Document:

EXHIBIT
10.50

 

Portions Subject
to Confidential Treatment Request Under Rule 406

 

UNIVERSITY  of PENNSYLVANIA

 

Patent License Agreement

 

This
Patent License Agreement (this “Agreement”) is
between The Trustees of the University of Pennsylvania, a Pennsylvania
nonprofit corporation (“Penn”), and VGX
Pharmaceuticals, Inc (“VGX”), a corporation organized and existing under
the laws of the State of Delaware.  This
Agreement will become effective on the date on which Penn and VGX have fully
executed the Agreement, (the “Effective Date”).

 

BACKGROUND

 

Penn
owns certain intellectual property developed by Dr. David B. Weiner (“Dr. Weiner”)
of Penn’s School of Medicine relating to therapeutic and prophylactic
applications of viral constructs.  Penn
also owns certain letters patent and/or applications for letters patent
relating to the intellectual property. 
VGX desires to obtain an exclusive license under the patent rights to
exploit the intellectual property.  VGX
also desires to fund further research by Dr. Weiner under a separate
agreement.  Penn has determined that the
exploitation of the intellectual property by VGX is in the best interest of
Penn and is consistent with its educational and research missions and goals.

 

In
consideration of the mutual obligations contained in this Agreement, and
intending to be legally bound, the parties agree as follows:

 

1                                         LICENSE

 

1.1                                 License Grant.  Penn grants to VGX an exclusive, world-wide
license (the “License”) to make, have made,
use, import, offer for sale and sell Licensed Products in the Field of Use
during the Term (as such terms may be defined in Sections 1.2 and 6.1).  The License includes the right to sublicense
as permitted by this Agreement.  No other
rights or licenses are granted by Penn. Any intellectual property created or
conceived during the performance of the Sponsored Research Agreement between
Penn and VGX being entered into simultaneously with this Agreement (the “Sponsored Research Agreement”) will be
governed by the terms of the Sponsored Research Agreement.

 

1.2                                 Related
Definitions. The term “Licensed Products”
means products that are made, made for, used, imported, offered for sale or
sold by VGX or its Affiliates or sublicensees and that either (i) in the
absence of this Agreement, would infringe at least one claim of the Patent
Rights or (ii) use a process or machine covered by a claim of Patent
Rights, in either case whether or not the claim is issued or pending.  The term “Patent Rights”
means all of Penn’s patent rights represented by or issuing from: (a) the
United States patents and patent applications listed in Exhibit A; (b) any
continuation, divisional and re-issue applications of (a); and (c) any
foreign counterparts and extensions of (a) or (b).  The term “Affiliate”
means a legal entity that is controlling, controlled by, or under common
control with VGX and that has executed either this Agreement or a written
Joinder Agreement agreeing to be bound by all of the terms and 

 

 

conditions
of this Agreement.  For purposes of this Section 1.2,
the word “control” means (x) the direct or
indirect ownership of more than fifty percent (50%) of the outstanding voting
securities of a legal entity, (y) the right to receive fifty percent (50%)
or more of the profits or earnings of a legal entity, or (z) the right to
determine the policy decisions of a legal entity.  The term “Field of Use”
means therapeutic and prophylactic use in all applications.

 

1.3                                 Reservation of
Rights by Penn.  Penn
reserves the right to use, and to permit other non-commercial entities to use,
the Patent Rights for educational and research purposes.

 

1.4                                 U.S. Government
Rights.  The parties acknowledge that
the United States government retains rights in intellectual property funded
under any grant or similar contract with a Federal agency.  The License is expressly subject to all
applicable United States government rights, including, but not limited to, any
applicable requirement that products, which result from such intellectual
property and are sold in the United States, must be substantially manufactured
in the United States.

 

1.5                                 Sublicense
Conditions.  The VGX’s
right to sublicense granted by Penn under the License is subject to each of the
following conditions:

 

(a)          In each sublicense agreement, VGX will prohibit the
sublicensee from further sublicensing to more than one additional sublicense in
any jurisdiction and require the sublicensee to comply with the terms and
conditions of this Agreement.

 

(b)                                 Within thirty
(30) days after VGX enters into a sublicense agreement, VGX will deliver to
Penn a complete and accurate copy of the entire sublicense agreement written in
the English language.  Penn’s receipt of
the sublicense agreement, however, will constitute neither an approval of the
sublicense nor a waiver of any right of Penn or obligation of VGX under this
Agreement.

 

(c)                                  In the event
that VGX causes or experiences a Trigger Event (as defined in Section 7.4),
all payments due to VGX from its Affiliates or sublicensees under the
sublicense agreement will, upon notice from Penn to such Affiliate or
sublicensee, become payable directly to Penn for the account of VGX.  Upon receipt of any such funds, Penn will
remit to VGX the amount by which such payments exceed the amounts owed by VGX
to Penn.

 

(d)                                 VGX’s execution
of a sublicense agreement will not relieve VGX of any of its obligations under
this Agreement.  VGX is primarily liable
to Penn for any act or omission of an Affiliate or sublicensee of VGX that
would be a breach of this Agreement if performed or omitted by VGX, and VGX will
be deemed to be in breach of this Agreement as a result of such act or
omission.

 

2

 

2                                         DILIGENCE

 

2.1                                 Development
Plan.  Attached as Exhibit B is
an outline of a Development plan. VGX will deliver to Penn, within ninety (90)
days after the Effective Date, a copy of a detailed development plan for the
Patent Rights (the “Development Plan”).  The purpose of the Development Plan is (a) to
demonstrate VGX’s capability to bring the Patent Rights to commercialization, (b) to
project the timeline for completing the necessary tasks, and (c) to
measure VGX’s progress against the projections. Thereafter, VGX will deliver to
Penn an annual updated Development Plan no later than December 1 of each
year during the Term.  The Development
Plan will include, at a minimum, the information listed in Exhibit B.

 

2.2                                 VGX’s Efforts.  VGX will use commercially reasonable efforts
to develop, commercialize, market and sell Licensed Products in a manner
consistent with the Development Plan.

 

2.3                                 Diligence
Efforts.  Until the
first commercial sale of the first Licensed Product, VGX will commit financial
resources to the development and commercialization of Licensed Products in
amounts not less that specified below (“Development Expenditures”)
in each 12 month period following the Effective Date.  Development Expenditures shall include all
monies spent directly for development of Licensed Product by VGX, its
subsidiaries, sub-licensees, business partners and independent contractors in
any given year and shall be applied as a credit against due diligence fees due
at the end of the year.  In the event
that VGX’s total Development Expenditures for Licensed Products in any such 12
month period do not meet or exceed the required minimum, then VGX will pay to
Penn the amount of the shortfall.

 

	
  Year 1

  	
   

  	
  $

  	
  200,000

  	
   

  
	
  Year 2

  	
   

  	
  $

  	
  250,000

  	
   

  
	
  Year 3

  	
   

  	
  $

  	
  300,000

  	
   

  
	
  All years thereafter

  	
   

  	
  $

  	
  400,000

  	
   

  

 

3                                         FEES AND
ROYALTIES

 

3.1                                 License
Initiation Fee.  In lieu of
Initiation and License Maintenance fees, VGX will pay to Penn $100,000 upon
execution of this Agreement.

 

3.2                                 Milestone
Payments.  In partial
consideration of the License, VGX will pay to Penn the applicable milestone
payment listed in the table below after achievement of each milestone event for
the first Licensed Product.  VGX will
provide Penn with written notice within thirty (30) days after achieving each
milestone.

