EXHIBIT 10.36


 


Portions Subject to Confidential Treatment Request Under Rule 406


 


 


NONEXCLUSIVE LICENSE


 


 


between


 


 


VGX PHARMACEUTICALS, INC.


 


(VGXP)


 


 


and


 


 


VGX ANIMAL HEALTH, INC.


 


(VGXAH)


 


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NONEXCLUSIVE LICENSE


 


This NONEXCLUSIVE LICENSE (“NONEXCLUSIVE
LICENSE”), made on August 15, 2007 (“EFFECTIVE DATE”), is by and between
VGX ANIMAL HEALTH, having a place of business at 2700 Research Forest Drive,
The Woodlands, TX 77381 (“VGXAH”), and VGX Pharmaceuticals, Inc., having a
place of business at 450 Sentry Parkway East, Blue Bell, PA 19422 (“VGXP”).


 


WHEREAS, VGXP owns and controls certain
intellectual property related to electroporation devices and methods of using
same to deliver biomolecules, including DNA plasmids (“DEVICE PATENT RIGHTS”)
and materials and methods of plasmid manufacturing (“MFG PATENT RIGHTS”);


 


WHEREAS, VGXP owns and controls certain intellectual property related
to biological products including Growth Hormone Releasing Hormone (GHRH) and
VGXP has licensed intellectual property rights related to such products to
VGXAH by way of an exclusive license agreement dated August 15, 2007 (“EXCLUSIVE
PRODUCT LICENSE”);


 


WHEREAS, VGXAH desires access to the
DEVICE PATENT RIGHTS and MFG PATENT RIGHTS in order to practice the rights
provided by the EXCLUSIVE PRODUCT LICENSE, and VGXP desires to effectuate the
license of DEVICE PATENT RIGHTS and MFG PATENT RIGHTS for such limited use to
VGXAH;


 


NOW, THEREFORE, in consideration of the
mutual promises and covenants contained herein and other good and valuable
consideration, the sufficiency of which is hereby acknowledged, the parties
agree as follows:


 


1.              DEFINITIONS


 


1.1
INTELLECTUAL PROPERTY is used herein to mean any and all legal right(s) that
protect(s) any invention, improvement or discovery, whether or not
patentable, and will include, but is not limited to, patent rights, patent
applications, copyrights, trademarks, trade secrets, and know-how.


 


1.2 VGXAH
INTELLECTUAL PROPERTY is used herein to mean and intellectual property that was
conceived or reduced to practice by VGXAH solely that does not incorporate or
extend from VGXP PATENT RIGHTS, DEVICE PATENT RIGHTS, and/or MFG PATENT RIGHTS.


 


1.3 VGXP
LICENSED PRODUCT(S) means product(s) which is/are made, made for,
used by, imported by or for, sold by or offered for sale by VGXAH and/or any
sublicensee(s) of VGXAH to unrelated third parties which  in the absence of this AGREEMENT would
infringe at least one claim of VGXP PATENT RIGHTS.


 


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1.4  VGXP PATENT RIGHTS means all of VGXP’s
interest in the rights represented by or issuing from (including all claims
referenced within) those United States patents and patent applications listed
in Attachment 1, including, in each case, any continuations,
continuations-in-part, divisions, provisionals, substitute applications, and
any patent issuing therefrom, and any reissues, reexaminations, renewals and/or
extensions (including any supplemental patent certificate) based thereon, and
any confirmation patent or registration patent or patent of addition based on
any such patent, and all foreign counterparts of any of the foregoing.


 


1.5 SALE means
any bona fide transaction for which consideration is received or expected for
the sale, use, lease, transfer or other disposition of DEVICE FACILITATED
PRODUCT(S) and/or PATENTED DEVICES to an unrelated third party.  A SALE shall be deemed completed at the time
VGXAH invoices, ships or receives payment for the SALE, whichever occurs first.


 


1.6 NET SALES
means the gross amount invoiced for SALES, less qualifying costs directly
attributable to such SALES and actually identified on the invoice and borne by
VGXAH.  Such qualifying costs shall be
limited to the following:


 


1.6.1 Discounts
and rebates, in amounts customary in the trade, for quantity purchases, prompt
payments, for wholesalers and distributors;


 


1.6.2 Credits,
allowances and/or refunds, not exceeding the original invoice amount, for
rejections, claims and/or returns;


 


1.6.3  Prepaid outbound transportation expenses and
transportation insurance premiums;


 


1.6.4 Sales and
use taxes, tariffs, duties, surcharges and other fees imposed by a governmental
agency; and


 


1.6.5  Retroactive price reductions actually applied
in an invoice.


 


1.7 TERRITORY A
shall mean the United States of America. 
TERRITORY B shall mean any country that is a part of the European
Union.  TERRITORY C shall mean any
country that not the United States of America or a part of the European Union.


 


1.8  FIELD or FIELD OF USE is used interchangeably
and means 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.


 


1.9  DEVICE PATENT RIGHTS means all of VGXP’s
interest in the rights represented by United States Patent Number 7,245,963 and
United States patent application Serial 


 


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Number
60/852,149, including, in each case, any continuations, continuations-in-part,
divisions, provisionals, substitute applications, and any patent issuing
therefrom, and any reissues, reexaminations, renewals and/or extensions
(including any supplemental patent certificate) based thereon, and any
confirmation patent or registration patent or patent of addition based on any
such patent, and all foreign counterparts of any of the foregoing.


