the Plan and Purchase Rights, and to establish, amend and revoke rules and regulations for its administration. The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan, in a manner and to the extent it deems necessary or expedient to make the Plan fully effective.

(iv) To settle all controversies regarding the Plan and Purchase Rights granted under the Plan.

(v) To suspend or terminate the Plan at any time as provided in Section 12.

(vi) To amend the Plan at any time as provided in Section 12.

(vii) Generally, to exercise such powers and to perform such acts as it deems necessary or expedient to promote the best interests of the Company and its Related Corporations and to carry out the intent that the Plan be treated as an Employee Stock Purchase Plan.

(viii) To adopt such procedures and sub-plans as are necessary or appropriate to permit participation in the Plan by Employees who are foreign nationals or employed outside the United States.

(c) The Board may delegate some or all of the administration of the Plan to a Committee or Committees. If administration is delegated to a Committee, the Committee will have, in connection with the administration of the

Plan, the powers theretofore possessed by the Board that have been delegated to the Committee, including the power to delegate to a subcommittee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board will thereafter be to the Committee or subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. The Board may retain the authority to concurrently administer the Plan with the Committee and may, at any time, revest in the Board some or all of the powers previously delegated. Whether or not the Board has delegated administration of the Plan to a Committee, the Board will have the final power to determine all questions of policy and expediency that may arise in the administration of the Plan.

(d) All determinations, interpretations and constructions made by the Board in good faith will not be subject to review by any person and will be final, binding and conclusive on all persons.

3. SHARES OF COMMON STOCK SUBJECT TO THE PLAN. 1

(a) Subject to the provisions of Section 11(a) relating to Capitalization Adjustments, the maximum number of shares of Common Stock that may be issued under the Plan will not exceed [8,571] shares of Common Stock, plus the number of shares of Common Stock that are automatically added on January 1st of each year for a period of up to ten years, commencing on the first January 1 following the Effective Date and ending on (and including) January 1, 2026, in an amount equal to the lesser of (i) 1% of the total number of shares of Capital Stock outstanding on December 31st of the preceding calendar year, and (ii) [21,428] shares of Common Stock. Notwithstanding the foregoing, the Board may act prior to the first day of any calendar year to provide that there will be no January 1 st increase in the share reserve for such calendar year or that the increase in the share reserve for such calendar year will be a lesser number of shares of Common Stock than would otherwise occur pursuant to the preceding sentence.

(b) If any Purchase Right granted under the Plan terminates without having been exercised in full, the shares of Common Stock not purchased under such Purchase Right will again become available for issuance under the Plan.

(c) The stock purchasable under the Plan will be shares of authorized but unissued or reacquired Common Stock, including shares repurchased by the Company on the open market.

4. GRANT OF PURCHASE RIGHTS; OFFERING.

(a) The Board may from time to time grant or provide for the grant of Purchase Rights to Eligible Employees under an Offering (consisting of one or more Purchase Periods) on an Offering Date or Offering Dates selected by the Board. Each Offering will be in such form and will contain such terms and conditions as the Board will deem appropriate, and will comply with the requirement of Section 423(b)(5) of the Code that all Employees granted Purchase Rights will have the same rights and privileges. The terms and conditions of an Offering shall be incorporated by reference into the Plan and treated as part of the Plan. The provisions of separate Offerings need not be identical, but each Offering will include (through incorporation of the provisions of this Plan by reference in the document comprising the Offering or otherwise) the period during which the Offering will be effective, which period will not exceed 27 months beginning with the Offering Date, and the substance of the provisions contained in Sections 5 through 8, inclusive.

(b) If a Participant has more than one Purchase Right outstanding under the Plan, unless he or she otherwise indicates in forms delivered to the Company: (i) each form will apply to all of his or her Purchase Rights under the Plan, and (ii) a Purchase Right with a lower exercise price (or an earlier-granted Purchase Right, if different Purchase Rights have identical exercise prices) will be exercised to the fullest possible extent before a Purchase Right with a higher exercise price (or a later-granted Purchase Right if different Purchase Rights have identical exercise prices) will be exercised.

(c) The Board will have the discretion to structure an Offering so that if the Fair Market Value of a share of Common Stock on the first Trading Day of a new Purchase Period within that Offering is less than or equal to the

1 NTD: Armata to confirm the post-reverse stock split numbers.

Fair Market Value of a share of Common Stock on the Offering Date for that Offering, then (i) that Offering will terminate immediately as of that first Trading Day, and (ii) the Participants in such terminated Offering will be automatically enrolled in a new Offering beginning on the first Trading Day of such new Purchase Period.

5. ELIGIBILITY.

(a) Purchase Rights may be granted only to Employees of the Company or, as the Board may designate in accordance with Section 2(b), to Employees of a Related Corporation. Except as provided in Section 5(b), an Employee will not be eligible to be granted Purchase Rights unless, on the Offering Date, the Employee has been in the employ of the Company or the Related Corporation, as the case may be, for such continuous period preceding such Offering Date as the Board may require, but in no event will the required period of continuous employment be equal to or greater than two years. In addition, the Board may provide that no Employee will be eligible to be granted Purchase Rights under the Plan unless, on the Offering Date, such Employee’s customary employment with the Company or the Related Corporation is more than 20 hours per week and more than five months per calendar year or such other criteria as the Board may determine consistent with Section 423 of the Code.

(b) The Board may provide that each person who, during the course of an Offering, first becomes an Eligible Employee will, on a date or dates specified in the Offering which coincides with the day on which such person becomes an Eligible Employee or which occurs thereafter, receive a Purchase Right under that Offering, which Purchase Right will thereafter be deemed to be a part of that Offering. Such Purchase Right will have the same characteristics as any Purchase Rights originally granted under that Offering, as described herein, except that:

(i) the date on which such Purchase Right is granted will be the “Offering Date” of such Purchase Right for all purposes, including determination of the exercise price of such Purchase Right;

(ii) the period of the Offering with respect to such Purchase Right will begin on its Offering Date and end coincident with the end of such Offering; and

(iii) the Board may provide that if such person first becomes an Eligible Employee within a specified period of time before the end of the Offering, he or she will not receive any Purchase Right under that Offering.

(c) No Employee will be eligible for the grant of any Purchase Rights if, immediately after any such Purchase Rights are granted, such Employee owns stock possessing five percent or more of the total combined voting power or value of all classes of stock of the Company or of any Related Corporation. For purposes of this Section 5(c), the rules of Section 424(d) of the Code will apply in determining the stock ownership of any Employee, and stock which such Employee may purchase under all outstanding Purchase Rights and options will be treated as stock owned by such Employee.

(d) As specified by Section 423(b)(8) of the Code, an Eligible Employee may be granted Purchase Rights only if such Purchase Rights, together with any other rights granted under all Employee Stock Purchase Plans of the Company and any Related Corporations, do not permit such Eligible Employee’s rights to purchase stock of the Company or any Related Corporation to accrue at a rate which exceeds $25,000 of Fair Market Value of such stock (determined at the time such rights are granted, and which, with respect to the Plan, will be determined as of their respective Offering Dates) for each calendar year in which such rights are outstanding at any time.

(e) Officers of the Company and any designated Related Corporation, if they are otherwise Eligible Employees, will be eligible to participate in Offerings under the Plan. Notwithstanding the foregoing, the Board may provide in an Offering that Employees who are highly compensated Employees within the meaning of Section 423(b)(4)(D) of the Code will not be eligible to participate.

6. PURCHASE RIGHTS; PURCHASE PRICE.

(a) On each Offering Date, each Eligible Employee, pursuant to an Offering made under the Plan, will be granted a Purchase Right to purchase up to that number of shares of Common Stock purchasable either with a percentage or with a maximum dollar amount, as designated by the Board, but in either case not exceeding 15% of

such Employee’s earnings (as defined by the Board in each Offering) during the period that begins on the Offering Date (or such later date as the Board determines for a particular Offering) and ends on the date stated in the Offering, which date will be no later than the end of the Offering.

(b) The Board will establish one or more Purchase Dates during an Offering on which Purchase Rights granted for that Offering will be exercised and shares of Common Stock will be purchased in accordance with such Offering.

(c) In connection with each Offering made under the Plan, the Board may specify (i) a maximum number of shares of Common Stock that may be purchased by any Participant on any Purchase Date during such Offering, (ii) a maximum aggregate number of shares of Common Stock that may be purchased by all Participants pursuant to such Offering and/or (iii) a maximum aggregate number of shares of Common Stock that may be purchased by all Participants on any Purchase Date under the Offering. If the aggregate purchase of shares of Common Stock issuable upon exercise of Purchase Rights granted under the Offering would exceed any such maximum aggregate number, then, in the absence of any Board action otherwise, a pro rata (based on each Participant’s accumulated Contributions) allocation of the shares of Common Stock available will be made in as nearly a uniform manner as will be practicable and equitable.

(d) The purchase price of shares of Common Stock acquired pursuant to Purchase Rights will be not less than the lesser of:

(i) an amount equal to 85% of the Fair Market Value of the shares of Common Stock on the Offering Date; or

(ii) an amount equal to 85% of the Fair Market Value of the shares of Common Stock on the applicable Purchase Date.

7. PARTICIPATION; WITHDRAWAL; TERMINATION.

(a) An Eligible Employee may elect to authorize payroll deductions as the means of making Contributions by completing and delivering to the Company, within the time specified in the Offering, an enrollment form provided by the Company. The enrollment form will specify the amount of Contributions not to exceed the maximum amount specified by the Board. Each Participant’s Contributions will be credited to a bookkeeping account for such Participant under the Plan and will be deposited with the general funds of the Company except where applicable law requires that Contributions be deposited with a third party. If permitted in the Offering, a Participant may begin such Contributions with the first payroll occurring on or after the Offering Date (or, in the case of a payroll date that occurs after the end of the prior Offering but before the Offering Date of the next new Offering, Contributions from such payroll will be included in the new Offering). If permitted in the Offering, a Participant may thereafter reduce (including to zero) or increase his or her Contributions. If specifically provided in the Offering, in addition to making Contributions by payroll deductions, a Participant may make Contributions through the payment by cash or check prior to a Purchase Date.

(b) During an Offering, a Participant may cease making Contributions and withdraw from the Offering by delivering to the Company a withdrawal form provided by the Company. The Company may impose a deadline before a Purchase Date for withdrawing. Upon such withdrawal, such Participant’s Purchase Right in that Offering will immediately terminate and the Company will distribute to such Participant all of his or her accumulated but unused Contributions and such Participant’s Purchase Right in that Offering shall thereupon terminate. A Participant’s withdrawal from that Offering will have no effect upon his or her eligibility to participate in any other Offerings under the Plan, but such Participant will be required to deliver a new enrollment form to participate in subsequent Offerings.

(c) Purchase Rights granted pursuant to any Offering under the Plan will terminate immediately if the Participant either (i) is no longer an Employee for any reason or for no reason (subject to any post-employment participation period required by law) or (ii) is otherwise no longer eligible to participate. The Company will distribute to such individual all of his or her accumulated but unused Contributions.

(d) During a Participant’s lifetime, Purchase Rights will be exercisable only by such Participant. Purchase Rights are not transferable by a Participant, except by will, by the laws of descent and distribution, or, if permitted by the Company, by a beneficiary designation as described in Section 10.

(e) Unless otherwise specified in the Offering, the Company will have no obligation to pay interest on Contributions.

8. EXERCISE OF PURCHASE RIGHTS.

(a) On each Purchase Date, each Participant’s accumulated Contributions will be applied to the purchase of shares of Common Stock, up to the maximum number of shares of Common Stock permitted by the Plan and the applicable Offering, at the purchase price specified in the Offering. No fractional shares will be issued unless specifically provided for in the Offering.

(b) If any amount of accumulated Contributions remains in a Participant’s account after the purchase of shares of Common Stock and such remaining amount is less than the amount required to purchase one share of Common Stock on the final Purchase Date of an Offering, then such remaining amount will be held in such Participant’s account for the purchase of shares of Common Stock under the next Offering under the Plan, unless such Participant withdraws from or is not eligible to participate in such Offering, in which case such amount will be distributed to such Participant after the final Purchase Date, without interest. If the amount of Contributions remaining in a Participant’s account after the purchase of shares of Common Stock is at least equal to the amount required to purchase one whole share of Common Stock on the final Purchase Date of an Offering, then such remaining amount will not roll over to the next Offering and will instead be distributed in full to such Participant after the final Purchase Date of such Offering without interest.

(c) No Purchase Rights may be exercised to any extent unless the shares of Common Stock to be issued upon such exercise under the Plan are covered by an effective registration statement pursuant to the Securities Act and the Plan is in material compliance with all applicable federal, state, foreign and other securities and other laws applicable to the Plan. If on a Purchase Date the shares of Common Stock are not so registered or the Plan is not in such compliance, no Purchase Rights will be exercised on such Purchase Date, and the Purchase Date will be delayed until the shares of Common Stock are subject to such an effective registration statement and the Plan is in material compliance, except that the Purchase Date will in no event be more than six months from the Offering Date. If, on the Purchase Date, as delayed to the maximum extent permissible, the shares of Common Stock are not registered and the Plan is not in material compliance with all applicable laws, no Purchase Rights will be exercised and all accumulated but unused Contributions will be distributed to the Participants without interest.

9. COVENANTS OF THE COMPANY.

The Company will seek to obtain from each federal, state, foreign or other regulatory commission or agency having jurisdiction over the Plan such authority as may be required to grant Purchase Rights and issue and sell shares of Common Stock thereunder. If, after commercially reasonable efforts, the Company is unable to obtain the authority that counsel for the Company deems necessary for the grant of Purchase Rights or the lawful issuance and sale of Common Stock under the Plan, and at a commercially reasonable cost, the Company will be relieved from any liability for failure to grant Purchase Rights and/or to issue and sell Common Stock upon exercise of such Purchase Rights.

10. DESIGNATION OF BENEFICIARY.

(a) The Company may, but is not obligated to, permit a Participant to submit a form designating a beneficiary who will receive any shares of Common Stock and/or Contributions from the Participant’s account under the Plan if the Participant dies before such shares and/or Contributions are delivered to the Participant. The Company may, but is not obligated to, permit the Participant to change such designation of beneficiary. Any such designation and/or change must be on a form approved by the Company.

(b) If a Participant dies, and in the absence of a valid beneficiary designation, the Company will deliver any shares of Common Stock and/or Contributions to the executor or administrator of the estate of the Participant. If no

executor or administrator has been appointed (to the knowledge of the Company), the Company, in its sole discretion, may deliver such shares of Common Stock and/or Contributions to the Participant’s spouse, dependents or relatives, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate.

11. ADJUSTMENTS UPON CHANGES IN COMMON STOCK; CORPORATE TRANSACTIONS.

(a) In the event of a Capitalization Adjustment, the Board will appropriately and proportionately adjust: (i) the class(es) and maximum number of securities subject to the Plan pursuant to Section 3(a), (ii) the class(es) and maximum number of securities by which the share reserve is to increase automatically each year pursuant to Section 3(a), (iii) the class(es) and number of securities subject to, and the purchase price applicable to outstanding Offerings and Purchase Rights, and (iv) the class(es) and number of securities that are the subject of the purchase limits under each ongoing Offering. The Board will make these adjustments, and its determination will be final, binding and conclusive.

(b) In the event of a Corporate Transaction, then: (i) any surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company) may assume or continue outstanding Purchase Rights or may substitute similar rights (including a right to acquire the same consideration paid to the shareholders in the Corporate Transaction) for outstanding Purchase Rights, or (ii) if any surviving or acquiring corporation (or its parent company)does not assume or continue such Purchase Rights or does not substitute similar rights for such Purchase Rights, then the Participants’ accumulated Contributions will be used to purchase shares of Common Stock within ten business days prior to the Corporate Transaction under the outstanding Purchase Rights, and the Purchase Rights will terminate immediately after such purchase.

12. AMENDMENT, TERMINATION OR SUSPENSION OF THE PLAN.

(a) The Board may amend the Plan at any time in any respect the Board deems necessary or advisable. However, except as provided in Section 11(a) relating to Capitalization Adjustments, shareholder approval will be required for any amendment of the Plan for which shareholder approval is required by applicable law or listing requirements, including any amendment that either (i) materially increases the number of shares of Common Stock available for issuance under the Plan, (ii) materially expands the class of individuals eligible to become Participants and receive Purchase Rights, (iii) materially increases the benefits accruing to Participants under the Plan or materially reduces the price at which shares of Common Stock may be purchased under the Plan, (iv) materially extends the term of the Plan, or (v) expands the types of awards available for issuance under the Plan, but in each of (i) through (v) above only to the extent shareholder approval is required by applicable law or listing requirements.

(b) The Board may suspend or terminate the Plan at any time. No Purchase Rights may be granted under the Plan while the Plan is suspended or after it is terminated.

(c) Any benefits, privileges, entitlements and obligations under any outstanding Purchase Rights granted before an amendment, suspension or termination of the Plan will not be materially impaired by any such amendment, suspension or termination except (i) with the consent of the person to whom such Purchase Rights were granted, (ii) as necessary to comply with any laws, listing requirements, or governmental regulations (including, without limitation, the provisions of Section 423 of the Code and the regulations and other interpretive guidance issued thereunder relating to Employee Stock Purchase Plans) including without limitation any such regulations or other guidance that may be issued or amended after the date the Plan is adopted by the Board, or (iii) as necessary to obtain or maintain favorable tax, listing, or regulatory treatment. To be clear, the Board may amend outstanding Purchase Rights without a Participant’s consent if such amendment is necessary to ensure that the Purchase Right and/or the Plan complies with the requirements of Section 423 of the Code.

13. EFFECTIVE DATE OF PLAN.

The Plan will become effective immediately prior to and contingent upon the Effective Date. No Purchase Rights will be exercised unless and until the Plan has been approved by the shareholders of the Company, which approval must be within 12 months before or after the date the Plan is adopted (or if required under Section 12(a) above, materially amended) by the Board.

14. MISCELLANEOUS PROVISIONS.

(a) Proceeds from the sale of shares of Common Stock pursuant to Purchase Rights will constitute general funds of the Company.

(b) A Participant will not be deemed to be the holder of, or to have any of the rights of a holder with respect to, shares of Common Stock subject to Purchase Rights unless and until the Participant’s shares of Common Stock acquired upon exercise of Purchase Rights are recorded in the books of the Company (or its transfer agent).

(c) The Plan and Offering do not constitute an employment contract. Nothing in the Plan or in the Offering will in any way alter the at will nature of a Participant’s employment or be deemed to create in any way whatsoever any obligation on the part of any Participant to continue in the employ of the Company or a Related Corporation, or on the part of the Company or a Related Corporation to continue the employment of a Participant.

(d) The provisions of the Plan will be governed by the laws of the State of Delaware without resort to that state’s conflicts of laws rules.

15. DEFINITIONS.

As used in the Plan, the following definitions will apply to the capitalized terms indicated below:

(a) “ Board ”means the Board of Directors of the Company.

(b) “ Capital Stock ”means each and every class of common stock of the Company, regardless of the number of votes per share.

(c) “ Capitalization Adjustment ” means any change that is made in, or other events that occur with respect to, the Common Stock subject to the Plan or subject to any Purchase Right after the date the Plan is adopted by the Board without the receipt of consideration by the Company through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, large nonrecurring cash dividend, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other similar equity restructuring transaction, as that term is used in Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor thereto). Notwithstanding the foregoing, the conversion of any convertible securities of the Company will not be treated as a Capitalization Adjustment.

(d) “ Code ”means the Internal Revenue Code of 1986, as amended, including any applicable regulations and guidance thereunder .

(a) “ Committee ”means a committee of one or more members of the Board to whom authority has been delegated by the Board in accordance with Section 2(c).

(e) “ Common Stock ” means the common stock of the Company, having one vote per share.

(f) “ Company ” means Armata Pharmaceuticals, Inc. (f/k/a AmpliPhi Biosciences Corporation).

(g) “Contributions ” means the payroll deductions and other additional payments specifically provided for in the Offering that a Participant contributes to fund the exercise of a Purchase Right. A Participant may make additional payments into his or her account if specifically provided for in the Offering, and then only if the Participant has not already had the maximum permitted amount withheld during the Offering through payroll deductions.

(h) “ Corporate Transaction ” means the consummation, in a single transaction or in a series of related transactions, of any one or more of the following events:

(i) a saleor other disposition of all or substantially all, as determined by the Board in its sole discretion, of the consolidated assets of the Company and its Subsidiaries;

(ii) a sale or other disposition of more than 50% of the outstanding securities of the Company;

(iii) a merger, consolidation or similar transaction following which the Company is not the surviving corporation; or

(iv) a merger, consolidation or similar transaction following which the Company is the surviving corporation but the shares of Common Stock outstanding immediately preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of the merger, consolidation or similar transaction into other property, whether in the form of securities, cash or otherwise.

(i) “ Director ”means a member of the Board.

(j) “ Effective Date ” means the date of the Company shareholders approve this Plan, which is the date of the annual meeting of shareholders of the Company held on June 20, 2016 provided this Plan is approved by the Company’s shareholders at such meeting.

(k) “ Eligible Employee ”means an Employee who meets the requirements set forth in the document(s) governing the Offering for eligibility to participate in the Offering, provided that such Employee also meets the requirements for eligibility to participate set forth in the Plan.

(l) “ Employee ”means any person, including an Officer or Director, who is “employed” for purposes of Section 423(b)(4) of the Code by the Company or a Related Corporation. However, service solely as a Director, or payment of a fee for such services, will not cause a Director to be considered an “Employee” for purposes of the Plan.

(m) “ Employee Stock Purchase Plan ”means a plan that grants Purchase Rights intended to be options issued under an “employee stock purchase plan,” as that term is defined in Section 423(b) of the Code.

(n) “ Exchange Act ”means the Securities Exchange Act of 1934, as amended and the rules and regulations promulgated thereunder.

(o) “ Fair Market Value ” means, as of any date, the value of the Common Stock determined as follows:

(i) If the Common Stock is listed on any established stock exchange or traded on any established market, the Fair Market Value of a share of Common Stock will be the closing sales price for such stock as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in the Common Stock) on the date of determination , as reported in such source as the Board deems reliable. Unless otherwise provided by the Board, if there is no closing sales price for the Common Stock on the date of determination, then the Fair Market Value will be the closing sales price on the last preceding date for which such quotation exists.

(ii) In the absence of such markets for the Common Stock, the Fair Market Value will be determined by the Board in good faith in compliance with applicable laws and in a manner that complies with Sections 409A of the Code.

(p) “ Offering ”means the grant to Eligible Employees of Purchase Rights, with the exercise of those Purchase Rights automatically occurring at the end of one or more Purchase Periods. The terms and conditions of an Offering will generally be set forth in the “ Offering Document ” approved by the Board for that Offering.

(q) “ Offering Date ” means a date selected by the Board for an Offering to commence.

(r) “ Officer ”meansa person who is an officer of the Company or a Related Corporation within the meaning of Section 16 of the Exchange Act.

(s) “ Participant ”means an Eligible Employee who holds an outstanding Purchase Right.

(t) “ Plan ”means this Armata Pharmaceuticals, Inc. 2016 Employee Stock Purchase Plan.

(u) “ Purchase Date ”means one or more dates during an Offering selected by the Board on which Purchase Rights will be exercised and on which purchases of shares of Common Stock will be carried out in accordance with such Offering.

(v) “ Purchase Period ” means a period of time specified within an Offering, generally beginning on the Offering Date or on the first Trading Day following a Purchase Date, and ending on a Purchase Date. An Offering may consist of one or more Purchase Periods.

(w) “ Purchase Right ”means an option to purchase shares of Common Stock granted pursuant to the Plan.

(x) “ Related Corporation ”means any “parent corporation” or “subsidiary corporation” of the Company whether now or subsequently established, as those terms are defined in Sections 424(e) and (f), respectively, of the Code.

(y) “ Securities Act ”means the Securities Act of 1933, as amended.

(z) “ Trading Day ”means any day on which the exchange(s) or market(s) on which shares of Common Stock are listed, including but not limited to the NYSE, Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq Capital Market or any successors thereto, is open for trading.

Exhibit 10.11

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY [***]
HAS BEEN OMITTED BECAUSE IT IS NOT MATERIAL AND WOULD LIKELY CAUSE
COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED.

Execution Copy

RESEARCH COLLABORATION AND OPTION TO LICENSE AGREEMENT

by and between

SYNTHETIC GENOMICS, INC.

and

MERCK SHARP & DOHME CORP.

Execution Copy

TABLE OF CONTENTS

10
Article 1 DEFINITIONS.		1
Article 2 RESEARCH PROGRAM		10
2.1	General	10
2.2	Performance of Research Plan	10
2.3	Joint Steering Committee	10
2.4	Alliance Managers	11
2.5	Exchange of Information	12
2.6	Records and Reports	12
2.7	Research Information and Inventions	12
2.8	Term of the Research Program(s)	13
2.9	Compliance with Law and Ethical Business Practices	13
2.10	Animal Research	14
2.11	Materials	14
Article 3 OPTION TO LICENSE; LICENSE; DEVELOPMENT AND COMMERCIALIZATION.		15
3.1	Option	15
3.2	Following Option Exercise by Merck.	15
3.3	No Implied Licenses	16
3.4	No Grant of Inconsistent Rights by Company	16
3.5	Sublicenses	16
3.6	Development and Commercialization	17
3.7	Exclusivity	17
Article 4 CONFIDENTIALITY AND PUBLICATION.		17
4.1	Nondisclosure Obligation	17
4.2	Publication	19
4.3	Publicity/Use of Names	19
Article 5 PAYMENTS; ROYALTIES AND REPORTS		20
5.1	Payments During the Research Program	20
5.2	Payments Upon and After Option Exercise (if any)	21
Article 6 REPRESENTATIONS AND WARRANTIES		27

Execution Copy


6.1	Representations and Warranties of Each Party	27
6.2	Company Representations and Warranties	28
6.3	Warranty Disclaimer	28
Article 7 PATENT PROVISIONS.		28
7.1	Filing, Prosecution and Maintenance of Patents	28
7.2	Interference, Derivation, Opposition, Reexamination, Reissue, Supplemental Examination, Inter Partes Review and Post-Grant Review Proceedings	33
7.3	Enforcement and Defense	34
Article 8 TERM AND TERMINATION		36
8.1	Term and Expiration	36
8.2	Termination by Merck	36
8.3	Termination for Cause	36
8.4	Effects of Termination	38
8.5	Effect of Expiration or Termination; Survival	38
Article 9 MISCELLANEOUS		39
9.1	Indemnification	39
9.2	Limitation of Liability	39
9.3	Force Majeure	40
9.4	Assignment	40
9.5	Use of Affiliates	40
9.6	Severability	40
9.7	Notices	40
9.8	Applicable Law	41
9.9	Dispute Resolution	41
9.10	Entire Agreement; Amendments	42
9.11	Headings	43
9.12	Independent Contractors	43
9.13	Waiver	43
9.14	Waiver of Rule of Construction	43
9.15	Certain Conventions.	43
9.16	Business Day Requirements	43
9.17	Counterparts	43

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RESEARCH COLLABORATION AND OPTION TO LICENSE AGREEMENT

This Research Collaboration and Option to License Agreement (this “Agreement” ) is effective as of May 22, 2017 (the “Effective Date” ) and is entered into by and between SYNTHETIC GENOMICS, INC., a corporation organized and existing under the laws of Delaware ( “Company” ), and MERCK SHARP & DOHME CORP., a corporation organized and existing under the laws of New Jersey ( “Merck” ).

RECITALS:

WHEREAS , Company has developed and is the owner of certain proprietary technology relating to engineering bacteriophages;

WHEREAS , Merck is interested in working with the Company to generate a [***] bacteriophage targeting [***] and, [***]

WHEREAS , through the [***] Research Plan (as defined below), and, if entered into pursuant to the terms hereof, the [***] Research Plan (as defined below), the Company will endeavor to generate bacteriophages meeting certain criteria as set forth herein; and

WHEREAS , during the term of the License Option (as defined below), Merck shall have the exclusive option to exclusively license any such bacteriophage meeting such criteria.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants contained herein, the receipt and sufficiency of which are hereby acknowledged, Company and Merck hereby agree as follows:

ARTICLE 1 DEFINITIONS.

Unless specifically set forth to the contrary herein, the following terms, whether used in the singular or plural, shall have the respective meanings set forth below.

1.1 “ AAALAC ” means the Association for Assessment and Accreditation of Laboratory Animal Care International.

