Document:

EXHIBIT
10.42

 

Portions Subject
to Confidential Treatment Request Under Rule 406

 

SALES AND
MARKETING AGREEMENT

 

BETWEEN

 

VGX
PHARMACEUTICALS, INC.

 

(VGX)

 

AND

 

VGX
INTERNATIONAL

 

(VI)

 

 

SALES AND
MARKETING AGREEMENT

 

This Sales and Marketing Agreement (“AGREEMENT”) is
between VGX Pharmaceuticals, Inc. (“VGX”),
a Delaware corporation, with offices located at 450 Sentry Parkway, Blue Bell,
Pennsylvania 19422, and VGX International
(“VI”), a corporation having an address of Jung-Hun
Building, #701, 944-1 Daechi
3-Dong, Gangnam-gu, Seoul, Korea.

 

A. Whereas VGX controls certain intellectual property
related to VGX-1027 (3-phenyl-4,5-dihydro-5-isoxazoleacetic acid) a drug for
treating a variety of diseases including Rheumatoid Arthritis (hereinafter
referred to as “VGX-1027 for RA”) currently in Phase I clinical trials in the
US;

 

B. Whereas VGX and VI desire to enter into an agreement for exclusive rights to sell and market
VGX-1027 for RA in Asia (excluding Japan), and Africa and the Middle East.

 

C. Whereas VGX provides VI with the right to first
negotiate an exclusive marketing and sales agreement in Japan.

 

NOW, THEREFORE, in consideration of the promises and
covenants contained in this AGREEMENT and intending to be legally bound, the
parties hereby agree as follows:

 

1.                                       DEFINITIONS

 

1.1         CALENDAR
QUARTER means each three-month period, or any portion thereof, beginning on January 1,
April 1, July 1 and October 1.

 

1.2         CALENDAR
YEAR means each 12-month period beginning on January 1.

 

1.3         EFFECTIVE
DATE means the date on which VI and VGX have both fully executed this
AGREEMENT.

 

1.4         FAIR MARKET
VALUE means the cash consideration which VGX or VI thereof would realize from
an unaffiliated, unrelated buyer in an arm’s length sale of an identical item
sold in the same quantity and at the same time and place of the transaction.

 

1.5         NET SALES
is defined as the gross amount of monies or cash equivalent or other
consideration which is paid by unrelated third parties to VI for VGX-1027 for
RA by sale or other mode of transfer, less all qualifying costs directly
attributable to such sales, which are made, made for, used or sold by VI, its
agents, employees and/or independent contractors.

 

1.6         SALE means
any bona fide transaction for which consideration payment is received or
expected for the sale, use, or other disposition of VGX-1027 for RA to an
unrelated 

 

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third party.  A SALE of VGX-1027 for RA shall be deemed
completed at the time VI, its agents, or its contractors receive payment for
such VGX-1027 for RA.

 

1.7         TERRITORY
means countries in Asia (excluding Japan), and Africa and the Middle East.

 

2.                                       FEES
AND ROYALTIES

 

2.1         Fees and
Royalties.

 

2.1.1                VGX agrees
to waive upfront fees.

 

2.1.2                As a partial
consideration of the exclusive rights granted to VI, VI shall pay for developmental costs incurred
and charged by third-party organizations or persons providing services to
properly initiate and complete Phase I clinical trials for VGX-1027. These
development costs include preclinical toxicity tests, completion of lab work,
payments for non-VGX personnel at clinical study sites working on the trial,
and creation of case report forms, IND preparation and filing and support
costs, API and placebo manufacturing costs, fill/finish/encapsulation/packaging/labeling
and shipment costs, statistical analysis and data management, and
pharmacokinetic analysis of drug levels. 
In return, VGX will be responsible for all direct internal costs (including
salaries. supplies, and overhead costs) of program managers, R&D
scientists, clinical scientists and other support staff involved in the
overseeing and management of product and Phase I clinical development processes
for VGX-1027. VI shall have rights to access and to reference data from Phase I
clinical studies.

 

2.1.3                In further
consideration of the exclusive rights granted to VI, VI shall pay to VGX, on a quarterly basis, a
royalty of ****** of the NET SALES, which is sold by VI, its agent(s), and/or
independent contractor(s) of VI for a period of ten (10) years from
the date of the first SALE of  VGX-1027
for RA in any country covered in the TERRITORY or until such time as the
related patent protection expires in such country, whichever is the later to
occur.

 

2.1.4                In further
consideration of the exclusive rights granted to VI, VI shall pay to Ganial Immunotherapeutics, Inc.
(hereinafter referred to as “GIT”), on a quarterly basis, a royalty of ******
of the NET SALES of each VGX-1027 for RA, which is sold by VI and any agent(s) and/or
independent contractor(s) of VI for a period of ten (10) years from
the date of the first SALE of VGX-1027 for RA, in any country covered by such
patent issuance or until such time as the related patent protection  expires in such country, whichever is the
later to occur.

 

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2.2         Diligence
and Milestone Fees.

 

2.2.1                As a partial
consideration of the exclusive rights granted to VI, VI agrees to pay the following milestones.

 

	
  Due Date

  	
   

  	
  Payment

  	
   

  
	
  Upon initiation of
  Phase II clinical trials for VGX-1027 for RA

  	
   

  	
  $

  	
  1,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Upon initiation
  of Phase III clinical trials for VGX-1027 for RA

  	
   

  	
  $

  	
  3,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Upon NDA
  submission for VGX-1027 for RA in the US or any country in the TERRITORRY

  	
   

  	
  $

  	
  3,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Upon NDA
  approval for VGX-1027 for RA in the US or any country in the TERRITORRY

  	
   

  	
  $

  	
  5,000,000

  	
   

  

 

2.3                   Currency,
Payment Method: All dollar amounts referred to in this AGREEMENT are United
States dollars.  All payments to VGX
under this AGREEMENT shall be made in United States dollars by check or
wire-transfer.  If VI receives revenues
from SALES of VGX-1027 for RA 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.

 

2.4                   Late
Payments: If VI fails to pay on the due date any amount which is payable under
this Agreement, then, without prejudice to other sections of this Agreement,
that amount shall bear interest compounded quarterly from the due date until
payment is made in full, both before and after any judgment, at an annual rate
of four (4) percentage points above the prime commercial lending rate
quoted by Citibank, New York, NY on the day payment was due, until paid.

 

2.5                   Right
to First Negotiate in Japan:  During the
time period from the Effective Date and the completion of final Phase II clinical
studies, VI shall have the right to first negotiate an exclusive sale and
marketing agreement to sell VGX-1027 for RA in Japan.

 

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3.                                       CONFIDENTIALITY

 

3.1         CONFIDENTIAL
INFORMATION means and includes all technical and business information, plans,
inventions, developments, discoveries, improvements, software, know-how,
procedures, methods, techniques, formulae, data, processes, studies, and other
proprietary ideas, whether or not patentable or copyrightable, that a party
hereto identifies as confidential or proprietary at the time it is delivered or
communicated to the other party hereto, or any other information that should
reasonably be recognizable by its nature to be confidential or trade secret
information of a party (including, without limitation, information respecting
such party’s business plans, sales and sales methods, customers and prospective
customers). CONFIDENTIAL INFORMATION should be in writing and marked
confidential or, if oral, should be reduced to writing within thirty (30) days
of disclosure and marked confidential.

 

3.2         Each party
shall maintain in confidence and not disclose to any third party any
CONFIDENTIAL INFORMATION of the other party during the term of this AGREEMENT
and for five (5) years after the date of termination of this
AGREEMENT.  Each party shall ensure that
its employees have access to CONFIDENTIAL INFORMATION of the other party only
on a need-to-know basis, and are obligated to abide by such party’s obligations
under this AGREEMENT.  The foregoing
obligation shall not apply to:

 

3.2.1                information
that is known to the receiving party prior to the time of disclosure, and was
not received directly or indirectly from the disclosing party hereunder in
violation of a confidentiality obligation, unless  independently developed by or for the
receiving party, without exposure to or benefit of the disclosing party’s
CONFIDENTIAL INFORMATION, in each case, to the extent evidenced by written
records; and

 

3.2.2                information
disclosed to the receiving party, without restriction, by a third party that
has a right to make such disclosure; and

 

3.2.3                information
that was or becomes patented, published or otherwise part of the public domain
as a result of acts by the disclosing party or a third person developing or
obtaining such information as a matter of right; and

 

3.2.4                information,
which the disclosing party permits, in writing, the receiving party to publicly
disclose.

