EXHIBIT 10.59


 


THIS NOTE HAS BEEN ACQUIRED FOR
INVESTMENT AND HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS.  ADDITIONALLY, THE TRANSFER OF THIS NOTE IS
SUBJECT TO CERTAIN CONDITIONS SPECIFIED IN THE NOTE PURCHASE AGREEMENT DATED AS
OF              
BETWEEN VGX PHARMACEUTICALS, INC.  (THE “COMPANY”)
AND THE SIGNATORY THERETO.  NO TRANSFER
OF THIS NOTE SHALL BE VALID OR EFFECTIVE UNTIL SUCH CONDITIONS HAVE BEEN
FULFILLED.  COPIES OF SUCH AGREEMENT MAY BE
OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS
NOTE TO THE SECRETARY OF THE COMPANY. 
NEITHER THIS NOTE NOR ANY INTEREST HEREIN MAY BE SOLD, TRANSFERRED,
ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS: (1) A
REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES
ACT AND ANY APPLICABLE STATE SECURITIES LAWS; OR (2) THE COMPANY RECEIVES
AN OPINION OF COUNSEL, WHICH OPINION IS SATISFACTORY TO THE COMPANY, THAT
REGISTRATION UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS IS NOT
REQUIRED.


 


AMENDED
AND RESTATED SUBORDINATED PROMISSORY NOTE


 


	
  US $[PRINCIPAL]

  	
   

  	
  Blue Bell,
  Pennsylvania

  
	
   

  	
   

  	
  Original
  Issuance Date:            

  
	
   

  	
   

  	
  Date of
  Amendment and Restatement: November      , 2008

  



 


FOR VALUE
RECEIVED, the undersigned, VGX PHARMACEUTICALS, INC., a Delaware corporation
(the “Borrower”), hereby promises to pay to the order of               ,
(hereinafter, with any subsequent holder, the “Holder”), the principal sum of                     ($###,###) (the “Principal Sum”), together with
interest on the balance of the Principal Sum outstanding at a per annum rate of
five percent (5%), upon the terms set forth below.  Interest shall be calculated on the basis of
the actual number of days elapsed over a 360-day year and shall commence to
accrue on the date hereof.


 


1.             Note
Purchase Agreement.  This amended and
restated subordinated promissory note (this “Note”) amends and restates, and
supersedes in its entirety, that certain convertible subordinated promissory
note that was issued by the Borrower to the Holder on               
(the “Original Note”) pursuant to the terms and conditions of the Note Purchase
Agreement (the “Purchase Agreement”) dated as of                
to which the Borrower and the Holder are parties.  All notices with respect to this Note shall
be made in accordance with Section 5.7 of the Purchase Agreement


 


2.             Maturity.  Unless this Note has been repaid pursuant to Section 6
below, the entire unpaid balance of the Principal Sum outstanding, together
with all accrued, but unpaid, interest and all other fees, costs and charges,
if any, shall be due and payable on the  earliest to occur of:


 

















 


(i) [Maturity Date] or (ii) the date of the closing of the transactions
contemplated by that certain Agreement and Plan of Merger dated as of July 7,
2008 among the Company, Inovio Biomedical Corporation and Inovio Acquisition
Corporation, as the same may be amended and/or restated from time to time (the “Maturity
Date”).  No payments of principal or
interest are required hereunder until the Maturity Date.  Upon payment in full of the Principal Sum and
interest payable hereunder, the Holder shall surrender this Note to the
Borrower for cancellation.


 


3.             Payment.  Any payment of principal, interest and all
other fees, costs and charges, if any, shall be in lawful money of the United
States of America by wire transfer of same day funds to the account of the
Holder at such banking institution as the Holder designates or, if requested by
the Holder, by certified or bank cashier’s check payable to the Holder mailed
to the Holder at the address of the Holder as set forth on the records of the
Borrower or such other address as shall be designated in writing by the Holder
to the Borrower.


 


4.             Credits.  The Borrower’s payments will be credited
first to any interest then due, and the remainder to the Principal Sum.  Interest will cease to accrue on any amount
credited to the Principal Sum as of the date any such amount is paid.