 

	
  MILESTONE

  	
   

  	
  PAYMENT

  	
   

  
	
  Filing of an IND Application

  	
   

  	
  $

  	
  125,000

  	
   

  
	
  Enrollment of First Subject in Phase II Clinical Trial

  	
   

  	
  $

  	
  250,000

  	
   

  
	
  Enrollment of First Subject in Phase III Clinical Trial

  	
   

  	
  $

  	
  375,000

  	
   

  
	
  Filing of NDA

  	
   

  	
  $

  	
  250,000

  	
   

  
	
  Receipt of Approval in US, EU or Japan (whichever is first to occur)

  	
   

  	
  $

  	
  1,500,000

  	
   

  

 

3

 

3.3                                 Earned Royalties.  In partial consideration of the License,
within 45 days after the end of each calendar quarter, VGX will pay to Penn a
royalty of ****** of worldwide Net Sales during the quarter and deliver to Penn
a report detailing net sales for the quarter. Such royalty payments shall
terminate on a product –by-product and country-by-country basis upon the later
of (a) the date which is ten (10) years after the date of the first
Sale of such Licensed Product in such country, or (b) in any country in
which patent rights exist for any Licensed Product, the date of expiration of
the last-to-expire patent in such country, within the definition of Patent
Rights, with a valid claim covering the Licensed Product.

 

3.4                                 Related
Definitions.  The term “Sale” means any bona fide transaction for
which consideration is received or expected by VGX or its Affiliate or
sublicensee for the sale, use, lease, transfer or other disposition of a
Licensed Product to a third party.  A
Sale is deemed completed at the time that VGX or its Affiliate or sublicensee
invoices, ships or receives payment for a Licensed Product, whichever occurs
first.  The term “Quarter” means each three-month period
beginning on January 1, April 1, July 1 and October 1.  The term “Net
Sales” means the consideration received or expected from, or the
fair market value attributable to, each Sale, less Qualifying Costs that are
directly attributable to a Sale, specifically identified on an invoice or other
documentation and actually borne by VGX or its Affiliates or sublicensees.  For purposes of determining Net Sales, the
words “fair market value” mean the cash
consideration that VGX or its Affiliates or sublicensees would realize from an
unrelated buyer in an arms length sale of an identical item sold in the same quantity
and at the time and place of the transaction. 
The term “Qualifying Costs”
means:  (a) customary discounts in
the trade for quantity purchased, for prompt payment or for wholesalers and
distributors; (b) credits or refunds for claims or returns that do not
exceed the original invoice amount; (c) prepaid outbound transportation
expenses and transportation insurance premiums; and (d) sales and use
taxes and other fees imposed by a governmental agency.

 

3.5                                 Minimum
Royalties.  In partial
consideration of the License, VGX will pay to Penn the amount, if any, that the
applicable minimum royalty listed in the table below, exceeds VGX’s actual
earned royalties under Section 3.3 for each Quarter after the first Sale
of a Licensed Product.

 

	
  

  QUARTER:

  	
   

  	
  First 8 

  Quarters

  	
   

  	
  Next 8 

  Quarters

  	
   

  	
  Next 8 

  Quarters

  	
   

  	
  All
  Quarters 

  thereafter

  	
   

  
	
  MINIMUM:

  	
   

  	
  ******

  	
   

  	
  ******

  	
   

  	
  ******

  	
   

  	
  ******

  	
   

  

 

3.6                                 Sublicense Fees.  In partial consideration of the License, VGX
will pay to Penn a sublicense fee of ****** plus the fair market value of all
other consideration of any kind, received by VGX from sublicensees during the
Quarter. Monies paid to VGX that are specifically targeted to fund research and
development or clinical studies, or paid in the form of loans to, or as an
equity investment in, VGX, or royalties based upon Sales or Net Sales by the
sublicensee are not subject to any payment to Penn, except to the extent and
only to the extent such monies are paid to VGX as a substitute, wholly or in
part, for a royalty on Sales of Licensed Products or for license initiation,
maintenance or other related fees and payments covered by this Agreement.

 

4

 

4                                         TRANSACTION FEE

 

4.1        VGX shall pay all reasonable documented
out-of-pocket expenses of Penn incurred in connection with the negotiation of
this Agreement, including legal fees and expenses provided however, that the
total amount of such out-of-pocket expenses shall not exceed $5,000. VGX shall
pay such expenses directly, within thirty (30) days of presentment of invoices
by Penn

 

5                                         REPORTS AND
PAYMENTS

 

5.1                                 Royalty Reports.  Within forty-five (45) days after the end of
each Quarter following the first Sale, VGX will deliver to Penn a report,
certified by the chief financial officer of VGX, detailing the calculation of
all royalties, fees and other payments due to Penn for such Quarter.  The report will include, at a minimum, the
following information for the Quarter, each listed by product, by country:  (a) the number of units of Licensed Products
constituting Sales; (b) the gross consideration invoiced, billed or
received for Sales; (c) Qualifying Costs, listed by category of cost; (d) Net
Sales; (e) the gross amount of any payments and other consideration
received by VGX from sublicensees and the amounts of any deductions permitted
by Section 3.6; (f) the royalties, fees and other payments owed to
Penn, listed by category; and (g) the computations for any applicable
currency conversions.  Each royalty
report will be substantially in the form of the sample report attached as Exhibit C.

 

5.2                                 Payments.  VGX will pay all royalties, fees and other
payments due to Penn under Sections 2.3, 3.2, 3.3, 3.5, and 3.6 within
forty-five (45) days after the end of the Quarter in which the royalties, fees
or other payments accrued.

 

5.3                                 Records.  VGX will maintain, and will cause its
Affiliates and sublicensees to maintain, complete and accurate books, records
and related background information to verify Sales, Net Sales, and all of the
royalties, fees, and other payments due or paid under this Agreement, as well
as the various computations reported under Section 5.1.  The records for each Quarter will be
maintained for at least five (5) years after submission of the applicable
report required under Section 5.1.

 

5.4                                 Audit Rights.  Upon reasonable prior written notice to VGX,
VGX and its Affiliates and sublicensees will provide Penn and its accountants,
which accounts are reasonably acceptable to VGX, with access to all of the
books, records and related background information required by Section 5.3
to conduct a review or audit of Sales, Net Sales, and all of the royalties,
fees, and other payments payable under this Agreement.  Access will be made available: (a) during
normal business hours; (b) in a manner reasonably designed to facilitate
Penn’s review or audit without unreasonable disruption to VGX’s business; and (c) no
more than once each calendar year during the Term (as defined below) and for a
period of five (5) years thereafter. 
VGX will promptly pay to Penn the amount of any underpayment determined
by the review or audit, performed by accountants reasonably acceptable to, plus
accrued interest.  If the review or audit
determines that VGX has underpaid any payment by five percent (5%) or more,
then VGX will also promptly pay the costs and expenses of Penn and its
accountants in connection with the review or audit.  In addition, once annual Sales of Licensed
Products exceed ****** VGX will conduct, at least once every two (2) years
at its own expense, an independent audit of Sales, Net Sales, and all of the
royalties, fees, and other payments due or paid under this Agreement.  Promptly after completion of the audit, VGX
will provide to Penn a copy of the report of the independent auditors.

 

5

 

5.5                                 Information
Rights.  Until the closing of the VGX’s
initial public offering, VGX will provide to Penn, at least as frequently as
the following reports are distributed to the Board of Directors or management
of VGX, copies of:  (a) all Board
and managerial reports that relate to the Patent Rights or the Licensed
Products. After the closing of the VGX’s initial public offering, VGX will
provide to Penn, promptly after filing, a copy of each annual report, proxy
statement, 10-K, 10-Q and other material report filed with the U.S. Securities
and Exchange Commission.

 

5.6                                 Currency.  All dollar amounts referred to in this
Agreement are expressed in United States dollars.  All payments will be made in United States
dollars.  If VGX receives payment from a
third party in a currency other than United States dollars for which a royalty
or fee is owed under this Agreement, then (a) the payment will 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 Quarter in which the payment was received by VGX,
and (b) the conversion computation will be documented by VGX in the
applicable report delivered to Penn under Section 5.1.