 

If a receiving party is required to disclose any of the disclosing
party’s CONFIDENTIAL INFORMATION by order of a governmental authority or a
court of competent jurisdiction; the receiving party shall timely inform its
disclosing party, reasonably cooperate at the disclosing parties expense with
any reasonable action the disclosing party takes to attempt to obtain
confidential treatment of such information by the authority or court, and limit
its disclosure of such information to the extent practical.

 

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Note: Confidential
information shall not be disclosed to third party and this rule shall
apply to both VGX and VI. This is particularly true for process development
data.

 

4.                                       TERM AND
TERMINATION

 

4.1         This
AGREEMENT, unless sooner terminated as provided in this AGREEMENT, shall
terminate upon the earlier of: (a) expiration of the last-to-expire patent
or (b) twenty (20) years after the EFFECTIVE DATE.

 

4.2         VI may
terminate this AGREEMENT (a) upon sixty (60) days written notice to VGX,
if the sale or other exploitation of the VGX-1027 for RA becomes technologically
or commercially unfeasible; or (b) upon sixty (60)-days written notice to
VGX, and by doing all of the following:

 

4.2.1                ceasing to
make, have made, use, import, sell and offer for sale VGX-1027 for RA; and

 

4.2.2                paying all
monies owed to VGX up to the date of the termination excluding any future
obligation under this AGREEMENT.

 

4.3         VGX may
terminate this AGREEMENT, upon sixty (60)-days written notice to VI, if any of
the following events of default (“Default”) occur:

 

4.3.1                VI is more
than ninety (90) days late in paying to VGX royalties, expenses or any other
monies due under this AGREEMENT and VI does not immediately pay VGX in full any
amounts due upon demand; or

 

4.3.2                VI
experiences a Trigger Event (defined below);

 

4.3.3                VI
materially breaches this AGREEMENT and does not cure the material breach within
sixty (60) days after the receipt of the written notice of such breach;

 

4.3.4                VI fails,
within a reasonable period of time, to make a good faith effort to establish
the necessary marketing and sales organization to achieve commercially
reasonable sales of VGX-1027 for RA in the TERRITORY.

 

4.3.5                VI fails,
within two years from regulatory approval of VGX-1027 for RA in a country in
the TERRITORY, to have established, or to be substantially in the process of
having established, the necessary marketing and sales organization in said
country.

 

4.4         “Trigger
Event” means any of the following if VI:

 

4.4.1.1               becomes
insolvent, bankrupt or generally fails to pay its material debts as such debts
become due;

 

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4.4.1.2               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; or

 

4.4.1.3               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;

 

4.4.2                If
proceedings under any International law related to bankruptcy, insolvency,
liquidation, or the reorganization, readjustment or the release of debtors are
instituted or commenced by VI;

 

4.4.3                If any order
for relief is entered relating to any of the proceedings described in Sections
4.4.2 ;

 

4.4.4                If VI shall
call a meeting of its creditors with a view to arranging a composition or
adjustment of its debts; or

 

4.4.5                If VI shall,
by any act or failure to act, indicate its consent to, approval of or
acquiescence in any of the proceedings described in Sections 4.4.2, 4.4.3,
4.4.4.

 

4.4.6                In the event
of a “change in control” of VI, VI shall promptly notify VGX of such change in
control and VGX shall be permitted to terminate
this Agreement at VGX’s option.  A “change
of control” means a change in the direct or indirect power to direct or cause
the direction of the management and policies of VI, whether through ownership
or voting securities, by contract, or otherwise

 

4.5         The
provisions of Sections 4.3 and 4.4 shall apply to a Default of, or a Trigger
Event experienced by, any agents and/or contractors of VI ‘s rights hereunder
if and to the extent that such Default of, or Trigger Event experienced by, the
agents and/or contractors(s) cause VI to fail to meet its diligence
obligations under Section 2.2.

 

4.6         In the
event of a termination under Section 4.1 or 4.3, all duties of VGX (other
than under Sections 4.11) and all rights (but not duties) of VI (other than
under Section 4.11) under this AGREEMENT immediately terminate without the
necessity of any action being taken either by VI or by VGX, provided, however,
that in no event shall the foregoing be construed to obligate VI to pay any
amounts accruing under Sections 2.1 
after the date of termination except under Section 4.10.  Upon and after any termination of this
AGREEMENT, the rights covered by this AGREEMENT for VI and any agents 

 

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and/or contractors
thereof to manufacture, sale, marketing, importation and/or distribution of VGX
R&DPRODUCT(s) shall terminate on the same date of the termination of
the AGREEMENT, except otherwise specified in this AGREEMENT or agreed upon by
both parties.

 

4.7         Upon
termination of this AGREEMENT, 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.

 

4.8         Upon
termination of this AGREEMENT under section 4.2 and 4.3, VI shall cause
physical inventories to be taken as soon as commercially practicable and in any
event no later than sixty (60) days after termination of: (a) all
completed VGX-1027 FOR RA on hand, under the control of VI, its agents, or
contractors thereof; and (b) such VGX-1027 FOR RA as are in the process of
manufacture and component parts thereof as of the date of termination of this
AGREEMENT, which inventories shall be recorded in writing.  VI shall deliver copies of such written
inventories, verified by an officer of VI, forthwith to VGX.  VGX shall have forty five (45) days after
receipt of such verified inventories within which to challenge the physical
inventory and request an audit thereof.

 

4.9         Upon
termination of this AGREEMENT under section 4.1, VI shall pay all monies owed
to VGX up to the date of the termination.

 

4.10             Notwithstanding
the foregoing, if this AGREEMENT terminates other than pursuant to Section 4.3.1
or 4.3.2, VI shall have a period of six (6) months to sell off its
inventory of VGX-1027 for RA existing on the date of termination of this
AGREEMENT and shall pay royalties to VGX with respect to such VGX-1027 for RA
within thirty (30) days following the expiration of such six-month period.

 

4.11             Each
party’s obligation to pay all monies owed and accruing as of the date of
termination under this AGREEMENT shall survive termination of this
AGREEMENT.  In addition, the provisions
of Articles 2, 3, 4, 5, 6, 7, and 8 shall survive such termination.

 

5.                                       REPRESENTATIONS
AND WARRANTIES OF VGX AND VI; DISCLAIMER OF ADDITIONAL WARRANTIES;
INDEMNIFICATION

 

5.1         VGX
represents and warrants to VI that:

 

5.1.1                VGX has the
full authority to execute and deliver this AGREEMENT.

 

5.1.2                To best of
VGX’s knowledge, there are no pending or threatened suits, claims, or actions
of any type whatsoever against VGX with respect to the VGX-1027 for RA.

 

7

 

5.1.3        All necessary corporate authorizations,
consents and approvals which are necessary or required for VGX to enter into
this AGREEMENT have been duly obtained.

 

5.1.4        To the best of its knowledge, the
entering into of this AGREEMENT by VGX will not (i) violate any Applicable
Law or (ii) conflict with or result in any breach of any of the terms,
conditions or provisions of, or constitute a default (or give rise to any right
of termination, cancellation or acceleration) under, or result in the creation
of any lien, security interest, charge or encumbrance upon any of the
properties or assets of VGX, under its organizational documents.

 

5.2           VI represents and warrants to VGX
that:

 

5.2.1  all necessary corporate
and other authorizations, consents, and approvals which are necessary or
required for VI to enter into this AGREEMENT have been duly obtained.