1.2 “ Act ” means, as applicable, the United States Federal Food, Drug and Cosmetic Act, 21 U.S.C. §§ 301 et seq., and/or the Public Health Service Act, 42 U.S.C. §§ 262 et seq., as amended from time to time.

1.3 “ Affiliate ” means (i) any corporation or business entity of which, now or hereafter, fifty percent (50%) or more of the securities or other ownership interests representing the equity, the voting

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stock or general partnership interest are owned, controlled or held, directly or indirectly, by Merck or Company; or (ii) any corporation or business entity which, now or hereafter, directly or indirectly, owns, controls or holds fifty percent (50%) (or the maximum ownership interest permitted by law) or more of the securities or other ownership interests representing the equity, the voting stock or, if applicable, the general partnership interest, of Merck or Company. A corporation or entity shall be deemed to be an Affiliate only during the period for which it meets the foregoing criteria.

1.4 “ Agreement ” has the meaning given such term in the preamble to this document.

1.5 “ Agreement Payments ” has the meaning set forth in Section 5.2.7.

1.6 “ Alliance Manager ” has the meaning set forth in Section 2.4.

1.7 “ Calendar Quarter ” means the respective periods of three (3) consecutive calendar months ending on March 31, June 30, September 30 and December 31.

1.8 “ Calendar Year ” means each successive period of twelve (12) months commencing on January 1 and ending on December 31.

1.9 “ Clinical Trial ” means a Phase I Clinical Trial, Phase II Clinical Trial, Phase IIb Clinical Trial, Phase III Clinical Trial, and/or Post-approval Clinical Trial.

1.10 “ Code ” has the meaning set forth in Section 8.3.3.

1.11 “Combination Product” means a Product that includes one or more pharmaceutically active ingredients other than Product Candidate in combination with Product Candidate.

1.12 “ Commercially Reasonable Efforts ” means, with respect to the efforts to be expended by a Party with respect to any objective, such reasonable and diligent efforts to accomplish such objective as such party would normally use to accomplish a similar objective under similar circumstances, but in any event no less than the efforts consistent with those used by similarly situated companies in the pharmaceutical industry. It is understood and agreed that with respect to the research, development and sale of Product by either Party, such efforts shall be substantially equivalent to those efforts and resources commonly used by such Party for pharmaceutical or biological products owned by such Party or to which such Party has rights (and in any event no less than the efforts consistent with those used by similarly situated companies in the pharmaceutical industry), which product is at a similar stage in its development or product life and is of similar market potential taking into account efficacy, safety, approved labeling, the competitiveness of alternative products in the marketplace, the patent and other proprietary position of the product, the likelihood of regulatory approval given the Regulatory Authority involved, the profitability of the product including the amounts payable to licensors of patent or other intellectual property rights, alternative products, other risks associated with the development or commercialization of the product and other relevant factors. Commercially Reasonable Efforts shall be determined on a market-by-market basis for a particular Product, and it is anticipated that the level of effort will be different for different markets, and will change over time, reflecting among other things changes in the status of the Product and the market(s) involved.

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1.13 “Committee ” has the meaning set forth in Section 2.3.

1.14 “ Company ” has the meaning given such term in the preamble to this Agreement.

1.15 “ Company Background IP ” means (a) the Patent Rights set forth on Schedule 1.12 and know-how owned or controlled by Company or any of its Affiliates as of the Effective Date and (b) the Company Platform Improvements.

1.16 “ Company Indemnified Parties ” has the meaning set forth in Section 9.1.1.

1.17 “ Company Information and Inventions ” means all protocols, formulas, data, Inventions (but not Company Platform Improvements), know-how and trade secrets, patentable or otherwise, resulting from the Research Program developed or invented solely by employee(s) of Company and/or its Affiliates, and/or a Third Party acting on behalf of Company and/or its Affiliates and not employed by Merck and/or its Affiliates.

1.18 “ Company Know-How ” means all information and materials, including but not limited to discoveries, improvements, processes, methods, protocols, formulas, data, inventions (including without limitation Company Information and Inventions and Company’s rights in Joint Information and Inventions), know-how and trade secrets, patentable or otherwise (but excluding any Company Patent Rights in any of the foregoing), which during the term of this Agreement (i) are in the possession of, and owned or controlled by, Company or its Affiliates, (ii) are not generally known and (iii) are reasonably necessary for the manufacture, marketing, use or sale of Product Candidate or Product in the Territory.

1.19 “Company Patent Rights ” means Patent Rights that claim or cover Company Information and Inventions.

1.20 “Company Platform Improvements” means all Inventions relating to an improvement or enhancement to any invention, process or technique claimed in or covered by the Patent Rights within clause (a) of the definition of Company Background IP, including to any invention, process or technique that relies upon or infringes any Patent Rights within clause (a) of the definition of Company Background IP.

1.21 “ Competitive Product ” means, with respect to a particular Product that has received Marketing Authorization in a country, a product sold by a Third Party in such country of that contains the same bacteriophage, or a bioequivalent form thereof, as such Product resulting in substantially the same antibacterial mechanism of action and generating substantially the same pharmacological outcome with substantially the same relative magnitude.

1.22 “ Dispute ” has the meaning set forth in Section 9.9.1.

1.23 “Field” means the use of Product and Product Candidate for any and all purposes.

1.24 “ First Commercial Sale ” means, with respect to any Product, the first sale for end use or consumption of such Product in a country that triggers a royalty payment to Company under this Agreement, excluding, however, any sale or other distribution for use in a Clinical Trial.

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1.25 “ GLP ” or “ Good Laboratory Practice ” means the applicable then-current standards for laboratory activities for pharmaceuticals or biologicals, as set forth in the Act and any regulations or guidance documents promulgated thereunder, as amended from time to time, together with any similar standards of good laboratory practice as are required by any Regulatory Authority in the Territory.

1.26 “[***] Engineered Phage” means an engineered bacteriophage [***] pursuant to the criteria set forth in the [***] Research Plan.

1.27 “ [***] License Option ” has the meaning set forth in Section 3.1.1.

1.28 “ [***] Option Term ” has the meaning set forth in Section 3.1.1.

1.29 “ [***] Research Option ” has the meaning set forth in Section 2.1.2.

1.30 “ [***] Research Plan ” has the meaning set forth in Section 2.1.1.

1.31 “ [***] Research Term ” has the meaning set forth in Section 2.8.

1.32 “ [***] Milestone 1 ” has the meaning set forth in Section 5.1.3.

1.33 “ [***] Milestone 2 ” has the meaning set forth in Section 5.1.3.

1.34 “ [***] Milestone 3 ” has the meaning set forth in Section 5.1.3.

1.35 “ [***] Milestone 4 ” has the meaning set forth in Section 5.1.3.

1.36 “ [***] Preclinical Milestones ” has the meaning set forth in Section 5.1.3.

1.37 “ IND ” means an Investigational New Drug application, Clinical Study Application, Clinical Trial Exemption, or similar application or submission for approval to conduct human clinical investigations filed with or submitted to a Regulatory Authority in conformance with the requirements of such Regulatory Authority.

1.38 “ Indemnified Party ” has the meaning set forth in Section 9.1.3.

1.39 “ Indemnifying Party ” has the meaning set forth in Section 9.1.3.

1.40 “ Indication ” means a separate and distinct disease or medical condition in humans (i) which a Product that is in Clinical Trials is intended to treat, prevent and/or diagnose, and/or (ii) for which a Product has received Marketing Authorization based on a separate Clinical Trial, meaning that such Indication is contained in the Product’s labeling approved by a Regulatory Authority as part of the Marketing Authorization for such Product.

1.41 “ Information ” means any and all information and data, including without limitation all Merck Know-How, all Company Know-How, and all other scientific, pre-clinical, clinical, regulatory, manufacturing, marketing, financial and commercial information or data, whether communicated

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in writing or orally or by any other method, which is provided by one Party to the other Party in connection with this Agreement.

1.42 “ Initiation ” means, with respect to a Clinical Trial, the administration of the first dose to a human subject in such Clinical Trial.

1.43 “Invention ” means any process, method, composition of matter, article of manufacture, discovery or finding that is conceived and/or reduced to practice as a result of the Research Program.

1.44 “In Vivo POC” , with respect to the [***] Research Plan, has the meaning set forth in subsection d. of “COMPANY deliverables” under “[***] Milestone 3: Proof-of-concept efficacy in a [***] animal model [***]” in the [***] Research Plan, and with respect to the [***] Research Plan, has the meaning set forth in subsection c. of “COMPANY deliverables” under “[***] Milestone 3: Proof-of-concept efficacy in a [***]animal model [***]” in the [***] Research Plan.

1.45 “ Joint Information and Inventions ” means all protocols, formulas, data, Inventions (but not Company Platform Improvements), know-how and trade secrets, patentable or otherwise, resulting from the Research Program developed or invented jointly by employee(s) of Merck and/or its Affiliates, and/or a Third Party acting on behalf of Merck and/or its Affiliates, and by employee(s) of Company and/or its Affiliates, and/or a Third Party acting on behalf of Company and/or its Affiliates.

1.46 “ Joint Patent Rights ” means Patent Rights that claim or cover Joint Information and Inventions.

1.47 “License Option” has the meaning set forth in Section 3.1.

1.48 “ Major European Market ” means anyone of the following countries: the United Kingdom, France, Germany, Italy or Spain.

1.49 “ Major Market ” means any one of the following countries: United States, Japan, the United Kingdom, France, Germany, Italy or Spain.

1.50 “ Marketing Authorization ” means all approvals from the relevant Regulatory Authority necessary to market and sell a Product in any country (including without limitation all applicable pricing and governmental reimbursement approvals even if not legally required to sell Product in a country).

1.51 “ Materials ” has the meaning set forth in Section 2.1.1.

1.52 “ Merck ” has the meaning given such term in the preamble to this Agreement.

1.53 “ Merck Indemnified Parties ” has the meaning set forth in Section 9.1.2.

1.54 “ Merck Information and Inventions ” means all protocols, formulas, data, Inventions (but not Company Platform Improvements), know-how and trade secrets, patentable or otherwise, resulting from the Research Program developed or invented solely by employee(s) of Merck

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and/or its Affiliates, and/or a Third Party acting on behalf of Merck and/or its Affiliates, and not employed by Company and/or its Affiliates.

1.55 “ Merck Know-How ” means all information and materials, including but not limited to discoveries, improvements, processes, methods, protocols, formulas, data, inventions (including without limitation Merck Information and Inventions and Merck’s rights in Joint Information and Inventions), know-how and trade secrets, patentable or otherwise, which during the term of this Agreement (i) are in Merck’s possession or control, (ii) are not generally known and (iii) are in Merck’s opinion necessary to Company in the performance of its obligations under the Research Program.

1.56 “ NDA ” means a New Drug Application, Biologics License Application, Marketing Authorization Application, filing pursuant to Section 510(k) of the Act, or similar application or submission for Marketing Authorization of a Product filed with a Regulatory Authority to obtain marketing approval for a biological, pharmaceutical or diagnostic product in that country or in that group of countries.

1.57 “ Net Sales ” means the gross invoice price (not including value added taxes, sales taxes, or similar taxes) of Product sold by Merck or its Related Parties to the first Third Party (or, if not invoiced, amounts received by Merck or its Related Parties for the sale of Products to Third Parties) after deducting, if not previously deducted, from the amount invoiced or received the following items to the extent included in the gross invoiced sales price of such Product and not separately invoiced:

1.57.1 trade and quantity discounts other than early payment cash discounts actually allowed and taken specifically with respect to the sales of Product;

1.57.2 returns , rebates, chargebacks and other allowances for the Products actually allowed and taken and applied in a uniform manner among Product and not other products;

1.57.3 retroactive price reductions that are actually allowed or granted;

1.57.4 deductions for Health Care Reform fees and similar deductions to gross invoice price of Product imposed by Regulatory Authorities or other governmental entities when adjusted for rebates and refunds;

1.57.5 a fixed amount equal to three percent (3%) of the amount invoiced to cover bad debt, early payment cash discounts, transportation and insurance and custom duties; and

1.57.6 the standard inventory cost of specialty devices or delivery systems used for dispensing or administering Product.

With respect to sales of Combination Products in a country during an accounting period, Net Sales shall be calculated on the basis of the gross invoice price of Product(s) containing the same dosage of Product Candidate sold without other active ingredients in such country and during such accounting period. In the event that Product with a certain dosage of Product Candidate is sold only as a Combination Product in a country during an accounting period, Net Sales shall be calculated on the basis of the gross invoice price of the Combination Product multiplied by a

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fraction, the numerator of which shall be the inventory cost of Product Candidate in the Product and the denominator of which shall be the inventory cost of all of the active ingredients in the Combination Product during such accounting period. Inventory cost shall be determined in good faith in accordance with Merck's regular accounting methods, consistently applied. The deductions set forth in Sections 1.37.1 through 1.37.6 will be applied in calculating Net Sales for a Combination Product prior to the application of the calculation in this paragraph. In the event that Product is sold only as a Combination Product and either Party reasonably believes that the calculation set forth in this Paragraph does not fairly reflect the value of Product Candidate relative to the other active ingredients in the Combination Product, the Parties shall reasonably negotiate other means of calculating Net Sales with respect to Combination Products.

1.58 “ Officials ” has the meaning set forth in Section 2.9.3.

1.59 “Party ” means Merck or Company, individually, and “ Parties ” means Merck and Company, collectively.

1.60 “ Patent Rights ” means any and all patents and patent applications in the Territory (which for the purpose of this Agreement shall be deemed to include certificates of invention and applications for certificates of invention), including divisionals, continuations, continuations-in-part, reissues, renewals, substitutions, registrations, re-examinations, revalidations, extensions, supplementary protection certificates, and the like of any such patents and patent applications, and foreign equivalents of the foregoing.

1.61 “Payment” has the meaning set forth in Section 2.9.3.

1.62 “ Person ” means any individual, partnership, joint venture, limited liability company, corporation, firm, trust, association, unincorporated organization, governmental authority or agency, or any other entity not specifically listed herein.

1.63 “ Phage ” means a [***] Engineered Phage and/or [***] Engineered Phage.

1.64 “ Phase I Clinical Trial ” means a human clinical trial in any country that would satisfy the requirements of 21 CFR 312.21(a) or its non-United States equivalents.

1.65 “ Phase II Clinical Trial ” means a human clinical trial in any country that would satisfy the requirements of 21 CFR 312.21(b) or its non-United States equivalents.

1.66 “ Phase IIb Clinical Trial ” means a Phase II Clinical Trial of a Product Candidate the principal purpose of which is to confirm efficacy and safety consistent with the efficacy and safety observed in a previous Clinical Trial of such Product Candidate in the target population at the intended dose or doses or range of doses on a sufficient number of subjects and for a sufficient period of time to determine the optimal manner of use of a Product Candidate (dose and dose regimen) prior to the Initiation of a Phase III Clinical Trial of such Product Candidate. For clarity, a Phase IIb Clinical Trial does not include a Phase Ib/IIa clinical trial.

1.67 “ Phase III Clinical Trial ” means a human clinical trial in any country that would satisfy the requirements of 21 CFR 312.21(c) or its non-United States equivalents.

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1.68 “ Preclinical Milestone ” means a [***] Preclinical Milestone or a [***] Preclinical Milestone and “ Preclinical Milestones ” means the [***] Preclinical Milestones and the [***] Preclinical Milestones.

1.69 “ Product(s) ” means any pharmaceutical or biological preparation for use in humans in final form containing Product Candidate as an active ingredient (i) for sale by prescription, over-the-counter or any other method; or (ii) for administration to human patients in a Clinical Trial, for any and all uses in the Field, including without limitation any Combination Product.

1.70 “ Product Candidate ” means (a) a [***] Engineered Phage (including [***] Engineered Phage) made by or on behalf of Company under the [***] Research Plan to the extent Merck exercises the [***] License Option, (b) an [***] Engineered Phage (including [***] Engineered Phage) made by or on behalf of Company under the [***] Research Plan to the extent Merck exercises the [***] License Option or (c) a [***] referred to in clauses (a) and (b), and with respect to each of clauses (a), (b), and (c), [***] CMC and regulatory purposes. References to “Product Candidate” in this Agreement will exclude clause (b) above in the event that Merck does not exercise the [***] Research Option.

1.71 “ Product-Specific Company Patent Right ” means any Company Patent Right that specifically claims (i) [***] and/or (ii) [***], and in the case of each of clause (i) and (ii) [***].

1.72 “ Regulatory Authority ” means any applicable government regulatory authority involved in granting approvals for the manufacturing, marketing, reimbursement and/or pricing of a Product in the Territory, including, in the United States, the United States Food and Drug Administration and any successor governmental authority having substantially the same function.

1.73 “ Related Party ” means each of Merck, its Affiliates, and their respective sublicensees (which term does not include distributors), as applicable.

1.74 “ Research Plan ” means the [***] Research Plan or the [***] Research Plan, as applicable.

1.75 “ Research Program ” means the research activities undertaken by the Parties as set forth in Article 2 and the [***] Research Plan and, if Merck exercises the [***] Research Plan Option, the [***] Research Plan.

1.76 “ Research Program Patent Rights ” means Company Patent Rights other than Product-Specific Company Patent Rights.

1.77 “ Research Term ” means the [***] Research Term or the [***] Research Term, as applicable.

1.78 “ Royalty Period ” has the meaning set forth in Section 5.2.3(a)(iii).

1.79 “ Second Marketing Authorization ” means a Marketing Authorization for a different Indication than one for which a Product Candidate has received Marketing Authorization. For the avoidance of doubt, expansion of an already approved Indication or approval for a subpopulation shall not constitute a Second Marketing Authorization.

1.80 “[***] Milestone 1” has the meaning set forth in Section 5.1.2.

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1.81 “[***] Milestone 2” has the meaning set forth in Section 5.1.2.

1.82 “[***] Milestone 3” has the meaning set forth in Section 5.1.2.

1.83 “[***] Milestone 4” has the meaning set forth in Section 5.1.2.

1.84 “[***] Preclinical Milestones” has the meaning set forth in Section 5.1.2.

1.85 “[***] Engineered Phage” means an engineered bacteriophage [***] pursuant to the criteria set forth in the [***] Research Plan.

1.86 “[***] License Option” has the meaning set forth in Section 3.1.1.

1.87 “[***] Option Term” has the meaning set forth in Section 3.1.1.

1.88 “[***] Research Plan” has the meaning set forth in Section 2.1.1.

1.89 “[***] Research Term” has the meaning set forth in Section 2.8.

1.90 “Taxes” has the meaning set forth in Section 5.2.7.

1.91 “ Territory ” means all of the countries in the world, and their territories and possessions.

1.92 “ Third Party ” means an entity other than Merck and its Related Parties, and Company and its Affiliates.

1.93 “Third Party License” has the meaning set forth in Section 5.2.3(e).

1.94 “ Valid Patent Claim ” means a claim of an issued, unexpired and in-force patent included within the Company Background IP, the Company Patent Rights or the Joint Patent Rights that claims Product Candidate as a composition of matter or, on a country-by-country basis, a method of treatment of a human disease which has received Marketing Authorization by the appropriate Regulatory Authority in the country in the Territory, which has not been revoked or held unenforceable or invalid by a decision of a court or other governmental agency of competent jurisdiction (which decision is not appealable or has not been appealed within the time allowed for appeal), and which claim has not been disclaimed, denied or admitted to be invalid or unenforceable through reissue, re-examination, supplemental examination or disclaimer or otherwise.

1.95 “Violation” means that either Party, or any of its officers or directors has been: (a) convicted of any of the felonies identified among the exclusion authorities listed on the U.S. Department of Health and Human Services, Office of Inspector General (OIG) website, including 42 U.S.C. 1320a-7(a) (https://oig.hhs.gov/exclusions/index.asp); and/or (b) identified in the OIG List of Excluded Individuals/Entities (LEIE) database (https://oig.hhs.gov/exclusions/exclusions_list.asp) or the U.S. General Services Administration's list of Parties Excluded from Federal Programs (https://www.sam.gov/portal/public/SAM/) (each of (a) and (b), singly and collectively, the “Exclusions Lists”).

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ARTICLE 2 RESEARCH PROGRAM

2.1 General .

2.1.1 Company and Merck shall engage in the Research Program upon the terms and conditions set forth in this Agreement. Schedule 2.1.1(a) sets forth the activities to be undertaken beginning as of the Effective Date (as the same may be amended, the “ [***] Research Plan ”). Schedule 2.1.1(b) sets forth the activities to be undertaken, if at all, following exercise by Merck of the [***] Research Option (as the same may be amended, the “ [***] Research Plan ”).

2.1.2 Company hereby grants to Merck an exclusive option, exercisable at any time prior to expiration of the [***] Research Term to require Company to engage in the [***] Research Plan (such option, the “ [***] Research Option ”). Merck may exercise the [***] Research Option, in Merck’s sole discretion, by sending Company written notice of such exercise, and paying [***] in accordance with Section 5.2.1(a).

2.2 Performance of Research Plan . Each Party shall be responsible for its costs and expenses in connection with the Research Program. Each Party shall proceed diligently and in good faith with the work set out in the Research Plan by using its reasonable efforts to allocate sufficient time, effort, equipment and facilities to the Research Program and to use personnel with sufficient skills and experience as are required to accomplish its activities under the Research Program in accordance with the terms of this Agreement and the Research Plan. Merck shall be entitled to utilize the services of its Affiliates and Third Parties to perform its Research Program activities. Company shall be entitled to utilize the service of Third Parties to perform its Research Program activities only upon Merck’s prior written consent, as set forth on Schedule 2.2 , or as specifically set forth in the Research Plan. Notwithstanding any such utilization, each Party shall remain at all times fully liable for its respective responsibilities under the Research Program.

2.3 Joint Steering Committee . The Parties hereby establish a committee to facilitate the Research Program as follows:

2.3.1 Composition of the Joint Steering Committee. The Research Program shall be conducted under the direction of a joint steering committee (the “Committee” ) comprised of two (2) senior representatives of Merck (who shall be employees of Merck or its Affiliate, as applicable) and two (2) senior representatives of Company (who shall be employees of Company or its Affiliate, as applicable). Each Party may change its representatives to the Committee from time to time in its sole discretion, effective upon notice to the other Party of such change. These representatives shall have appropriate technical credentials, experience and knowledge, and ongoing familiarity with the Research Program. Additional representative(s) or consultant(s) may, from time to time by mutual consent of the Parties, be invited to attend Committee meetings, subject to such representative’s or consultants written agreement to comply with the requirements of Section 4.1. The goal of all decision-making of the Committee shall be to achieve consensus. Decisions of the Committee shall be made unanimously by the representatives. In the event that the Committee cannot or does not, after reasonable good faith efforts, reach agreement on an issue within the scope of the Committee’s decision-making

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authority as set forth in Section 2.3.2 below, such issue shall be escalated pursuant to Section 9.9 hereof.

2.3.2 Scope of Committee Oversight. The Committee shall be responsible for overseeing the Research Program, including to (i) review and amend the Research Plan from time to time, (ii) review and coordinate the Parties’ activities under the Research Program, (iii) confer regarding the status of the Research Program and the progress under the Research Program and to make determinations and decisions in connection with the Research Plan (including issues of priority), (iv) review results under the Research Program, (v) consider and advise on technical issues a Party wishes to raise to the other Party under the Research Program, and (vi) determine whether the Preclinical Milestones have been achieved. With respect to any determination by the Committee as to the achievement of a Preclinical Milestone, the Committee shall be required to make any such determination within no less than forty-five (45) days after receiving written notice from the Company of its assessment that such Preclinical Milestone has been achieved. The Committee shall not have the authority to: (w) modify or amend the terms and conditions of this Agreement; (x) waive either Party’s compliance with the terms and conditions of this Agreement; (y) determine any issue in a manner that would conflict with the express terms and conditions of this Agreement; or (z) amend the Research Plan in a manner that would increase the Preclinical Milestones or modify the definitions thereof.

2.3.3 Meetings . During the Research Term, the Committee shall meet in accordance with a schedule established by mutual written agreement of the Parties, but no less frequently than once per Calendar Quarter, with the location for such meetings alternating between Company and Merck facilities (or such other location may be determined by the Committee or by means of teleconference, videoconference or other similar communications equipment). The Committee shall confer regarding the status of the Research Program, review relevant data, consider and advise on any technical issues that arise, consider issues of priority, and review and advise on any budgetary and economic matters relating to the Research Program which may be referred to the Committee. Each Party shall bear its own expenses related to the attendance of such meetings by its representatives.

2.3.4 Disbandment of Committee. Upon completion (or earlier termination) of the Research Program, the Committee shall have no further authority with respect to the activities hereunder. The Committee shall be disbanded upon expiration of the term of the License Option.

2.4 Alliance Managers. Each Party shall have the right to appoint an employee who shall oversee interactions between the Parties for all matters related to this Agreement (each an “Alliance Manager” ). Such persons shall endeavor to ensure clear and responsive communication between the Parties and the effective exchange of information, and may serve as a single point of contact for any matters arising under this Agreement. The Alliance Managers shall have the right to attend all Committee meetings as non-voting participants and may bring to the attention of the Committee any matters or issues either of them reasonably believes should be discussed, and shall have such other responsibilities as the Parties may mutually agree in writing. Each Party may designate different Alliance Managers by notice in writing to the other Party.

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2.5 Exchange of Information . During the Research Term, Company shall disclose to Merck in English and in writing or in an electronic format all results generated by or on behalf of Company under the Research Program and all Company Know-How reasonably necessary for Merck to determine whether to exercise a License Option. If Merck exercises a License Option, Company shall disclose to Merck such other Company Know-How requested by, or required to be disclosed to, a Regulatory Authority in connection with the development or commercialization of a Product or Product Candidate; provided , however , that if Company reasonably determines that such Company Know-How is particularly sensitive, Company may instead disclose such Company Know-How directly to such Regulatory Authority. Company shall make itself reasonably available to Merck and such Regulatory Authority in connection with the foregoing.

2.6 Records and Reports.

2.6.1 Records . Each Party shall maintain records, in sufficient detail and in good scientific manner appropriate for patent and regulatory purposes, which shall fully and properly reflect all work done and results achieved in the performance of the Research Program by or on behalf of such Party.

2.6.2 Copies and Inspection of Records. Merck shall have the right, during normal business hours and upon reasonable notice, to inspect and copy all such records of Company referred to in Section 2.6.1. Merck shall maintain such records and the information disclosed therein in confidence in accordance with Section 4.1. Merck shall have the right to arrange for its employee(s) and/or consultant(s) involved in the activities contemplated hereunder to visit the offices and laboratories of Company and any of its Third Party contractors as permitted under Section 2.2 during normal business hours and upon reasonable notice, and to discuss the Research Program work and its results in detail with the technical personnel and consultant(s) of Company. Upon request, Company shall provide copies of the records described in Section 2.6.1.

2.6.3 Semi -annual Reports. Within thirty (30) days after each June 30 and December 31 during the term of this Agreement, Company shall provide to Merck a written progress report in English which shall describe the work performed to date on the applicable Research Plan, evaluate the work performed in relation to the goals of such Research Plan and provide such other information as may be required by such Research Plan or reasonably requested by Merck relating to the progress of the goals or performance of such Research Plan. Following exercise by Merck of a License Option with respect to a Research Plan, if at all, such reports for such Research Plan shall be considered the Confidential Information of Merck.

2.7 Research Information and Inventions .

2.7.1 The entire right, title and interest in:

(a) Company Platform Improvements shall be owned solely by Company;

(b) Company Information and Inventions shall be owned solely by Company;

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(d) Joint Information and Inventions shall be owned jointly by Company and Merck.

2.7.2 Each Party shall promptly disclose to the other Party in writing the development, making conception or reduction to practice of Joint Information and Inventions, and Company shall reasonably promptly disclose to Merck in writing the development, making, conception or reduction to practice of Company Information and Inventions. For the purposes of determining ownership under this Section 2.7, inventorship shall be determined in accordance with United States patent laws (regardless of where the applicable activities occurred). Subject to the licenses granted to the other Party under this Agreement and the other terms and conditions of this Agreement, each Party shall have the non-exclusive right to exploit its interest in Joint Information and Inventions and Joint Patent Rights, and to grant licenses under its interest in Joint Information and Inventions and Joint Patent Rights, as it deems appropriate, without the consent of, and without accounting to, the other Party; provided, however , that for clarity, the foregoing joint ownership rights shall not be construed as granting, conveying or creating any license or other rights to the other Party’s intellectual property, unless otherwise expressly set forth in this Agreement; and further provided that, in the event that any Joint Patent Rights claim or cover a Product Candidate or the manufacturing process therefor, Company shall not grant any license under its interest in such Joint Patent Rights to any Third Party without Merck’s prior written consent.

