UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of
report (Date of earliest event reported): January 6, 2011
ZIOPHARM
Oncology, Inc.
(Exact
Name of Registrant as Specified in Charter)
Delaware
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001-33038
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84-1475642
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(State
or Other Jurisdiction
of
Incorporation)
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(Commission
File Number)
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(IRS
Employer
Identification
No.)
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1180
Avenue of the Americas
19th
Floor
New
York, NY
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10036
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(Address
of Principal Executive Offices)
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(Zip
Code)
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(646) 214-0700
(Registrant’s
telephone number, including area code)
Not
applicable
(Former
Name or Former Address, if Changed Since Last Report)
Check the
appropriate box below if the Form 8-K is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following
provisions:
¨
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Written
communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425).
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12).
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b)).
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c)).
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Item
1.01 Entry into a Material
Definitive Agreement.
Exclusive
Channel Partner Agreement
On
January 6, 2011, ZIOPHARM Oncology, Inc. (the “Company”) entered into an
Exclusive Channel Partner Agreement (the “Channel Agreement”) with Intrexon
Corporation (“Intrexon”) that governs a “channel partnering” arrangement in
which the Company will use Intrexon’s technology directed towards in vivo
expression of effectors in connection with the development of two existing
clinical-stage product candidates and generally to research, develop and
commercialize products, in each case in which DNA is administered to humans for
expression of anti-cancer effectors for the purpose of treatment or prophylaxis
of cancer (collectively, the “Cancer Program”). The Channel Agreement
establishes committees comprised of Company and Intrexon representatives that
will govern activities related to the Cancer Program in the areas of project
establishment, chemistry, manufacturing and controls, clinical and regulatory
matters, commercialization efforts and intellectual property.
The
Channel Agreement grants the Company a worldwide license to use specified
patents and other intellectual property of Intrexon in connection with the
research, development, use, importing, manufacture, sale, and offer for sale of
products involving DNA administered to humans for expression of anti-cancer
effectors for the purpose of treatment or prophylaxis of cancer (“ZIOPHARM
Products”). Such license is exclusive with respect to any clinical development,
selling, offering for sale or other commercialization of ZIOPHARM Products, and
otherwise is non-exclusive. Subject to limited exceptions, the Company may not
sublicense the rights described without Intrexon’s written consent.
Under the
Channel Agreement, and subject to certain exceptions, the Company is responsible
for, among other things, the performance of the Cancer Program including
development, commercialization and certain aspects of manufacturing of ZIOPHARM
Products. Among other things, Intrexon is responsible for the costs of
establishing manufacturing capabilities and facilities for the bulk manufacture
of products developed under the Cancer Program, certain other aspects of
manufacturing, costs of discovery-stage research with respect to platform
improvements and costs of filing, prosecution and maintenance of Intrexon’s
patents.
Subject
to certain expense allocations and other offsets provided in the Channel
Agreement, the Company will pay Intrexon 50% of the cumulative net quarterly
profits derived from the sale of ZIOPHARM Products, calculated on a ZIOPHARM
Product-by- ZIOPHARM Product basis. The Company has likewise agreed to pay
Intrexon 50% of quarterly revenue obtained from a sublicensor in the event of a
sublicensing arrangement. In addition, in partial consideration for each party’s
execution and delivery of the Channel Agreement, the Company entered into the
Stock Purchase Agreement (as defined below).
During
the first 24 months, either the Company or Intrexon may terminate the Channel
Agreement in the event of a material breach by the other and Intrexon may
terminate the Channel Agreement under certain circumstances if the Company
assigns its rights under the Channel Agreement without Intrexon’s
consent. Following the first 24 months, Intrexon may also terminate
the Channel Agreement if the Company elects not to pursue the development of a
Cancer Program identified by Intrexon that is a “Superior Therapy” as defined in
the Channel Agreement. Also following the first 24 months, the
Company may voluntarily terminate the Channel Agreement upon 90 days written
notice to Intrexon.
Upon
termination of the Channel Agreement, the Company may continue to develop and
commercialize any ZIOPHARM Product that, at the time of
termination:
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•
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is
being commercialized by the
Company,
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•
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has
received regulatory approval,
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•
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is
a subject of an application for regulatory approval that is pending before
the applicable regulatory authority,
or
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•
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is
the subject of at least an ongoing Phase 2 clinical trial (in the case of
a termination by Intrexon due to a ZIOPHARM uncured breach or a voluntary
termination by the Company), or an ongoing Phase 1 clinical trial in the
Field (in the case of a termination by the Company due to an Intrexon
uncured breach or a termination by Intrexon following an unconsented
assignment by the Company or the Company’s election not to pursue
development of a Superior
Therapy).
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The
Company’s obligation to pay 50% of net profits or revenue described above with
respect to these “retained” products will survive termination of the Channel
Agreement.
Stock
Purchase Agreement and Registration Rights Agreement
On
January 6, 2011, the Company entered into a Stock Purchase Agreement with
Intrexon pursuant to which Intrexon has agreed to purchase a number of shares of
the Company's common stock equal to 5.00% of the number of shares of Company
common stock issued and outstanding immediately prior to the issuance of such
shares (the “Purchase Shares”), at a purchase price equal to $4.80 per
share. At the same time, the Company has agreed to issue to Intrexon
a number of additional shares of Company common stock equal to 7.495% of the
number of shares of Company common stock issued and outstanding prior to such
issuance (the “First Tranche Shares”) at a purchase price equal to the $0.001
par value of such shares, which price will be deemed paid in partial
consideration for the execution and delivery of the Channel Agreement. Upon
satisfaction of customary closing conditions, the closing of the purchase and
sale of the Purchase Shares and the First Tranche Shares (the “First Tranche
Closing”) is expected to occur on or around January 12, 2011.
The
Company has also agreed to issue additional shares of Company common stock to
Intrexon upon dosing of the first patient in a ZIOPHARM-conducted Phase II
clinical trial in the United States, or similar study as the parties may agree
in a country other than the United States, of a product that is created,
produced, developed or identified directly or indirectly by the Company during
the term of the Channel Agreement and that, subject to certain exceptions,
involves DNA administered to humans for expression of anti-cancer effectors for
the purpose of treatment or prophylaxis of cancer. Upon satisfaction of such
contingency, the Company has agreed to issue to Intrexon an additional number of
shares of Company common stock equal to 7.495% of the number of shares Company
common stock issued and outstanding immediately prior to the First Tranche
Closing (the “Second Tranche Shares”) for a purchase price equal to the $0.001
par value of such shares, which price will be deemed paid in partial
consideration for the execution and delivery of the Channel
Agreement.
Based on
the number of shares of the Company’s common stock issued and outstanding on the
date of this report, the Purchase Shares will be comprised of 2,426,235 shares,
resulting in proceeds from the sale thereof approximately $11.6 million. Also
based on the Company’s currently issued and outstanding shares of common stock,
the First Tranche Shares and, if issued upon satisfaction of the condition
described above, the Second Tranche Shares will each be comprised of 3,636,926
shares. Such share amounts will be adjusted based on changes, if any, in the
number of shares of the Company’s common stock issued and outstanding between
the date of this report and the date of the First Tranche Closing.
Under the
Stock Purchase Agreement, if requested by the Company and subject to certain
restrictions and limitations, Intrexon has agreed to purchase securities in
conjunction with future securities offerings of the Company that constitute
“Qualified Financings” and that are conducted while the Channel Agreement
remains in effect. For this purpose, a “Qualified Financing” means a
sale of common stock or equity securities convertible into common stock in a
public or private offering, raising gross proceeds of at least $10,000,000,
where the sale of shares is either registered under the Securities Act of 1933,
as amended, at the time of issuance or the Company agrees to register the resale
of such shares. In conjunction with a Qualified Financing, Intrexon has
committed to purchase up to 19.99% of the securities issued and sold by the
Company therein (such amount to be calculated exclusive of Intrexon’s
purchase). Intrexon will not be obligated to purchase securities in a
Qualified Financing unless the Company is then in substantial compliance with
its obligations under the Channel Agreement and, with respect to a Qualified
Financing that is completed following January 6, 2012, the Company confirms its
intent that 40% of the net offering proceeds (the “Use of Proceeds Commitment
Amount”) shall have been spent, or in the next year will be spent, by the
Company under the Channel Agreement. In the case of a Qualified Financing that
is completed after January 6, 2012, Intrexon’s purchase commitment will be
further limited to an amount equal to 50% of the Use of Proceeds Commitment
Amount. Intrexon’s aggregate purchase commitment for all future Qualified
Financings is capped at $50,000,000.
Also
pursuant to the Stock Purchase Agreement and prior to the First Tranche Closing,
the Company will elect Randal J. Kirk, Chairman and Chief Executive Officer of
Intrexon, as a director to fill the existing vacancy on the Company’s board of
directors. In addition, the Company has agreed that at each stockholders’
meeting at which directors are to be elected, it will nominate and recommend for
election to the Board of Directors an individual designated by Intrexon,
provided that the Board of Directors determines that he or she is a suitable
candidate. If such Intrexon designee is not elected to the Board of Directors by
the Company’s stockholders, then, at Intrexon’s election, such designee will be
entitled to attend all Board of Directors and committee meetings as an observer
subject to certain conditions and limitations. At such time as
Intrexon controls 20% or more of the Company's stock, the Company will cause a
second individual designated by Intrexon to be elected to the Board of Directors
and, so long thereafter as Intrexon continues to control 20% or more of the
Company's stock, at each stockholders’ meeting at which directors are to be
elected, the Company will nominate and recommend for election to the Board of
Directors a second individual designated by Intrexon, provided that such second
designee is an “independent director” under Nasdaq’s listing standards and that
the Board of Directors determines that he or she is a suitable candidate. The
rights of Intrexon to designate director nominees discussed above will terminate
upon the termination of the Channel Agreement or upon an earlier sale of the
Company.
The Stock
Purchase Agreement contains a standstill provision pursuant to which, among
other things, Intrexon has agreed that, for a period of three years, subject to
certain exceptions and unless invited in writing by the Company to do so,
neither Intrexon nor its affiliates will, directly or indirectly: (i)
effect or seek, initiate, offer or propose to effect, or cause or participate in
any acquisition of securities or assets of the Company; any tender or exchange
offer, merger, consolidation or other business combination involving the
Company; any recapitalization, restructuring, liquidation, dissolution or other
extraordinary transaction with respect to the Company; or any “solicitation” of
“proxies” or consents to vote any voting securities of the Company, or in any
way advise or, assist any other person in doing so; (ii) form, join or in any
way participate in a “group” with respect to any securities of the Company;
(iii) otherwise act to seek to control or influence the management, Board of
Directors or policies of the Company; provided that the Intrexon director
designees, in their capacity as directors, may fully exercise their rights and
duties as directors of the Company including freely communicating with the
Company’s executive management and Board of Directors; (iv) take any
action reasonably expected to force the Company to make a public announcement
regarding any such matters; or (v) enter into any agreements, discussions or
arrangements with any third party with respect to any of the
foregoing. Among other things and subject to certain
exceptions, the standstill restrictions do not apply to the future purchase by
Intrexon and/or its affiliates of up to 10% of the number of shares of the
Company’s common stock then issued and outstanding in addition to the shares
issuable pursuant to the Stock Purchase Agreement.