 


5.             Financial
Reports.  The Borrower shall furnish
Holder the following financial statements prepared in accordance with generally
accepted accounting principles consistently applied: (i) within thirty
(30) days after the end of each calendar quarter, the Company’s unaudited or if
available, audited balance sheet and statements of income and cash flows for
the quarter just ended; and (ii) as soon as possible after the end of each
fiscal year of the Company, a balance sheet as of the end of its fiscal year
and the related statements of income and cash flows for the fiscal year then
ended, unaudited or if available, audited by an independent certified public
accounting firm; provided, however, that, in the event that the Borrower or any
of its successors or parent entities becomes subject to the financial statement
delivery requirements of the Securities and Exchange Commission, all such
financial statements shall be deliverable by the Borrower promptly after they
are required to be filed with the Securities and Exchange Commission (and not
before such date), notwithstanding anything to the contrary contained in this Section 5.


 


6.             Event
of Default.  Repayment of all
principal and interest under this Note will be accelerated and shall be
immediately due in full in the event of any of the following:


 


(a)           default shall be made
in the payment of the Principal Sum of this Note or any part thereof when and
as the same shall become due and payable, either on the Maturity Date or at a
date fixed by the parties in writing for prepayment or by acceleration or
otherwise and such default continues for a period of 10 days;


 


(b)           default shall be made
in the payment of interest on this Note when and as the same shall become due
and payable and such default continues for a period of 10 days;


 


(c)           the Borrower shall (i) apply
for or consent to the appointment of a receiver, trustee or liquidator of the
Borrower or any of its property, (ii) make a general assignment for the
benefit of creditors, (iii) commence a voluntary case under the federal
bankruptcy laws or file a petition or answer seeking reorganization or an
arrangement with 


 


2

















 


creditors to take
advantage of any other bankruptcy, reorganization, insolvency, readjustment of
debt, dissolution or liquidation law or statute, or file an answer admitting
the material allegations of a petition filed against it in any proceeding under
any such law, or (iv) take corporate action for the purpose of effecting
any of the foregoing; or an order, judgment or decree shall be entered, without
the application, approval or consent of the Borrower, by any court of competent
jurisdiction, approving a petition seeking reorganization of the Borrower, or
of all or a substantial part of the assets of the Borrower and such order,
judgment or decree shall continue unstayed and in effect for a period of 60
days;


 


(d)           The Borrower’s failure
to observe and perform any of the material terms, covenants, conditions or
agreements required to be observed and performed by the Borrower under this
Note or the Purchase Agreement, and such failure shall remain unremedied for 30
days after written notice shall have been provided to the Borrower by the
Holder of such default; or


 


(e)           Any representation or
warranty made by the Borrower under this Note or Purchase Agreement or in any other loan document relating to this
transaction, or in any certificate or writing delivered pursuant to any loan
document relating to this transaction, shall be incorrect in any material respect.


 


Nothing
in this Section 7 shall, in any manner, be construed to prohibit or
otherwise affect the rights of the Holder to enforce payment of this Note in
accordance with its terms.


 


7.             Subordination.  All principal and accrued interest on this
Note shall be subordinate in right and time of payment to the payment in full
of all Senior Indebtedness.  Notwithstanding anything to the contrary set
forth in this Note, unless and until the Senior Indebtedness shall have been
indefeasibly satisfied and paid in full in cash and all lending commitments
thereunder have terminated: (a) the Holder may not demand payment of any
of the Principal Sum; (b) no accrued interest on this Note shall be
payable to the Holder; provided, however, that interest on this Note shall
accrue in accordance with the terms of this Note; (c) the indebtedness
evidenced by this Note shall be unsecured; and (d) the holder of this Note
shall not, without the written consent of the holders of the Senior
Indebtedness, take any action with respect to collection or enforcement or
other like action hereunder or exercise any remedies the Holder may have at law
or equity in respect of any amounts owing under this Note, regardless of
whether an Event of Default exists pursuant to Section 7 hereof and regardless
of any remedies provision contained in this Note.  The provisions of this Section 8
shall continue in effect until all amounts under the Senior Indebtedness are
indefeasibly satisfied and paid in full in cash and all lending commitments of
the holders thereof under such Senior Indebtedness shall have terminated,
notwithstanding any delay or failure of such holder in the exercise of any
right or remedy with respect to the Senior Indebtedness.  For purposes
hereof, “Senior Indebtedness” shall mean all present and future obligations due
from the Borrower, its successors and assignees, arising in respect of borrowed
money, or from any bank or other financial institution, which obligations are
secured by any assets of the Borrower, including without limitation, any
principal and all interest thereon and all related fees and expenses.


