**Exhibit 10.29**

 

Confidential Treatment Requested under 17C.F.R. §§ 200.80(b)(4) and240.24b-2

 
| FINAL | CONFIDENTIAL |
|-------|--------------|

 

**MASTER PRODUCT SALE AGREEMENT**

 

This MASTER PRODUCT SALE AGREEMENT (this “Agreement”) is entered intoas of June 27, 2008 by and between Senesco Technologies Inc, a Delawarecorporation having its principal place of business at 303 George Street, Suite 420,New Brunswick, NJ 08901 (“CUSTOMER”), and among VGXI, Inc., a Delawarecorporation having an address of 2700 Research Forest Drive Suite 180, TheWoodlands, Texas 77381, and VGX International, Inc. a Korean companyhaving an address of Jung-Hun Building, #701, 944-1 Daechi 3-Dong, Gangnam-gu,Seoul, Korea, (collectively, “VGX”) with reference to the following facts:

 

**BACKGROUND**

 

A.                              VGXhas developed specific expertise and technology relating to production andtesting of DNA plasmids and is in the business of developing, manufacturing andtesting plasmid based products for research and therapeutic benefit.

 

B.                                CUSTOMERdesires to have VGX produce, from time to time, certain quantities of productsfor human clinical and/or non-human pre-clinical testing (“Contract Materials”),on each occasion, on the terms and conditions set forth in this Agreement andPurchase Order therefore.

 

NOW, THEREFORE, in consideration of the above premises and the mutualcovenants hereinafter recited, the parties agree as follows:

 

1.                                       **Definitions**.

 

When used inthis Agreement, each of the following terms shall have the meanings as setforth in this Article

 

1.1.                              “VGX Technology” shallmean VGX proprietary information, trade secrets, and/or know-how used by VGX inthe performance of this Agreement, including, but not limited to, informationrelating to materials, devices and methods for fermenting bacteria and thepurification and testing of DNA Plasmids.

 

1.2.                              “Affiliates” shall meanany corporation, firm, limited liability company, partnership or other entity,which directly or indirectly controls or is controlled by or is under thecommon control with a Party, or any corporation, firm, limited liabilitycompany, partnership or other entity of behalf of which either Party is actingas an agent, advisor, or distributor.

 

1.3.                              “Agreement” shall meanthis Master Product Sale Agreement, as amended from time to time.

 

1.4.                              “Bill of Testing” shallbe the tests agreed to in Exhibit B of this Agreement for each particularPurchase Order. The Bill of Testing will be considered a draft until mutuallyagreed upon in writing for a particular Purchase Order.

 

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1.5.                              “Biosafety Level 1” shallmean a basic level of containment that relies on standard microbiologicalpractices with no special primary or secondary barriers recommended other thana sink for hand washing, in which work is done with defined and characterizedstrains of viable microorganisms not known to cause disease in healthy adulthumans and classified as such by the relevant authorities, regulations or law.

 

1.6.                              “Calendar Year” shallmean each successive period of twelve (12) consecutive calendar monthscommencing on January 1 and ending on December 31.

 

1.7.                              “Cell Banking Activities”shall mean the creation, testing, and maintenance of a Master Cell Bank (MCB)and/or a Manufacturer’s Working Cell Bank (MWCB) under cGMP conditions,containing copies of the Parent Plasmid, each of which will meet thespecifications in Exhibit B as finalized pursuant to a particular PurchaseOrder.

 

1.8.                              “Commencement Date” withrespect to any particular order, shall mean the first date specified in thePurchase Order.

 

1.9.                              “Contract Materials”shall mean all of the materials to be produced by VGX for CUSTOMER as specifiedin Exhibit A including Product. The Parties hereto will prepare and signnew Exhibits A, for each new DNA plasmid that VGX is to produce hereunder.

 

1.10.                        “CUSTOMER Materials” shall meanall materials sent by CUSTOMER to VGX related to this Agreement and to theapplicable Purchase Order and documentation.

 

1.11.                        “Direct Materials Costs” shallmean the cost to VGX of materials utilized in the performance of ProductionServices, including freight-in costs, sales and excise taxes imposed thereonand customs duty and charges levied by government authorities, and all costs ofpackaging components.

 

1.12.                        “External Testing Costs” shallmean the cost of any tests listed as “contract” on the draft or final Bill ofTesting, as well as any other testing not performed at the VGX facility.

 

1.13.                        “FDA” shall mean the U.S. Foodand Drug Administration.

 

1.14.                        “Good Laboratory Practices” or “GLP”shall mean prescribed practices and policies related to all laboratorymanufacturing and test methods intended to assure quality, safety and integrityof the resulting product, with the intent that such product shall be subject tooversight by U.S. regulatory authorities and the corresponding authorities ofthe European Union, Member States of the European Union, and other countries tothe extent they are applicable.

 

1.15.                        “Good Manufacturing Practices”or “GMP” shall mean the good manufacturing practices required by the U.S. Foodand Drug Administration for the manufacture and testing of pharmaceuticalmaterials, and the corresponding requirements of the European Union, MemberStates of the European Union, and other countries to the

 

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extent they are applicable. “cGMP” or “current GMP” shall mean the GMPpractices in effect at a particular time.