In
connection with the transactions contemplated by the Stock Purchase Agreement,
and pursuant to a Registration Rights Agreement to be executed and delivered by
the parties at the First Tranche Closing, the Company will agree to file a
“resale” registration statement (the “Registration Statement”) registering the
resale of the Purchase Shares, the First Tranche Shares and the Second Tranche
Shares within 120 days of the First Tranche Closing. Under that agreement,
the Company will be obligated to use its reasonable best efforts to cause the
“resale” registration statement to be declared effective as promptly as
practicable after filing and to maintain the effectiveness of the registration
statement until all securities therein are sold or are otherwise can be sold
pursuant to Rule 144, without any restrictions.
The
foregoing description of each of the Channel Agreement, the Stock Purchase
Agreement and the form of Registration Rights Agreement is qualified in its
entirety by reference to such agreements, which are filed as Exhibits 10.1,
10.2 and 10.3 to this Current Report, respectively, and are incorporated herein
by reference. The benefits of the representations and warranties set forth
in the Channel Agreement, the Stock Purchase Agreement and the form of
Registration Rights Agreement are intended to be relied upon by the parties to
such agreements only and, expect as otherwise expressly provided therein, do not
constitute continuing representations and warranties to any other party or for
any other purpose. The press release dated January 6, 2011 announcing the
transactions described above is filed as Exhibit 99.1 to this Current Report on
Form 8-K and incorporated herein by reference.
Item 3.02
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Unregistered
Sales of Equity Securities.
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The
disclosure in Item 1.01 is incorporated herein by reference thereto. The
offer and sale of the Purchase Shares, the First Tranche Shares and the Second
Tranche Shares will not be registered under the Securities Act of 1933, as
amended (the “Securities Act”) at the time of sale, and therefore may not be
offered or sold in the United States absent registration or an applicable
exemption from registration requirements. For these issuances, the Company is
relying on the exemption from federal registration under Section 4(2) of the
Securities Act and/or Rule 506 promulgated thereunder, based on the Company’s
belief that the offer and sale of the Shares has not and will not involve a
public offering as Intrexon is an “accredited investor” as defined under Section
501 promulgated under the Securities Act and no general solicitation has been
involved in the Offering.
Item
5.02
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Departure
of Directors or Principal Officers; Election of Directors; Appointment of
Principal Officers
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The
disclosure in Item 1.01 is incorporated herein by reference thereto. In
accordance with the Stock Purchase Agreement, Randal J. Kirk will be elected as
a director of the Company to fill the Board of Director’s existing vacancy and
to serve as a director until the Company’s next annual stockholders’ meeting,
with such election to be effective immediately prior to the First Tranche
Closing.
Item 9.01
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Financial
Statements and Exhibits.
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Exhibit No.
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Description
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10.1
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Exclusive
Channel Partner Agreement by and between ZIOPHARM Oncology, Inc. and
Intrexon Corporation dated as of January 6, 2011 **
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10.2
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Stock
Purchase Agreement by and between ZIOPHARM Oncology, Inc. and Intrexon
Corporation dated as of January 6, 2011
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10.3
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Form
of Registration Rights Agreement by and between ZIOPHARM Oncology, Inc.
and Intrexon Corporation (incorporated by reference to Exhibit A to the
Stock Purchase Agreement filed as Exhibit 10.1 to this
report)
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99.1
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Press
Release dated January 6,
2011
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**
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Confidential
treatment has been requested as to certain portions of this exhibit
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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ZIOPHARM
Oncology, Inc.
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By:
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/s/ Richard Bagley
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Date:
January 11, 2011
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Name:
Richard Bagley
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Title:
President, Chief Operating Officer and Chief
Financial
Officer
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INDEX OF
EXHIBITS
Exhibit No.
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Description
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10.1
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Exclusive
Channel Partner Agreement by and between ZIOPHARM Oncology, Inc. and
Intrexon Corporation dated as of January 6, 2011 **
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10.2
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Stock
Purchase Agreement by and between ZIOPHARM Oncology, Inc. and Intrexon
Corporation dated as of January 6, 2011
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99.1
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Press
Release dated January 6,
2011
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**
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Confidential
treatment has been requested as to certain portions of this exhibit
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.
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Exhibit
10.1
Portions
herein identified by [*****] have been omitted pursuant to a request for
confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934,
as amended. A complete copy of this document has been filed
separately with the Securities and Exchange Commission.
Exclusive
Channel Partner Agreement
This
Exclusive Channel Partner Agreement (the “Agreement”) is made and
entered into effective as of January 6, 2011 (the “Effective Date”) by and
between Intrexon
Corporation, a Virginia corporation with offices at 20358 Seneca Meadows
Parkway, Germantown, MD 20876 (“Intrexon”), and ZIOPHARM
Oncology, Inc., a Delaware corporation having its principal place of
business at 1180 Avenue of the Americas, 19th Floor,
New York, NY 10036 (“ZIOPHARM”). Intrexon
and ZIOPHARM may be referred to herein individually as a “Party”, and collectively as
the “Parties.”
Recitals
Whereas, Intrexon has expertise in
and owns or controls proprietary technology relating to the design and
production of DNA vectors or their in vivo expression;
and
Whereas,
ZIOPHARM now desires to become Intrexon’s exclusive channel
partner with respect to such technology for the purpose of developing
the Cancer Program (as defined herein), and Intrexon is willing to appoint
ZIOPHARM as a channel partner in such field under the terms and conditions of
this Agreement.
Now
Therefore, in consideration of the foregoing and the covenants and
promises contained herein, the Parties agree as follows:
ARTICLE
1
Definitions
As used
in this Agreement, the following capitalized terms shall have the following
meanings:
1.1 “Affiliate” means, with respect
to a particular Party, any other person or entity that directly or indirectly
controls, is controlled by, or is in common control with such
Party. As used in this Section 1.1, the term “controls” (with
correlative meanings for the terms “controlled by” and “under common control
with”) means the ownership, directly or indirectly, of more than fifty percent
(50%) of the voting securities or other ownership interest of an entity, or the
possession, directly or indirectly, of the power to direct the management or
policies of an entity, whether through the ownership of voting securities, by
contract, or otherwise. Notwithstanding the foregoing, except as set
forth in Section 2.3(a), Third Security shall be deemed not to be an Affiliate
of Intrexon, and any other person, corporation, partnership, or other entity
that would be an Affiliate of Intrexon solely because it and Intrexon are under
common control by Randal J. Kirk or by investment funds managed by Third
Security or an affiliate of Third Security shall also be deemed not
to be an Affiliate of Intrexon.
1.2 “Allowable Expenses” means any
of the following expenses incurred by ZIOPHARM or an Affiliate of ZIOPHARM after
the First Commercial Sale in the Territory of a ZIOPHARM Product, in each case
to the extent specifically attributable to such ZIOPHARM Product and
specifically attributable to the Commercialization of such ZIOPHARM
Product: (a) Cost of Goods Sold, (b) Marketing Expenses, (c)
Distribution Expenses, (d) Post-Launch Product R&D Expenses, and (e)
Additional Commercialization Expenses, in each case as such terms are defined
and calculated in this Article 1 and in Exhibit A.
1.3 “Applicable Laws” has the
meaning set forth in Section 8.2(d)(xiii).
1.4 “Authorizations” has the
meaning set forth in Section 8.2(d)(xiii).
1.5 [*****].
1.6 “Cancer Program” has the
meaning set forth in Section 2.1.
1.7 “CC” has the meaning set forth
in Section 2.2(b).
1.8 “Channel-Related Program IP”
has the meaning set forth in Section 6.1(c).
1.9 “Claims” has the meaning set
forth in Section 9.1.
1.10 “CMCC” has the meaning set
forth in Section 2.2(b).
1.11 “Committees” has the meaning
set forth in Section 2.2(a).
1.12 “Commercialize” or “Commercialization” means any
activities directed to marketing, promoting, distributing, importing for sale,
offering to sell and/or selling ZIOPHARM Products.
1.13 “Confidential Information”
means each Party’s confidential information, inventions, non-public know-how or
non-public data disclosed pursuant to this Agreement or any other
confidentiality agreement between the Parties and shall include, without
limitation, manufacturing, marketing, financial, personnel and other business
information and plans, whether in oral, written, graphic or electronic
form.
1.14 “Control” means, with respect
to a Patent or other intellectual property right, that a Party owns or has a
license to such right and has the ability to grant a license or sublicense as
provided for in this Agreement under such right without violating the terms of
any agreement or other arrangement with any Third Party.
1.15 “CRC” has the meaning set forth
in Section 2.2(b).
1.16 “Diligent Efforts” means, with
respect to a Party’s obligation under this Agreement, the level of efforts and
resources reasonably required to diligently develop, manufacture, and/or
commercialize (as applicable) a ZIOPHARM Product in a sustained manner,
consistent with the efforts and resources a similarly situated company working
in the Field would typically devote to a product of similar market potential,
profit potential, strategic value and/or proprietary protection, based on market
conditions then prevailing. With respect to a particular task or
obligation, Diligent Efforts requires that the applicable Party promptly assign
responsibility for such task and consistently make and implement decisions and
allocate resources designed to advance progress with respect to such task or
obligation.
1.17 “Equity Agreements” has the
meaning set forth in Section 5.1.
1.18 “Excess Product Liability
Costs” has the meaning set forth in Section 9.3.
1.19 “Executive Officer” means the
Chief Executive Officer of the applicable Party, or another senior executive
officer of such Party who has been duly appointed by the Chief Executive Officer
to act as the representative of the Party to resolve, as the case may be, (a) a
Committee dispute, provided that such officer is not a member of the applicable
Committee and occupies a position senior to the positions occupied by the
applicable Party’s members of the applicable Committee, or (b) a dispute
described in Section 11.1.
1.20 “Existing Cancer Programs” has
the meaning set forth in Section 2.1.
1.21 “FDA” has the meaning set forth
in Section 8.2(d)(xiii).
1.22 [*****].
1.23 “Field” means the use of DNA
administered to humans for expression of anti-cancer effectors for the purpose
of treatment or prophylaxis of cancer; provided, however, that the Field does
not include any therapies or other medical interventions that are directed
toward the treatment or prophylaxis of a non-cancer disease or condition (e.g.,
infectious disease) unless the primary reason for such treatment or prophylaxis
is to prevent cancer. For the avoidance of doubt, the Field excludes
(a) the treatment or prophylaxis of cancer in non-human animals and (b) the
amelioration of symptoms or complications of cancer, including side effects of
other cancer treatments (as opposed to the treatment of the cancer
itself).
1.24 “First Commercial Sale” means,
with respect to a ZIOPHARM Product and country, the first sale to a Third Party
of such ZIOPHARM Product in such country after regulatory approval (and any
pricing or reimbursement approvals, if necessary) has been obtained in such
country.
1.25 “Fully Loaded Cost” means the
direct cost of the applicable good, product or service plus indirect charges and
overheads reasonably allocable to the provision of such good, product or service
in accordance with US GAAP.
1.26 “Information” means
information, results and data of any type whatsoever, in any tangible or
intangible form whatsoever, including without limitation, databases, inventions,
practices, methods, techniques, specifications, formulations, formulae,
knowledge, know-how, skill, experience, test data including pharmacological,
biological, chemical, biochemical, toxicological and clinical test data,
analytical and quality control data, stability data, studies and procedures, and
patent and other legal information or descriptions.
