EXHIBIT 10.38


 


ASSIGNMENT OF CONTINGENT PAYMENTS


 


This Agreement is made this 20th Day of October 2007 (“Effective Date”),
by and between  VGX Pharmaceuticals, Inc.,  a Delaware  Corporation  (hereinafter
referred to as  “VGXP”), VGX Animal Health, Inc.,  a Delaware corporation  (hereinafter referred to as  “VGXAH”), and Ronald O. Bergan  and Mary
Alice Bergan(hereinafter collectively 
referred to as “BERGANS”).


 


WHEREAS, under the
Asset Purchase Agreement by and among VGX Pharmaceuticals, Inc., Advisys, Inc.,   and 
BERGANS, dated February 21, 2007 (hereinafter referred to as
the  “Purchase Agreement”),  VGXP promised to the BERGANS, among other
things, certain contingent monetary payments under Article II paragraph
2.1 a(vii) in the Purchase Agreement. (hereinafter the above mentioned
monetary obligations shall be referred to as “Bergan Payments”); and


 


WHEREAS, in addition
to the licensing of some of VGXP’s technologies, VGXP desires to grant and
VGXAH desires to assume the obligations for Bergan Payments; and


 


WHEREAS, the parties
does not desire to disturb Bergan Payments and the right of BERGANS to Bergan
Payments;


 


NOW, THEREFORE, in
consideration of the mutual promises and conditions hereinafter set forth and
intending to be legally bound, the parties hereto agree as follows:


 


1.             DEFINITIONS:


 


1.1.
FIELD or FIELD OF USE is used interchangeably and means the practice, including
the making, using, selling, or offering to sell any product or services, in the
field of animal health.  Such practice contemplates application of any
product or services to an end user that is an animal that is non-human. 
One example of such end use is the treatment of a farm animal with a DNA
product for therapeutic purposes.


 


1.2. GHRH means growth hormone releasing
hormone.


 


1.3.
“Bergan Payments” is used herein to mean the contingent payment obligations of
VGXP as agreed to in the Purchase Agreement, Article II paragraph 2.1
a(vii), which relates to payments owed and payable to  BERGANS by VGX based on royalty and upfront
and milestone payments made by a licensee of VGX that is a Nonrelated Party and
VGX.


 


1.4 “Other Party” or “Nonrelated Party” is used herein interchangeably
and means a third party that is not VGX, the BERGANS, or any entity that is
wholly owned, majority controlled, or commonly controlled by VGX and/or the
BERGANS.


 

















 


2.             ASSUMPTION
OF PAYMENT OBLIGATION.   VGXAH hereby assumes VGXP’s obligations
for Bergan Payments that relate to the FIELD OF USE.   VGXAH assumes and agrees to perform and be
bound by, all of the terms, covenants and conditions of the Bergan Payments,
commencing as of the date of full execution of this Agreement, with the same
force and effect as though VGXAH was originally obligated in the Purchase
Agreement.


 


3.             BERGAN
PAYMENTS


 


3.1   METHOD OF CALCULATING
BERGAN PAYMENTS.  The terms agreed by
VGXP and the BERGANS under the Purchase Agreement shall be applicable as though
VGXAH is in the place of VGXP.


 


3.2.  Payment of
Bergan Payments by VGXAH.  The Bergan
Payments that relate to the FIELD OF USE shall be directly paid by VGXAH.


 


3.3.  VGXAH
Default.  VGXP agrees to reassume the
payment obligations assigned to VGXAH as a result of this Agreement should
VGXAH be in default of Bergan Payments.


 


4.             Notices,
payments, statements, reports and other communications under this Agreement
shall be in writing and shall be deemed to have been received as of the day
after the date sent if sent by public courier (e.g., Federal Express) or by
Express Mail, receipt requested, and addressed as follows:


 


	
  If for VGXP:

  	
  VGX Pharmaceuticals

  	
   

  	
   

  
	
   

  	
  450 Sentry Parkway

  	
   

  	
   

  
	
   

  	
  Blue Bell, PA 19422.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  If for VGXAH:

  	
  VGX Animal Health

  	
   

  	
   

  
	
   

  	
  2700 Research Forest Drive,

  	
   

  	
   

  
	
   

  	
  The Woodlands, TX 77381

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  If for Ronald O. Bergen and Mary Alice Bergen:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3300 North 7th Avenue

  	
   

  	
   

  
	
   

  	
  Fargo, ND 58108

  	
   

  	
   

  



 


Any party may change its official address
upon written notice to the other party.


 

















 


5.             This
Agreement shall be construed and governed in accordance with the laws of the
Delaware, without giving effect to conflict of law provisions.  In the event that a party to this Agreement
perceives the existence of a dispute with the other party concerning any right
or duty provided for herein, the parties will, as soon as practicable, confer
in an attempt to resolve the dispute.  If
the parties are unable to resolve such dispute amicably, then the parties
hereby submit to the exclusive jurisdiction of and venue in the courts located
in Delaware with respect to any and all disputes concerning the subject of this
Agreement.


 


[SIGNATURES ON FOLLOWING PAGE]


 


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IN WITNESS WHEREOF, the
parties have executed this AGREEMENT on the Effective Date.


 


 


	
  VGX
  PHARMACEUTICALS, INC.

  	
  VGX
  ANIMAL HEALTH, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  J. Joseph Kim

  	
   

  	
  By:

  	
  /s/
  Douglas R. Kern

  
	
   

  	
   

  
	
  Name:
   J. Joseph Kim

  	
   

  	
  Name:
  Douglas R. Kern

  
	
   

  	
   

  
	
  Title:
  President and CEO

  	
  Title:
  Vice President, Business Development

  
	
   

  	
   

  
	
  Date:
  October 20, 2007

  	
  Date:
  October 20, 2007

  
	
   

  	
   

  
	
   

  	
   

  
	
  RONALD O. BERGAN

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Ronald O . Bergan

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Date:

  	
  11-9-07

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  MARY ALICE BERGAN

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Mary Alice Bergan

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Date:

  	
  11-9-07

  	
   

  	
   

  
						



 


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