 

5.7                                 Place of
Payment.  All payments by VGX are
payable to “The Trustees of the University of Pennsylvania” and will be made to
the following addresses:

 

	
  By Electronic Transfer:

  	
   

  	
  By Check:

  
	
   

  	
   

  	
   

  
	
  Wachovia
  Bank, N.A.

  	
   

  	
  The
  Trustees of the University of Pennsylvania

  
	
  ABA
  #031-201-467

  	
   

  	
  c/o
  Center for Technology Transfer

  
	
  Account
  No.: 2000030009804

  	
   

  	
  P.O. Box
  785546

  
	
  c/o:
  CTT/T. Dunn

  	
   

  	
  Philadelphia,
  PA 19178-5546

  

 

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

 

6                                         CONFIDENTIALITY
AND USE OF PENN’S NAME

 

6.1                                 Confidentiality
Agreement.  If VGX and
Penn entered into one or more Confidential Disclosure Agreements prior to the
Effective Date, then such agreements will continue to govern the protection of
confidential information under this Agreement, and each Affiliate and
sublicensee of VGX will be bound to VGX’s obligations under such agreements.  If, however, no Confidential Disclosure
Agreement has been entered into between VGX and Penn prior to the Effective
Date, then in connection with the execution of this Agreement, the parties will
enter into a Confidential Disclosure Agreement substantially similar to Penn’s
standard form.  The term “Confidentiality Agreement” means all Confidential Disclosure
Agreements between the parties that remain in effect after the Effective Date.

 

6.2                                 Other
Confidential Matters.  Penn is not
obligated to accept any confidential information from VGX, except for the
reports required by Sections 2.1, 5.1, 5.4, and 7.6.  Penn, acting through its Center for
Technology Transfer and finance offices, will use reasonable efforts not to
disclose to any third party outside of Penn any confidential information of VGX
contained in those reports, for so long as such information remains
confidential.  Penn bears no
institutional responsibility for maintaining the confidentiality of any other
information of VGX.  VGX may 

 

6

 

elect
to enter into confidentiality agreements with individual investigators at Penn
that comply with Penn’s internal policies.

 

6.3                                 Use of Penn’s
Name.  VGX and its Affiliates,
sublicensees, employees, and agents may not use the name, logo, seal,
trademark, or service mark (including any adaptation of them) of Penn or any
Penn school, organization, employee, student or representative, without the
prior written consent of Penn.

 

7                                         TERM AND
TERMINATION

 

7.1                                 Term.  This Agreement will commence on Effective
Date and terminate upon the later of:  (a) the
expiration or abandonment of the last patent to expire or become abandoned of
the Patent Rights; or (b) ten (10) years after the first Sale of the
first Licensed Product if no patent has issued from the Patent Rights (as the
case may be, the “Term”).

 

7.2                                 Early
Termination by VGX.  VGX may
terminate this Agreement at any time effective upon completion of each of the
following conditions:  (a) providing
at least sixty (60) days prior written notice to Penn of such intention to
terminate; (b) ceasing to make, have made, use, import, offer for sale and
sell all Licensed Products; (c) terminating all sublicenses and causing
all Affiliates and sublicensees to cease making, having made, using, importing,
offering for sale and selling all Licensed Products; and (d) paying all
amounts owed to Penn under this Agreement and any Sponsored Research Agreement
between Penn and VGX related to the Patent Rights, through the effective date
of termination.

 

7.3                                 Early
Termination by Penn.  Penn may
terminate this Agreement if:  (a) VGX
is more than sixty (60) days late in paying to Penn any amounts owed under this
Agreement and does not immediately pay Penn in full, including accrued interest,
upon demand (a “Payment Default”); (b) other than a Payment Default, VGX
or its Affiliate or sublicensee breaches this Agreement and does not cure the
breach within sixty (60) days after written notice of the breach; or (c) VGX
or its Affiliate or sublicensee experiences a Trigger Event.

 

7.4                                 Trigger Event.  The term “Trigger Event”
means any of the following:    (a) a
material default by VGX under any Sponsored Research Agreement between VGX and
Penn related to the Patent Rights (whether entered prior to, contemporaneous
with, or subsequent to the Effective Date) that is not cured during any
specified cure periods; (b) if VGX or its Affiliate or sublicensee (i) becomes
insolvent, bankrupt or generally fails to pay its debts as such debts become due,
(ii) is adjudicated insolvent or bankrupt, (iii) admits in writing
its inability to pay its debts, (iv) suffers the appointment of a
custodian, receiver or trustee for it or its property and, if appointed without
its consent, not discharged within thirty (30) days, (v) makes an
assignment for the benefit of creditors, or (vi) suffers proceedings being
instituted against it under any law related to bankruptcy, insolvency,
liquidation or the reorganization, readjustment or release of debtors and, if
contested by it, not dismissed or stayed within thirty (30) days; (c) the
institution or commencement by VGX or its Affiliate or sublicensee of any
proceeding under any law related to bankruptcy, insolvency, liquidation or the
reorganization, readjustment or release of debtors; (d) the entering of
any order for relief relating to any of the proceedings described in Section 7.4(b) or
(c) above; (e) the calling by VGX or its Affiliate or sublicensee of
a meeting of its creditors with a view to arranging a composition or adjustment
of its debts; (f) the act or failure to act by VGX or its Affiliate or
sublicensee indicating its consent to, approval of or acquiescence in any of
the proceedings described in Section7.4 (b)– (e) above; (g) failure
by 

 

7

 

VGX
to pay patent counsel pursuant to the terms of a Client and Billing Agreement,
if any; or (h) the commencement by VGX of any action against Penn,
including an action for declaratory judgment, to declare or render invalid or
unenforceable the Patent Rights, or any claim thereof.

 

7.5                                 Effect of
Termination.  Upon the
termination of this Agreement for any reason: 
(a) the License terminates; (b) VGX and all its Affiliates and
sublicensees will cease all making, having made, using, importing, offering for
sale and selling all Licensed Products, except to extent permitted by Section 7.6;
(c) VGX will pay to Penn all amounts, including accrued interest, owed to
Penn under this Agreement and any Sponsored Research Agreement related to the
Patent Rights, through the date of termination, including royalties on Licensed
Products invoiced or shipped through the date of termination and any sell off
period permitted by Section 7.6, whether or not payment is received prior
to termination: or expiration of the sell off period permitted by Section 7.6;
(d) VGX will, at Penn’s request, return to Penn all confidential
information of Penn and provide to Penn one complete copy of all data with
respect to Licensed Products generated by VGX during the Term that will
facilitate the further development of the technology licensed under this
Agreement; and (e) in the case of termination under Section 7.3, all
duties of Penn and all rights (but not duties) of VGX under this Agreement
immediately terminate without further action required by either Penn or VGX.

 

7.6                                 Inventory &
Sell Off.  Upon the
termination of this Agreement for any reason, VGX will cause physical
inventories to be taken immediately of:  (a) all
completed Licensed Products on hand under the control of VGX or its Affiliates
or sublicensees; and (b) such Licensed Products as are in the process of
manufacture and any component parts on the date of termination of this
Agreement.  VGX will deliver promptly to
Penn a copy of the written inventory, certified by an officer of the VGX.  Upon termination of this Agreement for any
reason, VGX will promptly remove, efface or destroy all references to Penn from
any advertising, labels, web sites or other materials used in the promotion of
the business of VGX or its Affiliates or sublicensees, and VGX and its
Affiliates and sublicensees will not represent in any manner that it has rights
in or to the Patent Rights or the Licensed Products.  Upon the termination of this Agreement for
any reason other than pursuant to Section 7.3 (a) or (c), VGX may
sell off its inventory of Licensed Products existing on the date of termination
for a period of six (6) months and pay Penn royalties on Sales of such
inventory within thirty (30) days following the expiration of such six (6) month
period.