 

5.2.2  to the best of its knowledge the entering
into of this AGREEMENT by VI will not (i) violate any Applicable Law or
any applicable ruling, writ, injunction, order, judgment or decree of any
court, administrative agency or other governmental body or (ii) conflict
with or result in any breach of any of the terms, conditions or provisions of,
or constitute a default (or give rise to any right of termination, cancellation
or acceleration) under, or result in the creation of any lien, security
interest, charge or encumbrance upon any of the properties or assets of VGX
under its organizational documents.

 

5.2.3  VI shall not, during the course of any
manufacturing, marketing, using or selling by it of VGX-1027 FOR RA, engage in
any act which results in VGX-1027 for RA being adulterated or misbranded within
the meaning of Applicable Law.

 

5.2.4  VI shall comply with all Applicable Law
related to their importation, manufacture, use or sale of VGX-1027 for RA in
the TERRITORY.

 

5.2.5  to the best of its knowledge, VGX-1027
for RA, and its manufacture, use or sale by VI and/or
its Affiliates, will not violate any patents, patent rights, copyrights,
confidential information or trade secrets of any other person.

 

5.2.6  VI shall, and shall obligate its Affiliates,
subcontractors, joint venture partners, and any other person or entity
performing services under this AGREEMENT to substantially comply with all of
the terms in this AGREEMENT, including confidentiality provisions, and comply
all their operations relating to VGX-1027 for RA with all Applicable Laws in
the TERRITORY.

 

8

 

5.2.7  VI shall
use its best efforts to prevent sales of VGX-1027 for RA outside of the listed
VI TERRITORY above.  Breach of this
clause shall be considered a material breach of this AGREEMENT.

 

THE WARRANTIES CONTAINED IN THIS SECTION 5.1 and
5.2 ARE THE EXCLUSIVE WARRANTIES MADE BY THE PARTIES IN RESPECT TO VGX-1027
FOR RA, AND ALL OTHER WARRANTIES RELATING THERETO,
EXPRESSED, STATUTORY OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF
FITNESS FOR A PARTICULAR PURPOSE, AND MERCHANTABILITY ARE HEREBY WAIVED AND
EXCLUDED.

 

5.3  VGX shall
defend and indemnify and hold VI (and its respective officers, directors and
employees) harmless against any and all Losses, arising out of, relating to,
based on, or caused by (A) the breach by VGX of any representation or
warranty contained in this AGREEMENT, (B) a claim that the formulation or
manufacture of the VGX-1027 for RA by VGX for VI or other activities of VGX
under this AGREEMENT infringe on the patent or other intellectual property
rights of a third party, (C) any governmental or regulatory action arising
out of VGX, or (D) any negligence or intentional misconduct by VGX in
connection with performing its obligations under this AGREEMENT, in each case
except to the extent that such Losses arise from or are aggravated in any
substantial respect by the negligent acts of or failure to act by VI or its
agents and/or contractors.  VI will
promptly notify VGX of any such Losses which come to VI’s attention, but
failure to do so will not relieve VGX of its indemnification obligations under
this Section 5.3 except to the extent any such delay results in a material
prejudice to VGX.  Notwithstanding
anything to the contrary in this AGREEMENT, VGX shall not be liable for any
Losses to the extent that the Losses suffered by VI (and its officers,
directors and employees) are the result of or in consequence of any failure by
the indemnified party to take reasonable and prudent action to mitigate any
Losses.

 

5.4  VI shall
defend and indemnify and hold VGX (and its affiliates, including its agents
and/or contractors, and their respective officers, directors and employees)
harmless against any Losses, arising out of, relating to, based on, or caused
by (A) the breach by VI of any representation or warranty contained in
this AGREEMENT or (B) any negligence or intentional misconduct by VI in
connection with performing its obligations under this AGREEMENT, in each case
except to the extent that such Losses arise from or are aggravated by the
negligent acts of or failure to act by VGX, its agents and/or contractors.  VGX will promptly notify VI of any such
Losses which come to VGX’s attention, but failure to do so will not relieve VI
of its indemnification obligations under this Section.

 

6              RETENTION BY VI AND ACCESS TO RECORDS

 

6.1           Records:             VI shall keep records in accordance with customary
accounting practices and in sufficient detail showing the amount of VGX-1027
for RA sold or otherwise transferred to third parties to permit the
determination of royalties due to VGX. 
VI shall keep complete records related to activities such that records
shall be in sufficient

 

9

 

detail to enable the
Royalties payable hereunder by VI to be clearly and fully determined.  VI further agrees to permit its books and
records, including without limitation such books and records relating to VI’s
parties, agents, etc, to be examined no more than once in any two consecutive
Calendar Quarters to verify the reports provided under this Agreement, such
confidential examination to be made at VGX’s discretion by either: (i) an
independent auditing firm appointed by and at the expense of VGX, which firm
shall be reasonably acceptable to VI, or (ii) VGX’s internal
auditors.  Such records shall be kept and
examination thereof shall be limited to a period of time no more than three (3) Calendar
Years after the close of the fiscal year to which the records pertain.  In the event that VI shall include a VI’s partner
to the extent permitted hereunder, VI shall (a) cause such VI partner to incorporate
audit rights in favor of VGX substantially identical to the provisions of this Section 6.1
, and (b) use commercially reasonable efforts to enforce such audit rights
with respect to such VI’s partner.

 

6.2  Financial
Information.  VI shall provide to VGX (a) annual
audited financial statements and (b) such other quarterly financial
statements as may be prepared by or on behalf of VI, within ninety (90) days,
subject to assumption by VGX of customary and reasonable confidentiality
obligations regarding such information.

 

7              Insurance:  Prior to commencement of any commercial
product sales, VI will procure and maintain, at its own expense and for its own
benefit, Product Liability insurance having a bodily injury, death, and
property damage combined single limit of at least U.S. $5,000,000 per
occurrence.  If the above-mentioned
policy or the limit is not available in any of the countries in the listed
TERRITORY, VI agrees to use its best efforts to procure the best policy and
limit available in such countries.

 

7.1  VI will furnish VGX a certificate(s) from
an insurance carrier or showing all insurance set forth above.  The certificate(s) will include the
following statement:  “The insurance
certified hereunder is applicable to contracts between VGX. and the
Insured.  This insurance may be canceled
or altered only after thirty (30) days written notice to VGX.”  The insurance will be endorsed and the
certificate(s) will confirm that the insurance (1) names VGX. and its
affiliates as additional insureds with respect to matters arising from this
Agreement; (2) provides that such insurance is primary and
non-contributing to any liability insurance carried by VGX; and (3) provides
that underwriters and insurance companies of VI may not have any right of
subrogation against VGX and its affiliates. 
The insurance will contain no more than a typical industry deductible.

 

7.2  VI agrees to waive any right of recovery
against VGX, and its affiliates for any loss or damage of the type covered by
the insurance to be procured and maintained under this Agreement regardless of
whether or not such insurance is so maintained. 
Failure of any of the terms and conditions of the Insurance provision
will be deemed a material breach of this Agreement.

 

10

 

8              ADDITIONAL PROVISIONS

 

8.1  Nothing in
this AGREEMENT shall be deemed to establish a relationship of principal and
agent between VGX and VI, or between or among any of either party’s agents or
employees for any purpose whatsoever, nor shall this AGREEMENT be construed as
creating any other form of legal association or arrangement which would impose
liability upon one party for the act or failure to act of the other party.

 

8.2  VI is not
permitted to assign this AGREEMENT or any part of it to any person or entity,
either directly or by operation of law, without the prior written consent of
VGX in its sole discretion.  However, VI
has the rights to contract out the manufacturing of the VGX-1027 FOR RA covered
in this AGREEMENT and rights to establish sales and marketing partnership with
a third party.  In case any product
covered in this AGREEMENT is sold by a marketing partnership, VI shall have the
responsibility to pay royalty that is calculated on the bases of the combined
net sales of VI and its marketing partners. No assignment relieves VI of
responsibility for the performance of any accrued obligations, which it has
prior to such assignment.