 

1.16.                        “Information” means all (a) techniquesand data pertaining and/or related to the Product, including, but not limitedto, ideas, inventions (including patentable inventions), practices, methods,knowledge, know-how, trade secrets, skill, experience, documents, apparatus,clinical and regulatory strategies, test data, including pharmacological,toxicological and clinical test data, analytical and quality control data,manufacturing, patent and legal data or descriptions and (b) chemicalformulations, compositions of matter, product samples and assays pertainingand/or related to the Product.

 

1.17.                        “Manufacturer’s Working CellBank” or “MWCB” shall mean viable E. coli containing Parent Plasmid, culturedfrom the MCB under GMP conditions, diluted in glycerol and stored in sealedvials at less than minus sixty degrees Celsius.

 

1.18.                        “Master Cell Bank” or “MCB”shall mean viable E. coli containing Parent Plasmid, transformed directly fromCUSTOMER supplied stock under GMP conditions, diluted in glycerol and stored insealed vials at less than minus sixty degrees Celsius.

 

1.19.                        “Party” shall mean eitherCUSTOMER or VGX as the case may be.

 

1.20.                        “Parent Plasmid” shall mean theoriginal DNA plasmid construct, prepared by CUSTOMER and provided to VGX,listed in Exhibit C.

 

1.21.                        “Person” shall mean a naturalperson, a corporation, a partnership, a trust, a joint venture, anygovernmental authority or any other entity or organization.

 

1.22.                        “Pilot DNA Services” shall meanthe production of Research DNA at a sufficiently large scale as to provide areasonable indication of the growth, quality and yield of a GMP batch producedwith the same cell bank.

 

1.23.                        “Price” shall mean the amountpayable to VGX in U.S. dollars for the performance of Production Serviceshereunder with respect to any Purchase Order.

 

1.24.                        “Product” shall mean finishedgoods in final container/closure or other product as specified in Exhibit A,meeting those specifications in Exhibit B and to be delivered to CUSTOMER.

 

1.25.                        “Production Services” shallmean the activities to be performed by VGX hereunder, which shall mean theproduction of the Product and relevant supporting documentation accordingly tothe Purchase Order.

 

1.26.                        “Purchase Order” means apurchase order for a specific project, substantially in the form of a complete,signed set of each of Exhibit A to this Agreement.

 

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1.27.                        “Research Cell Bank” or “RCB”shall mean a small cell bank produced under research conditions used for theproduction of Research DNA only. This material is provided “as-is”.

 

1.28.                        “Research DNA” shall mean a smallamount of DNA prepared by VGX under Research Laboratory Conditions from the RCBas an initial indication of growth, yield, and quality characteristics. Thismaterial is provided “as-is”

 

1.29.                        “Research Laboratory Conditions”shall mean practices and policies generally accepted by trained scientists toassure quality and integrity of laboratory experiments. Such practices include,but are not necessarily limited to, aseptic techniques to avoid microbialcontamination, accurate measurements and calculations and documentation ofresearch results.

 

1.30.                        “Resuspension Buffer” shallmean the liquid used to resuspend DNA in the Finished Product and having thecomposition specified by the CUSTOMER in Exhibit C.

 

1.31.                        “Sample Plasmid” shall mean aDNA plasmid supplied by CUSTOMER, of sufficiently similar characteristics tothe Parent Plasmid to perform initial quality control assay evaluations and/orinitial process development testing. Sample Plasmid and Parent Plasmid shouldbe the same plasmid whenever possible to ensure the validity of the results.

 

1.32.                        “Specifications” means, withrespect to any Product, the specifications therefore as set forth in Exhibit Bof the Purchase Order for such Product.

 

1.33.                        “Third Party” means any personor entity other than VGX or CUSTOMER.

 

2.                                       **Purchase Orders**.

 

2.1.                              Supply. During theterm of, and subject to the terms and conditions in, this Agreement, CUSTOMERmay purchase from, and have Product produced by, VGX. Neither shall CUSTOMERhave any commitment to purchase any minimum quantity of Product nor shall VGXhave any commitment to produce and sell any minimum quantity of Product.CUSTOMER shall become obligated to purchase, and VGX shall be obligated toproduce, Product only upon execution and delivery by both VGX and CUSTOMER of aPurchase Order for such Product, as set forth below.

 

Neither VGX nor CUSTOMER may amend a PurchaseOrder after it has been executed, except according to the provisions of Section 11or by mutual agreement in writing as provided in Section 12.5. CUSTOMERmay cancel an existing Purchase Order prior to the Commencement date andforfeit any prepayments made for such Purchase Order. For each new Product thatis to be produced by VGX pursuant to this Agreement, the Parties will prepareand sign new, a Purchase Order, and upon signing such new Purchase Order shallbecome a part of this Agreement. Each such new Purchase Order shallspecifically reference this Agreement and be signed by both Parties hereto.  Each

 

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new PurchaseOrder will contain project details for the production and testing of some orall of the Contract Material.

 

2.2.                              Project Specifications.VGX will produce under appropriate conditions the specified amounts or numberof cycles of Contract Materials and Product. Such Product will be produced,tested, released and delivered to CUSTOMER according to the schedule in Exhibit A.VGX shall ship the Contract Materials directly to CUSTOMER. VGX will keep inits possession any required documentation, regulatory retains, and willmaintain certain additional samples and/or cell banks at the request ofCUSTOMER for an additional fee (to be determined in the applicable PurchaseOrder).