 


1.10  PATENTED DEVICES means any and all devices
and use of same that is covered by the DEVICE PATENT RIGHTS, and in particular,
the devices are those used for the electroporation of DNA to animals or cells of
an animal that is not human.


 


1.11 DEVICE
FACILITATED PRODUCT means any product that is delivered to an animal using the
PATENTED DEVICES, and includes the animal that results from such use.


 


1.12 PRODUCT
IMPROVEMENTS shall mean all inventions for which patent applications are or may
be filed, whether ultimately patentable or not, that are conceived or first
reduced to practice by VGXAH that incorporate or otherwise expand on inventions
that are subject to DEVICE PATENT RIGHTS and that relate to the make, use,
import, sale, or offer of sale of PATENTED DEVICES.


 


1.13 DEVICE
IMPROVEMENTS is used herein to mean any and all inventions for which patent
applications are or may be filed, whether ultimately patentable or not, that
are conceived or first reduced to practice by VGXAH that incorporate or
otherwise expand on inventions that are subject to the DEVICE PATENT RIGHTS.


 


1.14 MFG PATENT
RIGHTS is used herein to mean all of VGXP’s interest in the rights represented
by United States Patent Number 7,238,522, including, in each case, any
continuations, continuations-in-part, divisions, provisionals, substitute
applications, and any patent issuing therefrom, and any reissues,
reexaminations, renewals and/or extensions (including any supplemental patent
certificate) based thereon, and any confirmation patent or registration patent
or patent of addition based on any such patent, and all foreign counterparts of
any of the foregoing.


 


1.15 MFG
PROCESSES is used herein to mean plasmid manufacturing methods and devices to
accomplish the same as covered by MFG PATENT RIGHTS.


 


1.16 MFG
IMPROVEMENTS is used herein to mean any and all inventions for which patent
applications are or may be filed, whether ultimately patentable or not, that
are conceived or first reduced to practice by VGXAH that incorporate or
otherwise expand on inventions that are subject to the MFG PATENT RIGHTS.


 


1.17 AFFILIATE
means any corporation, firm, limited liability company, partnership, or other
entity that directly or indirectly controls, or is controlled by, or is under
common control with a Party to this Agreement. For the purpose of this
definition, control means ownership, directly or through one or more
Affiliates, of fifty percent (50%) (or such lesser percentage which is the
maximum allowed to be owned by a foreign entity in a 


 


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particular
jurisdiction) or more of the shares of stock entitled to vote for the election
of directors in the case of a corporation, or fifty percent (50%) (or such lesser
percentage which is the maximum allowed to be owned by a foreign entity in a
particular jurisdiction) or more of the equity interests in the case of any
other type of legal entity, or status as a general partner in any partnership,
or any other arrangement whereby a Party controls or has the right to control
the board of directors or equivalent governing body of a corporation or other
entity.


 


1.18 EXCLUDED
PROCEEDS means all proceeds reasonably and fairly attributable to bona fide (i) debt
financing; (ii) equity (and conditional equity, such as warrants,
convertible debt and the like (iii) investments in VGXAH at fair market
value; (iv) reimbursements of patent prosecution costs and patent
maintenance expenses; (v) reimbursement for the cost of research and/or
development services provided on the basis of full-time equivalent efforts of
personnel not in excess of commercially reasonable full-time equivalent rates.


 


2.  LICENSE GRANT


 


2.1           VGXP grants
to VGXAH for the agreed upon term, provided herein, a nonexclusive, world-wide
right and license under the DEVICE PATENT RIGHTS to use the PATENTED DEVICES in
the FIELD OF USE, including the right to sublicense to a third party (the “SUBLICENSEE”).


 


2.2           VGXP grants to VGXAH for the agreed
upon term, provided herein, a nonexclusive, world-wide right and license under
the MFG PATENT RIGHTS to use MFG PROCESSES in the FIELD OF USE, including the
right to sublicense to SUBLICENSEE; however, such right to sublicense MFG
PATENT RIGHTS will only extend to a SUBLICENSEE of DEVICE PATENT RIGHTS or to a
SUBLICENSEE of VGXP LICENSED PRODUCT.


 


3.  TERM OF NONEXCLUSIVE LICENSE


 


3.1 Term.  This NONEXCLUSIVE LICENSE, unless sooner
terminated as provided herein, shall terminate upon the later of:


 


(a) expiration or abandonment of the
last patent that is a component of the DEVICE PATENT RIGHTS; or


 


(b) twenty-five (25) years after the EFFECTIVE
DATE.


 


3.2
Termination.  The parties may terminate
this Agreement under the following conditions:


 


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3.2.1 VGXP,
upon ten (10) days written notice to VGXAH, may terminate if VGXAH is more
than sixty (60) days late in paying any amounts payable to VGXP or Ronald O.
Bergan and Mary Alice Bergan (collectively, “BERGANS”) (see Section 4.1.5,
below), provided herein, or if VGXAH, or SUBLICENSEE, breaches this
NONEXCLUSIVE LICENSE and does not cure the breach within thirty (30) days after
written notice of breach;


 


3.2.2 VGXAH,
upon thirty (30) days written notice to VGXP, may terminate if the sale or
other exploitation of the PATENTED DEVICES becomes technologically or
commercially unfeasible; or


 


3.2.3 In the
instant that the PRODUCT LICENSE AGREEMENT terminates, then parties agree that
this NONEXCLUSIVE LICENSE shall hereby terminate concomitantly.