 


3

















 


8.             Transfer
of Note.


 


(a)           Prior to any sale,
assignment, transfer, pledge, hypothecation or other disposition of this Note
or of any legal or beneficial interest herein (a “Transfer”), the Holder shall
give written notice to the Borrower of the Holder’s intention to effect such
Transfer and to comply in all other respects with the provisions of this Section 8.  Each such notice shall contain (a) a
statement setting forth the intention of the Holder’s prospective transferee
with respect to its retention or disposition of this Note, and (b) unless
waived by the Borrower, an opinion of counsel for the Holder, which opinion
shall be reasonably acceptable to the Borrower, addressed to the Borrower as to
the necessity or non-necessity for registration under the Securities Act of
1933, as amended (the “Securities Act”), and applicable state securities laws
in connection with such Transfer and stating the factual and statutory bases
relied upon by counsel.  The following
provisions shall then apply:


 


(1)            If in the opinion of
counsel for the Borrower the proposed Transfer of this Note may be effected
without registration or qualification under the Securities Act and any
applicable state securities laws, then the registered holder of this Note in
accordance with the intended method of disposition specified in the statement
delivered by such holder to the Borrower;


 


(2)           If in the opinion of
counsel for the Borrower the proposed Transfer of this Note may not be effected
without registration under the Securities Act or registration or qualification
under any applicable state securities laws, the registered holder of this Note
shall not be entitled to Transfer all or any portion thereof until the
requisite registration or qualification is effective; and


 


(3)           No Transfers shall be
permitted hereunder unless the transferee agrees in writing to be bound by the
provisions of this Note.


 


(b)           Each instrument issued
upon a Transfer of this Note shall bear the legend set forth in the Purchase
Agreement unless (1) in the opinion of counsel for the Holder, addressed
to the Borrower, the registration of future Transfers is not required by the
applicable provisions of the Securities Act and applicable state securities
laws, (2) the Borrower shall have waived the requirement of such legend or
(3) in the reasonable opinion of counsel to the Borrower, such Transfer
shall have been made in connection with an effective registration statement
filed pursuant to the Securities Act or in compliance with the requirements of Rule 144
or Rule 144A (or any similar or successor rule) promulgated under the
Securities Act, and in compliance with applicable state securities laws.


 


9.             Collection.  Should the indebtedness evidenced by this
Note, or any part hereof, be collected at law or in equity or in bankruptcy,
receivership or other court proceedings, or this Note placed in the hands of
attorneys for collection, the Borrower agrees to pay, in addition to the
balance of the Principal Sum outstanding, together with all accrued, but
unpaid, interest and all other fees, costs and charges, if any, due and payable
hereon, all costs of collection, including reasonable attorneys’ fees, incurred
by the Holder in collecting or enforcing this Note.


 


10.           Demand.  The Borrower hereby waives demand,
presentment, notice, notice of demand, notice for payment, protest and notice
of dishonor.


 


4

















 


11.           Waiver.  Holder will not be deemed to waive any of his
rights under this Note unless his waiver is in writing.  No delay or omission by the Holder in
exercising any of his rights will operate as a waiver of his rights.  A waiver in writing on one occasion will not
be construed as a consent to or a waiver of any of the Holder’s right or remedy
on any future occasion.


 


12.           Governing
Law.  This Note shall be governed by
and construed and enforced in accordance with the laws of the Commonwealth of
Pennsylvania and will take effect as an instrument under seal.  Whenever possible, each provision of this
Note will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Note will be prohibited by or
invalid under applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Note.


 


5

















 


IN WITNESS WHEREOF, the Company has caused this Note
to be issued this      day of November, 2008.


 


	
   

  	
  VGX PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  J. Joseph Kim, Ph.D.

  
	
   

  	
   

  	
  President and Chief
  Executive Officer

  
	
   

  	
   

  	
   

  
	
  The Holder consents to
  the amendment and restatement of the Original Note effected by this Note.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name of Holder
  (please print)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature of
  Holder

  



 


6