 

2.3.                              Laboratory TestProduction of Research DNA. Within one (1) week of the CommencementDate, CUSTOMER will supply VGX with more than fifteen (15) milligrams of eachParent Plasmid or more than ten (10) vials of a qualified cell bankcontaining Parent Plasmid for VGX use and retain. VGX shall perform, underResearch Laboratory Conditions, the experiments in Exhibit A to establishoptimum fermentation and purification conditions for the Parent Plasmid, todetermine yield, stability, purity and form of the plasmid DNA. Such work willbe performed in accordance with the schedule in Exhibit A.

 

2.4.                              Modification IfResearch Results Not Satisfactory. If the Research DNA produced pursuant tothis Section does not meet the draft productivity or purity standards inExhibits A and B, the Parent Plasmid shall be deemed not to be suitable forperforming Production Services. CUSTOMER and VGX shall then meet and negotiate,in good faith, appropriate modifications to the Agreement to address thefailure to meet the criteria. VGX will produce additional Research DNA batchesif deemed necessary by mutual written agreement between VGX and CUSTOMER. Thecost of producing the additional batches will be borne by CUSTOMER. If theparties agree that VGX should take other actions to address the purity orproductivity problems, they will also agree upon the appropriate modificationsto the payments in Exhibit A and execute an appropriate amendment. If theparties are unable to reach an agreement despite good faith negotiations,either party may terminate this Agreement by written notice to the other.

 

2.5.                              Testing to ReleaseManufacture. If the Research DNA produced meets the standards in Exhibits Aand B, VGX shall produce and perform relevant testing needed to release the MCBand/or MWCB into its facility, or evaluate and test any CUSTOMER supplied MCBand/or MWCB as appropriate. Such work shall be performed in accordance with theschedule in Exhibit A.

 

2.6.                              Finished ProductProduction. If the Pilot DNA produced by VGX meets the standards in thedraft Bill of Testing, the final Bill of Testing will be signed by VGX and theCUSTOMER and attached to this Agreement as Exhibit B. VGX shall thencommence with preparing for each Parent Plasmid under GMP conditions thespecified number of production cycles of Finished Product. Such FinishedProduct will be produced, tested, released and delivered to CUSTOMER accordingto the schedule in Exhibit A.

 

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2.7.                              Pilot ProductionUnsatisfactory. If the Pilot DNA produced by VGX does not meet thestandards in the draft Bill of Testing, VGX and CUSTOMER will discuss thepossible amendment of the Bill of Testing. VGX will produce an additional PilotDNA batch if deemed necessary by mutual written agreement between VGX andCUSTOMER. The cost of producing the additional batch will be borne by CUSTOMER.If the parties agree that VGX should take other actions to address the purityor productivity problems, they will also agree upon the appropriatemodifications to the payments in Exhibit A and execute an appropriateamendment. If the parties are unable to reach an agreement despite good faithnegotiations, either party may terminate this Agreement by written notice tothe other.

 

3.                                       **Materials and Information**.

 

Promptly after execution of a Purchase Order pursuant to Section 2.1,CUSTOMER shall deliver to VGX all materials and Information that are necessaryfor VGX to produce and manufacture the Products, and that such Purchase Orderprovides are to be delivered by CUSTOMER to VGX. Information supplied pursuantto this Article 3 shall be in a format acceptable to VGX. CUSTOMER shallbear the risk of loss of, and damage to, such materials and Information untilactual receipt by VGX. Following their receipt, VGX shall be responsible forthe risk of loss of, and damage to, such materials and Information.

 

4.                                       **Production**.

 

4.1.                              Performance of Work.VGX shall produce the Product in accordance with this Agreement, the PurchaseOrder therefore and any agreed technical or descriptive specifications.

 

VGX may subcontract the performance ofcertain services necessary for the performance of this Agreement, such as, butnot limited to, external testing. CUSTOMER agrees to VGX’ use of thesubcontractors listed in Exhibit A. VGX will not subcontract to personsother than those listed in Exhibit A without CUSTOMER’s written approval.

 

4.2.                              Quality Control andAssurance. VGX shall manufacture Product in compliance and in accordancewith the Specifications and all applicable laws and regulations. Prior to eachshipment of Product, VGX shall perform quality control testing on Product inaccordance with Specifications as outlined in the Purchase Order. VGX shall,during and after the term of this Agreement, maintain such records and datathat document its compliance with this Section 4.2 as is required by lawand regulation applicable to the manufacture of the Product. In performing itsobligations under this Agreement, VGX shall comply with all applicableenvironmental and health and safety laws. VGX shall be solely responsible fordetermining how to carry out these obligations.

 

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4.3.                              Audits by CUSTOMER.