 

8.3  A waiver by
either party of a breach of any provision of this AGREEMENT will not constitute
a waiver of any subsequent breach of that provision or a waiver of any breach
of any other provision of this AGREEMENT.

 

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

 

If for VGX:

 

VGX Pharmaceutical, Inc.

450 Sentry Parkway East

Blue Bell, PA 19422

Attention: Chief Executive Officer

 

If for VI:

 

VGX International

Jung-Hun Building, #701

944-1 Daechi 3-Dong

Gangnam-gu, Seoul, Korea

Attention: Vice President

 

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

 

8.5  This
AGREEMENT shall be construed and governed in accordance with the laws of the
Commonwealth of Pennsylvania in the United States of America, without giving
effect to conflict of law provisions.  In
the event that a party to this AGREEMENT perceives the existence of a dispute
with the other party concerning any right or duty provided for herein, the
parties will, as soon as practicable, confer in an attempt to resolve

 

11

 

the dispute.  If
the parties are unable to resolve such dispute amicably, then the parties
hereby submit to the exclusive jurisdiction of and venue in the either federal
or state courts located in the Eastern District of the Commonwealth of
Pennsylvania with respect to any and all disputes concerning the subject of
this AGREEMENT.  The parties agree to
accept original service of complaint via internationally recognized courier
with receipt confirmation.  Also, the
parties agree to waive the Hague Convention requirements relating to translation
of certain documents to applicable foreign language which in this case is Korean.

 

8.6  VI shall
comply with all prevailing laws, rules and regulations that apply to its
activities or obligations under this AGREEMENT. 
Without limiting the foregoing, it is understood that this AGREEMENT may
be subject to United States laws and regulations controlling the export of
technical data, computer software, laboratory prototypes and other commodities,
articles and information, including the Arms Export Control Act as amended in
the Export Administration Act of 1979, and that the parties’ obligations are
contingent upon compliance with applicable United States export laws and
regulations.

 

8.7  If any
provision of this AGREEMENT shall be held to be illegal, invalid or
unenforceable, then such illegality, invalidity or unenforceability shall
attach only to such provision, and shall not in any manner affect or render
illegal, invalid or unenforceable any other provision of this AGREEMENT, and
this AGREEMENT shall be carried out as if any such illegal, invalid or
unenforceable provision were not contained herein.

 

8.8   Fees:  Except as otherwise provided herein, each
Party shall bear its own legal fees incurred in connection with the
transactions contemplated hereby.

 

8.9  This AGREEMENT
may not be changed, modified, extended or terminated except by written
amendment executed by an authorized representative of each party.

 

[SIGNATURE PAGE FOLLOWS]

 

12

 

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

 

 

	
  VGX INTERNATIONAL, INC.

  	
   

  	
  VGX PHARMACEUTICALS, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Bryan Kim

  	
   

  	
  By:

  	
  /s/ Kevin W. Rassas

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Bryan Kim

  	
   

  	
  Name:

  	
    Kevin W.
  Rassas

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
     Vice President

  	
   

  	
  Title:

  	
      Senior Vice President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  2/28/08

  	
   

  	
  Date:

  	
      2/28/08

  
									

 

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  EXHIBIT 10.43    
    

EMPLOYMENT AGREEMENT  

        This Employment Agreement (the "Agreement"), dated March 31, 2008, is made by
and between VGX Pharmaceuticals, Inc., a Delaware corporation (the "Company"), and Dr. J. Joseph Kim
("Executive"). 

 R E C I T A L S  

        WHEREAS, the Company desires to employ Executive and to have the benefit of his skills
and services, and Executive desires to accept employment with the Company, on the terms and conditions set forth herein; and 

        WHEREAS, Executive and the Company previously entered into a Non-Disclosure, Assignment of Inventions,
Non-Solicitation and Non-Compete Agreement (the "Non-Compete Agreement"), which continues in full force and effect. 

        NOW, THEREFORE, in consideration of the mutual promises, terms, covenants and conditions set forth herein and in the
Non-Compete Agreement, and the performance of each, the parties hereto, intending legally to be bound, hereby agree as follows: 

1.    Employment; Term.    

        a.     The
Company hereby agrees to employ Executive as Chief Executive Officer and President and Executive hereby agrees to accept such employment with the Company in
accordance with the terms and conditions of this Agreement. 

        b.     The
"Term" of this Agreement shall commence on the date hereof (the "Commencement
Date") and continue for a period of three years from the Commencement Date; provided, however, that the Term of this Agreement may be terminated earlier at any time as provided
in Section 7 below. 

2.    Position and Duties.    

        a.     The
Company agrees to employ Executive throughout the Term as Chief Executive Officer and President of the Company with such responsibilities, duties and authority as are
assigned to him by the Board of Directors (the "Board") of the Company or its designee. 

        b.     Executive
shall faithfully devote his full business/working time, attention and energy to the business and affairs of the Company and the performance of his duties
hereunder and to use reasonable efforts to perform such responsibilities faithfully and efficiently. 

        c.     Without
limiting the generality of the foregoing paragraph, during the Term, upon prior written consent of the Board or its designee, Executive shall be permitted to
serve on other Boards of Directors, professional associations and otherwise be involved with any family business or trust to the extent that, in the reasonable judgment of the Board or its designee,
such other business pursuits and activity do not materially (i) interfere with Executive's ability to discharge Executive's duties and responsibilities to the Company, whether or not such
activity is pursued for gain, profit or other pecuniary advantage, or (ii) violate the Conflicts provision of the Non-Compete Agreement. 

3.    Compensation.    

        a.     Executive
shall be entitled to receive as compensation for his employment a base annual salary at a rate of $240,000 per annum (the "Base
Salary"), which shall be paid to Executive by the Company or any of its affiliates on a monthly basis. 

        b.     Increases
in the Base Salary shall be reviewed annually by the Board during the Term and any such increases, if any, will be at the Board's or its designee's sole
discretion and will otherwise be consistent with the Company's annual policies and budget for payroll increases. 

4.    Bonus.    

        During
the Term, Executive shall be eligible to receive an incentive cash bonus up to the amount, based upon the criteria, and payable at such times, as may be determined by the Board
and targeted at thirty percent (30%) or more of the Base Salary. The amount shall be determined by the Board, in its sole and absolute discretion, which shall be binding and final, and shall be paid
in a one-time lump sum payment (less payroll taxes). To the extent that such cash bonus is to be determined in light of financial performance during a specified fiscal period and the
Agreement commences on a date after the start of such fiscal period, any cash bonus payable in respect of such fiscal period's results may be prorated. In addition, if the period of Executive's
employment hereunder expires before the end of a fiscal period, and if Executive is eligible to receive a cash bonus at such time (such eligibility being subject to the restrictions set forth in
Section 7 below), any cash bonus payable in respect of such fiscal period's results may be prorated. Notwithstanding the foregoing, all bonuses shall be paid within two and one-half
months after the close of each year. 

5.    Benefits; Stock Options.    

        In
addition to the salary and cash bonus referred to above, Executive shall be entitled during the Term to participate in such employee benefits plans or programs of the Company, and
shall be entitled to such other fringe benefits, as are from time to time adopted by the Board and made available by the Company generally to employees of Executive's position, tenure, salary, age,
health and other qualifications. Without limiting the generality of the foregoing, Executive shall be eligible for such awards, if any, under the Company's employee benefits plans or programs as shall
be granted to Executive in the sole discretion of the Board or its designee. Executive acknowledges and agrees that the Company does not guarantee the adoption or continuance of any particular
employee benefits plan or program or other fringe benefits during the Term, and participation by Executive in any such plan or program shall be subject to the rules and regulations applicable thereto. 