2.8 Term of the Research Program(s) . Unless this Agreement is terminated pursuant to Section 8.2 or 8.3, the term of the [***] Research Program shall commence on the Effective Date and continue until the second anniversary of the Effective Date (the “ [***] Research Term ”). To the extent Merck exercises the [***] Research Option, and unless this Agreement is terminated pursuant to Section 8.2 or 8.3, the term of the [***] Research Plan shall expire on the date that is eighteen (18) months after the date of commencement of the [***] Research Plan(the “ [***] Research Term ”).

2.9 Compliance with Law and Ethical Business Practices.

2.9.1 Each Party shall conduct the Research Program in accordance with all applicable laws, rules and regulations including, without limitation, all current governmental regulatory requirements concerning Good Laboratory Practices. Each Party shall notify the other Party in writing of any deviations from applicable regulatory or legal requirements. Each Party hereby certifies that it has not and will not employ or otherwise use in any capacity the services of any person or entity debarred under Section 21 USC 335a in performing any services hereunder. Each Party shall notify the other Party in writing immediately if any such debarment occurs or comes to its attention, and shall promptly remove any person or entity so disbarred from performing any activities under the Research Program, or function or capacity related to the Research Program.

2.9.2 Company acknowledges that Merck’s corporate policy requires that Merck’s business must be conducted within the letter and spirit of the law. By signing this Agreement, each Party agrees to conduct the services contemplated herein in a manner which is consistent with both law and good business ethics.

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2.9.3 Each Party warrants that none of its employees, agents, officers or other members of its management are officials, officers, agents or representatives of any government or public international organization (as such term is defined in the Foreign Corrupt Practices Act). Neither Party shall make any payment, either directly or indirectly, of money or other assets, including but not limited to the compensation such Party derives from this Agreement (hereinafter collectively referred as a “Payment” ), to government or political party officials, officials of international public organizations, candidates for public office, or representatives of other businesses or persons acting on behalf of any of the foregoing (hereinafter collectively referred as “Officials” ) where such Payment would constitute violation of any law. In addition regardless of legality, neither Party shall make any Payment either directly or indirectly to Officials if such Payment is for the purpose of influencing decisions or actions with respect to the subject matter of this Agreement or any other aspect of the other Party’s business.

2.9.4 Company acknowledges that no employee of Merck or its Affiliates shall have authority to give any direction, either written or oral, relating to the making of any commitment by Company or its agents to any Third Party in violation of terms of this or any other provisions of this Agreement.

2.9.5 Each Party certifies to the other Party that as of the date of this Agreement it has screened itself, and its officers, directors and employees against the Exclusions Lists and that it has informed the other Party whether it or any of its officers or directors has been in Violation. After the execution of this Agreement, each Party shall notify the other Party in writing immediately if any such Violation occurs or comes to its attention.

2.9.6 Any failure to abide by the provisions of this Section 2.9 shall be deemed a material breach of this Agreement.

2.10 Animal Research . If animals are used in research hereunder, Company will comply with the Animal Welfare Act or any other applicable local, state, national and international laws and regulations relating to the care and use of laboratory animals. Merck encourages Company to use the highest standards, such as those set forth in the Guide for the Care and Use of Laboratory Animals (NRC, 1996), for the humane handling, care and treatment of such research animals. Company hereby certifies that it has and shall maintain current and valid accreditation from AAALAC during the Research Term. Any animals which are used in the course of the Research Program, or products derived from those animals, such as eggs or milk, will not be used for food purposes, nor will these animals be used for commercial breeding purposes.

2.11 Materials . Merck may, in its sole discretion, provide Company with certain materials solely for the purpose of enabling Company to perform its activities under the Research Program in accordance with the terms of this Agreement (“ Materials ”). To the extent Merck provides such Materials, such Materials are not to be used in humans, nor shall any of the Materials, or any derivatives, analogs, modifications or components thereof be transferred, delivered or disclosed to any Third Party without the prior written approval of Merck. Any unused Materials and any derivatives, analogs, modifications or components thereof shall be, at Merck’s option, either returned to Merck, or destroyed in accordance with instructions by Merck. To the extent Company provides any biological materials to Merck under this Agreement, (i) such materials are not to be used in humans, and (ii) if this Agreement terminates prior to the exercise of a

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License Option by Merck, any unused amounts of such materials and any derivatives, analogs, modifications or components thereof shall be, at Company’s option, either returned to Company, or destroyed in accordance with instructions by Company.

ARTICLE 3 OPTION TO LICENSE; LICENSE; DEVELOPMENT AND COMMERCIALIZATION.

3.1 Option . Company hereby grants to Merck an exclusive option to obtain with respect to any and all Product Candidates developed during any Research Term a worldwide license as set forth in Section 3.2 pursuant to the terms of this Agreement (the “ License Option ”). Merck may exercise the License Option, in its sole discretion, in the following circumstances by sending Company written notice of such exercise and making the applicable payment in accordance with Section 5.2.1(b) or (c):

3.1.1 if Merck does not exercise the [***] Research Option pursuant to Section 2.1.2, Merck may, in its sole discretion, at any time during the [***] Research Term and for a period of ninety (90) days thereafter (the “ [***] Option Term ”), exercise the License Option with respect to Product and Product Candidates from the [***] Research Plan (the “ [***] License Option ”); and

3.1.2 if Merck exercises the [***] Research Option pursuant to Section 2.1.2, Merck may, in its sole discretion, at any time during the [***] Research Term and for a period of ninety (90) days thereafter (the “ [***] Option Term ”), exercise its [***] License Option and/or the License Option with respect to Product and Product Candidates from the [***] Research Plan (the “ [***] License Option ”).

3.2 Following Option Exercise by Merck. Upon and following exercise by Merck of the [***] License Option and/or the [***] License Option, if at all:

3.2.1 License Grant .

(a) Company hereby grants to Merck an exclusive license (even as to Company) in the Territory under Company Patent Rights and its interest in Joint Patent Rights, with the right to grant and authorize sublicenses, for any and all uses in the Field, including, without limitation, to make, have made, use, import, offer to sell and sell (but not genetically modify) Product Candidate and Product.

(b) Company hereby grants to Merck an exclusive license (even as to Company) in the Territory under the Patent Rights included in Company Background IP, with the right to grant and authorize sublicenses, for any and all uses in the Field, solely to make, have made, use, import, offer to sell and sell (but not genetically modify) Product Candidate and Product.

(c) Company hereby grants to Merck an exclusive license (even as to Company) in the Territory under Company Know-How, with the right to grant and authorize sublicenses, for any and all uses in the Field, solely to make, have made, use, import, offer to sell and sell (but not genetically modify) Product Candidate and Product.

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3.2.2 Genetic Modifications to Product or Product Candidate for CMC or Regulatory Purposes . In the event Merck reasonably determines that a modification to Product Candidate is needed for CMC or regulatory purposes, and such modification is genetic in nature, Merck will notify Company, and Company will use reasonable efforts to make such needed modification as requested by Merck. Merck will reimburse Company for its reasonable out-of-pocket expenses and FTEs conducting such work to the extent Company provides appropriate documentation (including original receipts) and an invoice. Until the fifth anniversary of the Effective Date, the FTE rates shall not exceed $360,000 for a full-time equivalent person year, and thereafter the Parties shall agree in good faith on a reasonable increase in FTE rates to reflect inflation and then-current industry standards. Merck will pay the undisputed amount of such invoice within sixty (60) days after receipt thereof.

3.2.3 Non -Exclusive License Grant . In the event that the making, having made, use, import, offer for sale and/or sale by Merck or its Related Parties of Product Candidate or Product (other than with respect to any pharmaceutically active ingredients controlled by Company or its Affiliate other than Product Candidate) would infringe during the term of this Agreement a claim of an issued letters patent that Company (or its Affiliate) owns or has the rights to license and which patents are not covered by the grant in Section 3.2.1, Company hereby grants to Merck, to the extent Company is legally able to do so without incurring any payment obligations to any Third Party, a non-exclusive, sublicensable, royalty-free license in the Territory under such issued letters patent for Merck and its Related Parties to make, have made, use, import, offer to sell and sell Product Candidate and Product in the Territory.

3.3 No Implied Licenses . Except as specifically set forth in this Agreement, neither Party shall acquire any license or other intellectual property interest, by implication or otherwise, in any Information disclosed to it under this Agreement or under any patents or patent applications owned or controlled by the other Party or its Affiliates.

3.4 No Grant of Inconsistent Rights by Company. Company (and its Affiliates) shall not assign, transfer, convey or otherwise grant to any Person or otherwise encumber (including through lien, charge, security interest, mortgage, encumbrance or otherwise) (i) any rights to any Company Know-How or Company Patent Rights (or any rights to any intellectual property that would otherwise be included in the Company Know-How or Company Patent Rights), in any manner that is inconsistent with or would interfere with the grant of the rights or licenses to Merck hereunder, or (ii) any rights to any Product Candidates or Products (other than as set forth herein). Without limiting the foregoing, during the term of the Agreement, Company (and its Affiliates) shall not use (and shall not grant to any Third Party the right to use) any Product Candidate or Products for any purpose (including the development, manufacturing or commercialization thereof).

3.5 Sublicenses . Merck shall have the right to sublicense (through multiple tiers of sublicenses) any or all of the licenses granted to Merck hereunder. Merck shall be responsible for ensuring that the performance by any of its sublicensees hereunder that are exercising rights under a sublicense hereunder is in accordance with the applicable terms of this Agreement, any breach of the terms of this Agreement by a sublicensee shall be deemed to be a breach by Merck, and the grant of any such sublicense shall not relieve Merck of its obligations under this Agreement (except with

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respect to the diligence obligations to the extent they are performed by any such sublicensee(s) in accordance with this Agreement).

3.6 Development and Commercialization . Following exercise of a License Option by Merck, if at all:

3.6.1 Merck shall use Commercially Reasonable Efforts, at its own expense, to develop and commercialize a Product and shall conduct the development and commercialization in accordance with all applicable laws, rules and regulations. For avoidance of doubt, the satisfaction of Merck’s obligations under this Section 3.6 shall take into account any adverse condition or event relating to the safety or efficacy of the Product, and the obligation of Merck to meet development or marketing diligence milestones for any such Product shall be reasonably delayed or suspended to account for such conditions or events.

3.6.2 Until the First Commercial Sale of any Product, Merck shall submit to Company annual written reports providing a status of Merck’s and its Affiliates’ and Sublicensees’ activities related to the research and development of a Product during the preceding twelve (12) months.

3.7 Exclusivity . Except as contemplated by a Research Plan, during the [***] Research Term and the [***] Research Term, if any, Company will work exclusively (even as to Company itself) with Merck in any effort targeting [***]. Except as contemplated by a Research Plan: (a) during the term of this Agreement, Company may not conduct research or develop, for any use, (i) any Product Candidate or Product or (ii) any other bacteriophage in the same International Committee on Taxonomy of Viruses taxonomic family as such Product or Product Candidate that targets [***]; and (b) for a period of [***] years following exercise of the [***] License Option and/or the [***] License Option by Merck, if at all, Company may not research or develop [***].

ARTICLE 4 CONFIDENTIALITY AND PUBLICATION.

4.1 Nondisclosure Obligation . All Information disclosed by one Party to the other Party hereunder shall be maintained in confidence by the receiving Party and shall not be disclosed to any Third Party or used for any purpose except as set forth herein without the prior written consent of the disclosing Party, except to the extent that such Information:

4.1.1 is known by the receiving Party at the time of its receipt, and not through a prior disclosure by the disclosing Party, as documented by the receiving Party’s business records;

4.1.2 is in the public domain by use and/or publication before its receipt from the disclosing Party, or thereafter enters the public domain through no fault of the receiving Party;

4.1.3 is subsequently disclosed to the receiving Party by a Third Party who may lawfully do so and is not under an obligation of confidentiality to the disclosing Party;

4.1.4 is developed by the receiving Party independently of Information received from the disclosing Party, as documented by the receiving Party’s business records;

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4.1.5 is disclosed to governmental or other regulatory agencies in order to obtain patents directed to Company Information and Inventions, Merck Information and Inventions or Joint Information and Inventions, as applicable, or to gain or maintain approval to conduct clinical trials or to market Product, but such disclosure may be only to the extent reasonably necessary to obtain patents or authorizations;

4.1.6 is , after the exercise of the [***] License Option and/or the [***] License Option by Merck, reasonably deemed necessary by Merck to be disclosed to Related Parties, agent(s), consultant(s), and/or other Third Parties for any and all purposes Merck and its Affiliates deem necessary or advisable in the ordinary course of business in connection with the development or commercialization of Products in the Field in accordance with this Agreement on the condition that such Third Parties agree to be bound by confidentiality and non-use obligations that substantially are no less stringent than those confidentiality and non-use provisions contained in this Agreement; provided , however , that the term of confidentiality for such Third Parties shall be no less than ten (10) years;

4.1.7 is , prior to exercise of the [***] License Option and/or the [***] License Option by Merck, if at all, reasonably deemed necessary by Company to be disclosed to its Affiliates and consultant(s), and/or other Third Party contractors for purposes of performing Company’s obligations under this Agreement, on the condition that such Third Parties agree to be bound by confidentiality and non-use obligations that substantially are no less stringent than those confidentiality and non-use provisions contained in this Agreement; provided , however , that the term of confidentiality for such Third Parties shall be no less than ten (10) years; or

4.1.8 is reasonably deemed necessary to the receiving Party to be disclosed to such Party’s attorneys, independent accountants or financial advisors for the sole purpose of enabling such attorneys, independent accountants or financial advisors to provide advice to the receiving Party, on the condition that such attorneys, independent accountants and financial advisors agree to be bound by confidentiality and non-use obligations contained this Agreement; provided , however , that the term of confidentiality for such attorneys, independent accountants and financial advisors shall be no less than ten (10) years.

Any combination of features or disclosures shall not be deemed to fall within the foregoing exclusions merely because individual features are published or available to the general public or in the rightful possession of the receiving Party unless the combination itself and principle of operation are published or available to the general public or in the rightful possession of the receiving Party.

If a Party is required by judicial or administrative process (including a request for discovery received in an arbitration or litigation proceeding) to disclose Information that is subject to the non-disclosure provisions of this Section 4.1 or Section 4.2, such Party shall promptly inform the other Party of the disclosure that is being sought in order to provide the other Party an opportunity to challenge or limit the disclosure obligations. Information that is disclosed by judicial or administrative process shall remain otherwise subject to the confidentiality and non-use provisions of this Section 4.1 and Section 4.2, and the Party disclosing Information pursuant to law or court order shall take all steps reasonably necessary, including without limitation obtaining an order of confidentiality, to ensure the continued confidential treatment of such Information.

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4.2 Publication .

4.2.1 Prior to the earlier of (x) Merck’s exercise of the [***] License Option and/or the [***] License Option (if at all) and (y) expiration of the term of the License Option, neither Party shall publish results of the [***] Research Plan or the [***] Research Plan, if any, without the other Party’s prior written consent. Provisions governing the filing of patent applications, which may be published by patent offices in which such filing is made, before the earlier of (x) Merck’s exercise of the [***] License Option and/or the [***] License Option (if at all) and (y) expiration of the term of the License Option, by the Parties, are provided under Section 7 of this Agreement.

4.2.2 If Merck exercises the [***] License Option and/or the [***] License Option, Company shall have no right to publish results of the applicable Research Plan, and Merck shall have the right to publish results of such Research Plan. Prior to a written publication or oral presentation of any such results, Merck shall deliver to Company a copy of the proposed written publication or an outline of an oral disclosure at least sixty (60) days prior to submission for publication or presentation. Company shall have the right to: (a) propose modifications to the publication or presentation for patent reasons, trade secret reasons or business reasons or (b) request a reasonable delay in publication or presentation in order to protect patentable information for which Merck does not have filing rights in accordance with Article 7. If Company requests such a delay, Merck shall delay submission or presentation for a period of up to ninety (90) days as necessary to enable patent applications protecting Company’s rights in such information to be filed in accordance with Article 7. Upon expiration of such ninety (90) days, Merck shall be free to proceed with the publication or presentation; provided that if Company requests modifications to the publication or presentation, Merck shall edit such publication to prevent disclosure of trade secret or proprietary business information prior to submission of the publication or presentation. Provisions governing the filing of patent applications by the Parties, which may be published by patent offices in which such filing is made, if Merck exercises the [***] License Option and/or the [***] License Option, are provided under Section 7 of this Agreement.

4.2.3 If Merck does not exercise the [***] License Option and/or the [***] License Option prior to the expiration of the term of the License Option, then Company may publish results of any Research Plan for which Merck does not exercise a License Option; provided , however , that the Company may not make any publication containing Confidential Information of Merck, including any Merck Know-How, or use Merck’s name without Merck’s prior written consent.

4.3 Publicity /Use of Names. No disclosure of the existence, or the terms, of this Agreement may be made by either Party, and no Party shall use the name, trademark, trade name or logo of the other Party, its Affiliates or their respective employee(s) in any publicity, promotion, news release or disclosure relating to this Agreement or its subject matter, without the prior express written permission of the other Party, except (a) as may be required by law ( provided that the disclosing party shall seek confidential treatment, or a protective order, as applicable, for the terms of the Agreement to the extent permitted by applicable laws and regulations as determined by such Party), (b) in confidence to its legal and financial advisors to the extent such disclosure is reasonably necessary in connection with such Party's activities in connection with this Agreement

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and (c) to any bona fide potential or actual financial investor or lender (but not including any corporate pharmaceutical venture groups), acquirer or merger partner for the sole purpose of evaluating an actual or potential investment, acquisition, merger or loan; provided that in each case, such disclosees are bound by written obligations of confidentiality consistent with the confidentiality obligations of this Agreement, and the disclosing Party shall be responsible for any breach by any such disclosee of the confidentiality obligations of this Agreement.

ARTICLE 5 PAYMENTS; ROYALTIES AND REPORTS

5.1 Payments During the Research Program.

5.1.1 In partial consideration for Company's performance of its obligations under the Research Program, upon the terms and conditions contained herein, Merck shall pay Company a one-time, non-refundable upfront payment equal to [***], payable within thirty (30) days after the Effective Date.

5.1.2 Subject to the terms and conditions of this Agreement, Merck shall pay to Company the applicable milestone payments provided for in this Section 5.1.2 upon the first occurrence of the indicated milestone event during the [***] Research Term. Following a payment for a milestone set forth in this Section 5.1.2, the subsequent or repeated occurrence of the same milestone event (whether with a different candidate or otherwise or whether during or after the [***] Research Term) will not under any circumstance trigger any additional payment as a result of such event. Each such milestone payment will be due and payable to the Company within sixty (60) days after the Committee determines that such milestone event has been achieved.


Milestone Event	Milestone Payment
[*] (“ [*] Milestone 1 ”)	$[***]
[*] (“ [*] Milestone 2 ”)	$[***]
[*] (“ [*] Milestone 3 ”)	$[***]
[*] (“ [] Milestone 4 ” and together with [] Milestones 1, 2, and 3, the “ [*] Preclinical Milestones ”)	$[***]

5.1.3 Subject to the terms and conditions of this Agreement, Merck shall pay to Company the applicable milestone payments provided for in this Section 5.1.3 upon the first occurrence of the indicated milestone event during the [***] Research Term, if any. Following a payment for a milestone set forth in this Section 5.1.3, the subsequent or repeated occurrence of the same milestone event (whether with a different candidate or otherwise or whether during or after the [***] Research Term) will not under any circumstance trigger any additional payment as a result of such event. Each such milestone payment will be due and payable to the Company within sixty (60) days after the Committee determines that such milestone event has been achieved.

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Milestone Event	Milestone Payment
[*] (“ [*] Milestone 1 ”)	$[***]
[*] (“ [*] Milestone 2 ”)	$[***]
[*] (“ [*] Milestone 3 ”)	$[***]
[*] (“ [] Milestone 4 ” and together with [] Milestones 1, 2, and 3, the “ [*] Preclinical Milestones ”)	$[***]

5.2 Payments Upon and After Option Exercise (if any) . This Section 5.2 shall apply only if Merck exercises the [***] Research Option and/or a License Option pursuant to Section 3.1 of this Agreement.

5.2.1 Option Exercise Payments.

(a) In the event that Merck exercises the [***] Research Option pursuant to Section 2.1.2 of this Agreement, Merck shall pay to Company a one-time, non-refundable payment of [***] within thirty (30) days of the written notice contemplated thereby.

(b) In the event that Merck exercises the [***] License Option and the [***] License Option pursuant to Section 3.1.2 of this Agreement, in consideration for the licenses and other rights granted to Merck herein, upon the terms and conditions contained herein, Merck shall pay to Company, within thirty (30) days of the written notice contemplated thereby, a one-time, non-refundable payment equal to one of the following, as applicable:

(i) [***]; or

(ii) [***]; or

(iii) [***].

(c) In the event that Merck exercises the [***] License Option or the [***] License Option, but not both, pursuant to Section 3.1.1 or 3.1.2, as applicable, in consideration for the licenses and other rights granted to Merck herein, upon the terms and conditions contained herein, Merck shall pay to Company, within thirty (30) days of the written notice contemplated thereby, a one-time, non-refundable payment equal to [***].

5.2.2 Milestone Payments.

(a) Subject to the terms and conditions of this Agreement, in the event that Merck has exercised a License Option, Merck shall pay to Company the following milestone

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payments, for which Merck achieves the following milestone events hereunder following such exercise:

(i) Development and Regulatory Milestones

Milestone Event	Milestone Payment
Initiation of the first Phase I Clinical Trial of a Product in the first Indication.	$[***]
Initiation of the first Phase IIb Clinical Trial of a Product in the first Indication.	$[***]
Initiation of the first Phase III Clinical Trial of a Product in the first Indication.	$[***]
Marketing Authorization for a Product in the United States for the first Indication.	$[***]
Marketing Authorization for a Product (i) in the first Major European Market for the first Indication, or (ii) from the EMA under a centralized filing for Product for the first Indication	$[***]
Marketing Authorization for a Product in Japan for the first Indication	$[***]
Initiation of the first Phase III Clinical Trial of a Product in a second Indication.	$[***]
Second Marketing Authorization for a Product in the United States	$[***]
Second Marketing Authorization for a Product (i) in the first Major European Market, or (ii) from the EMA under a centralized filing for Product	$[***]
Second Marketing Authorization for a Product in Japan	$[***]

In the event one or more clinical development milestones set forth in this Section 5.2.2(a)(i) are combined or skipped for any reason (e.g., as a result of FDA’s agreement that an alternative clinical trial design would be appropriate for the Product), the listed payment for the relevant milestone event(s) will be due upon the earlier of (A) achievement of the next clinical development milestone; or (B) the first Marketing Authorization of the Product.

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(ii) Sales Milestones

Milestone Event	Milestone Payment
The achievement of aggregate total of worldwide Net Sales of Products in any single Calendar Year of [*]) or more but less than [*].	$[***]
The achievement of aggregate total of worldwide Net Sales of Products in any single Calendar Year of [*] or more but less than [*].	$[***]
The achievement of aggregate total of worldwide Net Sales of Products in any single Calendar Year of [*] or more but less than [*].	$[***]
The achievement of aggregate total of worldwide Net Sales of Products in any single Calendar Year [***].	$[***]

(b) Merck shall notify Company in writing within sixty (60) days following the achievement of each milestone set forth in Section 5.2.2(a)(i) and (ii). With respect to the achievement of a milestone under Section 5.2.2(a)(i), Merck shall make the appropriate milestone payment within sixty (60) days after the achievement of such milestone. With respect to the achievement of a milestone under Section 5.2.2(a)(ii), Merck shall make the appropriate milestone payment within sixty (60) days after the close of the Calendar Quarter in which such milestone was achieved. The milestone payments set forth in this Section 5.2.2 shall be payable only upon the initial achievement of such milestone and no amounts shall be due hereunder for subsequent or repeated achievement of such milestone.

5.2.3 Royalties . If Merck has exercised a License Option:

(a) Royalties Payable By Merck. Subject to the terms and conditions of this Agreement, Merck shall pay Company royalties, calculated on a Product-by-Product basis, as set forth in this Section 5.2.3. Solely in connection with this Section 5.2.3(a), the Parties acknowledge that as of the Effective Date, the Parties [***]. However, if a [***], the Parties will discuss in good faith [***]for purposes of determining the applicable royalty tier would be appropriate.

(i) Patent Royalties . Subject to the provisions of Section 5.2.3(a)(ii), Merck shall pay Company royalties in an amount equal to the following percentage of Net Sales of Products where the sale of Product would infringe a Valid Patent Claim in the country of sale; provided that a Competitive Product is not sold in the country of sale:

a. [***] of worldwide Net Sales in each Calendar Year up to and including [***];

b. [***] of worldwide Net Sales in each Calendar Year for the portion of Net Sales exceeding [***] up to and including [***];

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c. [***] of worldwide Net Sales in each Calendar Year for the portion of Net Sales exceeding [***] up to and including [***]; and

d. [***] of worldwide Net Sales in each Calendar Year for the portion of Net Sales exceeding [***].

(ii) Know-How Royalty . Notwithstanding the provisions of Section 5.2.3(a)(i), in countries where the sale of Product by Merck or its Related Parties would not infringe a Valid Patent Claim or a Competitive Product is sold in the country, Merck shall pay royalty rates that shall be set at [***] of the applicable royalty rate determined according to 5.2.3(a)(i). Such royalties shall be calculated after first calculating royalties under Section 5.2.3(a)(i).

(iii) Royalty tiers pursuant to Section 5.2.3(a)(i) and Section 5.2.3(a)(ii) shall be calculated based on worldwide Net Sales of each Product, provided that the determination of whether the royalty shall be calculated under Section 5.2.3(a)(i) or 5.2.3(a)(ii) shall be determined on a country-by-country basis. Royalties on each Product at the rates set forth above shall continue on a country-by-country basis until the expiration of the later of: (i) the last-to-expire Valid Patent Claim; or (ii) for a period of [***] years after First Commercial Sale of such Product in such country (the “ Royalty Period ”).

(iv) All royalties are subject to the following conditions:

(1) that only one royalty shall be due with respect to the same unit of Product;

(2) that no royalties shall be due upon the sale or other transfer among Merck or its Related Parties, but in such cases the royalty shall be due and calculated upon Merck’s or its Related Party’s Net Sales to the first independent Third Party;

(3) no royalties shall accrue on the sale or other disposition of Product by Merck or its Related Parties for use in a Clinical Trial; and

(4) no royalties shall accrue on the disposition of Product in reasonable quantities by Merck or its Related Parties as samples (promotion or otherwise) or as donations (for example, to non-profit institutions or government agencies for a non-commercial purpose).

(b) Change in Sales Practices. The Parties acknowledge that during the term of this Agreement, Merck’s sales practices for the marketing and distribution of Product may change to the extent to which the calculation of the payment for royalties on Net Sales may become impractical or even impossible. In such event the Parties

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agree to meet and reasonably discuss new ways of compensating Company to the extent currently contemplated under Section 5.2.3(a).

(c) Royalties for Bulk Product Candidate. In those cases in which Merck or a Related Party sells bulk Product Candidate rather than Product in packaged form to an independent Third Party where neither Merck nor any Related Party receives any consideration for the sales of Product by such Third Party, the royalty obligations of this Section 5.2.3 shall be applicable to the bulk Product Candidate.

(d) Compulsory Licenses. If a compulsory license is granted to a Third Party with respect to Product Candidate or Product in any country in the Territory with a royalty amount lower than the royalty amount provided by Section 5.2.3(a), then, following the First Commercial Sale of Competitive Product in such country under such compulsory license, the royalty amount to be paid by Merck on Net Sales in that country under Section 5.2.3(a) shall be reduced to the amount paid by the compulsory licensee during the term of such compulsory license.