1.27 “Infringement” has the meaning
set forth in Section 6.3(a).
1.28 “Intrexon Channel Technology”
means Intrexon’s technology directed towards in vivo expression of effectors,
including without limitation the technology embodied in the Intrexon Materials
and the Intrexon IP.
1.29 “Intrexon Indemnitees” has the
meaning set forth in Section 9.2.
1.30 “Intrexon IP” means the
Intrexon Patents and Intrexon Know-How.
1.31 “Intrexon Know-How” means all
Information (other than Intrexon Patents) that (a) is Controlled by Intrexon as
of the Effective Date or during the Term and (b) is reasonably required or
useful for ZIOPHARM to conduct the Cancer Program. For the avoidance
of doubt, the Intrexon Know-How shall include any Information (other than
Intrexon Patents) in the Channel-Related Program IP.
1.32 “Intrexon Materials” means the
genetic code and associated gene constructs used alone or in combination and
such other proprietary reagents including but not limited to plasmid vectors,
virus stocks, and cells and cell lines (e.g., natural killer cells and dendritic
cells), in each case that are reasonably required or provided to ZIOPHARM to
conduct the Cancer Program.
1.33 “Intrexon Patents” means all
Patents that (a) are Controlled by Intrexon as of the Effective Date or during
the Term; and (b) are reasonably required or useful for ZIOPHARM to conduct the
Cancer Program. For the avoidance of doubt, the Intrexon Patents
shall include any Patent in the Channel-Related Program IP.
1.34 “Intrexon Trademarks” means
those trademarks related to the Intrexon Channel Technology that are established
from time to time by Intrexon for use across its channel
partnerships.
1.35 “Inventions” has the meaning
set forth in Section 6.1(b).
1.36 “IPC” has the meaning set forth
in Section 2.2(b).
1.37 “JSC” has the meaning set forth
in Section 2.2(b).
1.38 “Losses” has the meaning set
forth in Section 9.1.
1.39 “Net Sales” means, with respect
to any ZIOPHARM Product, the net sales of such ZIOPHARM Product by ZIOPHARM or
an Affiliate of ZIOPHARM (including without limitation net sales of ZIOPHARM
Product to a non-Affiliate sublicensee but not including net sales by such
non-Affiliate sublicensee), as determined in accordance with US
GAAP.
1.40 “Patents” means (a) all patents
and patent applications (including provisional applications), (b) any
substitutions, divisions, continuations, continuations-in-part, reissues,
renewals, registrations, requests for continued examination, confirmations,
re-examinations, extensions, supplementary protection certificates and the like
of the foregoing, and (c) any foreign or international equivalents of any of the
foregoing.
1.41 “Product Profit” means Net
Sales less Allowable Expenses.
1.42 “Product-Specific Program
Patent” means any issued Intrexon Patent where all the claims are
directed to Inventions that relate solely and specifically to ZIOPHARM
Products. [*****].
1.43 “Proposed Terms” has the
meaning set forth in Section 11.2.
1.44 “Prosecuting Party” has the
meaning set forth in Section 6.2(c).
1.45 [*****].
1.46 [*****].
1.47 “Retained Product” has the
meaning set forth in Section 10.4(a).
1.48 “Reverted Product” has the
meaning set forth in Section 10.4(c).
1.49 “SEC” means the United States
Securities and Exchange Commission.
1.50 “Sublicensing Revenue” means
any cash consideration (including upfront payments, milestone payments, and
royalties), and the cash equivalent of all other consideration, actually
received by ZIOPHARM or its Affiliate from a Third Party in consideration for a
grant of a sublicense under the Intrexon IP or any rights to develop or
commercialize ZIOPHARM Products, but excluding: (a) any amounts paid as bona
fide reimbursement for research and development costs to the extent incurred
following such grant; (b) bona fide loans or any payments in consideration for a
grant of equity of ZIOPHARM to the extent that such consideration is equal to or
less than fair market value (i.e. any amounts in excess of fair market value
shall be Sublicensing Revenue); or (c) amounts received from sublicensees in
respect of any ZIOPHARM Product sales that are included in Net
Sales.
1.51 “Superior Therapy” means a
cancer therapy in the Field that, based on the data then available, (a)
demonstrably appears to offer superior efficacy, safety or cost, as compared
with both (i) those therapies that are marketed (either by ZIOPHARM or others)
at such time for a given cancer indication and (ii) those therapies that are
being actively developed by ZIOPHARM for such cancer indication; (b)
demonstrably appears to represent a substantial improvement over such existing
therapies; and (c) has intellectual property protection and a regulatory
approval pathway that, in each case, would not present a significant barrier to
commercial development.
1.52 “Support Memorandum” has the
meaning set forth in Section 11.2.
1.53 “Third Party” means any
individual or entity other than the Parties or their respective
Affiliates.
1.54 [*****].
1.55 “Third Security” means Third
Security, LLC.
1.56 “Territory” means the entire
world.
1.57 “US GAAP” means generally
accepted accounting principles in the United States.
1.58 “Working Group” has the meaning
set forth in Section 2.3(d).
1.59 “ZIOPHARM Indemnitees” has the
meaning set forth in Section 9.1.
1.60 “ZIOPHARM Product” means any
product in the Field that is created, produced, developed, or identified
directly or indirectly by or on behalf of ZIOPHARM during the term of this
Agreement, whether through use or practice of Intrexon Channel Technology or the
Intrexon Materials or otherwise, including, without limitation, any products
that are the subject of the Existing Cancer Programs.
1.61 “ZIOPHARM Program Patent” has
the meaning set forth in Section 6.2(b).
1.62 “ZIOPHARM Termination IP” means
all Patents or other intellectual property that ZIOPHARM or any of its
Affiliates Controls as of the Effective Date or during the Term that Cover, or
is otherwise necessary or useful for, the development, manufacture or
commercialization of a Reverted Product or necessary or useful for Intrexon to
operate in the Field.
ARTICLE
2
Scope
of Channel Partnership; Management
2.1 General. The
general purpose of the channel partnership described in this Agreement will be
to use the Intrexon Channel Technology (a) in connection with the following
currently existing Intrexon programs in the Field: DC-RTS IL-12 Phase
Ib clinical cancer program (IND #13565) and the AdV RTS-IL-12 cancer program
(the “Existing Cancer
Programs”) and (b) generally to research, develop and commercialize
products for use in the Field (collectively, the “Cancer
Program”). As provided below, the JSC shall establish projects
for the Cancer Program. Either Party may propose potential projects
in the Field for review and consideration by the JSC.
2.2 Committees.
(a) Generally. The
Parties desire to establish several committees (collectively, “Committees”) to oversee the
Cancer Program and to facilitate communications between the Parties with respect
thereto. Each of such Committees shall have the responsibilities and
authority allocated to it in this Article 2. Each of the Committees
shall have the obligation to exercise its authority consistent with the
respective purpose for such Committee as stated herein and any such decisions
shall be made in good faith.
(b) Formation and
Purpose. Promptly following the Effective Date, the Parties
shall create the Committees listed in the chart below, each of which shall have
the purpose indicated in the chart.
Committee
|
|
Purpose
|
|
|
|
Joint
Steering Committee (“JSC”)
|
|
Establish
projects for the Cancer Program and establish the priorities for such
projects.
|
|
|
|
Chemistry,
Manufacturing and Controls Committee (“CMCC”)
|
|
Establish
project plans and review and approve activities and budgets for chemistry,
manufacturing, and controls under the Cancer Program.
|
|
|
|
Clinical/Regulatory
Committee (“CRC”)
|
|
Review
and approve all research and development plans, clinical projects and
publications, and regulatory filings and correspondence under the Cancer
Program; review and approve itemized budgets with respect to the
foregoing.
|
|
|
|
Commercialization
Committee (“CC”)
|
|
Establish
project plans and review and approve activities and budgets for
commercialization activities under the Cancer Program.
|
|
|
|
Intellectual
Property Committee (“IPC”)
|
|
Evaluate
intellectual property issues in connection with the Cancer Program; review
and approve itemized budgets with respect to the
foregoing.
|
2.3 General Committee Membership and
Procedure.
(a) Membership. For
each Committee, each Party shall designate an equal number of representatives
who are employees of such Party or an Affiliate of such Party (not to exceed
three (3) for each Party) with appropriate expertise to serve as members of such
Committee (and Third Security shall be deemed to be an Affiliate of Intrexon
solely for purposes of this Section 2.3). Each representative may
serve on more than one Committee as appropriate in view of the individual’s
expertise. Each Party may replace its Committee representatives at
any time upon written notice to the other Party. Each Committee shall
have a chairperson; the chairperson of each committee shall serve for a two-year
term and the right to designate which representative to the Committee will act
as chairperson shall alternate between the Parties, with ZIOPHARM selecting the
chairperson first for the JSC, CRC and CC, and Intrexon selecting the
chairperson first for the CMCC and IPC. The chairperson of each Committee shall
be responsible for calling meetings, preparing and circulating an agenda in
advance of each meeting of such Committee, and preparing and issuing minutes of
each meeting within thirty (30) days thereafter.
(b) Meetings. Each
Committee shall hold meetings at such times as it elects to do so, but in no
event shall such meetings be held less frequently than once every six (6)
months. Meetings of any Committee may be held in person or by means of
telecommunication (telephone, video, or web conferences). To the
extent that a Committee holds any meetings in person, the Parties will alternate
in designating the location for such in-person meetings, with ZIOPHARM selecting
the first meeting location for each Committee. A reasonable number of
additional representatives of a Party may attend meetings of a Committee in a
non-voting capacity. Each Party shall be responsible for all of its
own expenses of participating in any Committee (including without limitation in
any Working Group).
(c) Meeting
Agendas. Each Party will disclose to the other proposed agenda
items along with appropriate information at least seven (7) business days in
advance of each meeting of the applicable Committee; provided, that a Party may
provide its agenda items to the other Party within a lesser period of time in
advance of the meeting, or may propose that there not be a specific agenda for a
particular meeting, so long as such other Party consents to such later addition
of such agenda items or the absence of a specific agenda for such Committee
meeting.
(d) Working
Groups. From time to time, each Committee may establish and
delegate duties to other committees, sub-committees or directed teams (each, a
“Working Group”) on an
“as-needed” basis to oversee particular projects or activities. Each
such Working Group shall be constituted and shall operate as the applicable
Committee determines; provided, that each Working Group shall have equal
representation from each Party. Each Working Group and its activities
shall be subject to the oversight, review and approval of, and shall report to,
the Committee that established such Working Group. In no event shall
the authority of the Working Group exceed that specified for the relevant
Committee in this Article 2.
(e) Limitations of Committee
Powers. Each Committee shall have only such powers as are
specifically delegated to it hereunder or from time to time as agreed to by the
mutual consent of the Parties and shall not be a substitute for the rights of
the Parties. Without limiting the generality of the foregoing, no
Committee shall have any power to amend this Agreement. Any amendment
to the terms and conditions of this Agreement shall be implemented pursuant to
Section 12.7 below.