 

(a)                                  Upon the writtenrequest of CUSTOMER, VGX shall permit CUSTOMER or an independent consultingfirm specializing in pharmaceutical manufacturing facility inspections selectedby CUSTOMER and reasonably acceptable to VGX, at CUSTOMER’s expense, to haveaccess during VGX normal business hours to inspect such of the records andfacilities of VGX as may be reasonably necessary to verify that Products manufacturedby VGX are manufactured in accordance with Good Manufacturing Practices andconform to the Specifications as outlined in a Purchase Order which is datednot more than twelve (12) months prior to the date of such request**.** CUSTOMER’s right to inspection shallcontinue until twelve (12) months from delivery of the Products. Onlyinformation that is related to this Agreement will be the subject of suchinspection. VGX shall make all efforts to address any GMP or Specificationsdeficiencies found by CUSTOMER in such inspection

 

(b)                                 CUSTOMER may make apreproduction inspection of the facilities upon reasonable notice, prior tosigning the first Purchase Order. VGX shall make all good faith efforts toaddress any GMP deficiencies found by CUSTOMER in any pre-productioninspection. If deficiencies are addressed to CUSTOMER’s satisfaction in areasonable time period, this Agreement or the applicable Purchase Order willcontinue. If deficiencies are not addressed to CUSTOMER’s satisfaction,CUSTOMER may terminate this Agreement or the applicable Purchase Order bywritten notice to VGX and neither party shall have any further liabilityhereunder as a result of such termination.

 

(c)                                  CUSTOMER shall treatall information subject to review under this Section 4.3 in accordancewith the confidentiality provisions of this Agreement, and shall cause itsconsultants who review such information to be bound by the same confidentialityprovisions.

 

4.4.                              Certificate of Releaseand Analysis. Concurrent with its delivery of Product, VGX shall deliver toCUSTOMER the certificate of pharmaceutical release and a written reportsummarizing analytical and manufacturing documentation which will include thefinal certificate of analysis for such Product.

 

4.5.                              Samples and Batch Records.VGX shall prepare and maintain or cause to be prepared and maintained batchrecords and a file sample, properly stored, from each lot or batch of Productmanufactured and shipped hereunder sufficient to perform each quality controltest identified in the Specifications. All batch records will be made availableto CUSTOMER in English upon completion of each batch. Such batch records willbe accessible for review by CUSTOMER at mutually convenient times for bothparties.

 

4.6                                 Inspections byGovernment Agencies. If any governmental agency shall inspect any facilityat which any Product is manufactured or the records with respect to thecompliance by VGX with laws and regulations applicable to the manufacturing ofsuch Product, VGX shall notify CUSTOMER of such inspection, the results thereofand, if VGX was required, as a result of any such inspection, to take anycorrective action in

 

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order to comply with any applicable law or regulation, any such action ithas taken in response to such requirement.

 

5.                                       **Shipment and Delivery**.

 

5.1.                              Storage.  VGX shall store each batch of Product orderedpursuant to a Purchase Order in accordance with the specifications in thatPurchase Order, or, if not specified therein, in accordance with goodcommercial standards. In no case will VGX be responsible for the storage of abatch for greater than two months from quality release.

 

5.2.                              Packing.  VGX shall pack each batch of Product orderedpursuant to a Purchase Order in accordance with the specifications in thatPurchase Order, or, if not specified therein, in accordance with goodcommercial standards.

 

5.3.                              Shipment.  VGX shall notify CUSTOMER not less than five (5) businessdays before shipment of a batch of Product that such batch will be ready forshipment by the date specified in such notice. CUSTOMER shall be obligated tonotify VGX of the route and carrier by which CUSTOMER desires such batch to beshipped to it. If VGX receives notice of the route and carrier by which CUSTOMERdesires a batch of Product to be shipped no later than five (5) businessdays before the date stated in VGX’ notice to CUSTOMER, VGX shall ship suchbatch in accordance with CUSTOMER’s directions; however, if CUSTOMER fails tonotify VGX as provided, VGX may ship such batch of Product by a carrier and ona route selected by VGX. For purposes of this Section 5.3, a “business day”is a day when VGX’ production facilities and administrative offices aregenerally open for business.

 

All customs,duties, taxes, insurance premiums, and other third party expenses relating tothe sale or transportation and delivery shall be paid by CUSTOMER.

 

5.4.                              Notice of Receipt. Upon receipt of Finished Product,CUSTOMER shall notify VGX of its receipt.

 

5.5.                              Risk of Loss.  Title to and risk of loss to all ContractMaterials and other items shipped by VGX shall pass to CUSTOMER upon deliveryto shipper.

 

**6.**                                      **Intended Use Specifications.**

 

6.1.                              CUSTOMER Use Only.All Contract Materials are being manufactured hereunder exclusively for theCUSTOMER. The CUSTOMER shall use the Contract Materials only for its ownpurposes or studies under CUSTOMER’s control and shall not forward suchmaterials to any third party except for testing or manufacturing serviceswithout VGX’ prior written approval, which shall not be unreasonably withheld.For the avoidance of doubt, this section 6.1 is intended to prevent the resaleof the Contract Materials to third parties, and is not intended to limit theuse of the Contract Materials by the CUSTOMER for its own purposes.

 

6.2.                              CUSTOMER ProprietaryMaterials. All CUSTOMER Materials and materials derived from CUSTOMERMaterials shall remain CUSTOMER’s proprietary

 

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property. VGX shall use such CUSTOMER Materials solely for the purposesof this Agreement and will not forward CUSTOMER Materials to third partiesexcept in connection with work by approved subcontractors.

 

6.3.                              CUSTOMER Use.  The CUSTOMER agrees to use the ContractMaterials in compliance with all regulations and laws and warrants and thatsuch materials shall only be used for purposes of civil research anddevelopment, quality control, clinical research and/or validation of processsteps. The CUSTOMER will maintain full documentation in accordance with itsstandard procedures on the use of the Contract Materials.