(e) Third Party Licenses. In the event that Merck obtains (after the Effective Date) a license under, or other rights to, Patent Rights or know-how or other intellectual property from any Third Party(ies) that are necessary in order to make, have made, use, import, offer to sell and/or sell Product(s) (hereinafter “Third Party Licenses ”), [***] of the royalties actually paid under such Third Party Licenses by Merck or its Related Parties in connection with the manufacture, use, sale or import, as applicable, of Product(s) in a country for a Calendar Quarter shall be creditable against the royalty payments due Company by Merck with respect to the sale of such Product in such Calendar Quarter in such country. Notwithstanding the foregoing, (i) in no event shall the royalties owed by Merck to Company for such Calendar Quarter for any Product for sales in a country be reduced by more than [***] pursuant to this Section 5.2.3(e) and (ii) if the Product is a Combination Product, then this Section 5.2.3(e) shall only apply to the extent that the Third Party License applies to the Product Candidate and not to the other pharmaceutically active ingredient. If Merck is not able to fully recover the amounts paid by Merck or its Related Parties under any Third Party License as a result of the foregoing restriction, then Merck shall be entitled to carry forward such right of off-set to future Calendar Quarters with respect to such excess amount. At the request of Merck, Company shall provide reasonable assistance to Merck (at Merck’s expense) (or its Related Parties) in obtaining any such Third Party Licenses or otherwise taking action with respect Patent Rights or know-how or other intellectual property of any Third Party(ies) that is reasonably necessary in order to make, have made, use, import, offer to sell and/or sell Product(s).

5.2.4 Reports ; Payment of Royalty. Following both (a) exercise of a License Option by Merck, if at all, and (b) the First Commercial Sale of a Product: Merck shall furnish to Company a quarterly written report for the Calendar Quarter showing the Net Sales of all Products, on a product-by-product and country-by-country basis, subject to royalty payments sold by Merck and its Related Parties in the Territory during the reporting period and the royalties payable under this Agreement, which reports shall show the aggregate deductions from gross sales under the definition of Net Sales and the calculation of

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royalties from Combination Products, if any, as determined in accordance with the applicable formula under the definition of Net Sales. Reports shall be due on the sixtieth (60th) day following the close of each Calendar Quarter. Royalties shown to have accrued by each royalty report shall be due and payable on the date such royalty report is due. Merck shall keep complete and accurate records in sufficient detail to enable the royalties payable hereunder to be determined.

5.2.5 Audits . Following both (a) exercise of a License Option by Merck, if at all, and (b) the First Commercial Sale of a Product:

(a) Upon the written request of Company and not more than once in each Calendar Year, Merck shall permit an independent certified public accounting firm of nationally recognized standing selected by Company and reasonably acceptable to Merck, at Company’s expense, to have access during normal business hours to such of the records of Merck as may be reasonably necessary to verify the accuracy of the royalty reports hereunder for any Calendar Year ending not more than thirty-six (36) months prior to the date of such request. The accounting firm shall disclose to Company only whether the royalty reports are correct or incorrect and the amount of any discrepancy. No other information shall be provided to Company.

(b) If such accounting firm correctly identifies a discrepancy made during such period, the appropriate Party shall pay the other Party the amount of the discrepancy within thirty (30) days of the date Company delivers to Merck such accounting firm’s written report so correctly concluding, or as otherwise agreed upon by the Parties. The fees charged by such accounting firm shall be paid by Company; provided , however , that if such audit uncovers an underpayment of royalties by Merck that exceeds [***], then the fees of such accounting firm shall be paid by Merck.

(c) Merck shall include in each sublicense granted by it pursuant to this Agreement a provision requiring the sublicensee to make reports to Merck, to keep and maintain records of sales made pursuant to such sublicense and to grant access to such records by Company’s independent accountant to the same extent required of Merck under this Agreement.

(d) Upon the expiration of thirty-six (36) months following the end of any Calendar Year, the calculation of royalties payable with respect to such Calendar Year shall be binding and conclusive upon Company, and Merck and its Related Parties shall be released from any liability or accountability with respect to royalties for such Calendar Year.

(e) Company shall treat all financial information subject to review under this Section 5.2.5 or under any sublicense agreement in accordance with the confidentiality and non-use provisions of this Agreement, and shall cause its accounting firm to enter into an acceptable confidentiality agreement with Merck and/or its Related Parties obligating it to retain all such information in confidence pursuant to such confidentiality agreement.

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5.2.6 Payment Terms . All payments to be made by Merck to Company under this Agreement shall be made in United States dollars and may be paid by check made to the order of Company or bank wire transfer in immediately available funds to such bank account in the United States as may be designated in writing by Company from time to time. In the case of sales outside the United States, the rate of exchange to be used in computing the monthly amount of currency equivalent in United States dollars due Company shall be determined by Merck at the monthly rate of exchange utilized by Merck in its worldwide accounting system.

5.2.7 Income Tax Withholding . Company shall be liable for all taxes on Company’s income and other taxes (including interest) (“ Taxes ”) imposed upon any payments made by Merck to Company under this Article 5 (“ Agreement Payments ”). If applicable laws, rules or regulations require the withholding of Taxes, Merck shall make such withholding payments to the appropriate tax authority and shall subtract the amount thereof from the Agreement Payments. Merck shall submit to Company appropriate proof of payment of the withheld Taxes as well as the official receipts within a reasonable period of time. Merck shall provide Company reasonable assistance in order to allow Company to obtain the benefit of any present or future treaty against double taxation which may apply to the Agreement Payments.

ARTICLE 6 REPRESENTATIONS AND WARRANTIES

6.1 Representations and Warranties of Each Party. Each Party represents and warrants to the other Party that as of the Effective Date:

6.1.1 such Party is duly organized and validly existing under the laws of the state or jurisdiction of its organization and has full corporate right, power and authority to enter into this Agreement and to perform its obligations hereunder;

6.1.2 the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by the necessary corporate actions of such Party. This Agreement has been duly executed by such Party. This Agreement and any other documents contemplated hereby constitute valid and legally binding obligations of such Party enforceable against it in accordance with their respective terms, except to the extent that enforcement of the rights and remedies created thereby is subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws of general application affecting the rights and remedies of creditors; and

6.1.3 the execution, delivery and performance by such Party of this Agreement and any other agreements and instruments contemplated hereunder will not (i) in any respect violate any statute, regulation, judgment, order, decree or other restriction of any governmental authority to which such Party is subject, (ii) violate any provision of the corporate charter, by-laws or other organizational documents of such Party, or (iii) constitute a material violation or breach by such Party of any provision of any material contract, agreement or instrument to which such Party is a party or to which such Party may be subject although not a party.

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6.2 Company Representations and Warranties. Company represents and warrants to Merck that as of the date of this Agreement:

6.2.1 to Company’s knowledge, the issued Patent Rights within the Company Background IP are not invalid or unenforceable, in whole or in part;

6.2.2 it has the full right, power and authority to enter into this Agreement, to perform the activities hereunder, including the Research Program, and to grant the licenses granted hereunder (including under Article 3);

6.2.3 it (and its Affiliates) has not prior to the Effective Date otherwise granted any rights to any Third Parties that would conflict with the rights granted to Merck hereunder;

6.2.4 to Company’s knowledge, it owns or controls the Company Background IP, all of which are (and shall be, in the case of Company Information and Inventions) free and clear of any liens, charges and encumbrances;

6.2.5 neither it nor any of its Affiliates has received any written notification from a Third Party that the use of the Company Background IP infringes or misappropriates the Patent Rights or know-how owned or controlled by such Third Party, and Company has no actual knowledge that a Third Party has any basis for any such claim;

6.2.6 Company has obtained all necessary consents, approvals and authorizations of all governmental authorities and other Persons required to be obtained by it as of the Effective Date, as applicable, in connection with the execution, delivery and performance of this Agreement by Company; and

6.2.7 Company (and its Affiliates) has not employed or otherwise used in any capacity, and will not employ or otherwise use in any capacity, the services of any Person debarred under United States law, including under Section 21 USC 335a or any foreign equivalent thereof, in performing any portion of the Research Program.

6.3 Warranty Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY WARRANTY WITH RESPECT TO ANY TECHNOLOGY, PATENTS, GOODS, SERVICES, RIGHTS OR OTHER SUBJECT MATTER OF THIS AGREEMENT, AND EACH PARTY HEREBY DISCLAIMS WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT WITH RESPECT TO ANY AND ALL OF THE FOREGOING. THE PARTIES ACKNOWLEDGE THAT ANY INFORMATION, BIOLOGICAL MATERIAL AND KNOW-HOW PROVIDED BY ONE PARTY TO ANOTHER HEREUNDER, ARE PROVIDED “AS IS” WITH NO WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED.

ARTICLE 7 PATENT PROVISIONS.

7.1 Filing , Prosecution and Maintenance of Patents.

7.1.1 Patent Rights in Company Background IP . Company, or, as applicable, Company’s licensors, shall be solely responsible for the preparation, filing, prosecution and

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maintenance of any patent or patent application claiming Company Background IP and during the term of this Agreement, shall keep Merck reasonably informed regarding the filing and prosecution of any such patent applications filed by Company during the Research Term.

7.1.2 Company Patent Rights Prior to Option Exercise . On a program-by-program basis, until the earlier of (i)(A) [***] License Option exercise by Merck or (B) [***] License Option exercise by Merck (as applicable) and (ii) expiration of the later of (A) the [***] Option Term or (B) the [***] Option Term (as applicable), Company shall have the sole right to prosecute all Research Program Patent Rights arising from the applicable program, in consultation with Merck, and in accordance with the following:

(a) Company shall give Merck an opportunity to review the text of any draft patent application before filing. Company shall consult with Merck with respect to such patent application, and shall make all changes to such application reasonably requested by Merck. Merck shall provide to Company any feedback regarding such application within thirty (30) days of Company consulting with Merck under this section. For clarity, Company shall not be required to make a change requested by Merck to any Research Program Patent Right that Company reasonably determines would be detrimental to any Company Background IP.

(b) Company agrees not to file any patent application that would be a Product-Specific Company Patent Right or Joint Patent Right (in the event that Merck were to exercise the applicable Option). Merck, in consultation with Company, shall have the right to determine whether claims or unclaimed disclosure in any draft patent application under this section cover such subject matter and, if Merck so determines, then Company will remove such claims or disclosure from the draft.

(c) Company shall supply Merck with a copy of the application as filed, together with notice of its filing date and serial number.

(d) Company shall keep Merck advised of the prosecution and maintenance status of the Research Program Patent Rights and, upon Merck’s request, shall provide advance copies of draft responses to substantive official office actions for review and comment by Merck. Such comments shall be provided by Merck within fourteen (14) days after receipt of such office actions. Company shall follow any reasonable advice and suggestions timely provided by Merck in connection therewith.

(e) Company shall promptly give notice to Merck of the grant, lapse, revocation, surrender, invalidation or abandonment of any Research Program Patent Rights licensed to Merck.

(f) Company shall give notice to Merck of any desire to cease prosecution and/or maintenance of any Research Program Patent Right on a country-by-country basis in the Territory and, in such case, shall permit Merck, in its sole discretion, to continue prosecution or maintenance of such Research Program Patent Right at its own expense. If Merck elects to continue prosecution or maintenance of such

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Research Program Patent Right, Company shall execute documents in a timely manner as may be reasonably necessary to allow Merck to continue such prosecution and maintenance. During prosecution of an application, however, Company may on its own, without providing such notice, abandon an application as long as a parent or child of such application is co-pending.

7.1.3 Product -Specific Company Patent Rights Following Option Exercise . If Merck exercises a License Option, from the date of such License Option exercise: Merck shall have the first right to file the corresponding patent applications claiming such Product-Specific Company Patent Rights included within such License Option at its own expense; and the following provisions shall apply with respect to such patent applications in the Product-Specific Company Patent Rights claiming or covering the corresponding subject matter:

(a) Merck shall give Company an adequate opportunity to review the text of any draft patent application before filing. Company shall provide to Merck any feedback regarding such application within thirty (30) days of receipt thereof. Merck shall supply Company with a copy of the application as filed, together with notice of its filing date and serial number.

(b) Upon request from Merck, at Merck’s expense, Company will cooperate with Merck in the drafting, prosecution and filing of Product-Specific Company Patent Rights including, but not limited to, determination of proper inventorship, execution of formal papers (including declarations, powers of attorney and assignments) and providing technical feedback and experimental data.

(c) Merck has the first right to prosecute and maintain the Product-Specific Company Patent Rights and to select countries in which to file the Product-Specific Company Patent Rights. Merck shall use Commercially Reasonable Efforts with regard to selecting countries in which to file the Product-Specific Company Patent Rights.

(d) Merck shall keep Company advised of the status of the prosecution and maintenance status of the Product-Specific Company Patent Rights and, upon Company’s written request, shall provide copies of office actions related to the prosecution and maintenance of the Product-Specific Company Patent Rights.

(e) Merck shall promptly give notice to Company of the grant, lapse, revocation, surrender, invalidation or abandonment of any Product-Specific Company Patent Rights.

(f) Merck shall give at least fifteen (15) days’ advanced written notice to Company of any desire to cease prosecution and/or maintenance of Product-Specific Company Patent Rights on a country-by-country basis in the Territory and, in such case, shall permit Company, in its sole discretion, to assume and continue prosecution or maintenance of such Product-Specific Company Patent Rights at its own expense. During prosecution of an application, however, Merck may on its own, without providing such notice, abandon an application as long as a parent or child of such application is co-pending.

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7.1.4 Research Program Patent Rights Following Option Exercise . If Merck exercises a License Option, from the date of such License Option exercise: Company shall have the first right to prosecute all Research Program Patent Rights arising from the applicable program, in consultation with Merck, and in accordance with the following:

(b) Company agrees not to file any patent application that would be a Product-Specific Company Patent Right or Joint Patent Right. Merck, in consultation with Company, shall have the right to determine whether claims or unclaimed disclosure in any draft patent application under this section cover Product-Specific Company Patent Rights or Joint Patent Rights and, if Merck so determines, then Company will remove such claims or disclosure.

(c) Company shall supply Merck with a copy of the application as filed, together with notice of its filing date and serial number.

(e) Company shall promptly give notice to Merck of the grant, lapse, revocation, surrender, invalidation or abandonment of any Research Program Patent Rights licensed to Merck.

(f) Company shall give notice to Merck of any desire to cease prosecution and/or maintenance of Research Program Patent Rights on a country-by-country basis in the Territory and, in such case, shall permit Merck, in its sole discretion, to continue prosecution or maintenance of such Research Program Patent Rights at its own expense. If Merck elects to continue prosecution or maintenance of such Research Program Patent Rights, Company shall execute documents in a timely manner as may be reasonably necessary to allow Merck to continue such prosecution and maintenance. During prosecution of an application, however, Company may on its own, without providing such notice, abandon an application as long as a parent or child of such application is co-pending.

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7.1.5 Joint Patent Rights. Until the earlier of (i)(A) the [***] License Option exercise by Merck or (B) the [***] Option Exercise by Merck and (ii) expiration of the later of (A) the [***] Option Term or (B) the [***] Option Term, neither Party shall, without the other Party’s written consent, file patent applications that claim or cover Joint Information and Inventions. Company shall have the first right to file the corresponding patent applications claiming or covering such Joint Information and Inventions only if Merck does not exercise the corresponding License Option. Following exercise by Merck of a License Option, if at all: Merck shall have the first right to file the corresponding patent applications claiming or covering such Joint Information and Inventions; and the following provisions shall apply with respect to patent applications in such Joint Patent Rights:

(a) Merck shall give Company an adequate opportunity to review the text of any patent application before filing, shall consult with Company with respect thereto, and shall supply Company with a copy of the application as filed, together with notice of its filing date and serial number.

(b) Upon request from Merck, at Merck’s expense, Company will cooperate with Merck in the drafting, prosecution and filing of Joint Patent Rights including, but not limited to, determination of proper inventorship, execution of formal papers (including declarations, powers of attorney and assignments) and providing technical feedback and experimental data.

(c) Merck has the first right to prosecute and maintain the Joint Patent Rights and to select countries in which to file the Joint Patent Rights.

(d) Merck shall keep Company advised of the status of the Joint Patent Rights and, upon Company’s written request, shall provide copies of office actions related to the prosecution and maintenance of the Joint Patent Rights.

(e) Merck shall give notice to Company of the grant, lapse, revocation, surrender, invalidation or abandonment of any Joint Patent Rights.

(f) Merck shall give at least fifteen (15) days’ advanced written notice to Company of any desire to cease prosecution and/or maintenance of Joint Patent Rights on a country-by-country basis in the Territory and, in such case, shall permit Company, in its sole discretion, to assume and continue prosecution or maintenance of such Joint Patent Rights at its own expense. During prosecution of an application, however, Merck may on its own, without providing such notice, abandon an application as long as a parent or child of such application is co-pending.

7.1.6 Other Provisions . Following exercise of a License Option by Merck, if at all:

(a) Patent Term Extension. The Parties shall cooperate fully with each other to provide necessary information and assistance, as the other Party may reasonably request, in obtaining patent term extension or supplemental protection certificates or their equivalents in any country in the Territory where applicable to Company Patent Rights and Joint Patent Rights of the corresponding exercised License Option. In the event that elections with respect to obtaining such patent term

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extension are to be made, Merck shall have the right to make the election and Company agrees to abide by such election.

(b) Other Cooperation. The Parties agree to cooperate fully and provide any information and assistance that either may reasonably request for the filing, prosecution and maintenance of Company Patent Rights and Joint Patent Rights. The Parties further agree to take reasonable actions to maximize the protections available under the safe harbor provisions of 35 U.S.C. 102(c) for U.S. patents and patent applications.

7.1.7 Filing , Prosecution and Maintenance Expenses. With respect to all filing, prosecution and maintenance activities under this Section 7.1, the filing and/or prosecuting Party shall be responsible for payment of all costs and expenses related to such activities.

7.1.8 Inventor Remuneration. Company shall comply with all applicable country-specific inventor remuneration laws and regulations associated with Company Patent Rights and Joint Patent Rights when inventor remuneration obligations are triggered by an employee of Company and/or its Affiliates, or a Third Party acting on behalf of Company and/or its Affiliates. Merck shall comply with all applicable country-specific inventor remuneration laws and regulations associated with Joint Patent Rights when inventor remuneration obligations are triggered by an employee of Merck and/or its Affiliates, or a Third Party acting on behalf of Merck and/or its Affiliates.

7.2 Interference , Derivation, Opposition, Reexamination, Reissue, Supplemental Examination, Inter Partes Review and Post-Grant Review Proceedings . Following exercise by Merck of the [***] License Option or [***] License Option, if at all, the following provisions shall apply with respect to any Product-Specific Company Patent Rights or Joint Patent Rights corresponding to the exercised License Option:

7.2.1 Third Party Initiated Proceedings. Each Party shall, within ten (10) days of learning of such event, inform the other Party of any request for, or filing or declaration of, any interference, derivation proceeding, opposition, reexamination requested by a Third Party, inter partes review, post-grant review or similar contested administrative proceeding involving a Third Party relating to Product-Specific Company Patent Rights or Joint Patent Rights. Merck and Company shall thereafter consult and cooperate fully to determine a course of action with respect to any such proceeding. Merck shall have the right to control such proceedings with respect to Product-Specific Company Patent Rights and Joint Patent Rights, and Company shall have the right to review any submission to be made in connection with such proceeding. The controlling Party shall bear all costs of conducting such proceedings.

7.2.2 Party Initiated Proceedings. Merck shall have the sole right and discretion to initiate a reexamination, supplemental examination, reissue or similar administrative proceeding relating to Product-Specific Company Patent Rights or Joint Patent Rights. Company shall have the right to review any submission to be made in connection with such proceeding. If there is disagreement regarding whether a reexamination, supplemental examination, reissue or similar administrative proceeding relating to Product-Specific Company Patent Rights or Joint Patent Rights should be initiated, such disagreement shall be referred to the

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senior intellectual property officers of the Parties. In the event that these two executives do not, after reasonable efforts, reach agreement, the resolution and/or course of conduct shall be determined by Merck. In the event that Merck chooses not to initiate a proceeding under this Section 7.2.2, and upon Merck’s written consent, Company shall have the right to initiate such proceedings. Merck shall have the right to control such proceedings.

7.2.3 Cooperation . In connection with any administrative proceeding under Section 7.2.1 or 7.2.2, Merck and Company shall cooperate fully and provide each other with any information or assistance that either may reasonably request. The Parties shall keep each other informed of developments in any such action or proceeding, including the status of any settlement negotiations and the terms of any offer related thereto. For any proceeding not controlled by Merck, Company shall obtain prior approval from Merck of any settlement offer or settlement agreement, which approval shall not be unreasonably withheld, conditioned or delayed.

7.2.4 Expenses . The Party controlling any administrative proceeding pursuant to Section 7.2.1 and 7.2.2 shall bear all expenses related thereto.

7.3 Enforcement and Defense. Following exercise by Merck of the [***] License Option or the [***] License Option, if at all, the following provisions shall apply with respect to any Know-How, Product-Specific Company Patent Rights, or Joint Patent Rights; or any Company Background IP or Research Program Patent Rights that claim Product or Product Candidate as a composition-of-matter or, on a country-by-country basis, a method of treatment of a human disease which has received Marketing Authorization by the appropriate Regulatory Authority in the country in the Territory corresponding to the exercised License Option:

7.3.1 The Parties shall give notice to each other of either (i) any infringement of Product-Specific Company Patent Rights or Joint Patent Rights; or any Company Background IP or Research Program Patent Rights that claim Product or Product Candidate as a composition-of-matter or, on a country-by-country basis, a method of treatment of a human disease which has received Marketing Authorization by the appropriate Regulatory Authority in the country in the Territory (including filing of a Biosimilar Application filed under Section 351(k) of the Public Health Service Act for which Merck is a reference product sponsor), or (ii) any misappropriation or misuse of Company Know-How, that may come to its attention. Merck and Company shall thereafter consult and cooperate fully to determine a course of action, including but not limited to the commencement of legal action by either or both Merck and Company, to terminate any infringement of Product-Specific Company Patent Rights or Joint Patent Rights; or any Company Background IP or Research Program Patent Rights that claim Product or Product Candidate as a composition-of-matter or, on a country-by-country basis, a method of treatment of a human disease which has received Marketing Authorization by the appropriate Regulatory Authority in the country in the Territory or any misappropriation or misuse of Company Know-How. The final decision regarding the course of action, however, will be Merck’s. Merck, upon notice to Company, shall have the first right to initiate and prosecute such legal action at its own expense and in the name of Merck and/or Company. Merck will have the right to control such legal action relating to Product-Specific Company Patent Rights, Company Know-How or Joint Patent Rights; or any Company Background IP or Research Program Patent Rights that claim Product or Product Candidate as a composition-of-matter or, on a country-by-country

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basis, a method of treatment of a human disease which has received Marketing Authorization by the appropriate Regulatory Authority in the country in the Territory, including selection of any patents for listing under 42 U.S.C. §262(l), and to control the defense of any declaratory judgment action relating to Product-Specific Company Patent Rights, Company Know-How or Joint Patent Rights; or any Company Background IP or Research Program Patent Rights that claim Product or Product Candidate as a composition-of-matter or, on a country-by-country basis, a method of treatment of a human disease which has received Marketing Authorization by the appropriate Regulatory Authority in the country in the Territory. Each Party shall have the right to be represented by counsel of its own choice.

7.3.2 Merck shall promptly inform Company if it elects not to exercise its first right under Section 7.3.1 to initiate and prosecute legal action, and, if Merck consents, Company shall thereafter have the right to either initiate and prosecute such action or to control the defense of such declaratory judgment action in the name of Company and, if necessary, Merck. If Company elects to do so, the costs of any agreed-upon course of action to terminate infringement of Product-Specific Company Patent Rights or Joint Patent Rights; or any Company Background IP or Research Program Patent Rights that claim Product or Product Candidate as a composition-of-matter or, on a country-by-country basis, a method of treatment of a human disease which has received Marketing Authorization by the appropriate Regulatory Authority in the country in the Territory; or misappropriation or misuse of Company Know-How, including without limitation the costs of any legal action commenced or the defense of any declaratory judgment, shall be paid by Company. Each Party shall have the right to be represented by counsel of its own choice.

7.3.3 For any action to terminate any infringement of Product-Specific Company Patent Rights or Joint Patent Rights; or any Company Background IP or Company Patent Rights that claim Product or Product Candidate as a composition-of-matter or, on a country-by-country basis, a method of treatment of a human disease which has received Marketing Authorization by the appropriate Regulatory Authority in the country in the Territory; or any misappropriation or misuse of Company Know-How, in the event that a Party is unable to initiate or prosecute such action solely in its own name, the other Party will join such action voluntarily and will execute and cause its Affiliates to execute all lawful documents necessary for the Party to initiate litigation to prosecute and maintain such action under this Section 7.3. In connection with any action or potential action, Merck and Company will cooperate fully and will provide each other with any information or assistance that either may reasonably request, including cooperating with regard to any pre-litigation review of the Product-Specific Company Patent Rights and Joint Patent Rights; or any Company Background IP or Research Program Patent Rights that claim Product or Product Candidate as a composition-of-matter or, on a country-by-country basis, a method of treatment of a human disease which has received Marketing Authorization by the appropriate Regulatory Authority in the country in the Territory. Each Party shall keep the other informed of developments in any action or proceeding. For any proceeding not controlled by Merck, Company shall obtain prior approval from Merck of any settlement offer or settlement agreement, such approval not to be unreasonably withheld, delayed or conditioned.

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7.3.4 Any recovery obtained by either or both Merck and Company in connection with or as a result of any action contemplated by this Section, whether by settlement or otherwise, shall be shared in order as follows:

(a) the Party which initiated and prosecuted the action shall recoup all of its costs and expenses incurred in connection with the action;

(b) the other Party shall then, to the extent possible, recover its costs and expenses incurred in connection with the action; and

(c) the amount of any recovery remaining shall then be allocated between the Parties on a pro rata basis taking into consideration the relative economic losses suffered by each Party.

ARTICLE 8 TERM AND TERMINATION

8.1 Term and Expiration. This Agreement shall be effective as of the Effective Date and unless terminated earlier pursuant to Sections 8.2 or 8.3, this Agreement shall continue in full force and effect until one or more Products has received Marketing Authorization and, thereafter, until expiration of all royalty obligations hereunder. Upon expiration of this Agreement, Merck's licenses pursuant to Section 3.2.1 and 3.2.2 shall become fully paid-up, perpetual licenses.

8.2 Termination by Merck.

8.2.1 During the Term of the License Option . During the term of the License Option, notwithstanding anything contained herein to the contrary, Merck shall have the right to terminate this Agreement, in its sole discretion, by giving ninety (90) days’ advance written notice of such termination to Company. For the avoidance of doubt, termination by Merck under this Section can be effected only through a written notice specifically referring to this Section.

8.2.2 Following Option Exercise. Notwithstanding anything contained herein to the contrary, and following exercise of a License Option by Merck, if at all, Merck shall have the right to terminate this Agreement at any time in its sole discretion by giving ninety (90) days’ advance written notice to Company. For the avoidance of doubt, termination by Merck under this Section can be effected only through a written notice specifically referring to this Section.

8.2.3 Termination due to Option Expiration. If Merck does not exercise a License Option on or before the end of the term of the License Option, this Agreement shall terminate automatically with no further action of the Parties.

8.3 Termination for Cause.

8.3.1 Cause for Termination. This Agreement may be terminated at any time during the term of this Agreement:

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(a) upon written notice by either Party if the other Party is in breach of its material obligations hereunder by causes and reasons within its control and has not cured such breach within ninety (90) days after notice requesting cure of the breach; provided , however , in the event of a good faith dispute with respect to the existence of a material breach, the ninety (90) day cure period shall be tolled until such time as the dispute is resolved pursuant to Section 9; or

(b) by either Party upon the filing or institution of bankruptcy, reorganization, liquidation or receivership proceedings, or upon an assignment of a substantial portion of the assets for the benefit of creditors by the other Party; provided , however , that in the case of any involuntary bankruptcy proceeding such right to terminate shall only become effective if the Party consents to the involuntary bankruptcy or such proceeding is not dismissed within ninety (90) days after the filing thereof.

8.3.2 Effect of Termination by Merck for Cause under Section 8.3.1(a) . In addition to Sections 8.4 and 8.5, if this Agreement is terminated by Merck pursuant to Section 8.3.1(a) following exercise by Merck of a License Option for a material breach by Company of Article 4 of this Agreement, Merck’s licenses pursuant to Sections 3.2.1 and 3.2.2 shall become perpetual licenses subject to the payment of royalties pursuant to the terms of Section 5.2.3 in an amount equal to fifty percent (50%) of any amounts set forth in such Section 5.2.3.