2.4 Committee
Decision-Making. If a Committee is unable to reach unanimous
consent on a particular matter within thirty (30) days of its initial
consideration of such matter, then either Party may provide written notice of
such dispute to the Executive Officer of the other Party. The
Executive Officers of each of the Parties will meet at least once in person or
by means of telecommunication (telephone, video, or web conferences) to discuss
the dispute and use their good faith efforts to resolve the dispute within
thirty (30) days after submission of such dispute to the Executive
Officers. If any such dispute is not resolved by the Executive
Officers within thirty (30) days after submission of such dispute to such
officers, then the Executive Officer of the Party specified in the applicable
subsection below shall have the authority to finally resolve such dispute acting
in good faith.
(a) Casting Vote at
JSC. If a dispute at the JSC is not resolved pursuant to
Section 2.4 above, then the Executive Officer of ZIOPHARM shall have the
authority to finally resolve such dispute
(b) Casting Vote at
CMCC. If a dispute at the CMCC is not resolved pursuant to
Section 2.4 above, then (i) in the case of any disputes relating to the Intrexon
Materials, the manufacture of a ZIOPHARM Product active pharmaceutical
ingredient, or the manufacturing of other components of ZIOPHARM
Products contracted for or manufactured by Intrexon, the Executive Officer of
Intrexon shall have the authority to finally resolve such dispute; and (ii) in
the case of any other disputes, the Executive Officer of ZIOPHARM shall have the
authority to finally resolve such dispute.
(c) Casting Vote at
CRC. If a dispute at the CRC is not resolved pursuant to
Section 2.4 above, then the Executive Officer of ZIOPHARM shall have the
authority to finally resolve such dispute.
(d) Casting Vote at
CC. If a dispute at the CC is not resolved pursuant to Section
2.4 above, then the Executive Officer of ZIOPHARM shall have the authority to
finally resolve such dispute.
(e) Casting Vote at
IPC. If a dispute at the IPC is not resolved pursuant to
Section 2.4 above, then the Executive Officer of Intrexon shall have the
authority to finally resolve such dispute, [*****].
(f) Other
Committees. If any additional Committee is formed, then the
Parties shall, at the time of such formation, agree on which Party shall have
the authority to finally resolve a dispute that is not resolved pursuant to
Section 2.4 above.
(g) Restrictions. Neither
Party shall exercise its right to finally resolve a dispute at a committee in
accordance with this Section 2.4 in a manner that (i) excuses such Party from
any of its obligations specifically enumerated under this Agreement; (ii)
expands the obligations of the other Party under this Agreement; (iii) negates
any consent rights or other rights specifically allocated to the other Party
under this Agreement; (iv) purports to resolve any dispute involving the breach
or alleged breach of this Agreement; (v) resolves a matter if the provisions of
this Agreement specify that mutual agreement is required for such matter; or
(vi) would require the other Party to perform any act that is inconsistent with
applicable law.
ARTICLE
3
License
Grants
3.1 Licenses to
ZIOPHARM.
(a) Subject
to the terms and conditions of this Agreement, Intrexon hereby grants to
ZIOPHARM a license under the Intrexon IP to research, develop, use, import,
make, have made, sell, and offer for sale ZIOPHARM Products in the Field in the
Territory. Such license shall be exclusive (even as to Intrexon) with
respect to any clinical development, selling, offering for sale or other
Commercialization of ZIOPHARM Products in the Field, and shall be otherwise
non-exclusive.
(b) Subject
to the terms and conditions of this Agreement, Intrexon hereby grants to
ZIOPHARM a non-exclusive, royalty-free license to use and display the Intrexon
Trademarks, solely in connection with the Commercialization of ZIOPHARM
Products, in the promotional materials, packaging, and labeling for ZIOPHARM
Products, as provided under and in accordance with Section 4.9.
3.2 Sublicensing. Except
as provided below, ZIOPHARM shall not sublicense the rights granted under
Section 3.1 to any Third Party, or transfer the Intrexon Materials to any Third
Party, or otherwise grant any Third Party the right to research, develop, use,
or commercialize ZIOPHARM Products, in each case except with Intrexon’s written
consent, which written consent may be withheld in Intrexon’s sole
discretion. Notwithstanding the foregoing, ZIOPHARM may transfer, to
the extent reasonably necessary, Intrexon Materials to a Third Party contractor
performing post-API fill/finish responsibilities for ZIOPHARM Products, and may
grant any sublicenses necessary to enable such Third Party to perform such
activities. In addition, ZIOPHARM shall not sublicense the rights
granted under Section 3.1 to an Affiliate, or transfer the Intrexon Materials to
any Affiliate, or otherwise grant any Affiliate the right to research, develop,
use, or commercialize ZIOPHARM Products, in each case except with Intrexon’s
written consent, which written consent shall not be unreasonably withheld or
delayed. In the event that Intrexon consents to any such grant or
transfer to an Affiliate, ZIOPHARM shall remain responsible for, and be
guarantor of, the performance by any such Affiliate and shall cause such
Affiliate to comply with the provisions of this Agreement in connection with
such performance (as though such Affiliate were ZIOPHARM), including any payment
obligations owed to Intrexon hereunder. None of the enforcement
rights under the Intrexon Patents that are granted to ZIOPHARM pursuant to
Section 6.3 shall be transferred to, or exercised by, a sublicensee except with
Intrexon’s prior written consent, which may be withheld in Intrexon’s sole
discretion.
3.3 No Non-Permitted
Use. ZIOPHARM hereby covenants that it shall not, nor shall it
permit any Affiliate or, if applicable, (sub)licensee, to use or practice,
directly or indirectly, any Intrexon IP, Intrexon Channel Technology, or
Intrexon Materials for any purposes other than those expressly permitted by this
Agreement.
3.4 Exclusivity. Intrexon
and ZIOPHARM mutually agree that, under the channel partnership established by
this Agreement, it is intended that the Parties will be exclusive to each other
in the Field. To this end, neither Intrexon nor its Affiliates shall
make the Intrexon Channel Technology or Intrexon Materials available to any
Third Party for the purpose of developing or commercializing products in the
Field, and neither Intrexon nor any Affiliate shall pursue (either by itself or
with a Third Party or Affiliate) the research, development or commercialization
of any product for purpose of sale in the Field, outside of the Cancer
Program. Further, neither ZIOPHARM nor its Affiliates shall pursue
(either by itself or with a Third Party or Affiliate) the research, development
or commercialization of any product for purpose of sale in the Field, outside of
the Cancer Program.
3.5 [*****].
3.6 No Prohibition on
Intrexon. Except as explicitly set forth in Sections 3.1 and
3.4, nothing in this Agreement shall prevent Intrexon from practicing or using
the Intrexon Materials, Intrexon Channel Technology, and Intrexon IP for any
purpose, and to grant to Third Parties the right to do the
same. Without limiting the generality of the foregoing, ZIOPHARM
acknowledges that Intrexon has all rights, in Intrexon’s sole discretion, to
make the Intrexon Materials, Intrexon Channel Technology (including any active
pharmaceutical ingredient used in a ZIOPHARM Product), and Intrexon IP available
to Third Party channel partners for use in fields outside the
Field.
3.7 [*****].
(a) [*****]
(b) [*****]
(c) [*****]
(d) For
any Third Party license under which ZIOPHARM or its Affiliates obtain a license
under Patents claiming inventions or know-how specific to or used or
incorporated into the development, manufacture, and/or commercialization of
ZIOPHARM Products, ZIOPHARM shall use commercially reasonable efforts to ensure
that ZIOPHARM will have the ability, pursuant to Section 10.4(h), to assign such
agreement to Intrexon or grant a sublicense to Intrexon thereunder (having the
scope set forth in Section 10.4(h)).
(e) The
licenses granted to ZIOPHARM under Section 3.1 may include sublicenses under
Intrexon IP that has been licensed to Intrexon by one or more Third
Parties. Any such sublicenses are subject to the terms and conditions
set forth in the applicable upstream license agreement, subject to the cost
allocation set forth in Section 3.7(c), provided that Intrexon shall
either provide unredacted copies of such upstream license agreements to ZIOPHARM
or shall disclose in writing to ZIOPHARM all of such terms and conditions that
are applicable to ZIOPHARM. ZIOPHARM shall not be responsible for
complying with any provisions of such upstream license agreements unless, and to
the extent that, such provisions have been disclosed to ZIOPHARM as provided in
the preceding sentence.
3.8 Licenses to
Intrexon. Subject to the terms and conditions of this
Agreement, ZIOPHARM hereby grants to Intrexon a non-exclusive, worldwide,
fully-paid, royalty-free license, under any applicable Patents or other
intellectual property Controlled by ZIOPHARM or its Affiliates, solely to the
extent necessary for Intrexon to conduct those responsibilities assigned to it
under this Agreement, which license shall be sublicensable solely to Intrexon’s
Affiliates or to any of Intrexon’s subcontractors.
3.9 Restrictions Relating to Intrexon
Materials. ZIOPHARM shall use the Intrexon Materials solely
for purposes of the Cancer Program and not for any other purpose without the
prior written consent of Intrexon. With respect to the Intrexon
Materials comprising Intrexon’s vector assembly technology, ZIOPHARM shall not,
and shall ensure that ZIOPHARM personnel do not (a) distribute, sell, lend or
otherwise transfer such Intrexon Materials to any Third Party; (b) co-mingle
such Intrexon Materials with any other proprietary biological or chemical
materials without Intrexon’s written consent; or (c) analyze such Intrexon
Materials or in any way attempt to reverse engineer or sequence such Intrexon
Materials.
ARTICLE
4
Other
Rights and Obligations
4.1 Development and
Commercialization. Subject to Sections 4.6 and 4.7, ZIOPHARM
shall be solely responsible for the performance of the Cancer Program and the
development and commercialization of ZIOPHARM Products in the
Field. ZIOPHARM shall be responsible for all costs incurred in
connection with the Cancer Program except that Intrexon shall be responsible for
the following: (a) costs of establishing manufacturing capabilities
and facilities in connection with Intrexon’s manufacturing obligation under
Section 4.6 (provided, however, that Intrexon may include an allocable portion
of such costs, through depreciation and amortization, when calculating the Fully
Loaded Cost of manufacturing ZIOPHARM Product, to the extent such allocation,
depreciation, and amortization is permitted by US GAAP, it being recognized that
the majority of non-facilities scale-up costs cannot be capitalized and
amortized under US GAAP); (b) costs of discovery-stage research with respect to
the Intrexon Channel Technology and Intrexon Materials (i.e., platform
improvements) (but, for clarity, excluding research described in Section 4.7);
(c) [*****]; and (d) costs of filing, prosecution and maintenance of Intrexon
Patents. The costs encompassed within subsection (a) above shall
include the scale-up of Intrexon Materials and API for clinical trials and
commercialization of ZIOPHARM Products undertaken pursuant to Section 4.6, which
shall be at Intrexon’s cost whether it elects to conduct such efforts internally
or through Third Party contractors retained by either Intrexon or ZIOPHARM (with
Intrexon’s consent).