 

6.4.                              Other Laws andRegulations.  In performing itsobligations under this Agreement, VGX shall comply with all applicableenvironmental and health and safety laws. VGX shall be solely responsible fordetermining how to carry out these obligations.

 

6.5                                 Improvements to VGXTechnology.  Customer shall promptlydisclose to VGX any improvements or additions made by Customer relating to theVGX Technology and/or applications or uses thereof, and such improvements, andimprovements to VGX Technology made jointly by VGX and Customer, will be solelyowned by VGX. Customer hereby assigns all rights to the aforementionedimprovements to VGX and agrees to execute all documents required to confirmsuch assignment or to protect such improvements.

 

7.4.                              CustomerResponsibility.  FDA and ICHguidelines provide that a sponsor seeking a license is considered the “manufacturer”even if they use a contract manufacturing organization, and the sponsor isresponsible for ensuring GMP compliance for those activities that have beencontracted out (US FDA 21 CFR 600.3(t), ICH Q7A Section 2). Therefore, VGXshall provide Customer, its employees, agents, and consultants reasonableaccess to VGX facilities, records, and personnel in order that appropriateinspections, evaluations, testing and audits may be carried out. Customer shallnotify VGX in writing of any noted compliance deficiencies during any visit,audit, or at any time when Customers Contract Materials are being produced,packaged, shipped, or stored. VGX will use good faith efforts to correct anynoted deficiencies in a reasonable time. Failure to correct any such deficiencyto Customer’s reasonable satisfaction shall be grounds for Customer to terminatethis Agreement as specified in Section 11.3 upon written notice to VGX.

 

7.                                       **Payment**.

 

7.1.                              Price.  The price payable by CUSTOMER for all workperformed and Product delivered pursuant to a Purchase Order shall be the Pricespecified therefore in that Purchase Order. All payments made under thisAgreement are non-refundable except as specified in sections 2 and 11.

 

7.2.                              Invoices.  Upon its execution, and concurrent with itsdelivery of a Purchase Order unless otherwise specified in the applicablePurchase Order, VGX shall

 

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deliver to CUSTOMER an invoice for ** of the Price stated therein forPilot DNA Services and ** of all other services listed in the Purchase Order.For the avoidance of doubt, production capacity and Commencement Date will notbe considered to be reserved until such time as Customer has made anappropriate non-refundable payment. ** days prior to the scheduled CommencementDate of each line item of a Purchase Order, VGX shall deliver to CUSTOMER aninvoice for ** for each line item. Upon, and concurrent with, its delivery ofeach Contract Material as specified in the amount and order of a particularPurchase Order, VGX shall deliver to CUSTOMER an invoice for the remaining **of the Price stated in the Purchase Order for such Contract Material. Paymentfor External Testing Costs, shipping costs, and all additional costs listed in Exhibit Ashall be made within thirty (30) days of receipt of an invoice therefore fromVGX, which invoice may be sent in advance of such costs being incurred, with afinal calculation and reconciliation of such costs to be made after completionof activities under this Agreement; any amounts paid by CUSTOMER in excess ofactual invoiced costs shall be credited against CUSTOMER’s final payment or, ifno payment is due, returned to CUSTOMER.

 

7.3.                              Price Modification.The amounts set forth in Exhibit A are based on the number of experimentsand production cycles provided therein. The yield and quality for each productionbatch of Contract Material cannot be determined prior to commencement of theAgreement or particular Purchase Order. If after the initial research and pilotstages are completed the plasmid yield or quality does not meet the needs ofthe CUSTOMER, the Parties shall negotiate the steps to take and appropriateprice adjustments as provided in Section 2. If either party terminates theAgreement pursuant to Section 2, VGX shall retain all payments made priorto the date of termination. All Contract Materials not shipped to the CUSTOMERprior to the date of termination shall be destroyed. In any event all pricemodifications will be mutually agreed in writing.

 

7.4.                              Time For Payment.CUSTOMER shall pay VGX the full amount specified in each appropriately renderedinvoice within thirty (30) days of date of receipt of the invoice.

 

7.5.                              Method of Payment.All amounts due and payable shall be paid in United States Dollars. Paymentshall be wired via electronic funds transfer to the account specified by VGX inrespect of which payment is made.

 

7.6.                              Late Payment. IfCUSTOMER fails to pay any amount when due, or VGX fails to refund any amountwhen due, it shall pay as a late charge to the other party an amount equal toone per cent (1%) per month on the amount unpaid, or if less, the maximumamount permitted by law, such amount to accrue from the date when payment wasdue until the date when paid in full. In all cases failure of Customer toprovide payment according to the agreed schedule listed in any Project Plan Exhibit Awill cause VGX to delay the Scheduled Start date of the particular Project Planline item by a minimum of thirty days after outstanding payments are received,or move the project task to the next available production slot, at the solediscretion of VGX. Such notification will be provided to the Customer inwriting.

 

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8.                                       **Warranties**.

 

8.1.                              Representations andWarranties of Both Parties.  Eachparty hereby represents and warrants to the other party as follows:

 

(a)                                  Such party is acorporation duly organized, validly existing and in good standing under thelaws of the jurisdiction in which it is incorporated.