 

7.7                                 Survival.  VGX’s obligation to pay all amounts,
including accrued interest, owed to Penn under this Agreement will survive the
termination of this Agreement for any reason. 
Sections 14.10 and 14.11  and
Articles 5, 6, 7, 10, 11,and 12 will survive the termination of this Agreement
for any reason in accordance with their respective terms.

 

8                                         PATENT
PROSECUTION AND MAINTENANCE

 

8.1                                 Patent Control.  Penn controls the preparation, prosecution
and maintenance of the Patent Rights and the selection of patent counsel, with
input from VGX.  If, however, VGX desires
a greater degree of control over the Patent Rights, then VGX and Penn will use
good faith efforts to enter into a Client and Billing Agreement with patent
counsel in substantially in the form attached as Exhibit D.  During the term of the Client and Billing
Agreement, VGX will manage the preparation, prosecution and maintenance of the
Patent Rights, with input from Penn. In the absence of or upon termination of a
Client and Billing Agreement for any reason, control reverts to Penn under the
first sentence of this Section 8.1. 
For purposes of this Article 8, the 

 

8

 

word
“maintenance” includes any interference
negotiations, claims, or proceedings, in any forum, brought by Penn, VGX, a
third party, or the United States Patent and Trademark Office, and any requests
by Penn or VGX that the United States Patent and Trademark Office reexamine or
reissue any patent in the Patent Rights.

 

8.2                                 Payment and
Reimbursement.  Within
thirty (30) days after the Effective Date, VGX will reimburse Penn for all
historically accrued attorneys fees, expenses, official fees and all other
charges accumulated prior to the Effective Date incident to the preparation,
filing, prosecution and maintenance of the Patent Rights.  Thereafter, VGX will either pay directly
under a Client and Billing Agreement or reimburse Penn for all documented
attorneys fees, expenses, official fees and all other charges accumulated on or
after the Effective Date incident to the preparation, filing, prosecution, and
maintenance of the Patent Rights, within thirty (30) days after VGX’s receipt
of invoices for such fees, expenses and charges.  Penn reserves the right to require the VGX to provide
a deposit in advance of incurring out of pocket patent expenses estimated by
counsel to exceed $2,500.  If VGX fails to reimburse patent expenses under
Paragraph 8.2, or provide a requested deposit with respect to a Patent Right,
then Penn will be free at its discretion and expense to either abandon such
applications or patents related to such Patent Right or to continue such
preparation, prosecution and/or maintenance activities, and any patent rights
associated with such patent action will be automatically excluded from the term
“Patent Rights” hereunder, on a patent by patent or country by country basis,
as applicable.

 

9                                         INFRINGEMENT

 

9.1                                 Notice.  VGX and Penn will notify each other promptly
of any infringement of the Patent Rights that may come to their attention.  VGX and Penn will consult each other in a
timely manner concerning any appropriate response to the infringement.

 

9.2                                 Prosecution of
Infringement.  VGX may
prosecute any infringement of the Patent Rights at VGX’s expense, including
defending against any counterclaims or cross claims brought by any party
against VGX or Penn regarding the Patent Rights and defending against any claim
that the Patent or Patent Rights are invalid in the course of any infringement
action or in a declaratory judgment action. 
Penn reserves the right to intervene voluntarily and join VGX in any
such infringement litigation.  If Penn
chooses not to intervene voluntarily, but Penn is a necessary party to the
action brought by VGX, then VGX may join Penn in the infringement
litigation.  If VGX decides not to
prosecute any infringement of the Patent Rights, then Penn may elect to
prosecute such infringement independently of VGX in Penn’s sole discretion.

 

9.3                                 Cooperation.  In any
litigation under this Article 9, either party, at the request and sole
expense of the other party, will cooperate to the fullest extent reasonably
possible.  This Section 9.3 will not
be construed to require either party to undertake any activities, including
legal discovery, at the request of any third party, except as may be required
by lawful process of a court of competent jurisdiction.  If, however, either party is required to
undertake any activity, including legal discovery, as a right of lawful process
of a court of competent jurisdiction, then VGX will pay all expenses incurred
by VGX and by Penn.

 

9.4                                 Control of
Litigation.  VGX
controls any litigation or potential litigation involving the prosecution of
infringement claims regarding the Patent Rights in which Penn is not a party,
including the selection of counsel, all with input from Penn.  VGX must not settle or compromise any such
litigation in a manner that imposes any obligations or restrictions on Penn 

 

9

 

or
grants any rights to the Patent Rights, other than any permitted sublicenses,
without Penn’s prior written permission. 
Penn controls any litigation or potential litigation involving the
prosecution of infringement claims regarding the Patent Rights in which Penn
has elected to prosecute the infringement independently of VGX or has
voluntarily or involuntarily joined VGX in the infringement litigation,
including the selection of counsel, all with input from VGX.  In all instances in which Penn is a party,
Penn reserves the right to select its own counsel.  If Penn is involuntarily joined as a party,
Penn retains the right to select its own counsel, but VGX will be responsible
for all litigation expenditures as set forth in Section 9.5.

 

9.5                                 Recoveries from
Litigation.  If VGX
prosecutes any infringement claims either without Penn as a party or with Penn
involuntarily joined as a party, then VGX will reimburse Penn for Penn’s
litigation expenditures, including any attorneys’ fees, expenses, official fees
and other charges incurred by Penn, even if there are no financial recoveries
from the infringement action.  VGX will
reimburse Penn within thirty (30) days after receiving each invoice from Penn.  After reimbursing Penn for its expenditures,
VGX will use the financial recoveries from such claims, if any, (a) first,
to reimburse VGX for its litigation expenditures; and (b) second, to
retain any remainder but to treat the remainder as either (i) Net Sales
for the purpose of determining the royalties due to Penn under Section 3.6
or (ii) sublicense consideration for the purpose of determining the
sublicense fees due to Penn under Section 3.10, whichever would result in
a larger payment to Penn.  If VGX
prosecutes any infringement claims with Penn joined as a voluntary party, then
any financial recoveries from such claims will be (x) first, shared
between VGX and Penn in proportion with their respective shares of the
aggregate litigation expenditures by VGX and Penn; and (y) second, shared
equally by VGX and Penn as to any remainder after VGX and Penn have fully
recovered their aggregate litigation expenditures.  If Penn prosecutes any infringement claims
independent of VGX, then Penn will prosecute such infringement at Penn’s
expense and will retain any financial recoveries in their entirety.

 

10                                  DISCLAIMER OF
WARRANTIES

 

10.1                           Disclaimer.  PENN REPRESENTS AND WARRANTS TO VGX THAT IT
HAS THE FULL AUTHORITY TO EXECUTE AND DELIVER THIS LICENSE AGREEMENT; THAT TO
THE KNOWLEDGE OF THE CURRENT STAFF OF THE UNIVERSITY OF PENNSYLVANIA CENTER FOR
TECHNOLOGY TRANSFER (CTT) AND OFFICE OF THE GENERAL COUNSEL (COLLECTIVELY “CTT/GC”),
CTT/GC HAVE RECEIVED NO MATERIAL CLAIM IN WRITING FROM ANY THIRD PARTY
CONTESTING THE VALIDITY, ENFORCEABILITY, LICENSABILITY, USE OR OWNERHIP OF ANY
SUCH PENN PATENT RIGHTS AND CTT/GC HAVE RECEIVED NO NOTICE IN WRITING OF ANY
LOSS OR EXPIRATION OF ANY PART OF PENN PATENT RIGHTS. EXCEPT AS SET FORTH
IN THE PREVIOUS SENTENCE, THE PENN PATENT RIGHTS, LICENSED PRODUCTS AND ANY
OTHER TECHNOLOGY LICENSED UNDER THIS AGREEMENT ARE PROVIDED ON AN “AS IS”
BASIS.  PENN MAKES NO REPRESENTATIONS OR
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO ANY WARRANTY OF
ACCURACY, COMPLETENESS, PERFORMANCE, MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, COMMERCIAL UTILITY, NON-INFRINGEMENT OR TITLE.