4.2 Transfer of Existing Cancer
Programs. Promptly following the Effective Date, Intrexon
shall promptly assign to ZIOPHARM, and will provide full copies of, all
regulatory approvals and regulatory filings that relate to the Existing Cancer
Programs. Intrexon shall also (a) make available to ZIOPHARM all
Intrexon Materials associated with the conduct of the Existing Cancer Programs,
and (b) take such actions and execute such other instruments, assignments and
documents as may be necessary to effect the transfer of rights thereunder to
ZIOPHARM. No later than sixty (60) days after the Effective Date (or
as soon thereafter as practicable), Intrexon shall provide to ZIOPHARM copies of
the relevant portions of all material reports and data, including clinical and
non-clinical data and reports, obtained or generated by or on behalf of Intrexon
or its Affiliates in connection with the Existing Cancer
Programs. Thereafter, as additional projects are included in the
Cancer Program, the JSC shall develop a plan and protocol for each such project
relating to the transfer of relevant data and Intrexon Materials.
4.3 Information and
Reporting. ZIOPHARM will keep Intrexon informed about
ZIOPHARM’s efforts to develop and commercialize ZIOPHARM Products, including
reasonable and accurate summaries of ZIOPHARM’s (and its Affiliates’ and, if
applicable, (sub)licensees’) global development plans (as updated), global
marketing plans (as updated), progress towards meeting the goals and milestones
in such plans and explanations of any material deviations, and significant
developments in the development and/or commercialization of the ZIOPHARM
Products, including initiation or completion of a clinical trial, submission of
a United States or international regulatory filing, receipt of a response to
such United States or international regulatory filing, clinical safety event,
receipt of Regulatory Approval, or commercial launch. Intrexon will
keep ZIOPHARM informed about Intrexon’s efforts (a) to establish manufacturing
capabilities and facilities for ZIOPHARM Products (and Intrexon Materials
relevant thereto) and otherwise perform its manufacturing responsibilities under
Section 4.6 and (b) to undertake discovery-stage research for the Cancer Program
with respect to the Intrexon Channel Technology and Intrexon
Materials. Such disclosures by ZIOPHARM and Intrexon will be made in
the course of JSC meetings at least once every six (6) months while ZIOPHARM
Products are being developed or commercialized anywhere in the world, and shall
be reflected in the minutes of such meetings.
4.4 Regulatory
Matters. At all times after the Effective Date, ZIOPHARM shall
own and maintain, at its own cost, all regulatory filings and Regulatory
Approvals for ZIOPHARM Products that ZIOPHARM is developing or Commercializing
pursuant to this Agreement. As such, ZIOPHARM shall be responsible
for reporting all adverse events related to such ZIOPHARM Products to the
appropriate regulatory authorities in the relevant countries, in accordance with
the applicable laws and regulations of such countries. The decision
to list or not list Patents in any regulatory filing for a ZIOPHARM Product (for
example, as required by 21 C.F.R. § 314.53(b)), or add or delete a Patent from a
regulatory filing shall be determined by Intrexon, after consultation with
ZIOPHARM, except with respect to Product Specific Program Patents, which will be
mutually determined by the Parties.
4.5 Diligence.
(a) ZIOPHARM
shall use Diligent Efforts to develop and commercialize ZIOPHARM
Products.
(b) Without
limiting the generality of the foregoing, Intrexon may, from time to time,
notify ZIOPHARM that it believes it has identified a Superior Therapy, and in
such case shall provide to ZIOPHARM its then-available information about such
therapy. ZIOPHARM shall have the following obligations with respect
to such proposed Superior Therapy: (i) within sixty (60) days after
such notification, ZIOPHARM shall prepare and deliver to the JSC for review and
approval a development plan detailing how ZIOPHARM will pursue the Superior
Therapy (including a proposed budget); (ii) ZIOPHARM shall revise the
development plan as directed by the JSC; and (iii) following approval of the
development plan by the JSC, ZIOPHARM shall use Diligent Efforts to pursue the
development of the Superior Therapy under the Cancer Program in accordance with
such development plan. If ZIOPHARM fails to comply with the foregoing
obligations, or if ZIOPHARM exercises its casting vote at the JSC to either (x)
prevent the approval of a development plan for a Superior Therapy; (y) delay
such approval more than sixty (60) days after delivery of the development plan
to the JSC; or (z) approve a development plan that is insufficient in view of
the nature and magnitude of the opportunity presented by the Superior Therapy,
then Intrexon shall have the termination right set forth in Section 10.2(b)
(subject to the limitation set forth therein). For clarity, any
dispute arising under this 4.5, including any dispute as to whether a proposed
project constitutes a Superior Therapy (as with any other dispute under this
Agreement) shall be subject to dispute resolution in accordance with Article
11.
(c) The
activities of ZIOPHARM’s Affiliates and any permitted sublicensees shall be
attributed to ZIOPHARM for the purposes of evaluating ZIOPHARM’s fulfillment of
the obligations set forth in this Section 4.5.
4.6 Manufacturing. Intrexon
shall use Diligent Efforts to perform any manufacturing activities in connection
with the Cancer Program that relate to the Intrexon Materials, the manufacture
of bulk drug product, the manufacturing of bulk quantities of other components
of ZIOPHARM Products, or any earlier steps in the manufacturing process for
ZIOPHARM Products. Except as provided in Section 4.1, any
manufacturing undertaken by Intrexon pursuant to the preceding sentence shall be
performed in exchange for cash payments equal to Intrexon’s Fully Loaded Cost in
connection with such manufacturing, on terms to be negotiated by the Parties in
good faith. In the event that Intrexon does not manufacture Intrexon
Materials, bulk drug product or bulk qualities of other components of ZIOPHARM
Products, then Intrexon shall provide to ZIOPHARM or a contract manufacturer
selected by ZIOPHARM and approved by Intrexon all Information Controlled by
Intrexon that is related to the manufacturing of such Intrexon Materials, bulk
drug product or bulk qualities of other components of ZIOPHARM Products, for use
in the Field and is reasonably necessary to enable ZIOPHARM or such contract
manufacturer (as appropriate) for the sole purpose of manufacturing such
Intrexon Materials, bulk drug product or bulk quantities of other components of
ZIOPHARM Products, in each case as manufactured by Intrexon. The
costs and expenses incurred by Intrexon in carrying out such transfer shall be
borne by Intrexon. Any manufacturing Information transferred
hereunder to ZIOPHARM or its contract manufacturer shall not be further
transferred to any Third Party or ZIOPHARM Affiliate without the prior written
consent of Intrexon; provided, however, that Intrexon shall not unreasonably
withhold such consent if necessary to permit ZIOPHARM to switch
manufacturers.
4.7 Support
Services. From time to time, on an ongoing basis, ZIOPHARM
shall request, or Intrexon may propose, that Intrexon perform certain support
services with respect to the Cancer Program, such services including but not
limited to, pre-clinical or clinical activities relating to transition of the
Cancer Program to ZIOPHARM. To the extent that the Parties mutually
agree that Intrexon should perform such services, the Parties shall negotiate in
good faith the terms under which services would be performed, it being
understood that Intrexon would be compensated for such services by cash payments
equal to Intrexon’s Fully Loaded Cost in connection with such
services.
4.8 Compliance with
Law. Each Party shall comply, and shall ensure that its
Affiliates, (sub)licensees and Third Party contractors comply, with all
applicable laws, regulations, and guidelines applicable to the Cancer Program,
including without limitation those relating to the transport, storage, and
handling of Intrexon Materials and ZIOPHARM Products.
4.9 Trademarks. To the
extent permitted by applicable law and regulations, ZIOPHARM shall, and shall
ensure that the packaging, promotional materials, and labeling for ZIOPHARM
Products shall carry, in a conspicuous location, the applicable Intrexon
Trademark(s), subject to ZIOPHARM’s reasonable approval of the size, position,
and location thereof. ZIOPHARM shall provide Intrexon with copies of
any materials containing the Intrexon Trademarks prior to using or disseminating
such materials, in order to obtain ZIOPHARM’s approval
thereof. ZIOPHARM’s use of the Intrexon Trademarks shall be subject
to prior review and approval of the IPC. ZIOPHARM acknowledges
Intrexon’s sole ownership of the Intrexon Trademarks and agrees not to take any
action inconsistent with such ownership. ZIOPHARM covenants that it
shall not use any trademark confusingly similar to any Intrexon Trademarks in
connection with any products (including any ZIOPHARM Product). From
time to time during the Term, Intrexon shall have the right to obtain from
ZIOPHARM samples of ZIOPHARM Product sold by ZIOPHARM or its Affiliates or
sublicensees for the purpose of inspecting the quality of such ZIOPHARM Products
and use of the Intrexon Trademark(s). In the event that Intrexon
inspects the quality of such ZIOPHARM Products and use of the Intrexon
Trademark, Intrexon shall notify the result of such inspection to ZIOPHARM in
writing thereafter. ZIOPHARM shall comply with reasonable policies
provided by Intrexon from time-to-time to maintain the goodwill and value of the
Intrexon Trademarks.
ARTICLE
5
Compensation
5.1 Equity. In partial
consideration for ZIOPHARM’s appointment as an exclusive channel partner and the
other rights granted to ZIOPHARM hereunder, ZIOPHARM has agreed to issue to
Intrexon certain shares of ZIOPHARM’s common stock, in accordance with the terms
and conditions of that certain Stock Purchase Agreement and Registration Rights
Agreement, each of even date herewith (the “Equity
Agreements”). Pursuant to the Equity Agreements, Intrexon has
also agreed to purchase certain shares of the Company’s common stock for cash
consideration, subject to the terms and conditions therein. Provided
that all closing conditions for the First Tranche Closing (as defined in the
Equity Agreements) that are within the reasonable control of Intrexon have been
satisfied or waived, the issuance of the First Tranche Shares (as defined in the
Equity Agreements) is a condition subsequent to the effectiveness of this
Agreement.
5.2 Profit-Share.
(a) No
later than thirty (30) days after each calendar quarter in which there is
positive Product Profit arising from the sale of ZIOPHARM Product in the Field
in the Territory, ZIOPHARM shall pay to Intrexon fifty percent (50%) of such
Product Profit, on a ZIOPHARM Product-by-ZIOPHARM Product basis. In
the event of negative Product Profit for a particular ZIOPHARM Product in any
calendar quarter, neither ZIOPHARM nor Intrexon shall owe any payments hereunder
with respect to such ZIOPHARM Product. [*****]. Except as
set forth in the preceding sentence, ZIOPHARM shall not be permitted to carry
forward any negative Product Profits to subsequent quarters.
(b) No
later than thirty (30) days after each calendar quarter in which ZIOPHARM or any
ZIOPHARM Affiliate receives Sublicensing Revenue, ZIOPHARM shall pay to Intrexon
fifty percent (50%) of such Sublicensing Revenue. As set forth in
Section 3.2, sublicensing shall require Intrexon’s prior written
consent. Nevertheless, this Section 5.2(b) shall apply to
Sublicensing Revenue received by ZIOPHARM or any ZIOPHARM Affiliate, even if
rights were granted to the applicable sublicensee in violation of this
Agreement. For purposes of clarity, sales of ZIOPHARM Products by
approved sublicensees shall not constitute Net Sales.
5.3 Method of
Payment. All payments due to Intrexon under this Agreement
shall be paid in United States dollars by wire transfer to a bank in the United
States designated in writing by Intrexon. All references to “dollars”
or “$” herein shall refer to United States dollars.