8.3.3 Effect of Termination for Cause under Section 8.3.1(b) . In addition to Sections 8.4 and 8.5, if this Agreement is terminated by Merck pursuant to Section 8.3.1(b) due to the rejection of this Agreement by or on behalf of Company under Section 365 of the United States Bankruptcy Code (the “Code” ), all licenses and rights to licenses granted under or pursuant to this Agreement by Company to Merck are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the Code, licenses of rights to “intellectual property” as defined under Section 101(35A) of the Code. The Parties agree that Merck, as a licensee of such rights under this Agreement, shall retain and may fully exercise all of its rights and elections under the Code, and that upon commencement of a bankruptcy proceeding by or against Company under the Code, Merck shall be entitled to a complete duplicate of or complete access to (as Merck deems appropriate), any such intellectual property and all embodiments of such intellectual property. Such intellectual property and all embodiments thereof shall be promptly delivered to Merck (i) upon any such commencement of a bankruptcy proceeding upon written request therefore by Merck, unless Company elects to continue to perform all of its obligations under this Agreement or (ii) if not delivered under (i) above, upon the rejection of this Agreement by or on behalf of Company upon written request therefore by Merck. The foregoing provisions of this Section 8.3.3 are without prejudice to any rights Merck may have arising under the Code or other applicable law.

8.3.4 Termination of Certain Licenses . If Merck or a Related Party commences or otherwise, directly or indirectly, pursues (or assists Third Parties to do so) any Challenge of any Patent Right included in the Company Patent Rights, Merck’s licenses hereunder shall terminate. For the purpose of this Section, “ Challenge ” means any challenge to the validity or enforceability of the applicable Patent Right, including by (i) filing a declaratory judgment action in which the applicable Patent Right is alleged to be invalid or unenforceable, (ii)

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citing prior art pursuant to 35 U.S.C. §301, filing a request for re-examination of the applicable Patent Right, or provoking or becoming party to an interference with the applicable Patent Right pursuant to 35 U.S.C. §135 or (iii) filing or commencing any re-examination, opposition, cancellation, nullity or similar proceedings against the applicable Patent Right, or petitioning for any form of administrative or judicial (or arbitration) review of the applicable Patent Right, including post-grant review, Inter Partes Review, or opposition proceedings.

8.4 Effects of Termination . In the event of any termination of this Agreement (except as otherwise expressly stated):

8.4.1 Except for the surviving provisions set forth in Section 8.5, the rights and obligations of the Parties hereunder (including the licenses and option rights under Article 3) shall terminate as of the date of such termination.

8.4.2 No later than thirty (30) days after the effective date of termination, each Party shall return or cause to be returned to the other Party all Information in tangible form received from the other Party and all copies thereof; provided , however , that each Party may retain any Information reasonably necessary for such Party’s continued practice under any license(s) which do not terminate pursuant to this Section, and may keep one copy of Information received from the other Party in its confidential files for record purposes.

8.4.3 Each Party shall pay all amounts then due and owing as of the termination date.

8.4.4 The Parties shall confer to determine how the Joint Patent Rights will be addressed.

8.4.5 Upon termination of this Agreement by either Party (other than a termination of this Agreement by Merck where Section 8.3.2 applies) following exercise of a License Option by Merck, (i) Merck and its Affiliates, sublicensees and distributors shall be entitled, during the twelve (12)-month period immediately following the effective date of termination, to finish any work-in-progress and to sell any Product or Product Candidate remaining in inventory, in accordance with the terms of this Agreement, subject to royalties therefor, and (ii) the obligations under Article 5 (Payments, Royalties and Reports) in connection with any selling permitted by clause (i) above shall continue in force and effect during such twelve (12)-month period until the expiration of the Royalty Period for each Product (provided for clarity that this clause shall not be construed to grant any licenses to Merck other than the permissions granted pursuant to this Section 8.4.5).

8.5 Effect of Expiration or Termination; Survival . Expiration or termination of this Agreement shall not relieve the Parties of any obligation accruing prior to such expiration or termination. Any expiration or termination of this Agreement shall be without prejudice to the rights of either Party against the other accrued or accruing under this Agreement prior to expiration or termination, including without limitation the obligation to pay royalties for Product(s) or Product Candidate sold prior to such expiration or termination. The provisions of Section 4.1 shall survive the expiration or termination of this Agreement and shall continue in effect for ten (10) years. The provisions of Article 1 (Definitions), Article 8 (Termination) and Article 9 (Miscellaneous) and Sections 2.7.1 (Research Information and Inventions), 7.1.5 (Joint Patent Rights), shall survive any expiration or termination of this Agreement.

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ARTICLE 9 MISCELLANEOUS

9.1 Indemnification .

9.1.1 Indemnification by Merck . Merck hereby agrees to indemnify, hold harmless and defend Company, its Affiliates and their respective officers, directors, agents, employees, successors and assigns (collectively, the “ Company Indemnified Parties ”) against any and all losses, costs, expenses, fees or damages arising out of or relating to claims, allegations, suits, actions or proceedings asserted by any Third Party, whether governmental or private, arising out of or relating to (i) breach by Merck of Section 2.9 (Compliance with Law and Ethical Business Practices), or (ii) if a License Option is exercised by Merck, the clinical development, manufacture, use, sale or other disposition of any Product Candidate or Product by Merck any Related Party.

9.1.2 Indemnification by Company . Company agrees to indemnify, hold harmless and defend Merck, its Affiliates and their respective officers, directors, agents, employees, successors and assigns (collectively, the “ Merck Indemnified Parties ”) against any and all losses, costs, expenses, fees or damages arising out of or relating to claims, allegations, suits, actions or proceedings asserted by any Third Party, whether governmental or private, arising out of or relating to breach by Company of Section 2.9 (Compliance with Law and Ethical Business Practices).

9.1.3 Procedure . If either Party is seeking indemnification under Section 9.1 (the “ Indemnified Party ”), it shall inform the other Party (the “ Indemnifying Party ”) of the claim giving rise to the obligation to indemnify pursuant to such Section as soon as reasonably practicable after receiving notice of the claim ( provided , however , any delay or failure to provide such notice shall not constitute a waiver or release of, or otherwise limit, the Indemnified Party’s rights to indemnification under, as applicable, Section 9.1, except to the extent that such delay or failure materially prejudices the Indemnifying Party’s ability to defend against the relevant claims). The Indemnifying Party shall have the right to assume the defense of any such claim for which it is obligated to indemnify the Indemnified Party. The Indemnified Party shall cooperate with the Indemnifying Party and the Indemnifying Party’s insurer as the Indemnifying Party may reasonably request, and at the Indemnifying Party’s cost and expense. The Indemnified Party shall have the right to participate, at its own expense and with counsel of its choice, in the defense of any claim or suit that has been assumed by the Indemnifying Party. The Indemnifying Party shall not settle any claim without the prior written consent of the Indemnified Party, not to be unreasonably withheld or delayed. The Indemnified Party shall not settle or compromise any such claim without the prior written consent of the Indemnifying Party, which it may provide (or not) in its sole discretion. If the Parties cannot agree as to the application of Section 9.1 to any claim, pending resolution of the dispute pursuant to Section 9.9, the Parties may conduct separate defenses of such claims, with each Party retaining the right to claim indemnification from the other Party in accordance with Section 9.1 upon resolution of the underlying claim.

9.2 Limitation of Liability . NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY UNDER ANY THEORY FOR, NOR SHALL ANY INDEMNIFIED PARTY HAVE THE RIGHT TO RECOVER, ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, INDIRECT OR

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OTHER SIMILAR DAMAGES OR ANY PUNITIVE DAMAGES OR ANY LOST PROFIT, LOST SALE OR LOST OPPORTUNITY DAMAGES (WHETHER SUCH DAMAGES ARE CLAIMED DIRECTLY OR INDIRECTLY) ARISING FROM OR RELATING TO THIS AGREEMENT (INCLUDING BREACH OF THIS AGREEMENT) OR THE EXERCISE OF ITS RIGHTS HEREUNDER, REGARDLESS OF ANY NOTICE OF THE POSSIBILITY OF SUCH DAMAGES; PROVIDED, HOWEVER, THAT SUCH LIMITATION SHALL NOT APPLY TO DAMAGES PAID OR PAYABLE TO A THIRD PARTY BY AN INDEMNIFIED PARTY FOR WHICH THE INDEMNIFIED PARTY IS ENTITLED TO INDEMNIFICATION HEREUNDER AND WITH RESPECT TO DAMAGES ARISING OUT OF OR RELATED TO A BREACH OF ITS CONFIDENTIALITY OBLIGATIONS UNDER ARTICLE 4.

9.3 Force Majeure . Neither Party shall be held liable to the other Party nor be deemed to have defaulted under or breached this Agreement for failure or delay in performing any obligation under this Agreement to the extent such failure or delay is caused by or results from causes beyond the reasonable control of the affected Party, potentially including, but not limited to, embargoes, war, acts of war (whether war be declared or not), acts of terrorism, insurrections, riots, civil commotions, strikes, lockouts or other labor disturbances, fire, floods, or other acts of God, or acts, omissions or delays in acting by any governmental authority or the other Party. The affected Party shall notify the other Party of such force majeure circumstances as soon as reasonably practical, and shall promptly undertake all reasonable efforts necessary to cure such force majeure circumstances.

9.4 Assignment . Except as provided in this Section 9.4, this Agreement may not be assigned or otherwise transferred, nor may any right or obligation hereunder be assigned or transferred, by either Party without the consent of the other Party; provided , however , that (i) Merck may, without such consent, assign, in whole or in part, this Agreement and its rights and obligations hereunder to an Affiliate and (ii) either Party may, without such consent, assign this Agreement in connection with the transfer or sale of all or substantially all of its assets related to the subject matter of this Agreement, or in the event of its merger or consolidation or change in control or similar transaction. Any attempted assignment not in accordance with this Section 9.4 shall be void. Any permitted assignee shall assume all assigned obligations of its assignor under this Agreement.

9.5 Use of Affiliates . Merck shall have the right to exercise its rights and perform its obligations under this Agreement either itself or through any of its Affiliates; provided , for clarity, that Merck shall remain at all times fully liable for its responsibilities under this Agreement and a Merck Affiliate shall have no right to enforce this Agreement against Company.

9.6 Severability . If any one or more of the provisions contained in this Agreement is held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby, unless the absence of the invalidated provision(s) adversely affects the substantive rights of the Parties. The Parties shall in such an instance use reasonable efforts to replace the invalid, illegal or unenforceable provision(s) with valid, legal and enforceable provision(s) which, insofar as practical, implement the purposes of this Agreement.

9.7 Notices . All notices which are required or permitted hereunder shall be in writing and sufficient if delivered personally, sent by facsimile (and promptly confirmed by personal delivery,

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registered or certified mail or overnight courier), sent by nationally-recognized overnight courier or sent by registered or certified mail, postage prepaid, return receipt requested, addressed as follows:

if to Company, to:	SYNTHETIC GENOMICS, INC.11149 North Torrey Pines Road La Jolla, CA 92037 Attention: Chief Executive Officer



and:	Attention: Office of General Counsel

if to Merck, to:	Merck Sharp & Dohme Corp. One Merck Drive Whitehouse Station, NJ 08889-0100 Attention: Office of Secretary Facsimile No.: (908) 735-1246
and	Merck Sharp & Dohme Corp. 2000 Galloping Hill Road PO Box 539 Mailstop K-1-4161 Kenilworth, NJ 07033-1310 Attention: Senior Vice President, Business Development

or to such other address(es) as the Party to whom notice is to be given may have furnished to the other Party in writing in accordance herewith. Any such notice shall be deemed to have been given: (a) when delivered if personally delivered or sent by facsimile on a business day (or if delivered or sent on a non-business day, then on the next business day); (b) on the business day after dispatch if sent by nationally-recognized overnight courier; or (c) on the fifth (5th) business day following the date of mailing, if sent by mail. The Parties hereby agree that, to the extent permitted by law, any notice provided in accordance with this Section shall constitute due service of process with respect to any legal proceeding between the Parties arising hereunder and that compliance with the Hague Convention for the Service of Process, if otherwise applicable, shall not be required.

9.8 Applicable Law . This Agreement shall be governed by and construed in accordance with the laws of the State of New York without reference to any rules of conflict of laws or renvoi.

9.9 Dispute Resolution.

9.9.1 The Parties shall negotiate and use reasonable efforts to settle any dispute, controversy or claim arising from or related to this Agreement or the breach thereof (a “Dispute” ). Any Party shall give the other Party written notice of any Dispute not resolved in the normal course of business. Within 20 days from the date of delivery of such notice, the receiving Party shall submit to the other Party a written response. The notice and response shall include (A) a statement of that Party's position and a summary of arguments supporting

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that position, and (B) the name and title of the executive who will represent that Party and of any other person who will accompany the executive. Within 45 days from the date of delivery of the initial notice, the executives of both Parties shall meet at a mutually acceptable time and place, and thereafter as often as they reasonably deem necessary, to attempt to resolve the Dispute. These executives shall have the authority to settle the Dispute and shall be at a higher level of management than the persons with direct responsibility for administration of this Agreement. All negotiations pursuant to this paragraph are confidential and shall be treated as compromise and settlement negotiations for purposes of applicable rules of evidence.

9.9.2 If the Parties do not fully settle following the procedure in Section 9.9.1, and a Party wishes to pursue the matter, each dispute, controversy or claim arising from or related to this Agreement or the breach thereof that is not an “Excluded Claim” shall be brought in (i) if the suit is initiated by Company, the federal court for the District of New Jersey, if federal jurisdiction is available, or, alternatively, in the state courts in Union County, New Jersey or (ii) if the suit is initiated by Merck, the federal court for the Southern District of California, if federal jurisdiction is available, or, alternatively, in the state courts in San Diego County, California. Each of the Parties hereby submits to the exclusive jurisdiction of such courts for the purpose of any such litigation; provided , that a final judgment in any such litigation shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Each party irrevocably and unconditionally agrees not to assert (a) any objection which it may ever have to the laying of venue of any such litigation in such courts, (b) any claim that any such litigation brought in any such court has been brought in an inconvenient forum, and (c) any claim that such court does not have jurisdiction with respect to such litigation. EACH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT TO A TRIAL BY JURY AND AGREES THAT ANY OF THEM MAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE ITS RIGHT TO TRIAL BY JURY IN ANY LITIGATION.

9.9.3 As used in this Section, the term “Excluded Claim” means a dispute, controversy or claim that concerns (a) the validity or infringement of a patent, trademark or copyright; or (b) any antitrust, anti-monopoly or competition law or regulation, whether or not statutory. Any action concerning Excluded Claims identified in clauses (a) and (b) of this Paragraph may be brought in any court having jurisdiction.

9.10 Entire Agreement; Amendments . This Agreement, together with the Schedules and Exhibits hereto, contains the entire understanding of the Parties with respect to the subject matter hereof. Any other express or implied agreements and understandings, negotiations, writings and commitments, either oral or written, with respect to the subject matter hereof are superseded by the terms of this Agreement. The Schedules and Exhibits to this Agreement are incorporated herein by reference and shall be deemed a part of this Agreement. This Agreement may be amended, or any term hereof modified, only by a written instrument duly executed by authorized representative(s) of both Parties hereto. Notwithstanding anything to the contrary in the foregoing, that certain confidentiality agreement between the Parties dated as of August 17, 2016,

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shall remain in full force and effect with respect to the subject matter thereof and information disclosed thereunder.

9.11 Headings . The captions to the several Articles, Sections and subsections hereof are not a part of this Agreement, but are merely for convenience to assist in locating and reading the several Articles and Sections hereof.

9.12 Independent Contractors . It is expressly agreed that Company and Merck shall be independent contractors and that the relationship between the two Parties shall not constitute a partnership, joint venture or agency. Neither Company nor Merck shall have the authority to make any statements, representations or commitments of any kind, or to take any action, which shall be binding on the other Party, without the prior written consent of the other Party.

9.13 Waiver . The waiver by either Party hereto of any right hereunder, or of any failure of the other Party to perform, or of any breach by the other Party, shall not be deemed a waiver of any other right hereunder or of any other breach by or failure of such other Party whether of a similar nature or otherwise.

9.14 Waiver of Rule of Construction . Each Party has had the opportunity to consult with counsel in connection with the review, drafting and negotiation of this Agreement. Accordingly, the rule of construction that any ambiguity in this Agreement shall be construed against the drafting Party shall not apply.

9.15 Certain Conventions. Any reference in this Agreement to an Article, Section, subsection, paragraph, clause, Schedule or Exhibit shall be deemed to be a reference to an Article, Section, subsection, paragraph, clause, Schedule or Exhibit, of or to, as the case may be, this Agreement, unless otherwise indicated. Whenever this Agreement refers to a number of days, unless otherwise specified, such number refers to calendar days. Unless the context of this Agreement otherwise requires, (a) words of any gender include each other gender, (b) words such as “herein”, “hereof”, and “hereunder” refer to this Agreement as a whole and not merely to the particular provision in which such words appear, (c) words using the singular shall include the plural, and vice versa, (d) the words “include”, “includes”, and “including” shall be deemed to be followed by the words “without limitation”, unless otherwise specified, and (e) any reference to a statute, directive, regulation or other instrument having the force of law shall be deemed to be a reference to such statute, directive, regulation or instrument as it may be amended from time to time.

9.16 Business Day Requirements . In the event that any notice or other action or omission is required to be taken by a Party under this Agreement on a day that is not a business day, then such notice or other action or omission shall be deemed to be required to be taken on the next occurring business day .

9.17 Counterparts . This Agreement may be signed in any number of counterparts (including by facsimile or electronic transmission), each of which shall be deemed an original, but all of which shall constitute one and the same instrument. After facsimile or electronic transmission, the Parties agree to execute and exchange documents with original signatures.

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[REMAINDER OF PAGE INTENTIONALLY BLANK]

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

MERCK SHARP & DOHME CORP.		SYNTHETIC GENOMICS, INC.

BY:	/s/ Benjamin Thorner	BY:	/s/ Oliver Fetzer
	Benjamin Thorner		Oliver Fetzer

TITLE: SVP & Head of BD&L		TITLE: Chief Executive Officer

Exhibit 10.12

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED

BY [***] HAS BEEN OMITTED BECAUSE IT IS NOT MATERIAL AND WOULD LIKELY

CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED.

CONFIDENTIAL

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ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (this “ Agreement ”), dated as of February 14, 2018, is made by and between C3J THERAPEUTICS, INC. , a Washington corporation (“ Purchaser ”), and SYNTHETIC GENOMICS, INC. , a Delaware corporation, and SYNTHETIC GENOMICS VACCINES, INC. , a Delaware corporation (collectively, “ Seller ”). Purchaser and Seller may be referred to herein collectively as the “ Parties ” and individually as a “ Party. ”

RECITALS

A. Seller operates research and development programs specific to engineering bacteriophage and Exploiting engineered and wild type bacteriophage (the “ Business ”). For clarity, and notwithstanding the foregoing, the Business does not include (i) Seller’s research (and use) of phage display as an approach for discovery of antibodies and/or affinity binding reagents within the mammalian synthetic biology and biologics discovery and production programs or (ii) the commercial sale of antibody libraries which may be formatted for phage display (collectively, the “ Other Phage Activities ”).

B. The Business includes research programs being conducted by Seller pursuant to that certain Research Collaboration and Option to License Agreement between Seller and Merck Sharp and Dohme Corp. (“ Merck ”) dated May 24, 2017 (the “ Merck Agreement ”) relating to [***].

C. Seller desires to sell to Purchaser, and Purchaser desires to purchase from Seller, (i) certain of Seller’s assets, properties and rights necessary for the operation of the Business, and (ii) access to certain other assets, properties and rights used in the operation of the Business, in each case as set forth in this Agreement.

D. Contemporaneous with the execution of this Agreement, Dr. Magda Barbu (the “ Key Employee ”) and Purchaser have duly executed an employment agreement (the “ Key Employee Employment Agreement ”) which will go into effect upon the Closing.

E. Capitalized terms used herein without definition are defined in Annex A .

AGREEMENT

Now, Therefore , for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, intending to be legally bound, hereby agree as follows:

ARTICLE 1

PURCHASE AND SALE

1.1 Assets to be Purchased and Sold . Upon the terms and subject to the conditions of this Agreement, Purchaser hereby purchases from Seller, and Seller hereby sells, transfers, grants, conveys, assigns, and relinquishes exclusively to Purchaser, on the Closing Date, free and clear of all Encumbrances, all right, title and interest of Seller in, to and under the following assets (collectively, the “ Transferred Assets ”):

(a) all Program Materials (as defined in Schedule 1.1(a) ) and other tangible personal property and assets set forth on Schedule 1.1(a) ;

(b) (i) the Program Patents and (ii) all Know-How owned or otherwise controlled (with the right to transfer) by Seller and/or its Affiliates and used exclusively in the Business as currently conducted by Seller and its Affiliates (collectively, “ Program IP ”), together with all goodwill associated therewith and all rights and causes of action for past, present or future infringement, misappropriation, violation, misuse, dilution, unfair trade practice or otherwise associated therewith, and rights of priority and protection of interests therein;

(c) all rights under all Contracts of Seller that are listed on Schedule 1.1(d) (the “ Assigned Contracts ”), including, without limitation, any and all of Seller’s rights to milestone payments, grant funding and other receivables, earned or unearned, under the Assigned Contracts that have not been received by Seller prior to the date of this Agreement;

(d) all Books and Records; and

(e) all of Seller’s claims, causes of action and other legal rights and remedies, whether or not known as of the Closing Date, resulting from Seller’s ownership of the Transferred Assets and/or the operation of the Business, but excluding causes of action and other legal rights and remedies of Seller (i) against Purchaser with respect to the Transactions; or (ii) relating to the Excluded Assets.

1.2 Excluded Assets . Except for the Transferred Assets, Seller shall not sell, convey, transfer, assign or deliver, and Purchaser shall not purchase or accept assignment from Seller of any other assets of Seller (the “ Excluded Assets ”). The Excluded Assets include (and the Transferred Assets do not include) without limitation:

(a) Any equipment or tangible items of any kind except for the Books and Records and assets listed on Schedule 1.1(a);

(b) cash, cash equivalents, accounts receivable, marketable securities or intercompany accounts receivable of Seller (other than receivables and other amounts that are included in the Transferred Assets);

(d) claims and counterclaims with respect to rights of offset against Excluded Liabilities; and

(e) rights of Seller under this Agreement.

1.3 Assumed Liabilities . On the terms and subject to the conditions set forth in this Agreement, at the Closing, Purchaser agrees, effective on the Closing Date, to assume the following specific Liabilities of Seller and no other Liabilities (the “ Assumed Liabilities ”):

(a) All Liabilities arising under the Assigned Contracts, but only to the extent such Liabilities (i) do not arise from any breach, default, violation or failure to perform by Seller or any of its Affiliates of any provision under any Assigned Contract on or before the Closing Date, (ii) do not arise by reason of events or circumstances occurring on or prior to the Closing Date which with notice or lapse of time, would constitute or result in a breach of any Assigned Contract, (iii) if arising or relating to a

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circumstance in existence as of or prior to the Closing Date, arise in accordance with the express terms of such Assigned Contracts, excluding any such Liabilities that relate to or arise from any failure to perform, improper performance, warranty or other breach, default or violation by Seller or any other Person under any Assigned Contract on or before the Closing Date, or (iv) are not Excluded Liabilities; and

(b) Liabilities arising out of Purchaser’s ownership or operation of the Transferred Assets after the Closing (other than the Excluded Liabilities).

For the avoidance of doubt, it is hereby clarified that Purchaser’s assumption of the Assumed Liabilities shall be considered part of the consideration paid for the Transferred Assets.

1.4 Excluded Liabilities . Notwithstanding any other provision in this Agreement, and regardless of any disclosure made to Purchaser, Seller shall retain, and shall be responsible for paying, performing and discharging when due, and Purchaser shall not assume or have any responsibility for, any Liabilities other than the Assumed Liabilities (all such Liabilities other than Assumed Liabilities, collectively the “ Excluded Liabilities ”), including without limitation the following specific Excluded Liabilities:

(a) all Liabilities of Seller or its Affiliates relating to or arising out of the Excluded Assets;

(b) any Liabilities under Contracts of Seller other than the Liabilities relating to Assigned Contracts that are assumed by Purchaser as provided in Section 1.3(a);

(c) any Liabilities resulting from, caused by or arising out of, directly or indirectly, actions pending prior to the Closing or facts, conditions or circumstances existing on or before the Closing Date, except to the extent included in the Assumed Liabilities as provided in Section 1.3(a)(iii);

(d) any Liabilities arising from Seller’s or its Affiliate’s infringement, misappropriation or misuse of Intellectual Property prior to the Closing Date;

(e) any Liabilities arising from any action, suit, proceeding, claim, arbitration or investigation pending or threatened against Seller on or before the Closing Date; and

(f) any Liabilities of Seller to any Person by reason of the fact that such Person was a manager, officer, employee, director or agent of Seller, including any Liabilities or claims relating to present and/or past employees of Seller with respect to plans, programs, policies, commitments, and other benefit entitlements established or existing on, prior to or after Closing.

1.5 Purchase Price .

(a) In addition to the Assumed Liabilities, as consideration for the sale of the Transferred Assets to Purchaser, (i) at the Closing, Purchaser will pay to Seller, by wire transfer of immediately available funds in US Dollars, the sum of $1,000,000 (the “ Closing Consideration ”), (ii) on the first annual anniversary of the Closing Date, Purchaser will pay to Seller, by wire transfer of immediately available funds in US Dollars, the sum of $1,000,000 (the “ First Anniversary Payment ”), (iii) on the second annual anniversary of the Closing Date, Purchaser will pay to Seller, by wire transfer of immediately available funds in US Dollars, the sum of $1,000,000 (the “ Second Anniversary Payment ”), and (iv) on the third annual anniversary of the Closing Date, Purchaser will pay to Seller, by wire transfer of immediately available funds in US Dollars, the sum of $5,000,000 (the “ Third Anniversary Payment ”). As further consideration for the sale of the Transferred Assets to Purchaser, within a reasonable time

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following the closing of the initial public offering of Purchaser or an Affiliate of Purchaser (such entity, the “ Issuer ”) pursuant to an effective registration statement under the Securities Act of 1933, as amended, covering the offer and sale of Common Stock for the account of the Issuer (the “ IPO ,” and the closing date of the IPO, the “ IPO Closing Date ), Purchaser shall, or shall cause the Issuer (if Purchaser is not the Issuer) to, issue to Seller that number of shares of Issuer’s Common Stock equal to (A) $27,000,000 divided by (B) the price per share of Issuer’s Common Stock offered to the public in the IPO, rounded down to the nearest full share (such shares, the “ Consideration Shares ,” and the issuance of such shares, the “ Share Payment ”). The Share Payment will be subject to Seller’s execution and delivery of a Common Stock Purchase Agreement substantially in the form attached hereto as Exhibit A and compliance with applicable securities laws. In the event that the IPO Closing Date occurs prior to the payment of the First Anniversary Payment, the Second Anniversary Payment and/or the Third Anniversary Payment, then Purchaser shall pay to Seller by wire transfer of immediately available funds in US Dollars, immediately following the IPO Closing Date, the First Anniversary Payment, the Second Anniversary Payment and/or the Third Anniversary Payment (in each case only to the extent Purchaser has not previously paid such amounts to Seller). Seller shall provide Purchaser with its wire instructions at least two Business Days prior to a date on which Purchaser will pay Seller via a wire transfer of funds; provided, that if Seller does not provide Purchaser wire instructions within such two Business Day period, Purchaser shall be entitled to rely on the most recent wire instructions previously provided by Seller.

(b) In the event of a sale by Purchaser to a Third Party of all or substantially all of the assets of Purchaser and its Affiliates (an “ Asset Sale ”) prior to the IPO Closing Date, Purchaser shall pay to Seller, in full satisfaction of Purchaser’s obligation set forth in Section 1.5(a) , (i) the First Anniversary Payment, the Second Anniversary Payment and/or the Third Anniversary Payment, in each case only to the extent Purchaser has not previously paid such amounts to Seller pursuant to Section 1.5(a), and (ii) consideration, in the same form received by Purchaser in the Asset Sale, equal to $27,000,000.