 

10

 

11.                               LIMITATION
OF LIABILITY

 

11.1                           Limitation of
Liability.  PENN WILL
NOT BE LIABLE TO VGX, ITS AFFILIATES, SUBLICENSEES, SUCCESSORS OR ASSIGNS, OR
ANY THIRD PARTY WITH RESPECT TO ANY CLAIM: 
ARISING FROM VGX’S USE OF THE PENN PATENT RIGHTS, LICENSED PRODUCTS OR
ANY OTHER TECHNOLOGY LICENSED UNDER THIS AGREEMENT; OR ARISING FROM THE
DEVELOPMENT, TESTING, MANUFACTURE, USE OR SALE OF LICENSED PRODUCTS.  PENN WILL NOT BE LIABLE TO VGX, ITS
AFFILIATES, SUBLICENSEES, SUCCESSORS OR ASSIGNS, OR ANY THIRD PARTY FOR LOST
PROFITS, BUSINESS INTERRUPTION, OR INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES
OF ANY KIND.

 

12.                               INDEMNIFICATION

 

12.1                           Indemnfication.  VGX will defend, indemnify, and hold harmless
each Indemnified Party from and against any and all Liabilities with respect to
an Indemnification Event.  The term “Indemnified Party” means each of Penn and its trustees,
officers, faculty, students, employees, contractors, and agents.  The term “Liabilities”
means all damages, awards, deficiencies, settlement amounts, defaults,
assessments, fines, dues, penalties, costs, fees, liabilities, obligations,
taxes, liens, losses, lost profits and expenses (including, but not limited to,
court costs, interest and reasonable fees of attorneys, accountants and other
experts) that are incurred by an Indemnified Party or awarded or otherwise
required to be paid to third parties by an Indemnified Party.  The term “Indemnification Event”
means any Claim against one or more Indemnified Parties arising out of or
resulting from: (a) the development, testing, use, manufacture, promotion,
sale or other disposition of any Penn Patent Rights or Licensed Products by
VGX, its Affiliates, sublicensees, assignees or vendors or third parties,
including, but not limited to, (x) any product liability or other Claim of
any kind related to use by a third party of a Licensed Product, (y) any
Claim by a third party that the practice of any of the Patent Rights or the design,
composition, manufacture, use, sale or other disposition of any Licensed
Product infringes or violates any patent, copyright, trade secret, trademark or
other intellectual property right of such third party, and (z) any Claim
by a third party relating to clinical trials or studies for Licensed Products; (b) any
material breach of this Agreement by VGX or its Affiliates or sublicensees; and
(c) the enforcement of this Article 12 by any Indemnified Party.  The term “Claim” means
any charges, complaints, actions, suits, proceedings, hearings, investigations,
claims or demands.

 

12.2                           Reimbursement
of Costs.  VGX will
pay directly all Liabilities incurred for defense or negotiation of any Claim
or will reimburse Penn for all documented Liabilities incident to the defense
or negotiation of any Claim within thirty (30) days after VGX’s receipt of
invoices for such fees, expenses and charges.

 

12.3                           Control of
Litigation.  VGX
controls any litigation or potential litigation involving the defense of any
Claim, including the selection of counsel, with input from Penn.  Penn reserves the right to protect its
interest in defending against any Claim by selecting its own counsel, with any
attorneys’ fees and litigation expenses paid for by VGX, pursuant to Sections 12.1
and 12.2.

 

12.4                           Other
Provisions.  VGX will
not settle or compromise any Claim giving rise to Liabilities in any manner
that imposes any restrictions or obligations on Penn or grants any rights to
the Penn Patent Rights or the Licensed Products without Penn’s prior written
consent.  If VGX fails or declines to
assume the defense of any Claim within thirty (30) days after notice of the 

 

11

 

Claim,
or fails to reimburse an Indemnified Party for any Liabilities pursuant to
Sections 12.1 and 12.2 within the thirty (30) day time period set forth in Section 12.2,
then Penn may assume the defense of such Claim for the account and at the risk
of VGX, and any Liabilities related to such Claim will be conclusively deemed a
liability of VGX.  The indemnification
rights of the Indemnified Parties under this Article 12 are in addition to
all other rights that an Indemnified Party may have at law, in equity or
otherwise.

 

13.                               INSURANCE

 

13.1                           Coverages.  VGX will procure and maintain insurance
policies for the following coverages with respect to personal injury, bodily
injury and property damage arising out of VGX’s performance under this
Agreement:  (a) during the Term,
comprehensive general liability, including broad form and contractual
liability, in a minimum amount of $2,000,000 combined single limit per
occurrence and in the aggregate; (b) prior to the commencement of clinical
trials involving Licensed Products, clinical trials coverage in a minimum
amount of $3,000,000 combined single limit per occurrence and in the aggregate;
and (c) prior to the Sale of the first Licensed Product, product liability
coverage, in a minimum amount of $2,000,000 combined single limit per
occurrence and in the aggregate.  Penn
may review periodically the adequacy of the minimum amounts of insurance for
each coverage required by this Section 13.1, and Penn reserves the right
to require VGX to adjust the limits accordingly.  The required minimum amounts of insurance do
not constitute a limitation on VGX’s liability or indemnification obligations
to Penn under this Agreement.

 

13.2                           Other
Requirements.  The
policies of insurance required by Section 13.1 will be issued by an
insurance carrier with an A.M. Best rating of “A” or better and will name
Penn as an additional insured with respect to VGX’s performance under this
Agreement.  VGX will provide Penn with
insurance certificates evidencing the required coverage within thirty (30) days
after the Effective Date and the commencement of each policy period and any
renewal periods.  Each certificate will
provide that the insurance carrier will notify Penn in writing at least thirty
(30) days prior to the cancellation or material change in coverage.

 

14.                               ADDITIONAL
PROVISIONS

 

14.1                           Independent
Contractors.  The parties
are independent contractors. Nothing contained in this Agreement is intended to
create an agency, partnership or joint venture between the parties.  At no time will either party make commitments
or incur any charges or expenses for or on behalf of the other party.

 

14.2                           No
Discrimination.  Neither
Penn nor VGX will discriminate against any employee or applicant for employment
because of race, color, sex, sexual or affectional preference, age, religion,
national or ethnic origin, handicap, or veteran status.

 

14.3                           Compliance with
Laws.  VGX must comply with all
prevailing laws, rules and regulations that apply to its activities or
obligations under this Agreement.  For
example, VGX will comply with applicable United States export laws and regulations.  The transfer of certain technical data and
commodities may require a license from the applicable agency of the United
States government and/or written assurances by VGX that VGX will not export
data or commodities to certain foreign countries without prior approval of the
agency.  Penn does not represent that no
license is required, or that, if required, the license will issue.

 

12

 

14.4                           Modification,
Waiver & Remedies.  This
Agreement may only be modified by a written amendment that is executed by an
authorized representative of each party. 
Any waiver must be express and in writing.  No waiver by either party of a breach by the
other party will constitute a waiver of any different or succeeding
breach.  Unless otherwise specified, all
remedies are cumulative.