 


3.2.4  VGXP may terminate this AGREEMENT, upon ten (10) days
written notice to VGXAH, if one of the following default events occur:


 


(a) If
VGXAH becomes insolvent, bankrupt or generally fails to pay its material debts
as such debts become due;


 


(b) If
VGXAH is adjudicated insolvent or bankrupt; admits in writing its inability to
pay its debts; or shall suffer a custodian, receiver or trustee for it or
substantially all of its property to be appointed and, if appointed without its
consent, is not discharged within thirty (30) days of such appointment;


 


(c) If
VGXAH makes an assignment for the benefit of creditors; or suffers proceedings
under any law related to bankruptcy, insolvency, liquidation or the
reorganization, readjustment or the release of debtors to be instituted against
it and, if contested by it, not dismissed or stayed within thirty (30) days;


 


(d) If
proceedings under any United States law related to bankruptcy, insolvency,
liquidation, or the reorganization, readjustment or the release of debtors are
instituted or commenced by VGXAH;


 


(e) If any
order for relief is entered relating to any of the proceedings described in
subsections (a) through (d);


 


(f) If
VGXAH shall call a meeting of its creditors with a view to arranging a
composition or adjustment of its debts; or


 


(g) If
VGXAH shall, by any act or failure to act, indicate its consent to, approval of
or acquiescence in any of the proceedings described in subsections (a) through
(d).


 


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3.2.5  Upon termination of this NONEXCLUSIVE
LICENSE, VGXAH and SUBLICENSEE(S) shall refrain from further manufacture,
sale, marketing, importation and/or distribution of PATENTED DEVICES and/or MFG
PROCESSES.


 


3.2.6 Upon
termination of this NONEXCLUSIVE LICENSE, each (receiving) party shall, at the
other (disclosing) party’s request, return to the other party all CONFIDENTIAL
INFORMATION (except for one copy for archival purposes) of the other party,
provided hereunder.


 


3.2.7 Upon
termination of this NONEXCLUSIVE LICENSE, VGXAH shall inventory in writing as
soon as commercially practicable and in any event no later than sixty (60) days
after termination of: all devices and manufacturing protocols for purposes of
MFG PROCESSES and all PATENTED DEVICES under the control of VGXAH or
SUBLICENSEE(S); and all PATENTED DEVICES that are in the process of manufacture
and component parts thereof, which inventories shall be reduced to
writing.  VGXAH shall deliver copies of
such written inventories, verified by an officer of VGXAH, forthwith to
VGXP.  VGXP shall have forty five (45)
days after receipt of such verified inventories within which to challenge the
inventory and request an audit thereof. 
Upon five (5) days written notice to VGXAH or SUBLICENSEE(S), VGXP
and its agents shall be given access during normal business hours to the
premises of respective company for the purpose of conducting an audit.  Upon the termination of this AGREEMENT, VGXAH
shall at its own expense forthwith remove, efface or destroy all references to
VGXP from all advertising or other materials used in the promotion of VGXAH’s,
or SUBLICENSSE’s, business and VGXAH and SUBLICENSEE(S) shall not
represent in any manner that it has rights in or to any one or more of the
DEVICE PATENT RIGHTS, MFG PATENT RIGHTS, PATENTED DEVICES, or MFG PROCESSES.


 


4.  FEES AND ROYALTIES


 


4.1  License Initiation Fees and Royalties


 


In the event
that VGXAH sublicenses DEVICE PATENT RIGHTS or a VGXP LICENSED PRODUCT to a
SUBLICENSEE, the parties agree that VGXAH shall have the option to license MFG
PATENT RIGHTS to same SUBLICENSEE, if desired by VGXAH.


 


4.1.1  As part of the consideration for the bundle
of rights granted to VGXAH, VGXAH shall pay to VGXP, on a quarterly basis:  a) a royalty of ******  of the NET SALES of each DEVICE
FACILITATED PRODUCT, including any PATENTED DEVICES, which is sold by VGXAH,
including any sold by independent contractor(s) or agent(s) of VGXAH,
and b) ******  of
any royalties paid by any SUBLICENSEE of DEVICE PATENT RIGHTS to VGXAH.  In 


 


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determining the
earned royalty payment, if any, such payment shall be made by VGXAH at the end
of any CALENDAR QUARTER following the first SALE of a DEVICE FACILITATED
PRODUCT or PATENTED DEVICE.  Such royalty
payments shall terminate on a product-by-product and country-by-country basis
upon the later of (a) the date which is ten (10) years after the date
of the first SALE of such DEVICE FACILITATED PRODUCT or PATENTED DEVICE in such
country, and (b) in any country in which patent rights exist for any
DEVICE PATENT RIGHTS, the date of expiration of the last-to-expire patent in
such country, within the definition of DEVICE PATENT RIGHTS, with an
enforceable claim covering the PATENTED DEVICES.


 


4.1.2  In the event that a sold product is both a
DEVICE FACILITATED PRODUCT and a VGXP LICENSED PRODUCT, royalty payment by
VGXAH to VGXP shall include only one ******  royalty obligation for each sale event of
such product.