(c) In the event of a consolidation with, or merger of Purchaser into, a Third Party (a “ Corporate Transaction ”) prior to the IPO Closing Date, (i) if the surviving entity in the Corporate Transaction is not an entity with a class of stock publicly traded on a national securities exchange, the surviving entity shall assume the obligations of Purchaser set forth in Sections 1.5(a) and 1.5(b) , as applicable, and (ii) if the surviving entity in the Corporate Transaction is an entity with a class of stock publicly traded on a national securities exchange, Purchaser shall pay to Seller immediately following the closing of the Corporate Transaction, in full satisfaction of Purchaser’s obligations set forth in Section 1.5(a) , (A) the First Anniversary Payment, the Second Anniversary Payment and/or the Third Anniversary Payment, in each case only to the extent Purchaser has not previously paid such amounts to Seller pursuant to Section 1.5(a), and (B) consideration, in the same form received by Purchaser in the Corporate Transaction, equal to $27,000,000.

(d) Notwithstanding anything to the contrary in Section 1.5(b)(ii) or 1.5(c)(ii)(B) , if Purchaser receives as consideration in an Asset Sale or a Corporate Transaction securities that are traded on a securities exchange, the value of such securities shall be deemed to be the average of the closing prices of the securities on such exchange or market over the thirty (30) day period ending three (3) days prior to the closing of such transaction.

(e) The value of any non-cash consideration to be received by Seller pursuant to Sections 1.5(b) or 1.5(c) shall be as mutually agreed by Seller and Purchaser in good faith and consistent with the valuation ascribed to such non-cash consideration in the definitive agreements with respect to the underlying transaction, and provided that such valuation shall be no less favorable with respect to Seller than with respect to the equityholders of Purchaser in connection with such transaction or any related distribution; provided further, that in connection with such determination, Seller shall be provided with a

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copy of the definitive transaction agreement with respect to the Asset Sale or Corporate Transaction, as applicable.

(f) Prior to the Share Payment, Seller shall have no rights of a shareholder of Purchaser with respect to the Consideration Shares, including, without limitation, any dividend rights, voting rights, liquidation rights, preemptive rights or other equity rights.

1.6 Sales and Transfer Taxes . Seller will bear and pay any and all Taxes, charges, fees or expenses that may become payable in connection with the Transactions.

1.7 Allocation of Purchase Price . Within 60 days after the Closing, Purchaser shall deliver to Seller an allocation statement reasonably acceptable to Seller setting forth Purchaser’s allocation of the Purchase Price for Tax purposes pursuant to Section 1060 of the Code and any other applicable Tax Laws (the “ Allocation Statement ”). Purchaser and Seller shall each file all Tax Returns (such as IRS Form 8594, to the extent applicable, or any other forms or reports required to be filed pursuant to Section 1060 of the Code or any comparable provisions of Law) in accordance with the Allocation Statement and, except as otherwise required by Law, Purchaser and Seller shall refrain from taking any action or position inconsistent therewith, including in any examination of any such Tax Return, in any refund claim or in any tax litigation. In the event of any adjustment to the Purchase Price for any reason, a supplemental Allocation Statement shall be prepared and delivered by Purchaser pursuant to this Section 1.7 , and the Parties agree to comply with this Section 1.7 with respect to the supplemental Allocation Statement.

1.8 License to Purchaser . Effective as of the Closing, and subject to all the terms and conditions of this Agreement, Seller hereby grants to Purchaser a perpetual (unless terminated pursuant to 7.1), irrevocable (unless terminated pursuant to Section 7.1), transferrable, royalty-free, fully paid-up, sublicensable through multiple tiers, worldwide license, under any Unfiled Program Know-How Patents and the Program Know-How, solely to operate the Business and Exploit Program Materials. The foregoing license shall be exclusive in the Excluded Field (but not for the Permitted Activities) (each as defined in Section 5.8) and otherwise non-exclusive. For the avoidance of doubt, to the extent any Program Know-How or any Unfiled Program Know-How Patents of Seller and/or its Affiliates fall(s) within the definitions of “Company Know-How,” “Company Patent Rights” or “Company Platform Improvements” (as such terms are defined in the Merck Agreement), the foregoing license shall be exclusive to Purchaser in the Excluded Field. Seller grants no license (by implication or otherwise) under any Intellectual Property except as expressly set forth in this Section 1.8.

1.9 Archetype . In order to facilitate Purchaser’s operation of the Business following the Closing, Seller shall provide Purchaser with access to Seller’s generally commercially available Archetype data sequencing database and software (“ Archetype ”) for a period of two (2) years from the Closing Date on (and subject to the Parties’ execution of) the terms of Seller’s standard Archetype license agreement in the form attached hereto as Exhibit B (the “ Archetype License Agreement ”).

1.10 Bioinformatics and Sequencing Services . Seller shall, for a period of two (2) years from the Closing Date, use commercially reasonable efforts to provide bioinformatics and genomic sequencing services of substantially the same type and in substantially the same volume as the bioinformatics and genomic sequencing services used by Seller to conduct the Business as currently conducted (the “ Supporting Services ”). The provision of Supporting Services shall be subject to the Parties’ execution of a mutually agreeable services agreement and the price for such services shall not exceed the lowest prices (on a time and materials or service-by-service basis, as applicable) paid by a Third Party to Seller for substantially the same services in substantially the same volume.

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ARTICLE 2

CLOSING AND CLOSING DOCUMENTS

2.1 Time of Closing and Closing Date . The closing of the purchase of the Transferred Assets by Purchaser (the “ Closing ”) shall occur remotely by electronic exchange of signatures on the Closing Date or at such other place as may be agreed upon by the Parties, no later than three Business Days after the satisfaction or waiver of the conditions set forth in Article 6 (other than those conditions that by their nature are to be satisfied at the Closing), unless otherwise agreed upon by the Parties. For purposes of this Agreement, “ Closing Date ” means the date as of which the Closing actually takes place.

2.2 Items to be Delivered at the Closing . At the Closing, the following items shall be delivered:

(a) Seller shall deliver an executed Bill of Sale in the form attached hereto as Exhibit C (the “ Bill of Sale ”);

(b) The Key Employee Employment Agreement shall not have been withdrawn or cancelled by the Key Employee;

(c) Seller shall deliver an executed certificate certifying that Seller is not a foreign person for purposes of Code Section 1445 or that the sale of the Transferred Assets is otherwise exempt from withholding under Code Section 1445 (the “ FIRPTA Certificate ”);

(d) Seller shall deliver all Required Consents set forth on Schedule 2.2(d) ;

(e) Seller shall deliver evidence of the release, discharge or termination of all Encumbrances on the Transferred Assets;

(f) Seller shall deliver an executed Patent Assignment Agreement in the form attached hereto as Exhibit D ;

(g) Purchaser shall deliver the Closing Consideration to Seller pursuant to the wire instructions to be delivered by Seller no later than two Business Days prior to the Closing.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF SELLER

Seller hereby represents and warrants to Purchaser, and acknowledges that Purchaser is entering into this Agreement in reliance thereon, as follows, subject to any exceptions listed on the disclosure schedule attached hereto (the “ Seller Disclosure Schedule ”) specifically identifying the relevant subparagraph hereof, which exceptions shall be deemed to be representations and warranties as if made hereunder:

3.1 Organization; Authority; Binding Obligation . Seller is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware. The execution and performance by Seller of this Agreement and all acts which may be necessary to consummate the Transactions have been authorized by all corporate actions necessary to be taken by Seller for the approval of this Agreement and the Transactions. This Agreement has been properly executed by Seller and is legally valid and binding upon Seller. This Agreement is enforceable against Seller according to its terms, except as such enforceability may be limited by principles of public policy and applicable bankruptcy, insolvency, moratorium or other laws affecting the rights of creditors generally and by general principles of equity.

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3.2 Title to Transferred Assets . Seller owns the entire rights and interests in and to, and has good and valid title to, or otherwise has valid, transferrable rights, licenses or leasehold interests in, all of the Transferred Assets, free and clear of any Encumbrances, and upon consummation of the Transactions, Purchaser will have acquired good and marketable title to or valid rights, licenses or leasehold interests in each of the Transferred Assets, free and clear of all Encumbrances.

3.3 Sufficiency of Assets; Right to License . Collectively, the Transferred Assets, the Program Know-How, and Archetype constitute all of the assets (including all Intellectual Property) used, held, owned, licensed or otherwise controlled by Seller and its Affiliates that are material to and necessary for the conduct of the Business and the Exploitation of the Program Materials, in each case, as currently conducted by Seller and its Affiliates. Without limiting the foregoing, the Program Materials constitute and will include, at the time of delivery to Purchaser, all biological materials necessary for the operation of the Business as currently conducted by Seller and its Affiliates. Seller has the full right, power and authority to grant the license to Purchaser as purported to be granted pursuant to Section 1.8.

3.4 No Conflict . The execution and delivery by Seller of this Agreement, and the consummation of the transactions contemplated hereby, will not (a) result in the creation of any Encumbrance on any of the Transferred Assets or (b) conflict with, or result in any violation of or default under (with or without notice or lapse of time, or both), or give rise to a right of termination, cancellation or acceleration of any obligation or loss of any benefit under, or require any consent, approval or waiver from any Person pursuant to, (i) any provision of the organizational documents of Seller, (ii) any Contract applicable to any of the Transferred Assets, or (iii) any Law applicable to Seller or any of the Transferred Assets, except with respect to clauses (ii) or (iii) that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. To the knowledge of Seller, no Person has any right, interest or claim in or to, and neither Seller nor any of its Affiliates has entered into any agreement granting to any Person any right, interest or claim in or to, any material Program Know-How or Unfiled Program Know-How Patents used to a significant extent in the Business and that would conflict with the license to Purchaser as purported to be granted pursuant to Section 1.8.

3.5 Approvals of Governmental Authorities . No consent, waiver, approval or authorization of, or declaration, filing or registration with, or notification to any Governmental Authority is required to be made or obtained by Seller in connection with the execution, delivery or performance of this Agreement, the compliance by Seller with any of the provisions hereof and the consummation of the Transactions.

3.6 Legal Proceedings . To Seller’s knowledge, no action or proceeding has been instituted or threatened before any court or other Governmental Authority to restrain or prohibit, or to obtain Losses in respect of, or which is related to or arises out of, the Transferred Assets or the Transactions, there is no pending or threatened litigation, arbitration, mediation, suit, claim or other proceeding or investigation before a Governmental Authority with respect to the Transferred Assets or the Business or otherwise that would reasonably be expected to have a Material Adverse Effect, and there is no judgment, decree, injunction or Order against any of the Transferred Assets.

3.7 Tax Matters . All of the Tax Returns required to be filed by Seller that relate in whole or in part to the Business or the Transferred Assets have been filed and (a) all such Tax Returns are true, complete and correct in all material respects, (b) all Taxes required to be paid by Seller that relate in whole or in part to the Business or the Transferred Assets have been paid in full or are being contested in good faith, and (c) there are no outstanding Tax liens that have been filed by any Tax authority against any of the Transferred Assets.

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3.8 Intellectual Property .

(a) All registrations and applications made by or on behalf of Seller (or under obligation of assignment to Seller) with any Governmental Authority for any Patents, Marks and Copyrights specific to the Transferred Assets, the Business as currently conducted or the Program Materials, including, without limitation, the Program Patents (collectively, “ Business IP Registrations ”), including the jurisdictions in which each such Business IP Registration has been issued or registered or in which any application for such issuance or registration has been filed, are set forth on Section 3.8(a) . To Seller’s knowledge, all of the issued or registered Business IP Registrations are valid, enforceable and subsisting. There are no actions that must be taken by Seller or Purchaser within 180 days after the date of this Agreement for the purpose of obtaining, maintaining, perfecting, preserving or renewing any Business IP Registration. Seller has not taken (or failed to take) any action, and has not used or enforced (or failed to use or enforce) the Program IP or the Program Know-How in a manner that would result in the abandonment, cancellation or unenforceability of any Business IP Registration, and Seller has not taken (or failed to take) any action that would result in the forfeiture or relinquishment of any of the Business IP Registrations. There have been no interferences, re-examinations or oppositions brought or, to Seller’s knowledge, threatened to be brought involving any of the Program Patents, nor, to Seller’s knowledge, is there any basis for any such interference, re-examination or opposition.

(b) Section 3.8(b) of the Seller Disclosure Schedule sets forth an accurate and complete list of each Contract to which Seller is a party or by which Seller is bound that contains any assignment or license of, or covenant not to assert or enforce any Program IP, or under which any Program IP is licensed or otherwise made available to Seller by any Person (other than licenses for commercial off-the-shelf software), or pursuant to which Seller has granted any Person any license under, or otherwise has granted to any Person any right (whether or not currently exercisable) or interest in, any Program IP.

(c) To Seller’s knowledge, no funding, facilities, or personnel of any Governmental Authority or any public or private university, college, or other educational or research institution were used, directly or indirectly, to develop or create, in whole or in part, any Program IP.

(d) Seller has taken reasonable steps to maintain the confidentiality of and otherwise protect and enforce its rights in all information pertaining to the Program IP and Program Know-How that Seller has intended to maintain as trade secrets or as confidential.

(e) Other than the Program Patents, there are no Patents owned or controlled by Seller or its Affiliates as of the Effective Date and neither Seller nor any of its Affiliates has filed any Patents on or prior to the Effective Date that (i) contain any claims directed to inventions within Program Know-How or within the Know-How included in the Program IP or that otherwise claim or describe any Program Know-How or Know-How included in the Program IP, or (ii) are necessary for or would be infringed by the conduct of the Business or the Exploitation of the Program Materials as currently conducted by Seller and its Affiliates.

(f) Neither Seller nor any of its Affiliates owns or controls or has filed any applications for any “Company Patent Rights” (as such term is defined in the Merck Agreement) as of the Effective Date or owns or controls or otherwise has any interest in any “Joint Patent Rights” (as such term is defined in the Merck Agreement).

(g) To Seller’s knowledge, no Person has infringed, misappropriated, or otherwise violated, and no Person is currently infringing, misappropriating, or otherwise violating, any Program IP or Program Know-How.

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(h) To Seller’s knowledge, (i) Seller has never infringed (directly, contributorily, by inducement, or otherwise), misappropriated, or otherwise violated or made unlawful use of any Intellectual Property of any other Person or engaged in unfair competition in each case in connection with the creation, discovery, acquisition, development, manufacture, use or other Exploitation of any Program IP, Program Know-How or Program Materials or the conduct of the Business, (ii) no Program IP, Program Know-How or Program Materials or method or process of manufacturing or use or other Exploitation thereof by Seller prior to the Closing Date infringes, violates, or makes unlawful use of any Intellectual Property of, or contains any Intellectual Property misappropriated from, any other Person, and (iii) there is no legitimate basis for a claim regarding the matters set forth in clauses (i) and (ii) of this Section 3.8(h). Seller has never received any written notice or other written communication relating to any actual, alleged, or suspected infringement, misappropriation, or violation of any Intellectual Property of another Person due to the operation of the Business. Notwithstanding anything to the contrary, Section 3.8(g) and Section 3.8(h) constitutes the sole and exclusive representations or warranties in this Agreement relating to non-infringement of Intellectual Property rights.

(i) Each director, officer, employee, consultant and independent contractor of Seller who has been involved in, or who contributed to, the creation or development of any Program IP has executed and delivered to Seller a valid and enforceable assignment of all rights, title and interests that such Person may have or may hereafter acquire in or to such Program IP and a valid and enforceable waiver of any and all moral rights that such Person may have therein. No current or former director, officer, employee, consultant or independent contractor of Seller has any rights, title, licenses, claims, moral rights or interests, directly or indirectly, in whole or in part, in or with respect to any Program IP.

3.9 Contracts and Commitments .

(a) Each Assigned Contract is valid and enforceable against Seller, and to the knowledge of Seller, against each other party thereto, except in each case, as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally.

(b) Except as would not reasonably be expected to result individually or in the aggregate in a Material Adverse Effect, there exists no default or event of default with respect to Seller or, to Seller’s knowledge, with respect to any other contracting party, which, with the giving of notice, the lapse of time or the happening of any other event or condition, would reasonably be expected to become a default or event of default under any Assigned Contract or give any Person (i) the right to declare a default or exercise any remedy under any Assigned Contract, (ii) the right to accelerate the maturity or performance of any obligation of Seller under any Assigned Contract, or (iii) the right to cancel or terminate any Assigned Contract. Seller has not received any written notice regarding any material violation of, material default under, or intention to cancel any Assigned Contract.

(c) The Assigned Contracts constitute all of the Contracts necessary for the conduct of the Business as currently conducted, and Seller has made available to Purchaser true and complete copies of all Assigned Contracts.

(d) Section 3.9(d) of the Seller Disclosure Schedule lists the consents to assign the Assigned Contracts to Purchaser and any and all other consents required to transfer, convey and assign the Transferred Assets to Purchaser free and clear of all Encumbrances (the “ Required Consents ”). Except for the Required Consents, no consents, waivers or approvals are required to transfer and assign the Assigned Contracts or the other Transferred Assets to Purchaser, and no transfer of an Assigned Contract to Purchaser pursuant hereto will conflict with, or result in any violation of or default under (with or without notice or

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lapse of time, or both), or give rise to a right of termination, cancellation or acceleration of any obligation or loss of any benefit under, or require any consent, approval or waiver from any Person pursuant thereto.

(e) Merck has not exercised the [***] Research Option (as defined in the Merck Agreement) pursuant to Section 2.1.2 of the Merck Agreement and, other than the payment from Merck pursuant to Section 5.1.1 of the Merck Agreement, Seller has not received any payments of any kind from Merck under the Merck Agreement, and, as of the date of this Agreement, no other payments have accrued from Merck under the Merck Agreement.

3.10 Compliance with Laws . Seller has complied in all material respects with, and is not in violation of, any applicable Laws with respect to the conduct of the Business or the ownership or operation of the Transferred Assets. No event has occurred, and no condition or circumstance exists, that will (with or without notice or lapse of time) constitute or result in a material violation by Seller of, or a failure on the part of Seller to comply with, any applicable Laws. Seller has not received any notice from any Governmental Authority or other Person alleging that the Business is in violation of any applicable Law or Order, except for violations that have been cured or are no longer being asserted. Seller has obtained each federal, state, county, local or foreign governmental consent, license, permit, grant, or other authorization of a Governmental Authority (a) pursuant to which Seller currently operates or holds any interest in any of the Transferred Assets or (b) that is required for the operation of the Business or the holding of any such interest (all of the foregoing consents, licenses, permits, grants, and other authorizations, collectively, the “ Business Authorizations ”), and all of the Business Authorizations are in full force and effect. Seller has materially complied with all of the terms of the Business Authorizations and Seller has not received any written notice or other written communication from any Governmental Authority regarding (i) any actual or possible violation of any Business Authorization or any failure to comply with any term or requirement of any Business Authorization or (ii) any actual or possible revocation, withdrawal, suspension, cancellation, termination or modification of any Business Authorization. None of the Business Authorizations will be terminated or impaired, or will become terminable, in whole or in part, as a result of the consummation of the Transactions.

3.11 [Intentionally Omitted] .

3.12 [Intentionally Omitted] .

3.13 Disclosure . No representation or warranty by Seller in this Agreement and no information or materials provided by Seller to Purchaser in connection with the negotiation or execution of this Agreement or any agreement contemplated hereby contains any untrue statement of a material fact, or omits to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances in which they are made, not misleading.

3.14 Brokers and Finders . Seller is not a party to, nor in any way obligated to make any payment relating to, or have any Liability in respect of, any contract, commitment, undertaking or understanding in connection with the origin, negotiation, execution or performance of this Agreement.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF PURCHASER

Purchaser hereby represents and warrants to Seller as follows:

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4.1 Organization; Authority; Binding Obligation . Purchaser is a corporation duly and validly organized and existing under the laws of Washington. The execution and performance of this Agreement and all acts which may be necessary or appropriate to consummate the Transactions have been authorized by company actions necessary to be taken for the approval of this Agreement and the Transactions. This Agreement has been properly executed by Purchaser and it is legally valid and binding upon Purchaser, is enforceable against Purchaser according to its terms except as such enforceability may be limited by principles of public policy and applicable bankruptcy, insolvency, moratorium or other laws affecting the rights of creditors generally and by general principles of equity.

4.2 No Conflict . The execution and delivery of this Agreement and the consummation of the Transactions do not conflict with or result in any violation of any term or condition of, or constitute a default under, (a) the organizational documents of Purchaser or (b) any requirement of Law or of any Governmental Authority.

4.3 Sufficient Funds . Purchaser has, and will have at Closing or an applicable payment date, as applicable, sufficient unencumbered funds to meet its obligations hereunder.

4.4 Legal Proceedings . No action or proceeding has been instituted or, to the best of Purchaser’s knowledge, threatened before any court or Governmental Agency to restrain or prohibit, or to obtain Losses in respect of, or which is related to or arises out of, this Agreement or the Transactions

4.5 Brokers and Finders . Purchaser is not a party to, nor in any way obligated to make any payment relating to, or has any Liability in respect of, any contract, commitment, undertaking or understanding in connection with the origin, negotiation, execution or performance of this Agreement.

ARTICLE 5

COVENANTS

5.1 Access . During the period from the date of this Agreement through the Closing Date (the “ Pre-Closing Period ”), Seller will, after receiving reasonable advance notice from Purchaser, give Purchaser reasonable access (during normal business hours) to Seller’s books and records relating primarily to the Transferred Assets , and will provide Purchaser with such information regarding the Transferred Assets as Purchaser may reasonably request, for the sole purposes of enabling Purchaser (a) to further investigate, at Purchaser’s sole expense, the Transferred Assets; and (b) to verify the accuracy of the representations and warranties set forth in Section 3 ; provided, however , that such access shall not interfere with the normal business and operations of the Business or Seller.

5.2 Ordinary Course . Except as explicitly permitted by this Agreement or as otherwise approved by Purchaser in writing in advance, during the Pre-Closing Period:

(i) Seller will (A) operate the Business in the ordinary course and consistent with past practices; and (B) use reasonable efforts to maintain good relations with the parties to the Assigned Contracts.

(ii) Seller will not (A) sell, license, transfer, assign, license, dispose of or create any Encumbrances in the Transferred Assets, or enter into any agreement or undertake any new obligation with any Person with respect to the Transferred Assets; or (B) terminate or amend any of the Assigned Contracts.

5.3 Required Consents . As soon as practicable following the execution date of this Agreement, Seller shall use reasonable efforts to obtain all Required Consents.

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5.4 Prosecution and Maintenance of Program Patents . Until the Closing, Seller shall use commercially reasonable efforts at its own expense to prosecute the Program Patents and defend any challenge or opposition relating thereto. Until the Closing, Seller shall inform Purchaser immediately in the event of any challenge or opposition to the Program Patents, which challenge or opposition shall be considered a Material Adverse Effect.

5.5 Notification of Certain Matters . During the Pre-Closing Period, promptly after obtaining knowledge thereof, Seller shall notify Purchaser of (i) the occurrence or non-occurrence of any fact or event which causes or would be reasonably likely to cause (A) any representation or warranty of Seller contained in this Agreement to be untrue or inaccurate or (B) any covenant, condition or agreement of Seller in this Agreement not to be complied with or satisfied in full, and (ii) any failure of Seller to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder; provided , however , that no such notification shall affect the representations or warranties of Seller or Purchaser’s right to rely thereon, or the conditions to the obligations of Purchaser except as provided in this Section 5.5 . Seller shall give prompt notice in writing to Purchaser of any notice or other communication from any Person alleging that the Consent of such Person is or may be required to be obtained by Seller in connection with the Transactions.

5.6 Tax Matters . Seller and Purchaser shall provide each other with such cooperation and information as either of them reasonably may request of the other in filing any Tax Return, amended Tax Return or claim for refund with respect to the Business or the Transferred Assets, in determining liability for Taxes or a right to refund of Taxes or in conducting any audit or other proceeding in respect of Taxes with respect to the Business or the Transferred Assets. Seller shall (i) continue to file all Tax Returns within the time period for filing, and such Tax Returns shall be true, correct and complete in all material respects, and (ii) pay when due any and all Taxes attributable to or levied or imposed upon the Transferred Assets for periods (or portions thereof) through and including the date of the Closing Date whether or not such payment is required to be paid after the Closing Date.

5.7 Delivery . Within thirty (30) days following the Closing, Seller shall complete delivery to Purchaser of all Transferred Assets, including, without limitation, physical delivery of (a) all Program Materials and other Transferred Assets that are tangible assets in Seller’s and/or its Affiliates’ possession or control and (b) copies or other reproductions in writing or electronic format of all Books and Records and all written (including electronic) records of Program Know-How, including written (including electronic) records of “Company Know-How” as defined in the Merck Agreement.

5.8 Restrictive Covenants .

(a) In order to protect the value of the Business, for a period of seven (7) years after the Closing Date (the “ Restricted Period ”), Seller shall not, and shall cause its Affiliates not to, directly or indirectly, either for itself or for or on behalf of any other Person, engage in the research, development, commercialization or other Exploitation of any [***] (the “ Excluded Field ”). For the avoidance of doubt, the Excluded Field includes the “Field” as defined in the Merck Agreement. Notwithstanding the foregoing: (i) the reference to Affiliates in the foregoing of this Section 5.8(a) does not include (and Section 5.8(a) shall not apply to) any of the Acquirer Entities; and (ii) nothing herein shall prohibit Seller from (A) performing any services for Purchaser; or (B) licensing or providing Intellectual Property or Know-How or performing services (e.g. gene-editing, gene synthesis, offering Archetype™), in each case, not specifically directed to the Excluded Field even if the licensee or recipient of such Intellectual Property, Know-How or services uses such to engage in activities in the Excluded Field; or (C) any of the Other Phage Activities (whether alone or with any third party) (collectively, the “ Permitted Activities ”).

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(b) For a period of three (3) years after the Closing Date, Seller shall not directly or indirectly through another Person, solicit for employment or induce or attempt to induce or encourage the Key Employee to leave the employ or service of Purchaser or any of its Affiliates or in any way interfere with the employment relationship between Purchaser or any of its Affiliates and the Key Employee; provided, however, that general advertising over the Internet, in print media or other mass media shall not be deemed to be a solicitation or inducement of or interference with respect to the Key Employee in violation of this sentence so long as such general advertising is not targeted or directed at the Key Employee. Seller and its Affiliates shall not hire or enter into a consulting relationship with or otherwise employ or engage the Key Employee in any capacity that induces the Key Employee to leave the employ or service of Purchaser or any of its Affiliates at any time during the three (3) year period after the Closing Date.

(c) For purposes of this Agreement, “ Confidential Information ” shall mean all information (whether or not in written or electronic form and whether or not expressly designated as confidential) exclusively relating to the Business and the Transferred Assets. At all times (including after the Restricted Period), Seller shall safeguard and hold all Confidential Information in strict confidence, and shall not, directly or indirectly in any capacity communicate, reveal, report, publish, disclose or transfer any Confidential Information to any Person (other than Purchaser or its Affiliates) or use any Confidential Information in any manner or for the benefit of any Person (other than Purchaser or its Affiliates). Notwithstanding the foregoing, Seller may disclose Confidential Information: (i) with Purchaser’s prior written consent or following Purchaser’s public disclosure of such Confidential Information; (ii) to a financial advisor or accountant who is subject to an obligation of confidence, solely for the purpose of obtaining advice or services from such Person pertaining to Seller’s Tax Returns or other Tax obligations; or (iii) to the extent the disclosure is required by a valid order of a court or other Governmental Authority having jurisdiction, provided that Seller gives prior written notice to Purchaser of such required disclosure, uses reasonable efforts to obtain (or assist Purchaser in obtaining) a protective order preventing or limiting the disclosure, and discloses only so much of the Confidential Information as is required by such order. Any copy or reproduction of any Confidential Information relating directly or indirectly to the Business or the Transferred Assets shall, after the Closing, be the property of Purchaser and shall be delivered to Purchaser by Seller pursuant to Section 5.7. Seller shall not make copies or otherwise reproduce Confidential Information in any form except with Purchaser’s prior written consent, and shall deliver to Purchaser or destroy any and all such copies and reproductions upon Purchaser’s request.