6.    Expenses.    

        The
Company will reimburse Executive, in accordance with the practices in effect from time to time for other officers or staff personnel of the Company, for all reasonable and necessary
business and traveling expenses and other disbursements incurred by Executive for or on behalf of the Company in the performance of Executive's duties hereunder, upon presentation by Executive to the
Company of appropriate vouchers and supporting documentation. 

7.    Termination.    

        Executive's
employment by the Company pursuant hereto is subject to termination as follows: 

        a.    Death or Disability.    The Company may by written notice to Executive or his personal representative terminate
Executive's employment on account of his death or total disability. In the case of Executive's death, Executive's employment shall be deemed to terminate on the date of Executive's death. For purposes
hereof, Executive shall be deemed to experience a "Total Disability" if Executive is considered totally disabled under any group disability plan
maintained by the Company and in effect at that time, or in the absence of any such plan, Executive shall be deemed to experience a Total Disability if he shall have been unable to perform his duties
hereunder on a full-time basis for 90 consecutive days or longer, or for shorter periods aggregating 120 days in any 360-day period. In the event of any dispute under
this Section 7(a), Executive shall submit to a physical examination by a licensed physician mutually satisfactory to the Company and Executive, the cost of such examination to be paid by the
Company, and the determination of such physician shall be determinative. In the case of a Total Disability, until the Company shall have terminated Executive's employment hereunder in accordance with
the foregoing, Executive shall be entitled to receive compensation provided for herein notwithstanding any such Total Disability. In the event of the termination of Executive's employment on account
of his death or such Total Disability, such termination shall be effective immediately upon 

notice,
in which case Executive or his representative will have no rights or claims against the Company under this Agreement except as follows: 

        (i)    Executive
(or his estate or representative, as applicable) shall be paid (A) any unpaid portion of his Base Salary computed on a pro
rata basis through the date of his termination and (B) any unreimbursed expenses; 

        (ii)   All
other of Executive's accrued but unpaid rights shall be as determined under any incentive compensation, stock option, retirement, employee welfare or other employee
benefits plan or program of the Company in which Executive is then participating at the time of his termination; and 

        (iii)  in
the case of Executive's Total Disability only, (A) the Company shall continue Executive's medical benefits coverage existing at the time of his termination
for as long as permissible under the Company's health benefits policies (not to exceed 60 days) and the Company further agrees to pay Executive's COBRA premiums for 24 months thereafter,
or, if earlier, the termination of such COBRA coverage, with such premiums to provide for coverage at the same level and subject to the same terms and conditions (including, without limitation, any
applicable co-pay obligations of Executive, but excluding any applicable tax consequences for Executive) as in effect for Executive at the time of termination, and (B) Executive
shall further receive a lump-sum payment, within 15 days after the effective date of termination, equal to the aggregate amount of Executive's Base Salary as in effect immediately
prior to such termination that would be payable over a period of 24 months following the effective date of such termination. 

        b.    Involuntary Termination for Cause.    In the event the Company terminates Executive's employment for Cause (as
such term is defined below), such termination ("Termination For Cause") shall be effective immediately upon notice thereof, in which case Executive will
have no rights or claims against the Company under this Agreement except as follows: 

        (i)    Executive
shall be paid (A) any unpaid portion of his Base Salary computed on a pro rata basis through the date of
his termination and (B) any unreimbursed expenses; and 

        (ii)   All
other of Executive's accrued but unpaid rights shall be as determined under any incentive compensation, stock option, retirement, employee welfare or other employee
benefits plan and program of the Company in which Executive is then participating at the time of his termination. 

        "Cause" shall mean: (1) conviction of Executive of any felony; (2) participation by Executive in any fraud or act of
dishonesty against the Company; (3) material violation by Executive of (i) any contract between the Company and Executive, or (ii) any statutory duty of Executive to the Company;
(4) conduct of Executive that, based upon a good faith and reasonable factual investigation and determination by the Board, demonstrates Executive's gross unfitness to serve; or (5) the
continued, willful refusal or failure by Executive to perform any material duties reasonably requested by the Board; provided, however, that in the case of conduct described in clauses (3),
(4) and (5) hereof, such conduct shall not constitute "Cause" unless (a) the Board shall have given Executive written notice setting forth with specificity (i) the conduct
deemed to constitute "Cause," (ii) reasonable action that would remedy the objectionable conduct and (iii) a reasonable time (not less than 10 days) within which Executive may
take such remedial action, and (b) Executive shall not have taken such specified remedial action within such specified reasonable time. 

        c.    Involuntary Termination Without Cause.    The Company may terminate Executive's employment, other than on
account of death, Total Disability or for Cause, on 30 days' written notice ("Termination Without Cause"), in which case Executive will have no
rights or claims against the Company under this Agreement except as follows: 

        (i)    Executive
(or his estate or representative, as applicable) shall be paid (A) any unpaid portion of his Base Salary computed on a pro
rata basis through the date of his termination, and (B) any unreimbursed expenses; 

        (ii)   All
other of Executive's accrued but unpaid rights shall be as determined under any incentive compensation, stock option, retirement, employee welfare or other employee
benefits plan and program of the Company in which Executive is then participating at the time of his termination; 

        (iii)  Executive
shall receive severance payments in the form of monthly payments of Executive's Base Salary (as in effect immediately prior to such termination) and of the
Pro Rata Bonus Amount (as such term is defined below) for a period of 24 months following the effective date of such termination; and 

        (iv)  The
Company shall continue Executive's medical benefits coverage existing at the time of his termination for as long as permissible under the Company's health benefits
policies (not to exceed 60 days) and the Company further agrees to pay Executive's COBRA premiums for 24 months thereafter, or, if earlier, the termination of such COBRA coverage, with
such premiums to provide for coverage at the same level and subject to the same terms and conditions (including, without limitation, any applicable co-pay obligations of Executive, but
excluding any applicable tax consequences for Executive) as in effect for Executive at the time of termination. 

        For
the purposes of this Agreement, "Pro Rata Bonus Amount" shall mean one-twelfth (1/12th) of the greater of
(A) the most recent annual cash bonus paid to Executive prior to the date of his termination, or (B) the average of the three most recent annual cash bonuses paid to Executive prior to
the date of his termination. The rights of Executive and the obligations of the Company under this Section 7(c) shall remain in full force and effect notwithstanding the expiration of the Term,
whether by failure of the Board to extend such Term or otherwise, and the failure of the Board to extend such Term shall be deemed a Termination Without Cause under this Section 7(c). 

        d.    Voluntary Termination For Good Reason.    Executive may terminate his employment for good reason
("Termination For Good Reason") by providing 30 days' written notice of a breach constituting Good Reason, which notice shall be provided within
90 days after the initial existence of the breach, provided, that such breach is not cured in all material respects to the reasonable satisfaction of Executive within 30 days after such
notice. In the event of Termination for Good Reason, Executive shall be entitled to receive the payments and other rights provided in Section 7(c) hereof. For purposes of this Agreement,
termination for "Good Reason" shall mean voluntary termination by Executive of his employment with the Company based on one of the following events: 

        (i)    the
material diminution in Executive's position, title, responsibilities or authority from those in effect at the Commencement Date; 

        (ii)   a
relocation of Executive's principal executive offices more than fifty miles from its location at the Commencement Date; or 

        (iii)  the
breach by the Company of any of its material obligations under this Agreement; 

provided,
however, that, with respect to subsections (i) and (ii) above, in the event that Executive terminates his employment within six months prior to a Change in Control (as such
term is defined below) or within 12 months after a Change in Control, "Good Reason" shall be defined to be (y) the material diminution in
Executive's position, title, responsibilities or authority from those in effect, or (z) a relocation of Executive's principal executive offices more than fifty miles from its location existing
at, six months prior to a Change in Control. 

        e.    Voluntary Termination.    Executive may otherwise terminate his employment without Good Reason upon
30 days' written notice, in which case Executive (or his estate or representative, as applicable) shall be paid (A) any unpaid portion of his Base Salary on a pro
rata basis through the date of the termination, and (B) any unreimbursed expenses. 

        f.    Section 409A.    The Base Salary continuation set forth in Sections 7 (a), (c) and
(d) hereof shall be intended to satisfy either (i) the safe harbor set forth in the regulations issued under Section 409A (as defined below) of the Internal Revenue Code of 1986,
as amended (the "Code") (Treas. Regs. 1.409A-1(n)(2)(ii)), or (ii) be treated as a Short-term Deferral as that term is defined 

under
Section 409A (Treas. Regs. 1.409A-1(b)(4)). To the extent that such continuation payments exceed the applicable safe harbor amount or do not constitute a
Short-term Deferral, the excess amount shall be treated as deferred compensation under Section 409A and as such shall be payable pursuant to the following schedule: such excess
amount shall be paid via standard payroll in periodic installments in accordance with the Company's usual practice for its senior executives. 