 


4.1.3  Within thirty (30) days after the end of each
of the periods specified below, VGXAH shall pay to VGXP the specified
percentage of any sublicense initiation fee and any other non-royalty
payment(s), net of all EXCLUDED PROCEEDS, including those resulting from
co-marketing, strategic alliance, joint venture and other similar
arrangement(s), actually received during such period by VGXAH from a
SUBLICENSEE resulting from activities with PATENTED DEVICES.  Any non-cash consideration received by VGXAH
from such sublicensee shall be valued at its FAIR MARKET VALUE as of the date
of receipt by VGXAH.


 


	
  Period

  	
   

  	
  Percentage

  
	
   

  	
   

  	
   

  
	
  EFFECTIVE DATE to 12 months after the EFFECTIVE
  DATE

  	
   

  	
  ******

  
	
   

  	
   

  	
   

  
	
  12 months and one day after EFFECTIVE DATE to 24
  months after the EFFECTIVE DATE

  	
   

  	
  ******

  
	
   

  	
   

  	
   

  
	
  24 months and one day after EFFECTIVE DATE to 36
  months after the EFFECTIVE DATE

  	
   

  	
  ******

  



 


4.1.4 In the
event one or more DEVICE FACILITATED PRODUCTS and/or PATENTED DEVICES are sold
in a COMBINATION PRODUCT, the amount of royalties paid to VGXP pursuant to this
Section 4.1 shall be based on the portion of the FAIR MARKET VALUE of such
combination of products reasonably attributable to the DEVICE FACILITATED
PRODUCTS and/or PATENTED DEVICES.


 


4.1.5 
VGXAH acknowledges and agrees to assume from VGXP the payment obligation
to BERGANS, which have been stipulated in the Asset Purchase 


 


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Agreement, section 2.1(a)(vii), made between
VGXP and ADViSYS, dated February 21, 2007, such payments being related to
the FIELD OF USE.


 


                4.2  Diligence and Milestone Fees


 


4.2.1  For
the term of this agreement, VGXAH shall provide VGXP on each January 30th,
written progress reports, setting forth in such detail as VGXP may reasonably
request, the progress of the development, evaluation, testing and
commercialization of each DEVICE FACILITATED PRODUCT.  VGXAH shall also notify VGXP in writing
within thirty (30) days of the first SALE of each DEVICE FACILITATED PRODUCT
and/or PATENTED DEVICE.


 


4.2.2  Any
of the events listed below that occur after the EFFECTIVE DATE shall require
that the following milestone payments be paid by VGXAH to VGXP within sixty
(60) days after the achievement of the respective milestone event. The
aforementioned notwithstanding, VGXAH shall not be obligated to remit a milestone
payment to VGXP until it has raised five million dollars ($ 5,000,000) in total
capital. Any milestone payment obligation arising prior to raising five million
dollars ($ 5,000,000) in total capital shall be accrued and become immediately
payable upon reaching or surpassing this threshold. The milestone payments
shall be made for each DEVICE FACILITATED PRODUCT that is not a VGXP LICENSED
PRODUCT for each animal species.


 


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  Event

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Filing of an
  INAD APPLICATION

  	
   

  	
  $

  	
  250,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Initiating of a
  Phase III or pivotal trial

  	
   

  	
  $

  	
  500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Receipt of an
  NADA approval letter for the first DEVICE FACILITATED PRODUCT in TERRITORY A

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Receipt of an
  NADA approval letter for the first DEVICE FACILITATED PRODUCT in TERRITORY B

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Receipt of an
  NADA approval letter for the first DEVICE FACILITATED PRODUCT in TERRITORY C

  	
   

  	
  $

  	
  1,000,000

  	
   

  



 


4.3 
Currency, Payment Method.


 


4.3.1  All
dollar amounts referred to in this NONEXCLUSIVE LICENSE are United States
dollars.  All payments to VGXP under this
NONEXCLUSIVE LICENSE shall be made in United States dollars by check payable to
“VGX Pharmaceuticals.”  If VGXAH receives
revenues from SALES of DEVICE FACILITATED PRODUCTS or PATENTED DEVICES in
currency other than United States dollars, revenues shall be converted into
United States dollars at the conversion rate for the foreign currency as
published in the eastern edition of The Wall Street Journal as of the last
business day of the applicable CALENDAR QUARTER.


 


4.3.2 
Amounts that are not paid when due shall accrue interest from the due
date until paid, at a rate equal to one and one-half percent (1.5%) per month
(or maximum allowed by law, if less).


 


5.  RECORDS AND REPORTS


 


5.1  VGXAH
shall deliver to VGXP within forty-five (45) days after the end of each
CALENDAR QUARTER following the first SALE of DEVICE FACILITATE PRODUCT(S) or
PATENTED DEVICE, a written report, certified by the chief financial officer or
treasurer of VGXAH (or an officer of VGXAH charged with the duties typically
entrusted to the chief financial officer or treasurer of a Delaware
corporation), setting forth the calculation of the royalties due to VGXP under Section 4.1
hereof for such CALENDAR QUARTER, including, without limitation:


 


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5.1.1 Gross consideration for SALES of DEVICE
FACILITATED PRODUCTS and/or PATENTED DEVICE(S), including all amounts invoiced,
billed or received;


 


5.1.2 NET SALES of DEVICE FACILITATED PRODUCTS
and/or PATENTED DEVICE(S) listed by country;


 


5.1.3 
Royalties owed to VGXP, listed by category, including, without
limitation, earned, and minimum royalty categories.