(d) Seller acknowledges that Purchaser has invested and will invest substantial time and money to acquire the Transferred Assets and to develop the Business, and the covenants set forth in Sections 5.8(a), (b), and (c) are a material part of the agreement between the Parties, are an integral part of the obligations of Seller hereunder, are supported by good and adequate consideration, and are reasonable and necessary to protect the legitimate business interests of Purchaser, and Purchaser would not consummate the Transactions unless the covenants set forth in Sections 5.8(a), (b) and (c) were in full force and effect and constituted a binding and enforceable contract of Seller. Seller further acknowledges that the duration and geographic territory contained in Section 5.8(a) are reasonable in all respects and necessary to protect the goodwill of the Business and that, without such protection, Purchaser’s or any of its Affiliates’ competitive advantage would be adversely affected. Notwithstanding any other provision of this Agreement (including Section 9.13), the Parties agree that: (i) the covenants in Sections 5.8(a), (b), and (c) are severable and separate, and the unenforceability of any specific covenant will not affect the continuing validity and enforceability of any other covenant; and (ii) in the event any court of competent jurisdiction determines that any of the scope, time or territorial restrictions set forth in Section 5.8(a), (b), or (c) are unreasonable and therefore unenforceable, then the Parties agree that such provision will be enforced to the fullest extent that the court deems reasonable and this Agreement will thereby be reformed.

(e) Seller acknowledges that a breach or threatened breach of any of the provisions in this Section 5.8 would give rise to irreparable harm to Purchaser, for which monetary damages would not

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be an adequate remedy, and hereby agrees that in the event of a breach or a threatened breach by Seller of any such provisions, Purchaser shall, in addition to any and all other rights and remedies that may be available to it in respect of such breach, be entitled to equitable relief, including a temporary restraining order, an injunction, specific performance or any other equitable relief that may be available from a court of competent jurisdiction (without any requirement to post bond) .

5.9 Further Actions; NIH Grant Assistance .

(a) The Parties shall cooperate reasonably with each other and with their respective representatives in connection with any steps required to be taken as part of their respective obligations under this Agreement, including the timely assignment, conveyance or other Transfer of the Transferred Assets to Purchaser and the consolidation, vesting and recordation of the full ownership thereof. The Parties shall (i) furnish upon request to each other such further information, (ii) execute and deliver to each other such other documents, and (iii) do such other acts and things, all as the other Party may reasonably request for the purpose of carrying out the intent of this Agreement; provided , however , that none of the above undertakings shall require the payment of expenses by Purchaser or otherwise materially increase the obligations of Purchaser or Seller beyond those expressly set forth in this Agreement.

(b) The Parties acknowledge that the NIAID R21/R33 Award granted to Seller (the “ NIH Grant ”) will not be assigned by Seller to Purchaser hereunder. Upon Purchaser’s request before and after Closing, and at Purchaser’s reasonable expense, Seller shall provide such assistance and take such steps as are reasonably requested by Purchaser with respect to transfer of the NIH Grant to Purchaser, including enabling the Key Employee to initiate the process and petition for the transfer of the NIH Grant prior to the Closing while the Key Employee is still employed by Seller.

(c) Without limiting the above, during the thirty (30) day period following Closing (the “ Post-Closing Period ”), Seller shall use commercially reasonable efforts to facilitate the ongoing work and wind-down of activities under the Merck Agreement and the transition from Seller to Purchaser of all activities under the Merck Agreement, including, without limitation, by allowing the Designated Personnel (as defined below) to conduct the Research Program (as defined in the Merck Agreement) and maintaining and committing the same resources, equipment, facilities (including laboratory) at Seller as Seller maintained and committed to conduct the Research Program prior to Closing (subject to a reasonable wind-down to transition the Research Program to Purchaser) and by providing the Key Employee with access to such resources, equipment and facilities (including laboratory) at Seller and reasonable assistance from such personnel at Seller in order for the Key Employee, on behalf of Purchaser, to carry out and transition to Purchaser the Research Program and other activities under the Merck Agreement. Seller agrees that any and all Know-How that is first generated, conceived, developed, discovered, reduced to practice or otherwise made by Designated Personnel in the course of conducting the Research Program or other activities under the Merck Agreement during the Post-Closing Period and all Intellectual Property therein and thereto (collectively, “ Merck Program IP ”) shall be owned by Purchaser. “ Designated Personnel ” shall mean Key Employee, Yvette Del Rosario, Lisa Kieweg-Thompson and Paula Patterson, who shall be the only individuals conducting research and development activities for the Research Program during the Post-Closing Period. Seller hereby irrevocably and unconditionally assigns to Purchaser all right, title and interest worldwide in and to all Merck Program IP. At Purchaser’s request and reasonable expense, Seller shall execute and deliver assignments of Merck Program IP to Purchaser or its designee and shall execute other papers and otherwise assist Purchaser as reasonably requested by Purchaser (including, without limitation, executing documents for prosecuting Patents) to apply for, obtain, perfect, maintain and enforce Purchaser’s right, title and interest in Merck Program IP. Seller also shall require that any Designated Personnel who conducts the Research Program or other activities under the Merck Agreement for or on behalf of Seller during the Post-Closing Period shall be under an obligation to assign, and shall assign, to Seller any and all Merck Program IP made by such Person.

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ARTICLE 6

CONDITIONS OF CLOSING

6.1 Conditions to Purchaser’s Performance . The obligations of Purchaser under this Agreement are subject to the satisfaction, at or prior to the Closing Date, of each of the following conditions; provided , however , that Purchaser may at its option waive in writing prior to or at Closing the performance of any of the conditions imposed hereunder:

(a) Seller’s representations and warranties set forth in Article 3 shall be true and correct in all material respects (except for such representations and warranties that are qualified by their terms by a reference to “materiality” or “Material Adverse Effect,” which representations and warranties as so qualified shall be true and correct in all respects) as of the Closing Date as if made on and as of the Closing Date (except for any such representations or warranties that, by their terms, speak only as of a specific date or dates, in which case such representations and warranties will be accurate as of such specific date or dates);

(b) Seller shall have performed in all material respects all obligations required by this Agreement to be performed by Seller on or before the Closing Date;

(c) All filings with and other Consents of any Governmental Authority required to be made or obtained in connection with the Transactions and set forth on Schedule 3.5 of the Seller Disclosure Schedule shall have been made or obtained and shall be in full force and effect;

(d) No injunction or other Order preventing the consummation of the Transactions shall have been issued since the date of this Agreement by any court of competent jurisdiction and shall remain in effect and no action shall have been commenced seeking such a result; and no Law that makes consummation of the transactions contemplated by this Agreement illegal shall have been enacted or adopted since the date of this Agreement and shall remain in effect;

(e) There shall not have occurred any event, change, circumstance, occurrence, effect or state of facts that, individually or in the aggregate, has resulted in, or could reasonably be expected to result in a Material Adverse Effect on the Transferred Assets or the Business;

(f) Seller shall have executed and delivered to Purchaser the Bill of Sale in the form attached hereto as Exhibit C ;

(g) The Key Employee shall have executed and delivered to Purchaser the Key Employee Employment Agreement, which has not been terminated or revoked;

(h) Seller shall have delivered to Purchaser the original FIRPTA Certificate;

(i) Seller shall have executed and delivered to Purchaser the Patent Assignment Agreement in the form attached hereto as Exhibit D ; and

(j) Seller shall have obtained all Required Consents set forth on Schedule 2.2(d) and no such Consents shall have been withdrawn, cancelled or revoked.

6.2 Conditions to Seller’s Performance . The obligations of Seller under this Agreement shall be subject to the satisfaction, at or prior to the Closing Date, of each of the following conditions; provided , however , that Seller may at its option waive in writing prior to or at Closing the performance of any conditions imposed hereunder:

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(a) Purchaser’s representations and warranties set forth in Article 4 shall be true and correct in all material respects (except for such representations and warranties that are qualified by their terms by a reference to “materiality” or “Material Adverse Effect,” which representations and warranties as so qualified shall be true and correct in all respects) as of the Closing Date as if made on and as of the Closing Date (except for any such representations or warranties that, by their terms, speak only as of a specific date or dates, in which case such representations and warranties will be accurate as of such specific date or dates);

(b) Purchaser shall have performed all obligations required by this Agreement to be performed by Purchaser on or before the Closing Date;

(c) All filings with and other Consents of any Governmental Authority required to be made or obtained in connection with the Transactions shall have been made or obtained and shall be in full force and effect; and

ARTICLE 7

TERMINATION

7.1 Termination .

(a) This Agreement may be terminated before the Closing:

(i) by mutual written consent of Seller and Purchaser;

(ii) by either Seller or Purchaser by written notice to the other if the Closing has not occurred on or before March 31, 2018; provided , however , that the right to terminate this Agreement under this Section 7.1(b) shall not be available to a Party whose breach of any representation, warranty, covenant, or agreement under this Agreement has been the cause of, or resulted in, the failure of the Closing to occur on or before such date;

(iii) by either Seller or Purchaser if a court of competent jurisdiction or other Governmental Authority shall have issued a final and nonappealable order, decree or ruling, or shall have taken any other action, having the effect of permanently restraining, enjoining or otherwise prohibiting any of the Transactions; or

(iv) by either Party if the other Party (the “ Breaching Party ”) materially breaches any covenant or obligations of the Breaching Party which breach has not been cured within 10 days after delivery of notice of such breach to the Breaching Party by the non-breaching Party.

(b) This Agreement may be terminated by Purchaser before Closing or thereafter on or before the date that is thirty (30) days after the third anniversary of the Closing Date if the Merck Agreement is terminated pursuant to Section 8.2 of the Merck Agreement at any time within three (3) years after the Closing Date.

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7.2 Termination Procedures . If either Party wishes to terminate this Agreement pursuant to Section 7.1 , such Party will deliver to the other Party a written notice stating that such Party is terminating this Agreement and setting forth a brief statement of the basis on which such Party is terminating this Agreement.

7.3 Effect of Termination .

(a) Upon the termination of this Agreement pursuant to Article 7: (i) no Party will have any obligation or other Liability to the other Party, except that (A) the Parties will remain bound by the provisions of Article 8, and (B) the termination of this Agreement shall not relieve either Party from any Liability for any breach of any covenant or agreement in this Agreement prior to such termination; and (ii) the license set forth in Section 1.8 shall terminate. For clarity, Section 1. 5 and Section 5.8 shall terminate upon termination of this Agreement.

(b) Notwithstanding the foregoing, if Purchaser terminates this Agreement pursuant to Section 7.1(b), (i) Purchaser shall transfer, convey and assign back, pursuant to a mutually agreeable form of assignment, to Seller all Transferred Assets, including the Assigned Contracts, together with all Assumed Liabilities ( mutatis mutandis) (provided, however, that Purchaser shall remain liable for any Assumed Liabilities arising under the Assigned Contracts after the Closing Date and prior to such re-assignment arising from any breach, default, violation or failure to perform by Purchaser or any of its Affiliates of any provision under any Assigned Contract after the Closing Date but on or before the date of such re-assignment or any events or circumstances occurring after the Closing Date but on or before the date of such re-assignment which with notice or lapse of time, would constitute or result in a breach by Purchaser of any Assigned Contract) and (ii) if and to the extent Purchaser owns or controls any Purchaser Transferred Assets IP at the time Purchaser terminates this Agreement pursuant to Section 7.1(b) (the “ Termination Date ”), Purchaser shall (A) transfer, convey and assign to Seller such Purchaser Transferred Assets IP that is owned or otherwise controlled (with the right to transfer) by Purchaser and/or its Affiliates and used exclusively in the Business as conducted by Purchaser and its Affiliates as of or any time prior to the Termination Date and (B) grant to Seller a perpetual, irrevocable, transferrable, royalty-free, fully paid-up, sublicensable through multiple tiers, worldwide, license under such other Purchaser Transferred Assets IP as existing at the Termination Date and necessary for the operation of the Business as conducted by Purchaser and its Affiliates as of or any time prior to the Termination Date, solely to operate the Business and Exploit Program Materials, which license shall be exclusive in the Excluded Field and otherwise non-exclusive; provided , however , that Seller shall have no obligation to assume any liabilities of Purchaser with respect to Purchaser Transferred Assets IP. All of such Transferred Assets and the Purchaser Transferred Assets IP that is transferred to Seller pursuant to clause (A) above shall become the confidential information of Seller in the same manner with Purchaser being bound to such information in the same manner as Seller is bound with respect to Confidential Information. For the avoidance of doubt, Purchaser Transferred Assets IP shall not include any Know-How or other Intellectual Property developed, owned or controlled by Purchaser and/or its Affiliates (1) prior to the Closing Date or (2) at any time after the Closing Date independent of the Transferred Assets or the license in Section 1.8 (i.e., other than exclusively from the use of the Transferred Assets or exercise of the license in Section 1.8), including such prior-existing and/or independently developed Intellectual Property related to the discovery, research, process development and/or manufacturing of bacteriophage and including any Patents claiming or covering, in whole or in part, any such prior-existing and/or independently developed Intellectual Property (collectively, “ Purchaser Background IP ”), and Seller shall have no rights, interests or licenses in or to, and Purchaser grants no license (by implication or otherwise) to Seller under, any Purchaser Background IP. Without limiting the foregoing, Purchaser Background IP includes, without limitation, all scientific and technical information and other Know-How and material, including but not limited to the isolation, phenotypic and genotypic characterization, evolution, modification, fermentation, purification, formulation, phage cocktails and construction thereof, and the bacterial and phage libraries for the following five (5) phage

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programs: Klebsiella pneumoniae , Acinetobacter baumannii , Streptococcus mutans , Escherichia coli , and Pseudomonas aeruginosa (but not any Transferred Assets or any Program Know-How relating to Pseudomonas aeruginosa), and any Patents that cover or claim the foregoing in whole or in part, and Seller acknowledges and agrees that Purchaser is and shall remain the sole and exclusive owner of all right, title, and interest in and to all Purchaser Background IP.

ARTICLE 8

SURVIVAL; INDEMNIFICATION

8.1 Survival . All representations and warranties in Articles 3 and 4 of this Agreement shall survive the Closing and expire on the date that is twelve (12) months after the Closing Date (the “General Indemnity Termination Date ” ), except that the representations and warranties of Seller contained in (i) Sections 3.3 ( Sufficiency of Assets ) and 3.8 ( Intellectual Property ) (together, the “ IP Assets Representations ”) shall survive the Closing and expire on the date that is three (3) years after the Closing Date, (ii) Sections 3.1 ( Organization; Authority; Binding Obligation ), 3.2 ( Title to Transferred Assets ), 3.13 ( Disclosure ) and 3.14 ( Brokers and Finders ) shall survive the Closing and expire on the date that is six (6) years after the Closing Date and (iii) Section 3.7 ( Tax Matters ) shall survive the Closing and expire on the date that is sixty (60) days after the expiration of the maximum statute of limitations applicable to such matters (such dates in clauses (i), (ii) and (iii) together with the General Indemnity Termination Date, as applied to the applicable representation and warranty, an “ Expiration Date ,” and the representations and warranties of Seller contained in the Sections referenced in clauses (ii) and (iii), collectively, the “ Fundamental Representations ”). If Purchaser or Seller delivers to the other Party, before the applicable Expiration Date, either a Claim Notice or an Indemnification Demand based upon a breach of a representation or warranty in Article 3 or 4 of this Agreement, then the demand for indemnification set forth therein shall survive until, but only for purposes of, the resolution of the matter covered by such Claim Notice or Indemnification Demand. Each covenant and agreement in this Agreement shall survive the Closing without limitation as to time until fully performed in accordance with its terms, and any claims based on Fraud will survive the Closing indefinitely.

8.2 Indemnification by Seller . Subject to the other provisions of this Article 8, Seller shall indemnify Purchaser, its Affiliates and their respective directors, officers, employees, agents, advisors, and representatives (the “ Purchaser Indemnified Parties ”) in respect of, and hold them harmless against, any Losses suffered by a Purchaser Indemnified Party as a result of (a) the breach by Seller of any representation or warranty of Seller contained in this Agreement, (b) the breach by Seller of any covenant or agreement of Seller contained in this Agreement, (c) any Excluded Liability, or (d) any willful breach or Fraud by Seller in connection with this Agreement or the Transactions.

8.3 Indemnification by Purchaser . Subject to the other provisions of this Article 8, Purchaser shall indemnify Seller, its Affiliates and their respective directors, officers, employees, agents, advisors, and representatives (the “ Seller Indemnified Parties ”) in respect of, and hold them harmless against, any Losses suffered by a Seller Indemnified Party as a result of (a) the breach by Purchaser of any representation or warranty of Purchaser contained in this Agreement, (b) the breach by Purchaser of any covenant or agreement of Purchaser contained in this Agreement, (c) any failure on the part of Purchaser to perform and discharge the Assumed Liabilities on a timely basis, or (d) any Fraud by Purchaser in connection with this Agreement or the Transactions.

8.4 Indemnification Claims .

(a) No claim for Losses pursuant to Section 8.2(a) or 8.3(a) shall be brought against an indemnifying Party after the applicable Expiration Date.

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(b) In the event a Purchaser Indemnified Party becomes aware of a claim by a Third Party (including any action or proceeding commenced or threatened to be commenced by any Third Party) that such Purchaser Indemnified Party reasonably believes may result in a demand against Seller pursuant to Section 8.2 , such Purchaser Indemnified Party shall promptly notify Seller in writing of such claim. Likewise, in the event a Seller Indemnified Party becomes aware of a claim by a Third Party that such Seller Indemnified Party reasonably believes may result in a demand against Purchaser for indemnification pursuant to Section 8.3 , such Seller Indemnified Party shall promptly notify Purchaser in writing of such claim. For purposes of this Section 8.4 , the Party giving any such notice (a “ Claim Notice ”) shall be deemed to be the “ Notifying Party ,” and the Party receiving the Claim Notice shall be deemed to be the “ Notified Party .” The Claim Notice shall be accompanied by reasonable supporting documentation submitted by the Third Party making such claim and shall describe in reasonable detail (to the extent known by the Notifying Party) the facts constituting the basis for such claim and the amount of the claimed Losses; provided, however , that no delay or failure on the part of the Notifying Party in delivering a Claim Notice shall relieve the Notified Party from any liability hereunder except to the extent of any damage or liability caused by or arising out of such delay or failure. Within twenty (20) days after receipt of any Claim Notice, the Notified Party may, upon written notice thereof to the Notifying Party, assume control of the defense of the claim referred to therein at the Notified Party’s sole cost and expense with counsel reasonably satisfactory to the Notifying Party. If the Notified Party does not so assume control of the defense of such claim, the Notifying Party shall control the defense of such claim at the sole cost and expense of the Notified Party. The Party not controlling the defense of such claim (the “ Non-controlling Party ”) may participate therein at its own expense; provided , however , that if the Notified Party assumes control of the defense of such claim and the Notified Party and the Notifying Party have materially conflicting interests or different defenses available with respect to such claim which cause the Notifying Party to hire its own separate counsel with respect to such claim, the reasonable fees and expenses of counsel to the Notifying Party shall be considered “Losses” for purposes of this Agreement (subject to the proviso in the definition thereof). The Party controlling the defense of such claim (the “ Controlling Party ”) shall keep the Non-controlling Party reasonably advised of the status of such claim and the defense thereof and shall consider in good faith recommendations made by the Non-controlling Party with respect thereto. The Non-controlling Party shall furnish the Controlling Party with such information as it may have with respect to such claim (including copies of any summons, complaint or other pleading which may have been served on such Party and any written claim, demand, invoice, billing or other document evidencing or asserting the same) and shall otherwise cooperate with and assist the Controlling Party in the defense of such claim. Neither the Notified Party nor the Notifying Party shall agree to any settlement of, or the entry of any judgment arising from, any such claim without the prior written consent of the other Party, which shall not be unreasonably withheld or delayed; provided, however , that the consent of the Notifying Party shall not be required with respect to any such settlement or judgment if the Notified Party agrees in writing to pay or cause to be paid all amounts payable pursuant to such settlement or judgment (subject to the other limitations in this Article 8), including all monetary obligations of the Notifying Party, and such settlement or judgment neither includes nor creates any non-monetary obligations of the Notifying Party.

(c) Except as otherwise provided in Section 8.4(b) with respect to Third Party claims for which notice has previously been provided, in order to seek indemnification under this Article 8, a Person entitled to indemnification under Section 8.2 or Section 8.3 (an “ Indemnified Party ”) shall deliver a written demand (an “ Indemnification Demand ”) to Seller (in the case of an Indemnification Demand from a Purchaser Indemnified Party) or Purchaser (in the case of an Indemnification Demand from a Seller Indemnified Party) which contains (i) a description and the amount (the “ Asserted Damages Amount ”) of any Losses incurred or reasonably expected to be incurred by the Indemnified Party, (ii) a statement that the Indemnified Party is entitled to indemnification under this Article 8 for such Losses and a reasonable explanation of the basis therefor, and (iii) a demand for payment in the amount of such Losses.

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(d) Within twenty (20) days after delivery of an Indemnification Demand to Seller or Purchaser (as the case may be), such Party shall deliver to the other Party a written response (the “ Response ”) in which the Party providing the Response shall: (i) agree that the Indemnified Party is entitled to receive all of the Asserted Damages Amount (in which case the Response shall be accompanied by a payment to the Indemnified Party of the full Asserted Damages Amount, by check or wire transfer; (ii) agree that the Indemnified Party is entitled to receive part, but not all, of the Asserted Damages Amount (such portion, the “ Agreed Portion ”) (in which case the Response shall be accompanied by a payment to the Indemnified Party of the Agreed Portion, by check or by wire transfer); or (iii) dispute that the Indemnified Party is entitled to receive any of the Asserted Damages Amount.

(e) In the event that the Party providing a Response pursuant to Section 8.4(d) shall (i) dispute that the Indemnified Party is entitled to receive any of the Asserted Damages Amount, or (ii) agree that the Indemnified Party is entitled to only the Agreed Portion of the Asserted Damages Amount, Purchaser and Seller shall attempt in good faith to agree upon the rights of the respective Party with respect to each of the indemnification claims that comprise the Asserted Damages Amount (or the portion of the Asserted Damages Amount not comprising the Agreed Portion). If Purchaser and Seller should so agree, a memorandum setting forth such agreement shall be prepared and signed by both Parties. If no such agreement can be reached after good faith negotiation within 60 days after delivery of a Response, either Purchaser or Seller may demand arbitration of any matter set forth in the applicable Indemnification Demand. The matter shall be settled by arbitration conducted by one arbitrator mutually agreeable to Purchaser and Seller. In the event that, within 30 days after submission of any dispute to arbitration, Purchaser and Seller cannot mutually agree on one arbitrator, then the Parties shall arrange for the American Arbitration Association to designate a single arbitrator in accordance with the rules of the American Arbitration Association.

(f) Any such arbitration shall be held in Los Angeles County, California, under the rules and procedures then in effect of the American Arbitration Association. The arbitrator shall determine how all expenses relating to the arbitration shall be paid, including the respective expenses of each Party, the fees of the arbitrator and the administrative fee of the American Arbitration Association. The arbitrator shall set a limited time period and establish procedures designed to reduce the cost and time for discovery while allowing Purchaser and Seller an opportunity, adequate in the sole judgment of the arbitrator, to discover relevant information from the opposing Party about the subject matter of the dispute. The arbitrator shall rule upon motions to compel or limit discovery and shall have the authority to impose sanctions, including attorneys’ fees and costs, to the same extent as a competent court of law or equity, should the arbitrator determine that discovery was sought without substantial justification or that discovery was refused or objected to without substantial justification. The decision of the arbitrator as to the validity and amount of any indemnification claim in such Indemnification Demand shall be final, binding and conclusive upon the Parties. Such decision shall be written and shall be supported by written findings of fact and conclusions which shall set forth the award, judgment, decree or order awarded by the arbitrator. All payments required by the arbitrator shall be made within 30 days after the decision of the arbitrator is rendered. Judgment upon any award rendered by the arbitrator may be entered in any court having jurisdiction.

8.5 Limitations . Except for Losses based on Fraud or willful breach, the maximum aggregate amount of Losses for which Seller shall be liable (a) under Section 8.2(a) for breach of (i) any Fundamental Representations shall be limited in the aggregate to the Purchase Price actually paid to Seller, (ii) any IP Assets Representations shall be limited in the aggregate to the Purchase Price actually paid to Seller up to $8,000,000,, and (iii) any representation or warranty of Seller other than breach of any Fundamental Representations or the IP Assets Representations shall be limited in the aggregate to an amount equal to [***]% of the Purchase Price actually paid to Seller, and (b) under Section 8.2(b) for breach of any covenant shall be limited in the aggregate to the Purchase Price actually paid to Seller. For purposes of this Section

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8.5 , the amount of the Purchase Price actually paid to Seller shall be determined as the amount of the Purchase Price that becomes due and payable to Seller pursuant to Section 1.5(a) hereof and is either received by Seller or validly set-off pursuant to a right of set-off of Purchaser arising from Section 8.6 hereof and shall not be limited by the amount of the Purchase Price actually received by Seller at the time such claim is made.

8.6 Set Off . Purchaser shall have the right to withhold and deduct any Losses for which any Purchaser Indemnified Party is entitled to indemnification under this Agreement after application in full of the provisions of Section 8.4 (subject to Section 8.5 hereof) from any payments, including for the avoidance of doubt any Share Payment, that may be owed to Seller pursuant to Section 1.5 (a “ Set Off ”). For purposes of clarity, Purchaser shall not have to right to a Set Off with respect to any amount that is subject to ongoing dispute pursuant to Section 8.4(e). Neither the exercise nor the failure to exercise a Set-Off will constitute an election of remedies or limit the Purchaser Indemnified Party in any manner in the enforcement of any other remedies that may be available to it under this Agreement.

ARTICLE 9

MISCELLANEOUS

9.1 Entirety of Agreement . This Agreement (including the Schedules and Exhibits hereto), state the entire agreement of the Parties, merge all prior negotiations, agreements and understandings, if any, and state in full all representations, warranties, covenants and agreements which have induced this Agreement. Each Party agrees that in dealing with third parties no contrary representations will be made.

9.2 Notices . All notices, demands and communications of any kind which a Party hereto may be required or desire to serve upon the other Party under the terms of this Agreement shall be in writing and shall be given by: (a) personal service upon such other Party; (b) mailing a copy thereof by certified or registered mail, postage prepaid, with return receipt requested; (c) sending a copy thereof by Federal Express or equivalent courier service; or (d) sending a copy thereof by facsimile or confirmed email, in each case to the other Party at its address, facsimile number or email address set forth on the signature pages hereto. In case of service by Federal Express or equivalent courier service, facsimile or email transmission, or personal service, such service shall be deemed complete upon delivery or transmission, as applicable. In the case of service by mail, such service shall be deemed complete on the fifth (5 th ) Business Day after mailing. The addresses and facsimile numbers to which, and persons to whose attention, notices and demands shall be delivered or sent may be changed from time to time by notice served as hereinabove provided by any party upon any other party.

9.3 Amendment . This Agreement may be modified or amended only by an instrument in writing, duly executed by both Parties.

9.4 Waiver . No waiver by any Party of any term, provision, condition, covenant, agreement, representation or warranty contained in this Agreement (or any breach thereof) shall be effective unless it is in writing executed by the Party against which such waiver is to be enforced. No waiver shall be deemed or construed as a further or continuing waiver of any such term, provision, condition, covenant, agreement, representation or warranty (or breach thereof) on any other occasion or as a waiver of any other term, provision, condition, covenant, agreement, representation or warranty (or of the breach of any other term, provision, condition, covenant, agreement, representation or warranty) contained in this Agreement on the same or any other occasion.

9.5 Counterparts; Facsimile . For the convenience of the Parties, any number of counterparts hereof may be executed, each such executed counterpart shall be deemed an original and all such

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counterparts together shall constitute one and the same instrument. Facsimile or electronic (i.e., PDF) transmission of any signed original counterpart shall be deemed the same as the delivery of an original.

9.6 Assignment; Binding Nature; No Beneficiaries . Purchaser may freely assign any or all of its rights under this Agreement, in whole or in part, to any other Person without obtaining the consent or approval of Seller and, after the Closing, Seller may freely assign any or all of its rights under this Agreement, in whole or in part, to any other Person, with written notice to Purchaser but without obtaining the consent or approval of Purchaser. For the avoidance of doubt, neither Purchaser nor Seller shall be permitted to assign or transfer or delegate any of its obligations under this Agreement without the other Party’s prior written consent, and any such assignment or delegation without the other Party’s prior written consent shall be null and void. This Agreement shall inure to the benefit of Seller and Purchaser, the Purchaser Indemnified Parties, the Seller Indemnified Parties and the respective successors and assigns (if any) of the foregoing.

9.7 Time of the Essence . Time is of the essence of this Agreement.

9.8 Governing Law; Jurisdiction . This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Washington, regardless of the laws that might otherwise govern under applicable principles of conflicts of laws thereof.