        Notwithstanding
any provision in this Agreement to the contrary, in the event that Executive is a "specified employee" as defined in Section 409A, any continuation payment,
continuation benefits or other amounts payable under this Agreement that would be subject to the special rule regarding payments to "specified employees" under Section 409A(a)(2)(B) of the Code
shall not be paid before
the expiration of a period of six months following the date of Executive's termination of employment or before the date of Executive's death, if earlier. 

        g.    Forfeiture of Rights.    In the event that, subsequent to termination of Executive's employment hereunder,
Executive breaches any of the provisions of the Non-Compete Agreement in any material respect, all payments and benefits to which Executive may otherwise have been entitled to pursuant to
this Section 7 hereof shall immediately terminate and be forfeited. 

        h.    Release.    Executive shall not be entitled to any compensation under this Section 7 unless Executive
executes and delivers to the Company within 10 days after termination, a Separation of Employment Agreement and General Release (the "Release")
in the form attached hereto as Exhibit A by which Executive releases the Company from any obligations and liabilities of any type whatsoever,
except for the Company's obligation to provide the compensation and benefits specified in this Section 7 and those Release Exclusions (as such term is defined in the Release) set forth in the
Release. The parties hereto acknowledge that the payments to be provided under this Section 7 are to be provided in consideration for the Release. 

8.    Change in Control Provisions.    

        a.    Effect of Termination Following Change in Control.    In the event of a Change in Control (as such term is
defined below) during the Term, and a termination of Executive's employment, either as a Termination Without Cause or Termination For Good Reason, occurring either within six months prior to or within
12 months following such Change in Control, whether or not such termination is during the Term, Executive shall be entitled to receive (i) the payments and other rights provided in
Section 7(c) hereof and (ii) a lump sum cash severance payment, paid within 15 days of the date of termination, equal to the sum of Executive's monthly base salary (as in effect
immediately prior to such termination) and the Pro-Rata Bonus Amount (as determined under Section 7(c)(iv) above) multiplied by 24, but discounted to present value from the dates
such payments would be made if paid on a monthly basis for such 24-month period, based on the 100% short-term Applicable Federal Rate (compounded annually) under
Section 1274(d) of the Internal Revenue Code of 1986, as amended (the "Code"), as in effect at the time of payment. 

        b.    Definition of Change in Control.    For purposes of this Agreement, a "Change in
Control" shall be deemed to have occurred upon: 

        (i)    an
acquisition subsequent to the date hereof by any person, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) (a "Person"), of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 30% or more of either (A) the then outstanding shares of common stock of the Company ("Common
Stock") or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the
"Outstanding Company Voting Securities"); excluding, however, the following: (1) any acquisition directly from the
Company, other than an acquisition by virtue of the exercise of a conversion privilege unless the security being so converted was itself acquired directly from the Company; (2) any acquisition
by the Company; and (3) any acquisition by an employee benefit plan (or related trust) sponsored or maintained by the Company; 

        (ii)   a
change in the composition of the Board such that during any period of two consecutive years, individuals who at the beginning of such period constitute the Board, and
any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in clause (i), (iii) or (iv) of
this Section 8(b)) whose election by the Board or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds of the directors then still in
office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority of the
members thereof; 

        (iii)  the
approval by the stockholders of the Company of a merger, consolidation, reorganization or similar corporate transaction, whether or not the Company is the
surviving corporation in such transaction, in which outstanding shares of Common Stock are converted into (A) shares of stock of another company, other than a conversion into shares of voting
common stock of the successor corporation (or a holding company thereof) representing 51% or more of the voting power of all capital stock thereof outstanding immediately after the merger or
consolidation or (B) other securities (of either the Company or another company) or cash or other property; 

        (iv)  the
approval by stockholders of the Company of the issuance of shares of Common Stock in connection with a merger, consolidation, reorganization or similar corporate
transaction in an amount in excess of 49% of the number of shares of Common Stock outstanding immediately prior to the consummation of such transaction; or 

        (v)   the
approval by the stockholders of the Company of (A) the sale or other disposition of all or substantially all of the assets of the Company or (B) a
complete liquidation or dissolution of the Company. 

9.    Parachute Tax Indemnity.    

        a.     If
it shall be determined that any amount paid, distributed or treated as paid or distributed by the Company to or for Executive's benefit (whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 9) (a
"Payment") would be subject to the excise tax imposed by Section 4999 of the Code, or any interest or penalties are incurred by Executive with
respect to such excise tax (such excise tax, together with any such interest and penalties, being hereinafter collectively referred to as the "Excise
Tax"), then Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount such
that after payment by Executive of all federal, state and local taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any
interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise
Tax imposed upon all the Payments. 

        b.     All
determinations required to be made under this Section 9, including whether and when a Gross-Up Payment is required and the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by a nationally recognized accounting firm as may be designated by Executive (the
"Accounting Firm") which shall provide detailed supporting calculations both to the Company and Executive within 15 business days of the receipt of
notice from Executive that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual,
entity or group effecting the Change in Control, Executive shall appoint another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then
be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne by the Company. Any Gross-Up Payment, as determined pursuant to this
Section 9, shall be paid by the Company to Executive within five days of the receipt of the Accounting Firm's determination. Any determination by the Accounting Firm shall be binding upon the
Company and Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible
that Gross-Up Payments which will not 

have
been made by the Company should have been made ("Underpayment"), consistent with the calculations required to be made hereunder. In the event that
the Company exhausts its remedies pursuant to this Section 9 and Executive thereafter is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for Executive's benefit. 

        c.     Executive
shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the
Gross-Up Payment. Such notification shall be given as soon as practicable but no later then 10 business days after Executive is informed in writing of such claim and shall apprise the
Company of the nature of such claim and the date on which such claim is requested to be paid. Executive shall not pay such claim prior to the expiration of the 30-day period following the
date on which he gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies Executive in writing
prior to the expiration of such period that the Company desires to contest such claim, Executive shall: 

        (i)    give
the Company any information reasonably requested by the Company relating to such claim; 

        (ii)   take
such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting
legal representation with respect to such claim by an attorney reasonably selected by the Company; 

        (iii)  cooperate
with the Company in good faith in order to effectively contest such claim; and 

        (iv)  permit
the Company to participate in any proceeding relating to such claim; provided, however, that the Company shall bear and pay directly all costs and expenses
(including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax or income
tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expense. Without limitation on the foregoing provisions of this
Section 9, the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forego any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and sue for a refund or contest the claim in any
permissible manner, and Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the
Company shall determine; provided, however, that if the Company directs Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to Executive, on an
interest-free basis, and shall indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties with respect
thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided that any extension of the statute of limitations relating to
payment of taxes for Executive's taxable year with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of the
contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and Executive shall be entitled to settle or contest, as the case may be, any other
issue raised by the Internal Revenue Service or any other taxing authority. 

        d.     If,
after Executive's receipt of an amount advanced by the Company pursuant to this Section 9, Executive becomes entitled to receive any refund with respect to
such claim, Executive shall (subject to the Company's complying with the requirements of this Section 9) promptly pay to the Company the amount of such refund (together with any interest paid
or credited thereon after taxes applicable thereto). If, after Executive's receipt of an amount advanced by the Company pursuant to this Section 9, a determination is made that Executive shall
not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days
after such determination, then such advance shall be 

forgiven
and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid. 