 

(b)                                 Such party (i) hasthe corporate power and authority and the legal right to enter into thisAgreement and to perform its obligations hereunder, and (ii) has taken allnecessary corporate action on its part to authorize the execution and deliveryof this Agreement and the performance of its obligations hereunder. ThisAgreement has been duly executed and delivered on behalf of such party, andconstitutes a legal, valid, binding obligation, enforceable against such partyin accordance with its terms.

 

(c)                                  All necessaryconsents, approvals and authorizations of all governmental authorities andother Persons required to be obtained by such party in connection with thisAgreement have been obtained.

 

8.2.                              Product Warranties. VGX hereby covenants, represents andwarrants to CUSTOMER that:

 

(a)                                  AllProduct will, on the date of delivery by VGX to CUSTOMER, comply with theapplicable laws, regulations and regulatory guidelines, the Specificationstherefore set forth in this Agreement and in the Purchase Order pursuant towhich such Product was ordered.

 

(b)                                 Titleto all Product sold hereunder shall pass to CUSTOMER as provided herein freeand clear of any security interest, lien or other encumbrance.

 

8.3                                 Disclaimer ofWarranties.  EXCEPT AS EXPRESSLYPROVIDED IN SECTION 8.2, VGXMAKES NO REPRESENTATION OR WARRANTY AS TO ANYCUSTOMER MATERIALS, EXPRESS OR IMPLIED, AND VGXSPECIFICALLY DISCLAIMS ANYWARRANTY OF MERCHANTABILITY, WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE,WARRANTY OF SYSTEM INTEGRATION, WARRANTY OF EFFECTIVENESS.

 

9.                                       **Liability, Indemnification and Insurance**.

 

9.1.                              Limitation onLiability.  VGX shall not be liablefor any special, consequential, incidental, exemplary or punitive damages. VGX’maximum liability with respect to any and all damages arising from its failureto deliver, late delivery of, delivery of defective Product or failure to corrector replace any Product shall be the total price payable by CUSTOMER under thatPurchase Order pursuant to which such Product were ordered by CUSTOMER.

 

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9.2.                              Responsibility andControl.  VGX and CUSTOMER shall eachbe solely responsible for the safety of its own employees, agents, licensees orsublicensees with respect to Product, and each shall hold the other harmlesswith regard to any liability for damages or personal injuries resulting fromacts of its respective employees, agents or servants to the extend that suchdamages are not due to gross negligence or willful misconduct of the otherparty.

 

9.3.                              Indemnification byCUSTOMER.  CUSTOMER shall indemnify,defend and hold harmless VGX from all losses, liabilities, damages and expenses(including reasonable attorneys’ fees and costs) that VGX may suffer or incuras a result of any claims, demands, actions or other proceedings made orinstituted by any Third Party arising out of (a) any alleged or actualinfringement or other violation of any patents, patent rights, trademarks,trade mark rights, copyrights, trade secrets, proprietary rights and processesor other such rights related to the Product except as related to the materialsor the process utilized by VGX in the manufacture of the Product as set forthin Section 9.4 hereof and (b) any alleged or actual loss, damage orinjury including death, which arises from the use of any Product which conformsto the specifications and warranties set in section 8.2.

 

9.4.                              Indemnification by VGX. Notwithstanding Section 9.1 hereof,VGX shall indemnify, defend and hold harmless CUSTOMER from all losses,liabilities, damages and expenses (including reasonable attorneys’ fees andcosts) that CUSTOMER may suffer or incur as a result of any claims, demands,actions or other proceedings made or instituted by any Third Party arising outof any alleged or actual infringement or other violations of any patents,patent rights, trade secrets, proprietary rights or other such rights relatedto the process utilized by VGX in the manufacture of the Product.

 

9.5.                              Notice and Assistance. An indemnifying party will not beobligated to indemnify and hold harmless any Indemnified Person unless theIndemnified Person gives the indemnifying Party prompt notice of any claim,suit or action brought against the Indemnified Person, after it becomes awareof it, allows the indemnifying Party to defend the same (without prejudice tothe right of the Indemnified Person to participate at through counsel of itsown choosing), renders the indemnifying Party all assistance reasonablynecessary in defending against such claim, suit or action at the indemnifyingParty’s expense, and does not compromise or settle such claim or action withoutthe indemnifying Party’s prior written consent.

 

9.6.                             Insurance.            VGX and CUSTOMER shallmaintain comprehensive general liability insurance, in such amounts as itcustomarily maintains for similar products and activities.

 

10.                                 **Confidentiality**.

 

10.1.                        Confidential Information. During the term of this Agreement, andfor a period of five (5) years following the expiration or earliertermination hereof, each party shall maintain in confidence all information(including samples) disclosed by the other party and identified as, oracknowledged to be, confidential (the “Confidential

 

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Information”), and shall not use, disclose or grant the use of theConfidential Information except on a need-to-know basis to those directors,officers, employees, consultants, contractors, governmental regulatoryagencies, (sub)licensees or permitted assignees, to the extent that suchdisclosure is reasonably necessary in connection with such party’s activitiesas expressly authorized by this Agreement. To the extent that disclosure isauthorized by this Agreement, prior to disclosure, each party hereto shallobtain agreement of any such Person to hold in confidence and not make use ofthe Confidential Information for any purpose other than those permitted by thisAgreement.

 

10.2.                        Terms of this Agreement. Neither party shall disclose any termsor conditions of this Agreement to any Third Party without the prior consent ofthe other party.