5.4 Payment Reports and Records
Retention. Within thirty (30) days after the end of each
calendar quarter during which Net Sales have been generated or Allowable
Expenses been incurred, ZIOPHARM shall deliver to Intrexon a written report that
shall contain at a minimum for the applicable calendar quarter:
(a) gross
sales of each ZIOPHARM Product (on a country-by-country basis);
(b) itemized
calculation of Net Sales, showing all applicable deductions;
(c) itemized
calculation of Allowable Expenses and Sublicensing Revenue;
(d) the
amount of the payment (if any) due pursuant to Section 5.2(a) and/or
5.2(b);
(e) the
amount of taxes, if any, withheld to comply with any applicable law;
and
(f) the
exchange rates used in any of the foregoing calculations.
For three
(3) years after each sale of ZIOPHARM Product or the incurring of an item
included in Allowable Expenses, ZIOPHARM shall keep (and shall ensure that its
Affiliates and, if applicable, (sub)licensees shall keep) complete and accurate
records of such sales or Allowable Expenses (as the case may be) in sufficient
detail to confirm the accuracy of the payment calculations
hereunder.
5.5 Audits.
(a) Upon
the written request of Intrexon, ZIOPHARM shall permit an independent certified
public accounting firm of internationally recognized standing selected by
Intrexon, and reasonably acceptable to ZIOPHARM, to have access to and to
review, during normal business hours and upon no less than thirty (30) days
prior written notice, the applicable records of ZIOPHARM and its Affiliates to
verify the accuracy and timeliness of the reports and payments made by ZIOPHARM
under this Agreement. Such review may cover the records for sales
made in any calendar year ending not more than three (3) years prior to the date
of such request. The accounting firm shall disclose to both Parties
whether the royalty reports and/or know-how reports conform to the provisions of
this Agreement and/or US GAAP, as applicable, and the specific details
concerning any discrepancies. Such audit may not be conducted more
than once in any calendar year.
(b) If
such accounting firm concludes that additional amounts were owed during such
period, ZIOPHARM shall pay additional amounts, with interest from the date
originally due as set forth in Section 5.7, within thirty (30) days of receipt
of the accounting firm’s written report. If the amount of the
underpayment is greater than five percent (5%) of the total amount actually owed
for the period audited, then ZIOPHARM shall in addition reimburse Intrexon for
all costs related to such audit; otherwise, Intrexon shall pay all costs of the
audit. In the event of overpayment, any amount of such overpayment
shall be fully creditable against amounts payable for the immediately succeeding
calendar quarter(s); provided, however, that such credit cannot be
applied to reduce the amounts payable by ZIOPHARM to Intrexon for any particular
calendar quarter by more than [*****] of the amount otherwise due to
Intrexon.
(c) Intrexon
shall (i) treat all information that it receives under this Section 5.5 in
accordance with the confidentiality provisions of Article 7 and (ii) cause its
accounting firm to enter into an acceptable confidentiality agreement with
ZIOPHARM obligating such firm to retain all such financial information in
confidence pursuant to such confidentiality agreement, in each case except to
the extent necessary for Intrexon to enforce its rights under this
Agreement.
5.6 Taxes. The Parties
will cooperate in good faith to obtain the benefit of any relevant tax treaties
to minimize as far as reasonably possible any taxes which may be levied on any
amounts payable hereunder. ZIOPHARM shall deduct or withhold from any
payments any taxes that it is required by applicable law to deduct or
withhold. Notwithstanding the foregoing, if Intrexon is entitled
under any applicable tax treaty to a reduction of the rate of, or the
elimination of, applicable withholding tax, it may deliver to ZIOPHARM or the
appropriate governmental authority (with the assistance of ZIOPHARM to the
extent that this is reasonably required and is expressly requested in writing)
the prescribed forms necessary to reduce the applicable rate of withholding or
to relieve ZIOPHARM of its obligation to withhold tax, and ZIOPHARM shall apply
the reduced rate of withholding tax, or dispense with withholding tax, as the
case may be, provided that ZIOPHARM has received evidence of Intrexon’s delivery
of all applicable forms (and, if necessary, its receipt of appropriate
governmental authorization) at least fifteen (15) days prior to the time that
the payment is due. If, in accordance with the foregoing, ZIOPHARM
withholds any amount, it shall make timely payment to the proper taxing
authority of the withheld amount, and send to Intrexon proof of such payment
within forty-five (45) days following that latter payment.
5.7 Late Payments. Any
amount owed by ZIOPHARM to Intrexon under this Agreement that is not paid within
the applicable time period set forth herein shall accrue interest at the lower
of (a) two percent (2%) per month, compounded, or (b) the highest rate permitted
under applicable law.
ARTICLE
6
Intellectual
Property
6.1 Ownership.
(a) Subject
to the license granted under Section 3.1, all rights in the Intrexon IP shall
remain with Intrexon.
(b) ZIOPHARM
and/or Intrexon may solely or jointly conceive, reduce to practice or develop
discoveries, inventions, processes, techniques, and other technology, whether or
not patentable, in the course of performing the Cancer Program (collectively
“Inventions”). Each
Party shall promptly provide the other Party with a detailed written description
of any such Inventions that relate to the Field. Inventorship shall
be determined in accordance with United States patent laws.
(c) Intrexon
shall solely own all right, title and interest in all Inventions related to
Intrexon Channel Technology, together with all Patent rights and other
intellectual property rights therein (the “Channel-Related Program
IP”). ZIOPHARM hereby assigns all of its right, title and
interest in and to the Channel-Related Program IP to
Intrexon. ZIOPHARM agrees to execute such documents and perform such
other acts as Intrexon may reasonably request to obtain, perfect and enforce its
rights to the Channel-Related Program IP and the assignment
thereof.
(d) Notwithstanding
anything to the contrary in this Agreement, any discovery, invention, process,
technique, or other technology, whether or not patentable, that is conceived,
reduced to practice or developed by ZIOPHARM solely or jointly through the use
of the Intrexon Channel Technology, Intrexon IP, or Intrexon Materials in breach
of the terms and conditions of this Agreement, together with all patent rights
and other intellectual property rights therein, shall be solely owned by
Intrexon and shall be included in the Channel-Related Program IP.
(e) All
information regarding Channel-Related Program IP shall be Confidential
Information of Intrexon. ZIOPHARM shall be under appropriate written
agreements with each of its employees or agents working on the Cancer Program,
pursuant to which such person shall grant all rights in the Inventions to
ZIOPHARM (so that ZIOPHARM may convey certain of such rights to Intrexon, as
provided herein).
6.2 Patent
Prosecution.
(a) Intrexon
shall have the sole right, but not the obligation, to conduct and control the
filing, prosecution and maintenance of the Intrexon Patents. At the
reasonable request of Intrexon, ZIOPHARM shall cooperate with Intrexon in
connection with such filing, prosecution, and maintenance, at Intrexon’s
expense. Under no circumstances shall ZIOPHARM (a) file, attempt to
file, or assist anyone else in filing, or attempting to file, any Patent
application, either in the United States or elsewhere, that claims or uses or
purports to claim or use or relies for support upon an Invention owned by
Intrexon or use, attempt to use, or assist anyone else in using or attempting to
use, the Intrexon Know-How, Intrexon Materials, or any Confidential Information
of Intrexon to support the filing of a Patent application, either in the United
States or elsewhere, that contains claims directed to the Intrexon IP, Intrexon
Materials, or the Intrexon Channel Technology.
(b) ZIOPHARM
shall have the sole right, but not the obligation, to conduct and control the
filing, prosecution and maintenance of any Patents claiming Inventions that are
owned by ZIOPHARM or its Affiliates and not assigned to Intrexon under Section
6.1(c) ( “ZIOPHARM Program
Patents”). At the reasonable request of ZIOPHARM, Intrexon
shall cooperate with ZIOPHARM in connection with such filing, prosecution, and
maintenance, at ZIOPHARM’s expense.
(c) The
Prosecuting Party shall be entitled to use patent counsel selected by it and
reasonably acceptable to the non-Prosecuting Party (including in-house patent
counsel as well as outside patent counsel) for the prosecution of the Intrexon
Patents and ZIOPHARM Program Patents, as applicable. The Prosecuting
Party shall:
(i) regularly
provide the other Party in advance with reasonable information relating to the
Prosecuting Party’s prosecution of Patents hereunder, including by providing
copies of substantive communications, notices and actions submitted to or
received from the relevant patent authorities and copies of drafts of filings
and correspondence that the Prosecuting Party proposes to submit to such patent
authorities (it being understood that, to the extent that any such information
is readily accessible to the public, the Prosecuting Party may, in lieu of
directly providing copies of such information to such other Party, provide such
other Party with sufficient information that will permit such other Party to
access such information itself directly);
(ii) consider
in good faith and consult with the non-Prosecuting Party regarding its timely
comments with respect to the same; provided, however, that if, within fifteen
(15) days after providing any documents to the non-Prosecuting Party for
comment, the Prosecuting Party does not receive any written communication from
the non-Prosecuting Party indicating that it has or may have comments on such
document, the Prosecuting Party shall be entitled to assume that the
non-Prosecuting Party has no comments thereon;
(iii) consult
with the non-Prosecuting Party before taking any action that would reasonably be
expected to have a material adverse impact on the scope of claims within the
Intrexon Patents and ZIOPHARM Program Patents, as applicable.
As used
above “Prosecuting
Party” means Intrexon in the case of Intrexon Patents and ZIOPHARM in the
case of ZIOPHARM Program Patents.
6.3 Infringement of Patents by Third
Parties.
(a) Except
as expressly provided in the remainder of this Section 6.3, Intrexon shall have
the sole right to take appropriate action against any person or entity directly
or indirectly infringing any Intrexon Patent (or asserting that a Intrexon
Patent is invalid or unenforceable) (collectively, “Infringement”), either by
settlement or lawsuit or other appropriate action.
(b) Notwithstanding
the foregoing, [*****] shall have the [*****] right, but not the obligation, to
take appropriate action to enforce [*****] against any Infringement that
involves a [*****] of allegedly infringing activities in the Field (“[*****]”),
either by settlement or lawsuit or other appropriate action. If
[*****] fails to take the appropriate steps to enforce [*****] against any
[*****] within [*****] days of the date one Party has provided notice to the
other Party pursuant to Section 6.3(g) of such [*****], then [*****] shall have
the right (but not the obligation), at its own expense, to enforce [*****]
against such [*****], either by settlement or lawsuit or other appropriate
action.
(c) With
respect to any [*****] that cannot reasonably be abated through the enforcement
of [*****] pursuant to Section 6.3(b) but can reasonable be abated through the
enforcement of [*****] (other than the [*****]),[*****] shall be obligated to
choose one of the following courses of action: [*****]. The
determination of which [*****] to assert shall be made by [*****] in its sole
discretion; provided, however, that [*****] shall consult in good faith with
[*****] on such determination. For the avoidance of doubt, [*****]
has no obligations under this Agreement to enforce any [*****] against, or
otherwise abate, any Infringement that is not a [*****].
(d) In
the event a Party pursues an action under this Section 6.3, the other Party
shall reasonably cooperate with the enforcing Party with respect to the
investigation and prosecution of any alleged, threatened, or actual
Infringement, at the enforcing Party’s expense (except with respect to an action
under Section 6.3(c), where all costs and expenses will be shared equally in
accordance with terms thereof).