 

14.5                           Assignment &
Hypothecation.  VGX may not assign
this Agreement or any part of it, either directly or by merger or operation of
law, without the prior written consent of Penn. 
Penn will not unreasonably withhold or delay its consent, provided that:
(a) at least thirty (30) days before the proposed transaction, VGX gives
Penn written notice and such background information as may be reasonably
necessary to enable Penn to give an informed consent; (b) the assignee
agrees in writing to be legally bound by this Agreement and to deliver to Penn
an updated Development Plan within forty-five (45) days after the closing of
the proposed transaction; and (c) VGX provides Penn with a copy of
assignee’s undertaking.  Any permitted
assignment will not relieve VGX of responsibility for performance of any
obligation of VGX that has accrued at the time of the assignment.  VGX will not grant a security interest in the
License or this Agreement during the Term. 
Any prohibited assignment or security interest will be null and void.

 

14.6                           Notices.  Any notice or other required communication
(each, a “Notice”) must be in
writing, addressed to the party’s respective Notice Address listed on the
signature page, and delivered: (a) personally; (b) by certified mail,
postage prepaid, return receipt requested; (c) by recognized overnight
courier service, charges prepaid; or (d) by facsimile.  A Notice will be deemed received:  if delivered personally, on the date of
delivery; if mailed, five (5) days after deposit in the United States
mail; if sent via courier, one (1) business day after deposit with the
courier service; or if sent via facsimile, upon receipt of confirmation of
transmission provided that a confirming copy of such Notice is sent by
certified mail, postage prepaid, return receipt requested.

 

14.7                           Severability &
Reformation.  If any provision of
this Agreement is held to be invalid or unenforceable by a court of competent
jurisdiction, then the remaining provisions of this Agreement will remain in
full force and effect. Such invalid or unenforceable provision will be
automatically revised to be a valid or enforceable provision that comes as close
as permitted by law to the parties’ original intent.

 

14.8                           Headings &
Counterparts.  The headings of the
articles and sections included in this Agreement are inserted for convenience
only and are not intended to affect the meaning or interpretation of this
Agreement.  This Agreement may be
executed in several counterparts, all of which taken together will constitute
the same instrument.

 

14.9                           Governing
Law.  This Agreement will be governed
in accordance with the laws of the Commonwealth of Pennsylvania, without giving
effect to the conflict of law provisions of any jurisdiction.

 

14.10                     Dispute
Resolution.  If a dispute arises
between the parties concerning any right or duty under this Agreement, then the
parties will confer, as soon as practicable, in an attempt to resolve the
dispute.  If the parties are unable to
resolve the dispute amicably, then the parties will

 

13

 

submit to the exclusive jurisdiction of, and venue in, the state and
Federal courts located in the Eastern District of Pennsylvania with respect to
all disputes arising under this Agreement.

 

14.11                     Integration.  This Agreement with its Exhibits and the
Sponsored Research Agreement, , contain the entire agreement between the
parties with respect to the Patent Rights and the License and supersede all
other oral or written representations, statements, or agreements with respect
to such subject matter, including but not limited to the Term Sheet.

 

Each party has caused this Agreement to be executed by its duly
authorized representative.

 

	
  THE TRUSTEES OF THE

  	
   

  	
  VGX PHARMACEUTICALS, INC.

  
	
  UNIVERSITY OF PENNSYLVANIA

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Michael E. Breton

  	
   

  	
  By:

  	
  /s/
  J. Joseph Kim

  
	
  Name:

  	
  Michael
  E. Breton

  	
   

  	
  Name:

  	
  J.
  Joseph Kim

  
	
  Title:

  	
  Assoc
  Vice Provost

  	
   

  	
  Title:

  	
  President/CEO

  

 

	
  Address:

  	
   

  	
  Center for Technology Transfer

  	
   

  	
  Address:  450 Sentry Parkway

  
	
   

  	
   

  	
  University of Pennsylvania

  	
   

  	
   

  	
  Blue Bell, PA 19422

  
	
   

  	
   

  	
  3160 Chestnut Street, Suite 200

  	
   

  	
   

  
	
   

  	
   

  	
  Philadelphia, PA 19104-6283

  	
   

  	
   

  
	
   

  	
   

  	
  Attention: Managing Director

  	
   

  	
   

  

 

	
  Required copy to:

  	
   

  	
  University of Pennsylvania

  	
   

  	
   

  
	
   

  	
   

  	
  Office of General Counsel

  	
   

  	
   

  
	
   

  	
   

  	
  133 South 36th Street,
  Suite 300

  	
   

  	
   

  
	
   

  	
   

  	
  Philadelphia, PA 19104-3246

  	
   

  	
   

  
	
   

  	
   

  	
  Attention: General Counsel

  	
   

  	
   

  

 

14

 

EXHIBIT INDEX

 

	
  Exhibit A

  	
   

  	
  Patents and Patent Applications in Patent Rights

  
	
   

  	
   

  	
   

  
	
  Exhibit B

  	
   

  	
  Development Plan Outline

  
	
   

  	
   

  	
   

  
	
  Exhibit C

  	
   

  	
  Format of Royalty Report

  
	
   

  	
   

  	
   

  
	
  Exhibit D

  	
   

  	
  Form of Patent Management Agreement

  

 

15

 

Exhibit A

Patents and Patent Applications in Patent
Rights

 

S4229 – “Improved HIV Vaccines and Methods for Using the Same” was
invented by Drs. David Weiner and Jian Yan. It relates to improved HIV
vaccines, improved methods for inducing immune responses and for prophylactically
and/or therapeutically immunizing individuals against HIV. A US Provisional
Patent Application Serial No. 60/833,856 was filed on July 28, 2006

 

S4253 – HPV and HCV Vaccines and Methods of Using the Same” was
invented by Drs. David Weiner and Jian Yan. The invention provides
expression optimized sequences for HPV and HCV antigens which are useful in
expression constructs such as vaccines, particularly but not limited to DNA
vaccines. A US Provisional Patent Application Serial No: 60/833,861 was filed on
July 28, 2006.

 

T4383 – “Consensus Sequences for Influenza Constructs” was invented by Drs. David
Weiner and Jian Yan. A US Provisional Patent Application was filed (Serial
Number not yet assigned).

 

16

 

Exhibit B

Development Plan Outline

 

VGX Pharmaceuticals DNA Vaccines Development
Plan Outline

 

	
  Target Activity

  	
   

  	
  Estimated Time

  
	
  Conduct R&D Studies in Preclinical Animal Models

  	
   

  	
  2Q 2007 – 2Q 2008

  
	
  Select Lead DNA Vaccine Clinical Candidate

  	
   

  	
  3/4Q 2007

  
	
  Conduct IND-enabling Animal Toxicity Testing on Lead Candidate

  	
   

  	
  4Q 2007 – 1/2Q 2008

  
	
  Perform GMP manufacturing of Lead Candidate

  	
   

  	
  4Q 2007 – 1/2Q 2008

  
	
  File IND on Lead Candidate

  	
   

  	
  2/3Q 2008

  
	
  Conduct Phase I Clinical Trial for Lead Candidate

  	
   

  	
  4Q 2008 – 3Q 2009

  
	
  Conduct Phase II Clinical Trial for Lead Candidate

  	
   

  	
  2010-2011 (TBD)

  
	
  Conduct Phase III Clinical Trial for Lead Candidate

  	
   

  	
  2012-2014 (TBD)

  
	
  Select Additional or Follow-on Clinical Candidates

  	
   

  	
  2008 –2009

  

 

17

 

Exhibit C

Royalty Report

 

INSERT Excel File “10.2 Penn Patent License-Exhibit C Royalty
Report 04-16-07”

 

18

 

Exhibit D

Client and Billing Agreement

 

The
Trustees of the University of Pennsylvania (“Penn”), a Pennsylvania non-profit
corporation doing business at 3160 Chestnut Street, Suite 200,
Philadelphia, PA 19104-6283; and VGX Pharmaceuticals, Inc. (“VGX”), a
corporation doing business at 450 Sentry Parkway, Blue Bell, PA 19422, have
entered into a License Agreement with respect to certain inventions which are
the subject of the patent applications and patents listed in Appendix A hereto,
including any continuations, divisions, extensions thereof, and any foreign
counterpart patents, applications, or registrations (“Patent Rights”);

 

Penn
has retained the services of Pepper Hamilton LLP (“Law Firm”), with offices at
Berwyn, PA 19312-1183, to prepare, file and prosecute the pending patent
applications constituting the Patent Rights and to maintain the patents that
issue thereon;

 

Penn,
Company and Law Firm, intending to formalize their business relationships,
agree as follows:

 

1.                                       Penn is the owner of the Patent Rights.

 

2.                                       Company is the licensee of Penn’s interest in
the Patent Rights.

 

3.                                       Penn shall maintain an attorney-client
relationship with Law Firm in furtherance of efforts to secure and maintain the
Patent Rights.