 


5.2  VGXAH
shall pay the royalties due under Section 4.1 within forty-five (45) days
following the last day of each CALENDAR QUARTER in which the royalties accrue.


 


5.3  VGXAH
shall maintain complete and accurate books and records which enable the
royalties payable under this NONEXCLUSIVE LICENSE to be verified.  The records for each CALENDAR QUARTER shall
be maintained for three years after the submission of the report covering such
period.  Upon reasonable prior notice to
VGXAH, VGXAH shall provide VGXP (or an independent, certified public accounting
firm selected by VGXP and reasonably acceptable to VGXAH) with access, during
normal business hours, to all books and records relating to the SALES of DEVICE
FACILITATED PRODUCTS and/or PATENTED DEVICE(S) by VGXAH to conduct a
review or audit of those books and records solely for purposes of verifying
royalties paid or due under this NONEXCLUSIVE LICENSE.  Access to VGXAH’s books and records for the
applicable period(s) shall be available at least once each CALENDAR YEAR,
during normal business hours, during the term of this NONEXCLUSIVE LICENSE and
for three years after the expiration or termination of this NONEXCLUSIVE
LICENSE.  If the audit is performed by an
independent, certified public accounting firm selected by VGXP and reasonably
acceptable to VGXAH and such auditor determines that VGXAH has underpaid
royalties by five percent (5%) or more, then VGXAH shall pay the costs and
expenses of VGXP and its accountants in connection with their review or audit,
in addition to such underpayment.


 


5.4  VGXP is entitled to only one copy of any
reports under this Section 4.5, and shall distribute such reports or audit
results only to such persons as may reasonably require such reports or audit
results in order for VGXP to fulfill its obligations, or enforce its rights,
under this NONEXCLUSIVE LICENSE.


 


6.  INTELLECTUAL PROPERTY, PATENTS
AND IMPROVEMENTS TO DEVICE PATENT RIGHTS


 


6.1  ASSIGNMENT. 
When a DEVICE IMPROVEMENT and/or MFG IMPROVEMENT is made or discovered
by VGXAH, VGXAH shall assign its entire right, title and interest in such
DEVICE IMPROVEMENT and/or MFG IMPROVEMENT to VGXP.  Furthermore, VGXAH shall cooperate with VGXP
in obtaining patent protection at VGXP’s cost, including, but not limited to
the execution of any and all lawful papers in the U.S. and foreign patent
offices. VGXP, in return for such cooperation, hereby grants VGXAH the ability
to use such DEVICE IMPROVEMENT 


 


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and/or MFG
IMPROVEMENT under the terms of this NONEXCLUSIVE LICENSE to the extent VGXP has
the right to convey the right to practice the DEVICE IMPROVEMENT and/or MFG
IMPROVEMENT to VGXAH.


 


6.2  PROHIBITION. 
Notwithstanding the foregoing, VGXAH, AFFILIATE, and/or SUBLICENSEE
shall not file any patent applications which disclose, describe or require the
presence of inventions subject to the DEVICE PATENT RIGHTS or MFG PATENT RIGHTS
absent written consent from VGXP.  VGXP
will have the right to review all sections and examples relating to DEVICE
PATENT RIGHTS and/or MFG PATENT RIGHTS forty five (45) days before the filing
of such patent application.  If for any
reason VGXAH files a patent application to a DEVICE IMPROVEMENT or MFG
IMPROVEMENT, VGXAH shall immediately grant VGXP an irrevocable, fully paid-up,
world-wide, exclusive, royalty-free license to such DEVICE IMPROVEMENT and MFG
IMPROVEMENT with the right to sublicense such rights.


 


7.  LICENSE OPTION


 


7.1  VGXP SUPPORTED PATENTING  VGXAH hereby grants VGXP an exclusive option
to acquire an exclusive or non-exclusive, worldwide, royalty-bearing license to
any and all rights owned by VGXAH in the VGXAH INTELLECTUAL PROPERTY that
results or is derived from VGXAH’s research and development related to the MFG
PROCESSES or PATENTED DEVICES, exercisable at VGXP’s sole discretion.  Upon exercise of such option by VGXP, VGXAH
and VGXP will negotiate in good faith the terms of such license agreement,
reasonable per industry standards.  This
exclusive option will terminate within twelve (12) months from the date of VGXP’s
receipt of an enabling written disclosure from VGXAH of the VGXAH INTELLECTUAL
PROPERTY (“Exclusive Period”).


 


If VGXP and
VGXAH fail to execute a license agreement within the Exclusive Period, VGXAH
shall be free to license the VGXAH INTELLECTUAL PROPERTY to any third parties
for a period of one (1) year following the Exclusive Period, but not on
more favorable terms than VGXAH offered to VGXP.


 


7.2  RESERVATION. 
Any license granted to VGXP pursuant to this AGREEMENT shall be subject
to VGXAH’s right to use VGXAH INTELLECTUAL PROPERTY for educational and
internal research purposes, and if applicable, to the rights of the United
States government reserved under Public Laws 96-517, 97-256 and 98-620,
codified at 35 U.S.C. 200-212, and any regulations issued thereunder.