(e) [*****]
shall not settle or otherwise compromise any action under this Section 6.3 in a
way that diminishes the rights or interests of [*****] or adversely affects any
[*****] without [*****]’s prior written consent, which consent shall not be
unreasonably withheld. [*****] shall not settle or otherwise
compromise any action under this Section 6.3 in a way that diminishes the rights
or interests of [*****] in the [*****] or adversely affects any [*****] with
respect to the [*****] without [*****]’s prior written consent, which consent
shall not be unreasonably withheld.
(f) Except
as otherwise agreed to by the Parties in writing, any settlements, damages or
other monetary awards recovered pursuant to a suit, proceeding, or action
brought pursuant to Section 6.3 will be allocated first to the costs and
expenses of the Party controlling such action, and second, to the costs and
expenses (if any) of the other Party (to the extent not otherwise reimbursed),
and any remaining amounts (the “[*****]”) will be shared by the
Parties as follows: [*****]. In any action initiated by
[*****] pursuant to Section 6.3(c), the Parties shall share the [*****] equally,
and such [*****] shall not be deemed to constitute [*****].
(g) ZIOPHARM
shall promptly notify Intrexon in writing of any alleged, threatened, or actual
Infringement of which it becomes aware, and Intrexon shall promptly notify
ZIOPHARM in writing of any alleged, threatened, or actual [*****] of which it
becomes aware.
ARTICLE
7
Confidentiality
7.1 Confidentiality. Except
to the extent expressly authorized by this Agreement or otherwise agreed in
writing by the Parties, each Party agrees that it shall keep confidential and
shall not publish or otherwise disclose and shall not use for any purpose other
than as provided for in this Agreement any Confidential Information disclosed to
it by the other Party pursuant to this Agreement, except to the extent that the
receiving Party can demonstrate by competent evidence that specific Confidential
Information:
(a) was
already known to the receiving Party, other than under an obligation of
confidentiality, at the time of disclosure by the other Party;
(b) was
generally available to the public or otherwise part of the public domain at the
time of its disclosure to the receiving Party;
(c) became
generally available to the public or otherwise part of the public domain after
its disclosure and other than through any act or omission of the receiving Party
in breach of this Agreement;
(d) was
disclosed to the receiving Party, other than under an obligation of
confidentiality to a Third Party, by a Third Party who had no obligation to the
disclosing Party not to disclose such information to others; or
(e) was
independently discovered or developed by the receiving Party without the use of
Confidential Information belonging to the disclosing Party, as documented by the
receiving Party’s written records.
The
foregoing non-use and non-disclosure obligation shall continue (i) indefinitely,
for all Confidential Information that qualifies as a trade secret under
applicable law; or (ii) for the Term of this Agreement and for [*****] years
thereafter, in all other cases.
7.2 Authorized
Disclosure. Notwithstanding the limitations in this Article 7,
either Party may disclose the Confidential Information belonging to the other
Party to the extent such disclosure is reasonably necessary in the following
instances:
(a) complying
with applicable laws or regulations or valid court orders, provided that the Party
making such disclosure provides the other Party with reasonable prior written
notice of such disclosure and makes a reasonable effort to obtain, or to assist
the other Party in obtaining, a protective order preventing or limiting the
disclosure and/or requiring that the terms and conditions of this Agreement be
used only for the purposes for which the law or regulation required, or for
which the order was issued;
(b) to
regulatory authorities in order to seek or obtain approval to conduct clinical
trials, or to gain regulatory approval, of ZIOPHARM Products or any products
being developed by Intrexon or its other licensees and/or channel partners,
provided that the Party making such disclosure (i) provides the other Party with
reasonable opportunity to review any such disclosure in advance and to suggest
redactions or other means of limiting the disclosure of such other Party’s
Confidential Information and (ii) does not unreasonably reject any such
suggestions;
(c) disclosure
to investors and potential investors, acquirers, or merger candidates who agree
to maintain the confidentiality of such information, provided that such disclosure
is used solely for the purpose of evaluating such investment, acquisition, or
merger (as the case may be);
(d) disclosure
on a need-to-know basis to Affiliates, licensees, sublicensees, employees,
consultants or agents (such as CROs and clinical investigators) who agree to be
bound by obligations of confidentiality and non-use at least equivalent in scope
to those set forth in this Article 7; and
(e) disclosure
of the terms of this Agreement by Intrexon to collaborators and other channel
partners who agree to be bound by obligations of confidentiality and non-use at
least equivalent in scope to those set forth in this Article
7.
7.3 Publicity. The
Parties agree that the public announcement of the execution of this Agreement
shall be substantially in the form of the press release attached as Exhibit
B.
7.4 Terms of the
Agreement. Each Party shall treat the terms of this Agreement
as the Confidential Information of other Party, subject to the exceptions set
forth in Section 7.2. Notwithstanding the foregoing, each Party
acknowledges that the other Party may be obligated to file a copy of this
Agreement with the SEC, either as of the Effective Date or at some point during
the Term. Each Party shall be entitled to make such a required
filing, provided that it requests confidential treatment of certain commercial
terms and sensitive technical terms hereof to the extent such confidential
treatment is reasonably available to it. In the event of any such
filing, the filing Party shall provide the other Party with a copy of the
Agreement marked to show provisions for which the filing Party intends to seek
confidential treatment and shall reasonably consider and incorporate the other
Party’s comments thereon to the extent consistent with the legal requirements
governing redaction of information from material agreements that must be
publicly filed. The other Party shall promptly provide any such
comments.
7.5 Proprietary
Information Audits.
(a) For
the purpose of confirming compliance with the Field-limited licenses granted in
Article 3 and the confidentiality obligations under Article 7, ZIOPHARM
acknowledges that Intrexon’s authorized representative(s), during regular
business hours may (i) examine and inspect ZIOPHARM’s facilities and (ii)
inspect all data and work products relating to this Agreement. Any
examination or inspection hereunder shall require five (5) business days written
notice from Intrexon to ZIOPHARM. ZIOPHARM will make itself and the
pertinent employees and/or agents available, on a reasonable basis, to Intrexon
for the aforementioned compliance review.
(b) In
view of the Intrexon Confidential Information, Intrexon Know-How, and Intrexon
Materials transferred to ZIOPHARM hereunder, Intrexon from time-to-time, but no
more than quarterly, may request that ZIOPHARM confirm the status of the
Intrexon Materials at Company (i.e. how much used, how much shipped, to whom and
any unused amounts destroyed (by whom, when) as well as any amounts returned to
Intrexon or destroyed). Within ten (10) business days of ZIOPHARM’s
receipt of any such written request, ZIOPHARM shall provide the written report
to Intrexon.
7.6 Intrexon
Commitment. Intrexon shall use reasonable efforts to obtain an
agreement with its other licensees and channel partners to enable ZIOPHARM to
disclose confidential information of such licensees and channel partners to
regulatory authorities in order to seek or obtain approval to conduct clinical
trials, or to gain regulatory approval of, ZIOPHARM Products, in a manner
consistent with the provisions of Section 7.2(b).
ARTICLE
8
Representations
And Warranties
8.1 Representations and Warranties of
ZIOPHARM. ZIOPHARM hereby represents and warrants to Intrexon
that, as of the Effective Date:
(a) Corporate
Power. ZIOPHARM is duly organized and validly existing under
the laws of Delaware and has corporate full power and authority to enter into
this Agreement and to carry out the provisions hereof.
(b) Due
Authorization. ZIOPHARM is duly authorized to execute and
deliver this Agreement and to perform its obligations hereunder, and the person
executing this Agreement on ZIOPHARM’s behalf has been duly authorized to do so
by all requisite corporate action.
(c) Binding
Agreement. This Agreement is a legal and valid obligation
binding upon ZIOPHARM and enforceable in accordance with its terms, except as
such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, arrangement, moratorium or other similar laws affecting
creditors’ rights, and subject to general equity principles and to limitations
on availability of equitable relief, including specific
performance. The execution, delivery and performance of this
Agreement by ZIOPHARM does not conflict with any agreement, instrument or
understanding, oral or written, to which it is a party or by which it may be
bound. ZIOPHARM is aware of no action, suit or inquiry or
investigation instituted by any governmental agency which questions or threatens
the validity of this Agreement.
8.2 Representations and Warranties of
Intrexon. Intrexon hereby represents and warrants to ZIOPHARM
that, as of the Effective Date:
(a) Corporate
Power. Intrexon is duly organized and validly existing under
the laws of Virginia and has full corporate power and authority to enter into
this Agreement and to carry out the provisions hereof.
(b) Due
Authorization. Intrexon is duly authorized to execute and
deliver this Agreement and to perform its obligations hereunder, and the person
executing this Agreement on Intrexon’s behalf has been duly authorized to do so
by all requisite corporate action.
(c) Binding
Agreement. This Agreement is a legal and valid obligation
binding upon Intrexon and enforceable in accordance with its terms, except as
such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, arrangement, moratorium or other similar laws affecting
creditors’ rights, and subject to general equity principles and to limitations
on availability of equitable relief, including specific
performance. The execution, delivery and performance of this
Agreement by Intrexon does not conflict with any agreement, instrument or
understanding, oral or written, to which it is a party or by which it may be
bound. Intrexon is aware of no action, suit or inquiry or
investigation instituted by any governmental agency which questions or threatens
the validity of this Agreement.
(d) Additional Intellectual Property
Representations.