10.    Remedies.    

        In
addition to other remedies provided by law or equity, upon a breach by Executive of any of the covenants contained herein or in the Non-Compete Agreement, the Company
shall be entitled to have a court of competent jurisdiction enter an injunction against Executive enjoining Executive and prohibiting any further breach of the covenants contained herein. Executive
acknowledges that a breach or threatened breach by Executive of the provisions of this Agreement will cause irreparable damage to the Company because Executive's services to be performed hereunder are
of a unique, special and extraordinary character. Thus, the Company shall be entitled to injunctive relief without the necessity of proving actual damages and the Company shall not be required to post
a bond or other security in support of such injunctive relief. 

11.    Arbitration.    

        Any
claim, dispute or controversy arising out of or in connection with this Agreement, or any breach thereof, shall be arbitrated by the parties before a sole arbitrator (who shall have
substantial experience in the pharmaceutical and life sciences industry) conducted in accordance with the National Rules for the Resolution of Employment Disputes of the American Arbitration
Association then in effect. The arbitrator shall have the authority to order discovery but shall not have the authority to add to, detract from or modify any provision hereof nor to award punitive
damages to any injured party. A decision by the sole arbitrator shall be final and binding. Judgment may be entered on the arbitrator's award in any court having jurisdiction. The direct expense of
any arbitration proceeding shall be borne by the Company. Each party shall bear its own counsel fees. Such arbitration shall take place in Philadelphia, Pennsylvania. The parties hereto consent to the
jurisdiction of the state and federal courts located in the Commonwealth of Pennsylvania with respect to any action arising under this Agreement. Notwithstanding the foregoing, the Company shall be
entitled to seek injunctive or other equitable relief, as contemplated by Section 10 hereof, from any court of competent jurisdiction, without the need to resort to arbitration. 

12.    Assignment; Binding Nature.    

        This
Agreement shall be binding upon and inure to the benefit of the parties and their respective successors, heirs (in the case of Executive) and permitted assigns. No rights or
obligations of the Company under this Agreement may be assigned or transferred by the Company except that such rights or obligations may be assigned or transferred to the successor of the Company or
its business if the assignee or transferee assumes all of the liabilities, obligations and duties of the Company, as contained in this Agreement, either contractually or as a matter of law. If any
such successor of the Company or its business does not agree to so assume such liabilities, obligations and duties, Executive may immediately resign, which shall be deemed a Termination For Good
Reason under the provisions of this Agreement. No rights or obligations of Executive under this Agreement may be assigned or transferred by Executive other than Executive's rights to compensation and
benefits, which may be transferred only by will or operation of law, except as otherwise specifically provided or permitted hereunder. 

13.    Notice.    

        Any
notice (including notice of a change of address) permitted or required to be given pursuant to the provisions of this Agreement shall be in writing and sent by certified mail,
postage pre-paid, return receipt requested, or by hand delivery to the parties at the following addresses: 

If to the Company:

VGX
Pharmaceuticals Inc.

450 Sentry Parkway

Blue Bell, PA 19422

Attention: Corporate Secretary 

With a copy to:

Duane
Morris LLP

30 South 17th Street

Philadelphia, PA 19103-4196

Attention: Kathleen Shay, Esquire 

If to Executive:

J.
Joseph Kim, Ph.D.

4 Camelot Way

Harleysville, PA 19438 

        Notice
properly given by mail shall be deemed effective three business days after mailing, and if hand-delivered, upon receipt. 

14.    Entire Agreement.    

        This
Agreement and the Non-Compete Agreement constitute the complete agreements and understandings between the Company and Executive concerning Executive's employment by the
Company, and supersede any and all previous agreements or understandings concerning such employment, whether written or oral, between Executive and the Company. 

15.    Modification.    

        This
Agreement may not be waived, amended or modified without the express written consent of the party against whom enforcement of such Agreement is sought. 

16.    Waiver.    

        Except
as set forth herein, no delay or omission to exercise any right, power or remedy accruing to any party shall impair any such right, power or remedy or shall be construed to be a
waiver of or an acquiescence to any breach hereof. No waiver by either party of any breach by the other party of any condition or provision contained in this Agreement to be performed by such other
party shall be deemed a waiver of a similar or dissimilar condition or provision at the same or any prior or subsequent time. Any waiver must be in writing and signed by Executive and the Chairman of
the Board. 

17.    Section 409A.    

        It
is intended that this Agreement be drafted and administered in compliance with section 409A of the Code, including, but not limited to, any future amendments to Code
section 409A, and any other Internal Revenue Service or other governmental rulings or interpretations (collectively, "Section 409A")
issued pursuant to Section 409A so as not to subject Executive to payment of interest or any additional tax under Section 409A. The parties intend for any payments under this Agreement
to either satisfy the requirements of Section 409A or to be exempt from the application of Section 409A, and this Agreement shall be construed and interpreted accordingly. In furtherance
thereof, if payment or provision of any amount or benefit hereunder that is subject to Section 409A at the time specified herein would subject such amount or benefit to any additional tax under
Section 409A, the payment or provision of such amount or benefit shall be postponed to the earliest commencement date on which the payment or provision of such amount or benefit could be made
without incurring such additional tax. In addition, to the extent that any Internal Revenue Service guidance issued under Section 409A would result in Executive being subject to the payment of
interest or any additional tax under Section 409A, the parties agree, to the extent reasonably possible, to amend this Agreement in order to avoid the imposition of any such interest or
additional tax under Section 409A, which amendment shall have the minimum economic effect necessary and be reasonably determined in good faith by the Company and Executive. 

18.    Invalidity of Any Provision.    

        If
any portion of this Agreement is held invalid or inoperative, the other portions of this Agreement shall be deemed valid and operative and, so far as is reasonable and permitted by
the law, effect shall be given to the intent manifested by the portion held invalid or inoperative. 

19.    Applicable Law.    

        This
Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania, without regard to the principles of conflict of laws thereof. 

20.    Counterparts.    

        This
Agreement may be executed simultaneously in any number of counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same
agreement. 

21.    Headings.    

        The
Section headings contained in this Agreement are for reference purposes only and will not affect in any way the meaning or interpretation of this Agreement. 

22.    Binding Effect.    

        The
provisions of this Agreement will be binding upon, and will inure to the benefit of, the respective heirs, legal representatives and successors of the parties thereto. 

[SIGNATURE PAGE FOLLOWS]

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

							
	 	 	 VGX PHARMACEUTICALS, INC.
	

 	
 	
By:	
 	

 
	 	 	 	 	Name:	 	 
	 	 	 	 	Title:	 	 
	

 	
 	
 EXECUTIVE
	

 	
 	
/s/ J. Joseph Kim

  Dr. J. Joseph Kim, Ph.D.