 


8.  INFRINGEMENT AND LITIGATION


 


8.1 VGXP and VGXAH are responsible for notifying
each other promptly of any known or suspected infringement of DEVICE PATENT
RIGHTS or MFG PATENT RIGHTS, which may come to their attention after the
EFFECTIVE DATE.  VGXP and VGXAH shall
consult one another in a timely manner concerning an appropriate response to
the infringement.


 


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8.2 In any action to enforce any of the DEVICE
PATENT RIGHTS or MFG PATENT RIGHTS, either party, at the request and reasonable
expense of the other party, shall cooperate to the fullest extent reasonably
possible.  This provision shall not be
construed to require either party to undertake any activities, including legal
discovery, at the request of any third party except as may be required by
lawful process of a court of competent jurisdiction.


 


9.  CONFIDENTIAL INFORMATION,
PUBLICATION, USE OF NAME


 


9.1  CONFIDENTIAL INFORMATION.           For purposes of this agreement, the term “Confidential Information”
includes any confidential information of one of the parties hereto (the “Disclosing
Party”) that is disclosed to the other party hereto (the “Receiving Party”).   “Confidential Information” includes but is
not limited to the terms and conditions of this agreement, business and
technical information and data, whether communicated in oral, written, graphic,
physical or electronic form, as well as information or data generated or
derived as a result of the discussions hereunder.


 


Any
Confidential Information disclosed orally by the Disclosing Party must be set
forth in writing and delivered to the Receiving Party, marked “confidential” or
“trade secret”, within sixty (60) days after oral disclosure in order to be
subject to the provisions of this agreement.


 


The
term Confidential Information as used in this agreement shall not include any
information:


 


a.
which was in the public domain at the time of disclosure by the Disclosing
Party to the Receiving Party;


 


b.
which is published or otherwise comes into the public domain after its
disclosure to the Receiving Party through no violation of this Agreement by the
Receiving Party;


 


c.
which is disclosed to the Receiving Party by a third party not under an
obligation of confidence;


 


d.
which is already known by the Receiving Party at the time of its disclosure to
the Receiving Party by the Disclosing Party as evidenced by written
documentation of the Receiving Party existing prior to such disclosure;


 


e.
which is independently developed by the Receiving Party through persons who
have not had, either directly or indirectly, access to or knowledge of the
Confidential Information of the Disclosing Party, as evidenced by written
documentation of the Receiving Party; or


 


f.
which is required to be disclosed by any law or governmental regulation or
produced under order of a court of competent jurisdiction; provided, however, 


 


13

















 


that
the Receiving Party provide the Disclosing Party prompt written notice of such
request or order and Disclosing Party is provided with an opportunity to
attempt to limit such disclosure.


 


For
seven (7) years from the date of disclosure of Confidential Information or
the date of termination of this agreement, whichever is later, the parties
agree to all the rights, promises and obligations provided in this
agreement.  The Receiving Party agrees to
treat as confidential all Confidential Information of the Disclosing Party made
available to the Receiving Party.  The
Receiving Party shall not disclose or use any Confidential Information for any
reasons other than relevant to the Purpose, whether or not a written agreement
results.


 


9.2           Prior to VGXAH making any oral or written disclosure relating to the
DEVICE PATENT RIGHTS, MFG PATENT RIGHTS, PATENTED DEVICES, or MFG PROCESSES,
VGXP shall be provided  a period of sixty
(60) days to review proposed printed publication (including manuscripts and
written abstracts) or oral presentation for improper disclosure of Confidential
Information.  After review, if VGXP
reasonably determines improper disclosure of CONFIDENTIAL INFORMATION of VGXP,
VGXAH shall consider any amendments suggested by VGXP.


 


9.3           VGXAH agrees, upon written request of VGXP, to delay any publication or
presentation contemplated under Section 9.2 for up to ninety (90)
additional days in order to allow VGXP and VGXAH to protect intellectual
property rights (or option rights under this agreement) of VGXP relating to the
DEVICE PATENT RIGHTS, MFG PATENT RIGHTS, PATENTED DEVICES, or MFG PROCESSES,
including, without limitation, allowing VGXP time to have patent applications
filed or amended if VGXP reasonably determines that such filing and/or
prosecution is necessary to protect any patentable DEVICE IMPROVEMENTS and/or
MFG IMPROVEMENTS contained in such disclosure.


 


9.4           Any publication or disclosure of VGXAH INTELLECTUAL PROPERTY, or
Results related thereto, that contains disclosure of DEVICE PATENT RIGHTS, MFG
PATENT RIGHTS, PATENTED DEVICES, or MFG PROCESSES, or variants thereof, shall
require VGXP’s  right of review as
provided in Section 9.2, including the possible period of delay provided
in Section 9.3.  Without prejudice
to VGXP’s rights under Sections 9.2 and 9.3, VGXP shall use reasonable efforts
to minimize delays.


 


9.5           VGXAH shall not use VGXP’s name, or the name of any director, officer
or employee thereof, without VGXP’s prior written consent except that VGXAH may
acknowledge VGXP’s contributions in scientific publications.  VGXP shall not use VGXAH’s name, or the name
of any trustee, officer, faculty member, student or employee thereof, without
VGXAH ‘s prior written consent.