 

10.3.                        Permitted Disclosures.  The confidentiality obligations contained inthis Article 10 shall not apply to the extent that (a) the receivingparty (the “Recipient”) is required (i) to disclose information byapplicable law, regulation or order of a governmental agency or a court ofcompetent jurisdiction, or (ii) to disclose information to anygovernmental authority for purposes of obtaining approval to test or market aProduct, provided in either case that the Recipient shall provide writtennotice thereof to the other party and sufficient opportunity to object to anysuch disclosure or to request confidential treatment thereof; or (b) theRecipient can demonstrate that (i) the disclosed information was publicknowledge at the time of such disclosure by the other party hereunder, orthereafter became public knowledge, other than as a result of actions of theRecipient in violation hereof; (ii) the disclosed information wasrightfully known by the Recipient (as shown by its written records) prior tothe date of disclosure to the Recipient by the other party hereunder; or (iii) thedisclosed information was disclosed to the Recipient on an unrestricted basisfrom a source unrelated to any party to this Agreement and not under a duty ofconfidentiality to the other party. CUSTOMER agrees that VGX may use CUSTOMER’scorporate name in certain marketing and other publications and presentations,as example of, but not limited to, a client list.

 

11.                                 **Term of Agreement, Renewal, Termination**.

 

11.1.                        Term.  This Agreement shall commence on the datefirst written above and upon execution of the first Purchase Order, and unlessearlier terminated in accordance with the provisions of this Article 11,shall continue in full force and effect for a period of five (5) yearsfrom date of signature, and in any case as long as any Purchase Order is inforce. Thereafter, the term of this Agreement shall be renewed for successiveone (1) year periods upon mutual agreement.

 

11.2.                        Termination After Researchor Pilot Work.  Either Party mayterminate this Agreement as provided in Section 2.

 

11.3.                        Termination for Cause.  If either party breaches any provision of thisAgreement, the other party may give written notice to the breaching party thatif the default is not cured within thirty (30) days of the date of such notice,the Agreement will be terminated. If the non-breaching party gives such noticeand the breach is not cured

 

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during suchthirty (30) day period, then this Agreement shall terminate automatically atthe end of such thirty (30) day period**.**

 

Should CUSTOMER terminate this Agreementpursuant to this Section 11.3, VGX shall reimburse to CUSTOMER all moniespaid by CUSTOMER in respect of outstanding uncompleted Purchase Order(s) lessthe cost of those Production Services performed by VGX, under such PurchaseOrder(s), which are compliant with this Agreement and can be exploited byCUSTOMER. Such repayment and VGX liabilities toward CUSTOMER shall be withinthe limits stated in section 9.1 in the event of such a breach.

 

Should VGX terminate this Agreement pursuantto this Section 11.3 for breach, then upon termination CUSTOMER shall payVGX an amount equal to (i) all amounts due for completed Purchase Orders,plus (ii) all amounts listed on any signed and uncompleted Purchase Order.The terms of this Section will also apply if CUSTOMER reduces thequantities or the number of batches of products for any Purchase Order

 

11.4.                        Termination by MutualAgreement This Agreement may be terminated at any time by written agreementof the Parties.

 

11.5.                        Termination for Violation ofEthical Principles.  If CUSTOMER(including its employees, subcontractors, agents, servants, licensees) uses theContract Materials in a manner inconsistent with ethical principles as definedin the Helsinki Declaration by the World Medical Association, VGX shall beallowed to terminate this Agreement and any Purchase Order at any time withoutprior notice to CUSTOMER and shall have no liability to CUSTOMER as a result ofsuch termination. All Payments made to VGX prior to the date of suchtermination shall be retained by VGX.

 

11.6.                        Termination without Cause. Either Party may terminate thisAgreement by written notice during any period when no Purchase Order iscurrently active, meaning (i) no activities are planned or being performedby VGX for the CUSTOMER, (ii) no Contract Materials are due to bedelivered to the CUSTOMER, (iii) neither party owes the other any paymentor refund.

 

11.7.                        Returned Materials.  On the termination of this Agreement, VGX andCUSTOMER each shall return to the other all information (including thematerials) which it possesses or controls that belongs to the other, or whichcontains the other parties confidential information, except that each mayretain a copy solely for record keeping purposes.

 

11.8.                        During the term of thisAgreement and as long as it is in force and a Purchase Order has never beenterminated for breach or default of VGX before completion, CUSTOMER agrees tooffer the first right of refusal to VGX t o manufacture all DNA plasmidsrequired by CUSTOMER and to supply for CUSTOMER, such DNA plasmids as shall beagreed upon from time to time by the Parties, for CUSTOMER’s pre-clinical andclinical use and for commercial sale, according to the terms and

 

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conditions set forth herein. If the CUSTOMER manufactures, or hasmanufactured for it by a third party, DNA plasmids utilized in studies forregulatory filings, without first obtaining from VGX a refusal to manufacturethe DNA plasmid, VGX may terminate this Agreement under the terms of Section 11.3,by written notice to CUSTOMER.

 

11.9.                        Survival.  Articles 8, 9, 10, 11 and 12 shall survive anytermination or expiration of this Agreement.

 

12.                                 **Miscellaneous Provisions**.