9.9 Fees and Expenses . Subject to Article 8, all fees and expenses incurred in connection with this Agreement and the transactions contemplated by this Agreement shall be paid by the Party incurring such expenses.

9.10 Attorneys’ Fees . Subject to Article 8, if any legal action or other legal proceeding relating to this Agreement or the enforcement of any provision of this Agreement is brought against any Party to this Agreement, the prevailing Party shall be entitled to recover reasonable attorneys’ fees, costs and disbursements (in addition to any other relief to which the prevailing Party may be entitled).

9.11 Negotiated Agreement . Purchaser and Seller acknowledge that they have been advised and represented by counsel in the negotiation, execution and delivery of this Agreement and accordingly agree that if an ambiguity exists with respect to any provision of this Agreement, such provision shall not be construed against any party because such party or its representatives drafted such provision.

9.12 Public Announcements . Neither Seller nor, prior to the Closing Date, Purchaser shall issue any press release or make any other public announcement concerning the Business, this Agreement or the transactions contemplated hereby (including, without limitation, any announcements relating to the direction of or Purchaser’s plans for the Business) without the prior written approval of the other Party.

9.13 Severability . Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. If the final judgment of a court of competent jurisdiction declares that any term or provision hereof is invalid or unenforceable, the Parties hereto agree that the court making such determination shall have the power to limit the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified. In the event such court does not exercise the power granted to it in the prior sentence, the Parties hereto agree to replace such invalid or unenforceable term or provision with a valid and enforceable term or provision that will achieve, to the extent possible, the economic, business and other purposes of such invalid or unenforceable term.

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9.14 WAIVER OF JURY TRIAL . PURCHASER AND SELLER HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

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CONFIDENTIAL

EXECUTION VERSION

The Parties hereto have duly executed and delivered this Asset Purchase Agreement as of the date first set forth above.


	PURCHASER: C3J THERAPEUTICS, INC.

	By:	/s/ Todd R. Patrick
		Name: Todd R. Patrick
		Title: President & CEO

	Address:4503 Glencoe Avenue Marina del Rey, California 90292

	Facsimile: 310.665.2963
	Email: tpatrick@c3jtherapeutics.com

	SELLER:

	SYNTHETIC GENOMICS, INC.

	By:	/s/ Oliver Fetzer
		Name: Oliver Fetzer
		Title: Chief Executive Officer

	Address:11149 North Torrey Pines Road La Jolla, California 92037

	Facsimile: 858.777.5452
	Email: ofetzer@syntheticgenomics.com

	SYNTHETIC GENOMICS VACCINES, INC.

	By:	/s/ Oliver Fetzer
		Name: Oliver Fetzer
		Title: Chief Executive Officer

	Address:11149 North Torrey Pines Road La Jolla, California 92037

	Facsimile: 858.777.5452
	Email: ofetzer@syntheticgenomics.com

ANNEX A

DEFINITIONS

For purposes of this Agreement, the following terms shall have the meanings specified below:

“ Acquisition ” of an entity (a “ Target Entity ”) means a transaction or series of related transactions pursuant to which another entity (an “ Acquirer ”) directly or indirectly (a) obtains control of more than fifty percent (50%) of the voting securities of such Target Entity, or (b) succeeds to substantially all the assets and business of such Target Entity (whether via merger, sale of assets, or otherwise).

“ Acquirer Entities ” means (i) the Acquirer in any Acquisition of Seller or Seller Affiliate; and (ii) any Affiliates of such Acquirer (other than the entity acquired in the corresponding Acquisition and its controlled Affiliates).

“ Affiliate ” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person, and the term “control” (including the terms “controlled by” and “under common control with”) means ownership, directly or indirectly, of more than fifty percent (50%) of the voting securities, participating profit interest, or other ownership interests of a Person.

“ Books and Records ” means all books, ledgers, files, reports, plans, records, manuals, documentation and other printed, written or electronic materials (or portions thereof), including, without limitation, books of account, invoices, correspondence, memoranda, scientific records and files (including laboratory notebooks, research records and invention disclosures), customer and supplier lists, databases, specifications, operating history information, draft and published manuscripts, market analyses, marketing reports, submissions and correspondence to and from regulatory authorities and inventory records (in all cases, in any form or medium) maintained or generated exclusively for the Business as currently conducted by Seller and its Affiliates and/or the Program Materials.

“ Business Day ” means Monday through Friday, excluding any such day on which banks are closed in the State of New York.

“ Code ” means the Internal Revenue Code of 1986, as amended.

“ Consent ” means any consent, approval or waiver.

“ Contract ” means any written agreement, contract, understanding, arrangement, instrument, note, guaranty, indemnity, warranty, deed, assignment, purchase order, work order, commitment, covenant, assurance or undertaking of any nature.

“ controlled ”, with respect to Intellectual Property or Know-How, means the ability to transfer ownership of such Intellectual Property or Know-How or grant a license or sublicense with respect thereto.

“ Copyrights ” means works of authorship, whether or not registered, and all pending applications for registration of the same.

“ Encumbrance ” shall mean any lien, pledge, hypothecation, mortgage, security interest, equity, trust, equitable interest, encroachment or Order.

“ Exploit ” (with correlative meaning for “ Exploitation ”) means to research, develop, design, test, modify, improve, manufacture, produce, use, sell, offer for sale, promote, lease, import, export, distribute, have made, used and sold, and make other dispositions (including transfer of title or possession), reproduce, market, distribute, license, sublicense, commercialize and otherwise utilize and exploit.

“ Fraud ” means any fraud, intentional misrepresentation or willful misconduct.

“ GAAP ” means United States generally accepted accounting principles and practices.

“ Governmental Authority ” means any national, federal, regional, state, provincial, local, or foreign or other governmental authority or instrumentality, legislative body, court, administrative agency, regulatory body, commission or instrumentality, including any multinational authority having governmental or quasi-governmental powers, or any other industry self-regulatory authority.

“ Intellectual Property ” means all worldwide intellectual property rights including, without limitation, rights in and to any Patents, Marks, Copyrights and Know-How.

“ Know-How ” means any of the following intangible items, whether patentable or otherwise, and regardless of the form or medium: data, results, know-how, trade secrets, expertise, knowledge, practices, techniques, concepts, methodologies, methods, processes, protocols, designs, ideas, technology, inventions (whether or not reduced to practice), improvements, industrial designs and models, engineering drawings, discoveries, procedures, developments, databases, formulae, specifications, formulations, assays, screens, software, algorithms, test data, analytical and quality control data and results or descriptions (including pharmacological, biological, chemical, biochemical, toxicological, pre-clinical and clinical test data), raw data, analyzed data and other confidential or proprietary information, including such information contained in lab notebooks, research records, technical information, market analyses, information contained in submissions to and information from regulatory authorities, and marketing and other reports. Notwithstanding the foregoing, Know-How excludes Patents and any inventions claimed in Patents as of the Effective Date.

“ knowledge ” means the actual knowledge of each of Dr. Magda Barbu, Todd Peterson Ph.D., Anthony Artuso Ph.D., Rob Cutler, Margaret Dunbar, including in each case the knowledge that such person would have obtained after due inquiry in the reasonable conduct of his or her duties after familiarizing himself or herself with the terms and conditions of this Agreement and the Seller Disclosure Schedule. With respect to Intellectual Property, the “due inquiry in the reasonable conduct of his or her duties” does not require the Seller or any of the individuals named in the previous sentence to conduct, have conducted, obtain, or have obtained any freedom-to-operate opinions or similar opinions of counsel or any clearance searches, and no knowledge of any third-party Intellectual Property that would have been revealed by such inquiries, opinions, or searches will be imputed to the Seller or any such individual.

“ Law ” means any federal, state, local, municipal, foreign or other law, statute, constitution, principle of common law, rule, regulation, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Authority.

“ Liability ” or “ Liabilities ” means any debt, loss, damage, adverse claim, liability or obligation (whether direct or indirect, known or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, or due or to become due, and whether in contract, tort, strict liability or otherwise), and including all costs and expenses relating thereto.

“ Loss ” or “ Losses ” means any and all losses, costs, claims, damages (other than speculative or indirect damages or punitive or exemplary damages, in each case except to the extent such damages are

paid or payable to a Third Party), Liabilities, Taxes, judgments, settlements, awards, demands, offsets, reasonable out-of-pocket costs, expenses and attorneys’ fees (including any such reasonable costs, expenses and attorneys’ fees incurred in enforcing an Indemnified Party’s right to indemnification against any indemnifying Party or with respect to any appeal) and penalties and interest, if any.

“ Marks ” means all (a) trademarks, service marks, trade names, service names, brand names, trade dress rights, logos, corporate names and general intangibles of a like nature, together with the goodwill associated with any of the foregoing, and all applications, registrations and renewals thereof, and (b) internet protocol addresses and networks, including internet domain names, e-mail addresses, world wide web and http addresses, network names, network addresses and services, including registrations of and applications for any of the foregoing.

“ Material Adverse Effect ” means any circumstance, development, effect, event, change, condition, occurrence or state of facts which (a) has been, or reasonably could be expected to be, material and adverse with respect to the condition (financial or otherwise), assets, properties, Liabilities, rights, results, operations or prospects of the Business as currently conducted or the Transferred Assets, or (b) materially impairs, or reasonably could be expected to materially impair, the ability of Seller to consummate the Transactions or to perform its obligations under this Agreement; provided, however , that the following shall not be deemed to constitute, and shall not be taken into account in determining whether there has been, a Material Adverse Effect: (a) any adverse effect resulting directly or indirectly from general business or economic conditions; (b) any adverse effect resulting directly or indirectly from conditions generally affecting any industry or industry sector in which the Business as currently conducted operates or competes; (c) any adverse effect resulting directly or indirectly from the announcement, execution or delivery of this Agreement or the pendency or consummation of the Transactions; or (d) any adverse effect resulting directly or indirectly from any change in accounting requirements or principles or any change in applicable Laws or the interpretation thereof (except that the conditions in clauses (a) and (b) shall be taken into account to the extent they have adversely affected the Business to a greater degree than they have affected the business of other companies that conduct business in the same industry or sector as the Business.

“ Order ” means any writ, judgment, decree, injunction, award, assessment, decision, ruling or similar order of any Governmental Authority (in each such case whether preliminary or final).

“ Patents ” means any and all (a) issued patents, (b) patent applications, including all applications and filings made pursuant to the Patent Cooperation Treaty, provisional applications, substitutions, continuations, continuations-in-part, divisionals, converted provisionals, continued prosecution applications and renewals, and all letters of patent granted with respect to any of the foregoing, (c) patents of addition, restorations, extensions, supplementary protection certificates, registration or confirmation patents, utility models, petty patents and design patents, patents resulting from post-grant proceedings, inter partes reviews, oppositions and other existing or future post-issuance proceedings, and extensions revalidations, reissues, re-examinations and supplemental examinations, (d) inventor’s certificates and (e) other forms of government issued rights substantially similar to any of the foregoing.

“ Person ” means any individual, corporation, partnership, firm, joint venture, association, joint-stock company, trust, unincorporated organization, governmental body or other entity.

“ Program Know-How ” means all Know-How owned or otherwise controlled by Seller and/or its Affiliates as of the Effective Date and necessary for the operation of the Business as currently conducted by Seller and its Affiliates. Notwithstanding the foregoing, Program Know-How excludes Archetype and any “shrink wrap” and similar generally available commercial licenses to third party software . For the avoidance of doubt, to the extent any “Company Know-How” and/or “Company Platform Improvements”

(as such terms are defined in the Merck Agreement) is or are not included in Program IP, the same shall be included in the Program Know-How.

“ Program Patents ” means the Patents set forth on Schedule 1.1(b)

“ Purchase Price ” means, collectively, the Share Payment, the Closing Consideration, the First Anniversary Payment, the Second Anniversary Payment and the Third Anniversary Payment.

“ Purchaser Transferred Assets IP ” means (a) any Know-How (excluding inventions claimed in Patents as of the Termination Date (as defined in Section 7.3(b)) specifically related to the Business or the Exploitation of the Program Materials, in each case, arising from Purchaser’s use of the Transferred Assets or exercise of the license in Section 1.8 following the Closing Date and (b) any Patents that both: (i) claim inventions within the Know-How described in clause (a); and (ii) are filed after the Termination Date, in each case, ((a) and (b)), excluding Purchaser Background IP (as defined in Section 7.3(b)). Notwithstanding the foregoing, the Patents described in clause (b) exclude the claims of any Patents to the extent directed to inventions outside the Know-How described in clause (a) and the Patents described in clause (b) exclude Patents owned or controlled by (A) an Acquirer in any Acquisition of Purchaser or Purchaser Affiliate or (B) any Affiliates of such Acquirer (other than the entity acquired in the corresponding Acquisition and its controlled Affiliates), in either case, ((A) or (B)), prior to the date of such Acquisition (for clarity, the Patents described in clause (b) include any Patents claiming inventions within the Know-How described in clause (a) that are filed by such Acquirer or any Affiliates of such Acquirer after the date of such Acquisition and after the Termination Date).

“ Tax ” or “ Taxes ” means any tax (including any income tax, franchise tax, capital gains tax, estimated tax, gross receipts tax, surtax, excise tax, transfer tax, sales tax, use tax, property tax, business tax, occupation tax, inventory tax, occupancy tax, withholding tax or payroll tax), documentary charges, recording fees, levy, assessment, tariff, impost, imposition, toll, duty (including any customs duty), deficiency or fee, and any related charge or amount (including any fine, penalty or interest), that is, has been or may in the future be (a) imposed, assessed or collected by or under the authority of any Governmental Authority, or (b) payable pursuant to any tax‑sharing agreement or similar contract.

“ Tax Return ” means any return (including any information return), report, statement, declaration, estimate, schedule, notice, notification, form, election, certificate or other document or information that is, has been or may in the future be filed with or submitted to, or required to be filed with or submitted to, any Governmental Authority in connection with the determination, assessment, collection or payment of any Tax or in connection with the administration, implementation or enforcement of or compliance with any Laws relating to any Tax.

“ Third Party ” means any Person other than Purchaser, Seller or their respective Affiliates.

“ Transactions ” mean (a) the execution and delivery of this Agreement and (b) all of the transactions contemplated by this Agreement, including: (i) the sale of the Transferred Assets by Seller to Purchaser in accordance with this Agreement; (ii) the assumption of the Assumed Liabilities by Purchaser; and (iii) the performance by Seller and Purchaser of their respective obligations under this Agreement, and the exercise by Seller and Purchaser of their respective rights under this Agreement.

“ Unfiled Program Know-How Patents ” means Patents (including, without limitation, any “Company Patent Rights” as defined in the Merck Agreement) owned or controlled by Seller or its Affiliates that both: (i) claim inventions within Program Know-How; and (ii) are filed after the Effective Date. Notwithstanding the foregoing, Unfiled Program Know-How Patents exclude: (A) the claims of any Patents to the extent directed to inventions: (1) outside the Program Know-How; or (2) claimed or described in any

Patents filed on or prior to the Effective Date; and (B) Patents owned or controlled by any of the Acquirer Entities prior to the date of the corresponding Acquisition (for clarity, Unfiled Program Know-How Patents include any Patents claiming inventions within Program Know-How that are filed by any Acquirer Entity after the date of such Acquisition).

EXECUTION VERSION

AMENDMENT TO ASSET PURCHASE AGREEMENT

THIS AMENDMENT TO ASSET PURCHASE AGREEMENT (this “ Amendment ”) is made and entered into as of December 20, 2018 (the “ Amendment Effective Date ”) by and between C3J THERAPEUTICS, INC. , a Washington corporation (“ Purchaser ”), and SYNTHETIC GENOMICS, INC. , a Delaware corporation, and SYNTHETIC GENOMICS VACCINES, INC. , a Delaware corporation (collectively, “ Seller ”). Purchaser and Seller may be referred to herein collectively as the “ Parties ” and individually as a “ Party .”

RECITALS

WHEREAS , Purchaser and Seller entered into that certain Asset Purchase Agreement dated as of February 14, 2018 (the “ Agreement ”);

WHEREAS , Purchaser and a Third Party have executed a non-binding term sheet pertaining to a potential reverse triangular merger involving Purchaser and such Third Party (the “ Merger Transaction ”);

WHEREAS , the Parties wish to amend the Agreement to modify the purchase price provisions thereof subject to the closing of the Merger Transaction.

NOW, THEREFORE , for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:

1. All capitalized terms used in this Amendment and not otherwise defined herein shall have the same meaning as defined in the Agreement .

2. ANNEX A to the Agreement (DEFINITIONS) is hereby amended to add the following definitions:

““ Covered ” means, with respect to a Product and any Program Patents, that, in the absence of ownership of or a license granted under such Program Patents, the manufacture, use, sale, offering for sale or importation of such Product would infringe an issued patent within such Program Patents or, as to a pending application within such Program Patents, the manufacture, use, sale, offering for sale or importation of such Product would infringe such pending application if it were to issue as a patent.”

““ Product ” means a synthetic bacteriophage product or engineered bacteriophage product that (a) is developed by or on behalf of Purchaser or its Affiliate utilizing bacteriophage from Program Materials that were owned or controlled by or in the possession of Seller and/or its Affiliates and included in the Transferred Assets as of the Closing Date, (b) is developed by or on behalf of a counterparty to an Assigned Contract pursuant to the terms of such Assigned Contract and either utilizes bacteriophage licensed, transferred or otherwise provided to such counterparty pursuant to such Assigned Contract prior to the

Closing Date or utilizes bacteriophage from Program Materials that were owned or controlled by or in the possession of Seller and/or its Affiliates and included in the Transferred Assets as of the Closing Date, or (c) is Covered by a Valid Claim. For clarity, Product excludes any synthetic bacteriophage product or engineered bacteriophage product that is developed by or on behalf of Purchaser, its Affiliate or any counterparty to an Assigned Contract and that (i) utilizes any bacteriophage that (A) was not included in the Program Materials that comprised part of the Transferred Assets sold to Purchaser on the Closing Date or (B) was not licensed, transferred or otherwise provided to a counterparty to an Assigned Contract pursuant to such Assigned Contract prior to the Closing Date, or (ii) is not Covered by a Valid Claim (for example, excluding any such product that may be developed by such counterparty pursuant to an amendment to such Assigned Contract after the Closing Date).”

“ Valid Claim ” means with respect to the particular country within which the application was filed (a) a claim of an issued and unexpired patent within Program Patents in the relevant country which claim has not: (i) lapsed, been cancelled, permanently revoked or dedicated to the public; (ii) become abandoned; (iii) been held invalid or unenforceable by a court or government agency or other appropriate body of competent jurisdiction (within the US, including the USPTO or PTAB), which holding is unappealable or unappealed within the time allowed for appeal; or (iv) been disclaimed or admitted to be invalid or unenforceable through reissue, inter partes review, post grant review, reexamination, opposition, revocation, disclaimer or otherwise, or (b) a claim of a pending patent application within Program Patents in the relevant country which has not been cancelled, withdrawn, abandoned, finally rejected or expired; provided , that, notwithstanding the foregoing, a patent application pending in the relevant country for more than five (5) years will not be considered to have any Valid Claim for purposes of this Agreement unless and until any Program Patents in the relevant country that meets the criteria set forth in clause (a) above with respect to such application issues.”

3. Section 1.5 of the Agreement ( Purchase Price ) is hereby deleted and replaced in its entirety with the following:

“In addition to the Assumed Liabilities, as consideration for the sale of the Transferred Assets to Purchaser:

(a) at the Closing, Purchaser paid to Seller, by wire transfer of immediately available funds in US Dollars, the sum of $1,000,000 (the “Closing Consideration”);

(b) Purchaser will pay to Seller, by wire transfer of immediately available funds in US Dollars, the following amounts on the following dates: (i) $1,000,000 on January 31, 2019; (ii) $1,000,000 on January 31, 2020; and (iii) $2,000,000 on January 31, 2021 (the payments pursuant this Section 1.5(b), collectively, the “Cash Payments”);

(c) Purchaser will pay to Seller the following milestone payments in accordance with the procedure set forth below in this Section 1.5(c) upon the achievement of the following milestone events by Purchaser or its Affiliate or a counterparty to an Assigned Contract with respect to each

of the first three (3) Products, on a Product-by-Product basis: (i) $2,000,000 upon the first to occur of (x) dosing of the first human subject in the first Phase 3 clinical study in the U.S. of the first Product or (y) submission of a new drug approval application for the first Product to the regulatory authority with power to approve the use of such Product for therapeutic use in humans in any country; (ii) $5,000,000 upon dosing of the first human subject in the first Phase 3 clinical study in the U.S. of each of the second Product and the third Product; (iii) $7,500,000 upon the first to occur of (x) FDA approval of a BLA or NDA in the U.S. for the first Product or (y) EMA approval in Europe for the first Product; and (iv) with respect to each of the second Product and the third Product, $10,000,000 upon the first to occur of (x) FDA approval of a BLA or NDA in the U.S. for such Product or (y) EMA approval in Europe for such Product (the payments pursuant this Section 1.5(c), collectively, the “Milestone Payments”). On a Product-by-Product basis, in the event that the applicable FDA approval milestone event set forth in clause (iii) or clause (iv) of this Section 1.5(c) is achieved but the Milestone Payment pursuant to clause (i) or clause (ii) of this Section 1.5(c) (as applicable) has not previously been paid with respect to such Product (e.g., if FDA approval is obtained without conducting a Phase 3 clinical study of such Product), then the Milestone Payment pursuant to clause (i) or clause (ii) of this Section 1.5(c), as applicable, shall become payable upon achievement of the applicable milestone event set forth in clause (iii) or clause (iv) of this Section 1.5(c) with respect to such Product. Purchaser shall notify Seller in writing within thirty (30) days of the achievement of each milestone event set forth in this Section 1.5(c). Following receipt of such written notice, Seller will promptly invoice Purchaser for the applicable Milestone Payment and Purchaser will pay such Milestone Payment to Seller, by wire transfer of immediately available funds in US Dollars, within thirty (30) days of receipt of such invoice.

(d) Immediately prior to the closing of the Merger Transaction, Purchaser shall issue to Synthetic Genomics, Inc. that number of shares of Purchaser’s Common Stock (as evidenced and confirmed by Purchaser’s capitalization table provided on the date of such issuance) equal to 10% of Purchaser’s fully diluted capitalization (excluding options and restricted stock units) immediately prior to the closing of the Merger Transaction (such shares, the “Consideration Shares,” and the issuance of such shares, the “Share Payment”). The Share Payment will be subject to Seller’s execution and delivery of a Common Stock Purchase Agreement substantially in the form attached hereto as Exhibit A (with the recitals thereof modified as appropriate) and in compliance with applicable securities laws. Prior to the Share Payment, Seller shall have no rights of a shareholder of Purchaser with respect to the Consideration Shares, including, without limitation, any dividend rights, voting rights, liquidation rights, preemptive rights or other equity right.

(e) Seller shall provide Purchaser with its wire instructions at least two Business Days prior to a date on which Purchaser will pay Seller via a wire transfer of funds; provided, that if Seller does not provide Purchaser wire instructions within such two Business Day period, Purchaser shall be entitled to rely on the most recent wire instructions previously provided by Seller.”

The Parties acknowledge that Purchaser has paid the Closing Consideration and that Purchaser’s obligation under Section 1.5(a) of the Agreement has been satisfied in full.

4. The last sentence of Section 8.5 of the Agreement ( Limitations ) is hereby deleted and replaced in its entirety with the following:

“For purposes of this Section 8.5 , the amount of the Purchase Price actually paid to Seller shall be determined as the amount of the Purchase Price that becomes due and payable to Seller pursuant to Section 1.5 (subsections (a) through (e) inclusive) hereof and is either received by Seller or validly set-off pursuant to a right of set-off of Purchaser arising from Section 8.6 hereof and shall not be limited by the amount of the Purchase Price actually received by Seller at the time such claim is made.”

5. The first sentence of Section 8.6 of the Agreement ( Set-Off ) is hereby deleted and replaced in its entirety with the following:

“Purchaser shall have the right to withhold and deduct any Losses for which any Purchaser Indemnified Party is entitled to indemnification under this Agreement after application in full of the provisions of Section 8.4 (subject to Section 8.5 hereof) from any payments, including for the avoidance of doubt any Share Payment and any Milestone Payment, that may be owed to Seller pursuant to Section 1.5 (subsections (a) through (e) inclusive) hereof (a “ Set Off ”).”

6. The definition of “Purchase Price” in ANNEX A to the Agreement (DEFINITIONS) is hereby deleted and replaced in its entirety with the following:

““ Purchase Price ” means, collectively, the Closing Consideration, the Cash Payments, the Milestone Payments and the Share Payment.”

7. Notwithstanding anything to the contrary in this Amendment, in the event the closing of the Merger Transaction does not occur on or before June 1, 2019, or such other date as the Parties may agree upon in writing, this Amendment shall be null and void and the Agreement will remain in full force and effect without amendment; provided , however, that the $1,000,000 payment made by Purchaser to Seller on January 31, 2019 pursuant to Paragraph 2 of this Amendment will constitute the “First Anniversary Payment” under the Agreement, and Purchaser’s obligation to make the First Anniversary Payment pursuant to Section 1.5(a)(ii) of the Agreement shall be satisfied in full as a result of such payment under this Amendment.

8. Each Party hereby represents and warrants to the other that it has the corporate power and authority to enter into this Amendment and this Amendment constitutes a legal, valid and binding obligation, enforceable against such Party in accordance with its terms.

9. Subject to Paragraph 7 of this Amendment, this Amendment shall be effective upon the Amendment Effective Date set forth above.

10. Except as expressly modified in this Amendment, all of the terms and conditions of the Agreement shall remain in full force and effect. To the extent that there are any inconsistencies

between this Amendment and the Agreement, the terms of this Amendment shall govern and shall supersede the Agreement.

11. This Amendment may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Each Party may execute this Amendment by facsimile transmission or in Adobe™ Portable Document Format (PDF) sent by electronic mail. Facsimile or PDF signatures of authorized signatories of the Parties will be deemed to be original signatures, will be valid and binding upon the Parties, and, upon delivery, will constitute due execution of this Amendment.

[Signature Page Follows]

IN WITNESS WHEREOF, the Parties have caused this Amendment to be executed by their duly authorized representatives as of the Amendment Effective Date set forth above.


PURCHASER:

C3J Therapeutics, Inc.

By:	/s/ Todd R. Patrick
	Name: Todd R. Patrick
	Title: President & CEO

SELLER:

Synthetic Genomics, Inc.

By:	/s/ Oliver Fetzer
	Name: Oliver Fetzer
	Title: Chief Executive Officer

Synthetic Genomics Vaccines, Inc.

By:	/s/ Oliver Fetzer
	Name: Oliver Fetzer
	Title: Chief Executive Officer

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Todd R. Patrick, certify that:

I have reviewed this quarterly report on Form 10-Q of Armata Pharmaceuticals, Inc.;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 14, 2019


	/s/ Todd R. Patrick
	Todd R. Patrick
	Chief Executive Officer
	(Principal Executive Officer)

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Steve R. Martin, certify that:

I have reviewed this quarterly report on Form 10-Q of Armata Pharmaceuticals, Inc.;

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 14, 2019


	/s/ Steve R. Martin
	Steve R. Martin
	Chief Financial Officer
	(Principal Financial Officer)

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Armata Pharmaceuticals, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2019 as filed with the Securities and Exchange Commission (the “Report”), I, Todd R. Patrick, Chief Executive Officer of the Company, hereby certify as of the date hereof, solely for purposes of Title 18, Chapter 63, Section 1350 of the United States Code, that to the best of my knowledge:

(1)

the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, and

(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

This Certification has not been, and shall not be deemed, “filed” with the Securities and Exchange Commission.

Date: August 14, 2019


	/s/ Todd R. Patrick
	Todd R. Patrick
	Chief Executive Officer
	(Principal Executive Officer)

Exhibit 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Armata Pharmaceuticals, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2019 as filed with the Securities and Exchange Commission (the “Report”), I, Steve R. Martin, Chief Financial Officer of the Company, hereby certify as of the date hereof, solely for purposes of Title 18, Chapter 63, Section 1350 of the United States Code, that to the best of my knowledge:

(1)

the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, and

(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.

This Certification has not been, and shall not be deemed, “filed” with the Securities and Exchange Commission.

Date: August 14, 2019


	/s/ Steve R. Martin
	Steve R. Martin
	Chief Financial Officer
	(Principal Financial Officer)