 


10.  DISCLAIMER OF WARRANTIES


 


10.1         VGXP represents and warrants to VGXAH that to
its KNOWLEDGE as of the date hereof:


 


14

















 


 


10.1.1 VGXP has the full authority to execute
and deliver this NONEXCLUSIVE LICENSE.


 


10.1.2 No material claim by any third party
contesting the validity, enforceability, licensability, use or ownership of any
of such DEVICE PATENT RIGHTS has been made, is currently outstanding or is
threatened against VGXP.


 


10.1.3 No loss or expiration of any part of the
DEVICE PATENT RIGHTS is currently pending.


 


10.2 EXCEPT AS SET FORTH IN SECTION 10.1,
THE DEVICE PATENT RIGHTS, MFG PATENT RIGHTS, PATENTED DEVICES, AND MFG
PROCESSES, AND ALL OTHER TECHNOLOGY LICENSED UNDER THIS AGREEMENT ARE PROVIDED
ON AN “AS IS” BASIS AND VGXP MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR
IMPLIED, WITH RESPECT THERETO.  BY WAY OF
EXAMPLE, BUT NOT OF LIMITATION, VGXP MAKES NO REPRESENTATIONS OR WARRANTIES (i) OF
COMMERCIAL UTILITY; (ii) OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE; OR (iii) THAT THE USE OF THE DEVICE PATENT RIGHTS, MFG PATENT
RIGHTS, PATENTED DEVICES, OR MFG PROCESSES, OR ALL OTHER TECHNOLOGY LICENSED
UNDER THIS AGREEMENT WILL NOT INFRINGE ANY PATENT, COPYRIGHT, TRADE SECRET OR
TRADEMARK OR OTHER PROPRIETARY RIGHTS OF OTHERS.  VGXP SHALL NOT BE LIABLE TO VGXAH, VGXAH’S
SUCCESSORS OR ASSIGNS OR ANY THIRD PARTY WITH RESPECT TO: ANY CLAIM ARISING
FROM USE OF THE DEVICE PATENT RIGHTS, MFG PATENT RIGHTS, PATENTED DEVICES, OR
MFG PROCESSES, OR ANY OTHER TECHNOLOGY LICENSED UNDER THIS AGREEMENT OR FROM
THE MANUFACTURE, USE OR SALE OF DEVICE FACILIATED PRODUCTS OR PATENTED DEVICES;
OR ANY CLAIM FOR LOSS OF PROFITS, LOSS OR INTERRUPTION OF BUSINESS, OR FOR
INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES OF ANY KIND.


 


10.3 
VGXAH shall defend, indemnify and hold harmless VGXP, its trustees,
officers, agents and employees (individually, an “Indemnified Party”, and
collectively, the “Indemnified Parties”), from and against any and all
liability, loss, damage, action, claim or expense suffered or incurred by the
Indemnified Parties (including attorney’s fees and expenses) (individually, a “Liability”,
and collectively, the “Liabilities”) that results from or arises out of:  (a) the development, use, manufacture,
promotion, sale or other disposition of any DEVICE PATENT RIGHTS, MFG PATENT
RIGHTS, PATENTED DEVICES, or MFG PROCESSES by VGXAH, its vendors or other third
parties; (b) any breach by VGXAH of this NONEXCLUSIVE LICENSE; and (c) the
enforcement by an Indemnified Party of this Section.  Without limiting the foregoing, VGXAH shall
defend, indemnify and hold harmless the Indemnified Parties from and against
any Liabilities resulting from:


 


15

















 


10.3.1 
any product liability or other claim of any kind related to the use by a
third party of a PATENTED DEVICE that was manufactured, sold or otherwise
disposed by VGXAH or agents, other than such Liabilities arising from or
related to the inaccuracy of any representation or warranty of VGXP in Section 10.1
of this NONEXCLUSIVE LICENSE; and


 


10.3.2  a
claim by a third party that the DEVICE PATENT RIGHTS and/or MFG PATENT RIGHTS
or the design, composition, manufacture, use, sale, or other disposition of any
PATENTED DEVICES and/or MFG PROCESSES infringes or violates any patent,
copyright, trademark or other intellectual property rights of such third party,
except to the extent that any such claim may relate to the inaccuracy of any
representation or warranty in Section 10.1; and


 


10.3.3 clinical trials or studies conducted by
or on behalf of VGXAH and/or its agent relating to the PATENTED DEVICES,
including, without limitation, any claim by or on behalf of a human subject of
any such clinical trial or study.


 


10.4 
VGXAH is not permitted to settle or compromise any claim or action
giving rise to Liabilities in a manner that imposes any restrictions or
obligations on VGXP or grants any rights to the DEVICE PATENT RIGHTS, MFG
PATENT RIGHTS, PATENTED DEVICES, or MFG PROCESSES without VGXP’s prior written
consent.  If VGXAH fails or declines to
assume the defense of any such claim or action within thirty (30) days after
notice thereof, VGXP may assume the defense of such claim or action for the
account and at the risk of VGXAH, and any Liabilities related thereto shall be
conclusively deemed a liability of VGXAH. 
The indemnification rights of the parties or any other Indemnified Party
contained herein are in addition to all other rights which the parties or such
Indemnified Party may have at law or in equity or otherwise.