 

4.                                       Law Firm will interact directly with Company
on all patent prosecution and patent maintenance matters related to the Patent
Rights and will copy Penn on all correspondence related thereto.  Company and Law Firm agree to use all
reasonable efforts to notify Penn in writing at least thirty (30) days prior to
the due date or deadline for any action which could adversely affect the
pending status of any patent application within the Patent Rights, the
maintenance of any granted patent within the Patent Rights, Penn’s right to
file any continuing application or foreign counterpart application based on the
Patent Rights, or the breadth of any claim within the Patent Rights.  In any case, Company shall give Penn written
notice of any final decision regarding the action to be taken or not to be
taken on such matters prior to instructing Law Firm to implement the
decision.  Penn reserves the right to countermand
any instruction given by Company to Law Firm.

 

5.                                       Law Firm’s legal services relating to the
Patent Rights will be performed on behalf of Penn.  Law Firm shall invoice Company directly for
all work relating to the filing, prosecution and maintenance of the Patent
Rights and shall provide copies of all invoices to Penn.  Company is responsible for the payment of all
charges and fees so invoiced by Law Firm. 
Company will pay invoices directly to Law Firm and copy Penn on each
payment.

 

6.                                       To clarify each party’s position with regard
to prosecution and maintenance of the Patent Rights, either Penn or Company
will notify Law Firm in writing of all decisions to authorize the performance
of any desired service(s), which shall be subject to Penn’s right to
countermand, as provided in paragraph 4, above. 
In the event Penn countermands any decision or instruction of Company,
such countermand shall be promptly communicated in writing to Law Firm.

 

7.                                       This agreement represents the complete
understanding of each of the undersigned parties as to the client and billing
arrangements defined herein.  Additions
or deletions of dockets identified in Appendix A will become effective only by
written addendum to Appendix A.  All such
additions

 

19

 

or deletions of individual patents or applications filed in the US, or
as foreign counterparts thereof are considered to be within the terms of this
client and billing agreement.

 

8.                                       Notices and copies of all correspondence relating
to the Patent Rights should be sent to the following:

 

	
  To
  PENN:

  	
   

  	
  To
  COMPANY:

  
	
   

  	
   

  	
   

  
	
  Center
  for Technology Transfer

  	
   

  	
  VGX
  Pharmaceuticals Inc

  
	
  University
  of Pennsylvania

  	
   

  	
  450
  Sentry Parkway

  
	
  3160
  Chestnut Street, Suite 200

  	
   

  	
  Blue
  Bell, PA 19422

  
	
  Philadelphia,
  PA 19104-6283

  	
   

  	
  Attn:
  Chief Executive Officer

  
	
  Attn:  Director, Intellectual Property

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  To
  Law Firm:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Pepper
  Hamilton LLP

  	
   

  	
   

  
	
  Berwyn,
  PA 19312-1183

  	
   

  	
   

  

 

	
  ACCEPTED AND AGREED TO:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  THE TRUSTEES OF THE

  	
   

  	
  VGX PHARMACEUTICALS INC.

  
	
  UNIVERSITY OF PENNSYLVANIA

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Michael E. Breton

  	
   

  	
  By:

  	
  /s/
  J. Joseph Kim

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Michael
  E. Breton

  	
   

  	
  Name:

  	
  J.
  Joseph Kim

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Assoc
  Vice Provost

  	
   

  	
  Title:

  	
  President/CEO

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  4-12-07

  	
   

  	
  Date:

  	
  4-16-07

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  LAW FIRM

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Marc DeLuca

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Marc
  DeLuca

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Partner

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  4/27/07

  	
   

  	
   

  	
   

  

 

20

 

UNIVERSITY of PENNSYLVANIA

 

First
Amendment to Patent License Agreement

 

This First Amendment to Patent License Agreement dated June 12,
2008 (this “First Amendment”), is
made by and between The Trustees of the University of Pennsylvania (“Penn”) and VGX Pharmaceuticals, Inc.
(“Company”) and amends the Patent
License Agreement between the parties, effective as of April 16, 2007 (the
“License Agreement”).

 

BACKGROUND

 

The License Agreement relates to certain intellectual property
developed by Dr. David B. Weiner of Penn’s School of Medicine which
intellectual property is the subject of patents or patent applications (the “Penn Dockets”). Company desires to add new
dockets to the Penn Dockets, to establish license terms for the new dockets and
to add terms related to certain combination products.  The parties wish to amend the License
Agreement to reflect these changes.

 

Now, therefore, the parties hereby agree as follows:

 

1)               Exhibit A to
the License Agreement is hereby amended and restated in its entirety, and is
replaced by Exhibit A to this Amendment.

 

2)               Section 3.3 of
the License Agreement shall be replaced with the following language:

 

3.3                    Earned
Royalties. In partial consideration of the License, within 45 days after the
end of each Quarter, VGX will pay to Penn a royalty of ******of worldwide Net
Sales during the quarter; except that VGX will pay to Penn a royalty of ******
worldwide Net Sales of Combination Products. 
For the sake of clarity, the royalty on a Combination Product is based
on the total Net Sales for such Combination Product, regardless of the number of
components or their relative value.  Such
royalty payments shall terminate on a product-by-product and country-by-country
basis upon the later of (a) the date which is ten (10) years after
the date of the first Sale of such Licensed Product or Combination Product in
such country, or (b) in any country in which patent rights exist for any
Licensed Product, the date of expiration of the last-to-expire patent in such
country, within the definition of Patent Rights, with a valid claim covering
the Licensed Product.

 

21

 

3)               Section 3.4 of
the License Agreement shall be replaced with the following language:

 

3.4                    Related
Definitions. The term “Sale” means
any bona fide transaction for which consideration is received or expected by
VGX or its Affiliate or sublicensee for the sale, use, lease, transfer or other
disposition of a Licensed Product or Combination Product to a third party.
 A Sale is deemed completed at the time that VGX or its Affiliate or
sublicensee invoices, ships or receives payment for a Licensed Product or
Combination Product, whichever occurs first. The term “Quarter” means each three month period
beginning on January 1, April 1, July 1 and October 1. The
term “Net Sales” means the
consideration received or expected from, or the fair market value attributable
to, each Sale, less Qualifying Costs that are directly attributable to a Sale,
specifically identified on an invoice or other documentation and actually borne
by VGX or its Affiliates or sublicensees.  For purposes of determining Net
Sales, the words “fair market value” mean
the cash consideration that VGX or its Affiliates or sublicensees would realize
from an unrelated buyer in an arms-length sale of an identical item sold in the
same quantity and at the time and place of the transaction.  The term “Qualifying Costs” means:  (a) customary discounts in the trade
for quantity purchased or for wholesalers and distributors; (b) credits or
refunds for claims or returns that do not exceed the original invoice amount; (c) prepaid
outbound transportation expenses and transportation insurance premiums; and (d) sales
and use taxes and other fees imposed by a governmental agency.  The term “Combination Products” means products that
are made, made for, used, imported, offered for sale or sold by VGX or its
Affiliates or sublicensees that contain (a) one or more Licensed Product
and (b) one or more active ingredients that are not Licensed Products.