 

 EXHIBIT A

 SEPARATION OF EMPLOYMENT AGREEMENT AND GENERAL RELEASE  

        WHEREAS Dr. J. Joseph Kim, Ph.D. ("Executive") has been employed by VGX Pharmaceuticals, Inc. (the "Company"), and
because Executive's employment with the Company will terminate effective                        , Executive and the Company agree
as follows: 

        1.     In
consideration of the promises of the Company set forth in Paragraph 3 below, Executive, and his heirs, executors and administrators, intending to be legally
bound, hereby permanently and irrevocably agrees to the termination of Executive's employment with the Company effective
on                        (or such earlier date as may be communicated in writing by
                        ) (the "Termination Date") and hereby REMISE, RELEASE and FOREVER DISCHARGE the Company and any individual
or organization related to the Company and against whom or which Executive
could assert a claim, including                        (hereinafter, together with the Company, referred to collectively as
"Releasees"), of and from any and all causes of action, suits, debts, claims and
demands whatsoever, which he had, has or may have against Releasees up until the date of his execution of this Separation of Employment Agreement and General Release (this "Release Agreement"), other
than the Release Exclusions (as such term is defined below). Particularly, but without limitation, Executive so releases and waives all claims relating in any way to his employment or the termination
of his employment relationship with the Company, including without limitation claims under Title VII of the Civil Rights Act of 1964, as amended,
§§ 42 U.S.C. 2000e et seq. ("Title VII"), the Americans with Disabilities Act, 42 U.S.C.
§§ 12101 et seq. (the "ADA"), the Employee Retirement Income Security Act 29 U.S.C.
§§ 1001 et seq. ("ERISA"), the Age Discrimination in Employment Act, as
amended 29 U.S.C. §§ 621 et seq. (the "ADEA"), any and all other federal and/or state statutes,
including without limitation the Pennsylvania Human Relations Act ("PHRA"), and all federal, state or common law claims, including all tort and contract claims of whatever nature or form, and all
claims for counsel fees and costs. Executive agrees that Executive will not file any civil complaint or lawsuit against the Company or any of Releasees under Title VII, ERISA, the ADA, the ADEA, the
PHRA or any other federal, state or local law. Executive further agrees and covenants that should any person, organization or other entity file, charge, claim, sue, or cause or permit to be filed any
civil action, suit or legal proceeding involving any matter occurring at any time in the past, Executive will not seek or accept any personal relief in such civil action, suit or legal proceeding.
This release does not relinquish Executive's rights, if any, to the following specific claims that Executive has or may have (the "Release Exclusions"): (i) to seek indemnification pursuant to
applicable state law and the Company's By-laws; (ii) to seek coverage under directors' and officers' liability insurance policies maintained by the Company; (iii) to enforce
the Company's obligations under this Agreement or (iv) to seek relief for any claims that Executive has arising from his interest in the Company as a stockholder, including those claims that
arise from any stockholder agreement to which Executive is or was a party. 

        2.     Executive
shall promptly take all steps necessary to dismiss with prejudice any and all pending complaints, lawsuits and/or grievances against the Releasees, regardless
of whether they are or have been filed internally or externally. Executive waives his right to institute or have pursued on his behalf any complaints, lawsuits, or grievances whatsoever against the
Releasees for any matter occurring up to the present, regardless of the forum, other than the Release Exclusions. Executive also agrees that the payment in Paragraph 3 is in full satisfaction
of any liability or obligation to Executive under the Employment Agreement, dated as of March     , 2008, between the Company and Executive. 

        3.     In
full consideration of Executive's execution of this Release Agreement, and his agreement to be legally bound by its terms, the Company will provide Executive with the
following consideration, to which Executive acknowledges he would not otherwise be entitled: 

(a)-(b)
[Refer to applicable sections of Employment Agreement] 

A-1

 

        Executive
understands and expressly agrees that each benefit enhancement and payment under paragraphs (a) and (b) above is expressly contingent on Executive's continued
employment through                        , or such earlier date as may be communicated in writing by the Company. 

        Executive
acknowledges that, other than the payments described in this Paragraph 3, he has received payment in full of all of the compensation, wages, benefits and/or payments of
any kind otherwise due to him from the Company. Except as set forth in this Release Agreement, it is expressly agreed and understood that Releasees do not have, and will not have, any obligation to
provide Executive at any time in the future with any payments, benefits or considerations other than those recited in this Paragraph, required by law or as may be claimed as a right under the Release
Exclusions. 

        4.     If
Executive brings a legal action for claims against any of the Releasees in contravention of any part of this Release Agreement, including Paragraph 1 of this
Release Agreement, and other than the Release Exclusions, Executive agrees and acknowledges that he will reimburse such Releasees for their reasonable attorneys' fees and costs in defending any such
action, provided, however, that this reimbursement requirement shall be inapplicable in any matter regarding the ADEA. 

        5.     The
parties acknowledge that the performance of the promises of each are expressly contingent upon the fulfillment and satisfaction of the obligations of the other party
as set forth in this Release Agreement. 

        6.     Executive
hereby agrees and recognizes that, as of his Termination Date, Executive's employment relationship with the Company or Releasees will be permanently and
irrevocably severed, Executive promises never to seek employment with the Company or Releasees in the future, and that Executive waives his right to be hired or rehired in the future by the Company
and any of its affiliates. It is further agreed and understood that Executive will continue to be available and cooperate in a reasonable manner in providing assistance to the Company in concluding
any matters which are reasonably related to the duties and responsibilities that Executive had while employed by the Company, provided that such cooperation and assistance does not interfere with any
subsequent employment obtained by Executive. 

        7.     Executive
agrees and acknowledges that this Release Agreement is not and shall not be construed to be an admission of any violation of any federal, state or local statute
or regulation, or of any duty owed by Releasees. 

        8.     Executive
agrees, covenants and promises that Executive will not communicate or disclose the terms of this Release Agreement to any persons with the exception of members
of Executive's immediate family and Executive's attorney and financial advisor. Executive further agrees to refrain from using or disclosing for the benefit of any person, business or entity other
than the Company, any confidential information relating to the Company's business, which includes but is not limited to information relating to the Company's employees, suppliers, customers, services,
plans, research, marketing studies or analyses, and financial or business affairs. Executive represents that any and all documents containing such confidential information will be returned to the
Company by the Termination Date and that, in addition, he will otherwise retain no equipment or property of the Company, including any documents and files, whether electronically stored or maintained
in hard copy. 

        9.     This
Release Agreement, and the provisions of the Employment Agreement and the Non-Disclosure, Assignment of Inventions, Non-Solicitation and
Non-Compete Agreement (attached as Exhibit A to the Employment Agreement) that survive Executive's termination of employment, constitute the complete and entire understanding
between the parties, and supersede any and all prior agreements and understandings between the parties to the extent they are inconsistent with this Release Agreement. 

A-2

 

        10.   Executive
hereby certifies that Executive has read the terms of this Release Agreement, that Executive has been advised by the Company, and is again hereby advised, to
consult with an attorney of his own choice prior to executing this Release Agreement, that Executive has had an opportunity to do so, and that Executive understands this Release Agreement's terms and
effects. Executive further certifies that neither Releasees nor any representative of Releasees have made any representations to Executive concerning this Release Agreement other than those contained
herein. 

        11.   Executive
acknowledges that Executive has been informed that this Release Agreement includes a waiver of claims under the ADEA, and that Executive has the right to
consider this Release Agreement for a period of 21 days. Executive also understands that he has the right to revoke this Release Agreement for a period of seven days following his execution of
this Release Agreement by giving written notice to the Company in care of                        . Executive also understands and
agrees that this Release Agreement will not be binding or enforceable until
after the seven day revocation period has expired. 

        12.   If
any provision of this Release Agreement is deemed invalid, the remaining provisions shall not be affected. 

        13.   The
provisions of this Release Agreement shall be governed by the laws of the Commonwealth of Pennsylvania, without regard to the principles of conflict of laws thereof. 

        14.   Executive
certifies and acknowledges that: (a) he has carefully read this Release Agreement; (b) it is written in a manner understandable to him and he
fully understood it; (c) he is entering into it knowingly and voluntarily; and (d) he intends to be legally bound by the promises contained in this Release Agreement for the aforesaid
consideration. 

A-3

 

        IN
WITNESS WHEREOF, and intending to be legally bound hereby, the parties have executed the foregoing Separation of Employment Agreement and General Release on the dates indicated below. 

							
	WITNESS:	 	

 	 	 

  Dr. J. Joseph Kim, Ph.D.
	

 	
 	
 	
 	
DATE:	
 	

 
	
 WITNESS:	
 	

 	
 	
VGX PHARMACEUTICALS, INC.
	

 	
 	
 	
 	
BY:	
 	

 
	 	 	 	 	NAME:	 	

 
	 	 	 	 	TITLE:	 	

 
	 	 	 	 	DATE:	 	

 

A-4

QuickLinks

EXHIBIT 10.43

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