 


11.  ADDITIONAL PROVISIONS.


 


11.1  ASSIGNS AND SUCCESSORS.  This Agreement is personal to the parties and
no rights hereunder may be assigned by VGXAH or VGXP, directly or by merger or
other operation of law, without prior, express written consent of the other
party.  Any prohibited assignment of this
AGREEMENT or the rights hereunder shall be null and void.  No assignment shall relieve the assigning
party of responsibility for the performance of any obligations that it has accrued
prior to such assignment.


 


11.2  NO IMPLIED WAIVER.  A waiver by either party of a breach or
violation of any provision of this AGREEMENT will not constitute or be
construed as a waiver of any subsequent breach or violation of that provision
or as a waiver of any breach or violation of any other provision of this
AGREEMENT.


 


11.3  NO AGENCY. 
Nothing herein shall be deemed to establish a relationship of principal
and agent between VGXAH and VGXP, nor between or among any of their agents or
employees, nor shall this AGREEMENT be construed as creating any form of legal
association or arrangement which would impose liability upon one party for the
act 


 


16

















 


or failure to
act of the other party.  Nothing in this
AGREEMENT, express or implied, is intended to confer on any person other than
the parties hereto or their permitted assigns, any benefits, rights or
remedies.


 


11.4  COMMUNICATIONS.  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 dispatched if sent by
public overnight courier (e.g., Federal Express) and addressed as follows:


 


	
  If
  to VGXAH:

  	
   

  
	
   

  	
   

  
	
   

  	
  VGX
  Animal Health, INC.

  
	
   

  	
  2700
  Research Forest Drive

  
	
   

  	
  Suite 180

  
	
   

  	
  The
  Woodlands, TX 77381

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
  Douglas
  R. Kern

  
	
   

  	
   

  	
  Vice
  President Business Development

  
	
   

  	
   

  	
   

  
	
  If
  to VGXP:

  	
   

  
	
   

  	
   

  
	
   

  	
  VGX
  Pharmaceuticals, Inc.

  
	
   

  	
  450
  Sentry Parkway East

  
	
   

  	
  Blue
  Bell, PA 19422

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
  J.Joseph
  Kim

  
	
   

  	
   

  	
  President
  and CEO

  
				



 


11.5  CHOICE OF LAW.  This AGREEMENT shall be construed and
governed in accordance with the laws of the Commonwealth of Pennsylvania,
without giving effect to conflict of law provisions.  The parties hereby submit to the exclusive jurisdiction
of and venue in any state or federal courts located within the Eastern District
of Pennsylvania with respect to any and all disputes concerning the subject of
this AGREEMENT.


 


11.6  FORCE MAJEURE.  Neither party shall be liable for any failure
to perform as required by this AGREEMENT to the extent such failure to perform
is due to circumstances reasonably beyond such party’s control, including,
without limitation, labor disturbances or labor disputes of any kind,
accidents, failure of any governmental approval required for full performance,
civil disorders or commotions, acts of aggression, acts of God, energy or other
conservation measures imposed by law or regulation, explosions, failure of
utilities, mechanical breakdowns, material shortages, disease, or other such
occurrences.


 


11.7  LAWFUL CONDUCT.  The parties shall comply with all applicable
laws, regulations and other legal requirements as it relates to the conduct of
either party in the course of performance of this AGREEMENT.


 


17

















 


11.8  AMENDMENTS. 
No amendment, modification, waiver, termination or discharge of any
provision of this AGREEMENT, nor consent to any departure by either party
therefrom, will in any event be effective unless the same will be in writing,
specifically identifying this Agreement and the provision intended to be
amended, modified, waived, terminated or discharged and signed by the both
parties, and each such amendment, modification, waiver, termination, or
discharge will be effective only in the specific instance and for the specific
purpose for which given. No provision of this Agreement will be varied,
contradicted, or explained by any oral agreement, course of dealing or
performance, or any other matter not set forth in an agreement in writing and
signed by both parties.


 


11.9  ENTIRE AGREEMENT.  This AGREEMENT embodies the entire
understanding between the parties relating to the subject matter hereof and
supersedes all prior understandings and agreements, whether written or
oral.  This AGREEMENT may not be varied
except by a written document signed by duly-authorized representatives of each
party. IN WITNESS WHEREOF, the duly-authorized representatives of the parties
hereby execute this AGREEMENT as of the date first written above.


 


11.10
SURVIVAL.  Termination or expiration of
this NONEXCLUSIVE LICENSE shall not affect the covenants, indemnities,
obligations, rights, licenses, options, representations, and warranties of the
parties as set forth in this NONEXCLUSIVE LICENSE or accrued prior to
termination or expiration of this Agreement, unless expressly provided
otherwise herein.


 


18

















 


IN WITNESS WHEREOF, the parties, intending to be legally bound, have
caused this NONEXCLUSIVE LICENSE to be executed by their duly-authorized
representatives.


 


 


	
  VGX
  ANIMAL HEALTH, INC.

  	
   

  	
  VGX
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:
  Douglas R. Kern

  	
   

  	
  By:
  J. Joseph Kim

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  /s/
  Douglas R. Kern

  	
   

  	
  Name:

  	
  /s/
  J. Joseph Kim

  
	
   

  	
   

  	
   

  
	
  Title:
  Vice President Business Development

  	
   

  	
  Title:
  President and CEO

  
	
   

  	
   

  	
   

  
	
  Date:
  September 1, 2007

  	
   

  	
  Date:
  September 1, 2007

  
					



 


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