 

12.1.                        Successors and Assigns.  Neither this Agreement nor any interesthereunder shall be assignable by either party without the written consent ofthe other (which approval shall not be unreasonably withheld), and anyattempted assignment without such consent shall be null and void; provided,however, that either party may, without consent, assign this Agreement to itssuccessors in the event of the merger or consolidation of it or the businesswith which the Product are associated with another company. This Agreementshall be binding upon the successors and permitted assignees of the parties.Any such successor or permitted assignee shall be subject to the same rightsand obligations as the original party hereunder.

 

12.2.                        Notices.  All notices or other communications requiredor permitted to be given hereunder shall be in writing and shall be deliveredby hand, courier or facsimile and confirmed in writing, as follows:

 

If to VGX, as follows:

 

VGXI Inc.

2700 Research Forest Drive, Suite 180 

The Woodlands, TX 77381

 

If to CUSTOMER, as follows:

 

Senesco Technologies Inc303 George Street, Suite 420New Brunswick, NJ 08901

 

or in any case to such other address or addresses as hereafter shall befurnished as provided in this Section 12.2 by any party hereto to theother party. Any notice delivered pursuant to this Section 12.2 shall bedeemed delivered on the date received by the recipient unless such notice isreceived on a day on which the recipient is not open for business or on a daywhen the recipient is generally open for business but after the time when it isgenerally open for business, in which case such notice shall be deemed to havebeen received on the next day on which the recipient is generally open forbusiness.

 

12.3.                        PublicDisclosure.  Neither party willannounce or publicly refer to this Agreement without the prior consent of theother, except as may be required by law and except that in marketing itsservices VGX may disclose the existence of this Agreement

 

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but none of its terms. For the avoidance of any doubt, each party shallbe permitted to use the name of the other party in any regulatory submissionassociated with this Agreement without the prior written consent of the namedparty. In the case of public disclosure of this Agreement, no reference will bemade to the financial terms of this Agreement or the Product.

 

12.4.                        Entire Agreement.  This Agreement and its appendices constitutethe entire agreement between the parties with respect to the subject matterhereof and supersede all prior agreements or understandings of the partiesrelating thereto.

 

12.5.                        Amendment.  This Agreement may be modified or amended onlyby written agreement of the parties hereto.

 

12.6.                        Counterparts.  This Agreement may be executed in any numberof counterparts, each of which shall be deemed an original but all of whichtogether shall constitute a single instrument.

 

12.7.                        Governing Law / Arbitration.  This Agreement shall be governed by the lawsof the Pennsylvania, as those laws are applied to contracts entered into and tobe performed entirely in Pennsylvania without regard to principles of conflictsof law. Any dispute arising out of or in connection with this agreement whichcould not be solved by an amicable settlement shall be finally settled bybinding arbitration. Both parties agree that any arbitration decision may beenforced in any court of law with proper jurisdiction over the party againstwhich the arbitration decision is to be enforced.

 

12.8.                        Captions.  All section titles or captions contained inthis Agreement and in any appendix referred to herein or annexed to thisAgreement are for convenience only, shall not be deemed a part of thisAgreement and shall not affect the meaning or interpretation of this Agreement.

 

12.9.                        Construction.  This Agreement shall be deemed to have beendrafted by both VGX and CUSTOMER and shall not be construed against eitherparty as the draftsperson hereof.

 

12.10.                  Expenses.  In the event a dispute between the partieshereunder is resolved through litigation or other proceeding or a party mustengage an attorney (including internal counsel) to enforce its right hereunder,the prevailing party shall be entitled to reimbursement of all reasonable feesand disbursements incurred in connection with such litigation.

 

12.11.                  Independent Contractors.  Nothing contained herein shall be deemed tocreate any joint venture or partnership between the parties hereto, and, exceptas is expressly set forth herein, neither party shall have any right by virtueof this Agreement to bind the other party in any manner whatsoever.

 

12.12.                  Severability.  If any provision of this Agreement is held tobe illegal, invalid or unenforceable under present or future laws effectivewhile this Agreement remains in effect, the legality, validity andenforceability of the remaining provisions

 

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shall not beaffected thereby, and in lieu of each such illegal, invalid or unenforceableprovision there shall be added automatically, as a part of the document, aprovision that is legal, valid and enforceable, and as similar in terms to suchillegal, invalid or unenforceable provision as may be possible while givingeffect to the benefits and burdens for which the parties have bargainedhereunder.

 

12.13.                  Force Majeure.  Neither Party shall be liable to the other forits failure to perform any of its obligations under this Agreement, during anyperiod in which such performance is delayed because rendered impracticable orimpossible due to circumstances beyond the Party’s reasonable control,including without limitation, earthquakes, governmental regulation, fire,flood, labor difficulties, interruption of supply of key raw materials, civildisorders, and acts of God, provided that the Party experiencing the delaypromptly notifies the other Party of delay.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement asof the date first above written.

 

VGXI**,**INC.

 

 
| By:    | /s/ Henry Hebel           |   |
|--------|---------------------------|--------|
|   |
| Name:  |   Henry Hebel   |   |
|   |
| Title: |   VP Operations |   |
|        |                           |        |  |  |

 

 

CUSTOMER

 

 
| By:    | /s/ Richard S. Dondero               |   |
|--------|--------------------------------------|--------|
|   |
| Name:  |   Richard S. Dondero       |   |
|   |
| Title: |   Vice President R & D |   |
|        |                                      |        |  |  |

 

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