 

4)               Section 5.1 of
the License Agreement shall be replaced with the following language:

 

5.1                    Royalty Reports.
Within forty-five (45) days after the end of each Quarter following the first
Sale, VGX will deliver to Penn a report, certified by the chief financial
officer of VGX, detailing the calculation of all royalties, fees and other
payments due to Penn for such Quarter. The report will include, at a minimum,
the following information for the Quarter, each listed by product, by country: (a) the
number of units of Licensed Products 
constituting Sales; (b) the number of units of Combination Products
constituting Sales (c) the gross consideration invoiced, billed or
received for Sales; (d) Qualifying Costs, listed by category of cost; (e) Net
Sales; (f) the gross amount of any payments and other consideration
received by VGX from sublicensees and the amounts of any deductions permitted
by Section 3.6; (g) the royalties, fees and other payments owed to
Penn, listed by category; and (h) the computations for any applicable
currency conversions. Each royalty report will be substantially in the form of
the sample report attached as Exhibit C.

 

5)               A new section 8.3
shall be added after section 8.2 as follows.

 

22

 

8.3                    Within thirty
(30) days of the execution date of this First Amendment, VGX will reimburse
Penn for all historically accrued attorney fees, expenses, official fees and
all other charges accumulated since the first filing of the patent application
under dockets S4231, R3791, O2725, L2092 and L2056 incident to the preparation,
filing, prosecution and maintenance of the Patent Rights.

 

6)               In partial
consideration of the amendments included in this First Amendment, VGX will pay
Penn ****** upon execution hereof.

 

7)    This First Amendment, together with the
License Agreement, constitutes the entire agreement between the parties.  All other terms and provisions of the License
Agreement, except as expressly amended by this First Amendment, remain in full
force and effect.

 

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

 

 

	
  THE TRUSTEES OF THE UNIVERSITY OF PENNSYLVANIA

  	
   

  	
  VGX PHARMACEUTICALS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
     /s/ Michael J. Cleare

  	
   

  	
  By:

  	
     /s/ J. Joseph Kim

  
	
   

  	
   

  	
   

  
	
  Name: Michael J. Cleare, Ph.D.

  	
   

  	
  Name: J. Joseph Kim, Ph.D.

  
	
   

  	
   

  	
   

  
	
  Title: Associate Vice Provost for Research and

  Executive Director, Center for Technology

  Transfer

  	
   

  	
  Title: President and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
  Date:

  	
     6/12/08

  	
   

  	
  Date:

  	
     6/16/08

  
							

 

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  EXHIBIT 10.51    
    

EMPLOYMENT AGREEMENT  

        This Employment Agreement (the "Agreement"), dated October 1, 2005, is made by
and between Viral Genomix, Inc. (VGX Pharmaceuticals), a Delaware corporation (the "Company"), and with its principal offices at 450 Sentry
Parkway East, Blue Bell, PA 19422, and MR. GENE J. 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 agrees to execute and shall be bound by the terms and conditions of the Non-Disclosure, Assignment of
Inventions, Non-Solicitation and Non-Compete Agreement (the "Non-Compete Agreement"), attached hereto as  Exhibit A. 

        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 Mr. Kim as Director of Finance 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 October 1, 2005 (the "Commencement
Date") and continue for a period of three (3) 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 Mr. Kim throughout the Term as Director of Finance of the Company with such responsibilities, duties and authority as are assigned to
him by the Chief Executive Officer and/or Chief Operating Officer or its designee. The Director of Finance shall report to the Chief Executive Officer and/or Chief Operating Officer. 

        b.     Executive
shall faithfully devote his 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 Executive's 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 $100,000 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 Chief Executive Officer and/or Chief Operating Officer during the Term and any such increases, if any, will
be at the Chief Executive 

 

Officer
and/or Chief Operating Officer 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 twenty percent (20%) 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. 

5.    Benefits; Stock Options and Vacation.    

        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. 

        a.     On
or about October 1, 2005, the Board Resolution granted Mr. Kim options to purchase One Hundred Fifty Thousand (150,000) shares of Common Stock of the
Company. Upon execution of this Agreement by the Executive and the Company, the Executive will be awarded One Hundred Fifty Thousand (150,000) Incentive Stock Options (ISO) to purchase Common Shares
of the Company's Stock at a strike price of $0.30 per share pursuant to an Option Grant Agreement in substantially the form attached hereto as  Exhibit B over three years. These options are
subject to the rules and regulations of the 2001 Equity Incentive Plan. In addition, all shares of
the Company's stock will be subject to those restrictions contained in the anticipated future Company's Stockholder's Agreement. 

        b.     The
Company offers the medical benefits to Executive and his family. 

        c.     In
addition, the Executive is entitled 15 business days (3 weeks) as a Company paid vacation days annually. The Executive will have an office and a dedicated
laptop to improve Executive ability to concentrate at work, and increase his productivity. 

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. 

2

 

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 6 months thereafter,
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 6 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. 

3

 

        "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 and/or Chief Executive Officer;  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 6 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 6 months thereafter, 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") upon 30 days written 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 

4

 

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)   the
breach by the Company of any of its material obligations under this Agreement. 

        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.    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. 

8.    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. 

9.    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. 

10.    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 

5

 

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. 

11.    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:

Viral
Genomix, Inc.

450 Sentry Parkway East

Blue Bell, PA 19422

Attention: Corporate Secretary 

With a copy to:

If to the Executive:

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

12.    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. 

13.    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. 

14.    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. 

15.    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. 

16.    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. 

6

 

17.    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. 

18.    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. 

19.    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. 

20.    Termination of Other Agreements.    

        The
execution of this Agreement by Viral Genomix and the Executive terminates and voids for all purposes any other Agreements, if any, between the parties. 

[SIGNATURE PAGE FOLLOWS]

7

 

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

					
	 	 	 VIRAL GENOMIX, INC.
	

 	
 	
By:	
 	
/s/ J. Joseph Kim

 
	 	 	Name:	 	J. Joseph Kim, Ph.D.
	 	 	Title:	 	President & CEO
	

 	
 	
 EXECUTIVE:
	

 	
 	
/s/ Gene J. Kim

  MR. GENE J. KIM

8

 
 FIRST AMENDMENT TO THE EMPLOYMENT AGREEMENT DATED

OCTOBER 1, 2005  

        This is the First Amendment ("Amendment") to the Employment Agreement between VGX Pharmaceuticals, Inc. ("VGX") and Gene J Kim
("Executive") dated as of 20th day of August, 2008 (the "Effective Date"), amending the Employment Agreement ("Agreement") dated December 17, 2005 between VGX and Executive. All
undefined terms contained herein shall have the meaning set forth in the Agreement. 

        WHEREAS,
both parties wishes to amend the Agreement as follows: 

        NOW,
THEREFORE, for good and valuable consideration and intending to be legally bound, the parties hereby agree as follows: 

	1.
	The
base annual salary the Executive is entitled to receive for his employment is $170,400.00 per annum

	2.
	Executive
is entitled to 20 business days (4 weeks) as a Company paid vacation days annually.

	3.
	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 for a period of 12 months following the effective date of such termination for involuntary termination without cause. 

							
	Mr. Gene J Kim

220 Huntsman Ln

Blue Bell, PA, 19422	 	VGX Pharmaceuticals

450 Sentry Parkway

Blue Bell, PA 19422

Telephone: 267-440-4205
	 	 	 	 	 	 	 
	/s/ Gene J. Kim

  Gene J. Kim

Chief Financial Officer	 	/s/ J. Joseph Kim

  Dr. J. Joseph Kim

Chief Executive Officer
	
 Date:	
 	
August 20, 2008

 	
 	
Date:	
 	
August 20, 2008

 

9

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EXHIBIT 10.51

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