(i) Intrexon
possesses sufficient rights to enable Intrexon to grant all rights and licenses
it purports to grant to ZIOPHARM with respect to the Intrexon Patents under this
Agreement;
(ii) The
Intrexon Patents existing as of the Effective Date constitute all of the Patents
Controlled by Intrexon as of such date that are necessary for the development,
manufacture or Commercialization of ZIOPHARM Products;
(iii) Intrexon
has not granted, and during the Term Intrexon will not grant, any right or
license, to any Third Party under the Intrexon IP that conflicts with the rights
or licenses granted or to be granted to ZIOPHARM hereunder;
(iv) There
is no pending litigation, and Intrexon has not received any written notice of
any claims or litigation, seeking to invalidate or otherwise challenge the
Intrexon Patents or Intrexon’s rights therein;
(v) To
Intrexon’s knowledge, [*****], the use of the Intrexon Materials in connection
with the Existing Cancer Programs as of the Effective Date and the conduct of
the Existing Cancer Programs as contemplated as of the Effective Date, does not
(A) infringe any claims of any Patents of any Third Party, or (b) misappropriate
any Information of any Third Party;
(vi) None
of the Intrexon Patents is subject to any pending re-examination, opposition,
interference or litigation proceedings;
(vii) All
of the Intrexon Patents have been filed and prosecuted in accordance with all
applicable laws and have been maintained, with all applicable fees with respect
thereto (to the extent such fees have come due) having been paid;
(viii) Intrexon
has entered into agreements with each of its current and former officers,
employees and consultants involved in research and development work, including
development of the Intrexon’s products and technology providing Intrexon, to the
extent permitted by law, with title and ownership to patents, patent
applications, trade secrets and inventions conceived, developed, reduced to
practice by such person, solely or jointly with other of such persons, during
the period of employment by Intrexon (except where the failure to have entered
into such an agreement would not have a material adverse effect on the rights
granted to ZIOPHARM herein), and Intrexon is not aware that any of its employees
or consultants is in material violation thereof;
(ix) To
Intrexon’s knowledge, there is no infringement, misappropriation or violation by
third parties of any Intrexon Channel Technology in the Field;
(x) There
is no pending or, to Intrexon’s knowledge, threatened action, suit, proceeding
or claim by others against Intrexon that Intrexon infringes, misappropriates or
otherwise violates any intellectual property or other proprietary rights of
others in connection with the use of the Intrexon Channel Technology, and
Intrexon has not received any written notice of such claim;
(xi) To
Intrexon’s knowledge, no employee of Intrexon is the subject of any claim or
proceeding involving a violation of any term of any employment contract, patent
disclosure agreement, invention assignment agreement, non-competition agreement,
non-solicitation agreement, non-disclosure agreement or any restrictive covenant
to or with a former employer (A) where the basis of such violation relates to
such employee’s employment with Intrexon or actions undertaken by the employee
while employed with Intrexon and (B) where such violation is relevant to the use
of the Intrexon Channel Technology in the Field;
(xii) None
of the Intrexon Patents owned by Intrexon or its Affiliates, and, to Intrexon’s
knowledge, the Intrexon Patents licensed to Intrexon or its Affiliates, have
been adjudged invalid or unenforceable by a court of competent jurisdiction or
applicable government agency, in whole or in part, and there is no pending or,
to Intrexon’s knowledge, threatened action, suit, proceeding or claim by others
challenging the validity or scope of any such Intrexon Patents; and
(xiii) Except
as otherwise disclosed in writing to ZIOPHARM, Intrexon: (A) is in
material compliance with all statutes, rules or regulations applicable to the
ownership, testing, development, manufacture, packaging, processing, use,
distribution, marketing, labeling, promotion, sale, offer for sale, storage,
import, export or disposal of any product that is under development,
manufactured or distributed by Intrexon in the Field (“Applicable Laws”); (B) has not
received any FDA Form 483, notice of adverse finding, warning letter, untitled
letter or other correspondence or notice from the United States Food and Drug
Administration (the “FDA”) or any other federal,
state, local or foreign governmental or regulatory authority alleging or
asserting material noncompliance with any Applicable Laws or any licenses,
certificates, approvals, clearances, authorizations, permits and supplements or
amendments thereto required by any such Applicable Laws (“Authorizations”), which would
not, individually or in the aggregate, result in a material adverse effect; (C)
possesses all material Authorizations necessary for the operation of its
business as described in the Field and such Authorizations are valid and in full
force and effect and Intrexon is not in material violation of any term of any
such Authorizations; and (D) since January 1, 2008, (1) has not received notice
of any claim, action, suit, proceeding, hearing, enforcement, investigation,
arbitration or other action from the FDA or any other federal, state, local or
foreign governmental or regulatory authority or third party alleging that any
product operation or activity is in material violation of any Applicable Laws or
Authorizations and has no knowledge that the FDA or any other federal, state,
local or foreign governmental or regulatory authority or third party is
considering any such claim, litigation, arbitration, action, suit investigation
or proceeding; (2) has not received notice that the FDA or any other federal,
state, local or foreign governmental or regulatory authority has taken, is
taking or intends to take action to limit, suspend, modify or revoke any
material Authorizations and has no knowledge that the FDA or any other federal,
state, local or foreign governmental or regulatory authority is considering such
action; (3) has filed, obtained, maintained or submitted all material reports,
documents, forms, notices, applications, records, claims, submissions and
supplements or amendments as required by any Applicable Laws or Authorizations
and that all such reports, documents, forms, notices, applications, records,
claims, submissions and supplements or amendments were materially complete and
correct on the date filed (or were corrected or supplemented by a subsequent
submission); and (4) has not, either voluntarily or involuntarily, initiated,
conducted, or issued or caused to be initiated, conducted or issued, any recall,
market withdrawal or replacement, safety alert, post sale warning, “dear doctor”
letter, or other notice or action relating to the alleged lack of safety or
efficacy of any product or any alleged product defect or violation and, to
Intrexon’s knowledge, no third party has initiated, conducted or intends to
initiate any such notice or action. Except to the extent disclosed in
writing to ZIOPHARM, since January 1, 2008, Intrexon has not received any
notices or correspondence from the FDA or any other federal, state, local or
foreign governmental or regulatory authority requiring the termination,
suspension or material modification of any studies, tests or preclinical or
clinical trials conducted by or on behalf of Intrexon.
except,
in each of (ix) through (xiii), for any instances which would not, individually
or in the aggregate, result in a material adverse effect on the rights granted
to ZIOPHARM hereunder or Intrexon’s ability to perform its obligations
hereunder.
8.3 Warranty
Disclaimer. EXCEPT FOR THE EXPRESS WARRANTIES PROVIDED IN THIS
ARTICLE 8 OR IN THE EQUITY AGREEMENTS, EACH PARTY HEREBY DISCLAIMS ANY AND ALL
OTHER WARRANTIES, EITHER EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY
WARRANTIES OF TITLE, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR
NONINFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD
PARTIES.
ARTICLE
9
Indemnification
9.1 Indemnification by
Intrexon. Intrexon agrees to indemnify, hold harmless, and
defend ZIOPHARM and its Affiliates and their respective directors, officers,
employees, and agents (collectively, the “ZIOPHARM Indemnitees”) from
and against any and all liabilities, damages, costs, expenses, or losses
(including reasonable legal expenses and attorneys’ fees) (collectively, “Losses”) resulting from any
claims, suits, actions, demands, or other proceedings brought by a Third Party
(collectively, “Claims”)
to the extent arising from (a) the gross negligence or willful misconduct of
Intrexon or any of its Affiliates, or their respective employees or agents, (b)
the use, handling, storage or transport of Intrexon Materials by or on behalf of
Intrexon or its Affiliates, licensees (other than ZIOPHARM) or sublicensees; or
(c) breach by Intrexon of any representation, warranty or covenant in this
Agreement. Notwithstanding the foregoing, Intrexon shall not have any
obligation to indemnify the ZIOPHARM Indemnitees to the extent that a Claim
arises from (i) the gross negligence or willful misconduct of ZIOPHARM or any of
its Affiliates, licensees, or sublicensees, or their respective employees or
agents; or (ii) a breach by ZIOPHARM of a representation, warranty, or covenant
of this Agreement.
9.2 Indemnification by
ZIOPHARM. ZIOPHARM agrees to indemnify, hold harmless, and
defend Intrexon, its Affiliates and Third Security, and their respective
directors, officers, employees, and agents (and any Third Parties which have
licensed to Intrexon intellectual property rights within Intrexon IP on or prior
to the Effective Date, to the extent required by the relevant upstream license
agreement) (collectively, the “Intrexon Indemnitees”) from
and against any Losses resulting from Claims, to the extent arising from any of
the following: (a) the gross negligence or willful misconduct of
ZIOPHARM or any of its Affiliates or their respective employees or agents; (b)
the use, handling, storage, or transport of Intrexon Materials by or on behalf
of ZIOPHARM or its Affiliates, licensees, or sublicensees; (c) breach by
ZIOPHARM or any representation, warranty or covenant in this Agreement; or (d)
the design, development, manufacture, regulatory approval, handling, storage,
transport, distribution, sale or other disposition of any ZIOPHARM Product by or
on behalf of ZIOPHARM or its Affiliates, licensees, or
sublicensees. Notwithstanding the foregoing, ZIOPHARM shall not have
any obligation to indemnify the Intrexon Indemnitees to the extent that a Claim
arises from (i) the gross negligence or willful misconduct of Intrexon or any of
its Affiliates, or their respective employees or agents; or (ii) a breach by
Intrexon of a representation, warranty, or covenant of this
Agreement.
9.3 Product Liability
Claims. Notwithstanding the provisions of Section 9.2, any
Losses arising out of any Third Party claim, suit, action, proceeding, liability
or obligation involving any actual or alleged death or bodily injury arising out
of or resulting from the development, manufacture or commercialization of any
ZIOPHARM Products for use or sale in the Field, to the extent that such Losses
exceed the amount (if any) covered by the applicable Party’s product liability
insurance (“Excess Product
Liability Costs”), shall be paid by [*****], except to the extent such
Losses arise out of any Third-Party Claim based on the gross negligence or
willful misconduct of a Party, its Affiliates, its or its Affiliates’
Sublicensees, or any of the respective officers, directors, employees and agents
of each of the foregoing entities, in the performance of obligations or exercise
of rights under this Agreement.
9.4 Control of
Defense. As a condition precedent to any indemnification
obligations hereunder, any entity entitled to indemnification under this Article
9 shall give written notice to the indemnifying Party of any Claims that may be
subject to indemnification, promptly after learning of such Claim. If
such Claim falls within the scope of the indemnification obligations of this
Article 9, then the indemnifying Party shall assume the defense of such Claim
with counsel reasonably satisfactory to the indemnified Party. The
indemnified Party shall cooperate with the indemnifying Party in such
defense. The indemnified Party may, at its option and expense, be
represented by counsel of its choice in any action or proceeding with respect to
such Claim. The indemnifying Party shall not be liable for any
litigation costs or expenses incurred by the indemnified Party without the
indemnifying Party’s written consent, such consent not to be unreasonably
withheld. The indemnifying Party shall not settle any such Claim if
such settlement (a) does not fully and unconditionally release the indemnified
Party from all liability relating thereto or (b) adversely impacts the exercise
of the rights granted to the indemnified Party under this Agreement, unless the
indemnified Party otherwise agrees in writing.
9.5 Insurance. During
the term of this Agreement, ZIOPHARM shall maintain in effect and good standing
a product liability insurance policy issued by a reputable insurance company in
amounts considered standard for the industry. At Intrexon’s
reasonable request, ZIOPHARM shall provide Intrexon with all details regarding
such policy, including without limitation copies of the applicable liability
insurance contracts. ZIOPHARM shall use reasonable efforts
to include Intrexon as an additional insured on any such
policy.
ARTICLE
10
Term;
Termination
10.1 Term. The term of
this Agreement shall commence upon the Effective Date and shall continue until
terminated pursuant to Section 10.2 or 10.3.
10.2 Termination
for Material Breach; Termination Under Section 4.5(b)
(a) Either
Party shall have the right to terminate this Agreement upon written notice to
the other Party if the other Party commits any material breach of this Agreement
that such breaching Party fails to cure within sixty (60) days following written
notice from the nonbreaching Party specifying such breach.
(b) Intrexon
shall have the right to terminate this Agreement under the circumstances set
forth in Section 4.5(b) upon written notice to ZIOPHARM, such termination to
become effective sixty (60) days following such written notice unless ZIOPHARM
remedies the circumstances giving rise to such termination within such sixty
(60) day period.
(c)
Intrexon shall have the right to terminate this Agreement under the
circumstances set forth in Section 12.8 upon written notice to ZIOPHARM, such
termination to become effective immediately upon such written
notice.
(d) Notwithstanding
the foregoing, during the twenty-four (24) month period commencing on the
Effective Date, neither Party shall have the right to terminate this Agreement
under Section 10.2(a) based on the failure of the other Party to use Diligent
Efforts or to comply with any other diligence obligations hereunder (including
Section 4.5), nor shall Intrexon have the right to terminate this Agreement
under Section 4.5(b).
10.3 Termination by
ZIOPHARM. ZIOPHARM shall have the right to voluntarily
terminate this Agreement in its entirety upon ninety (90) days written notice to
Intrexon at any time, provided that such notice may not be given during the
twenty four (24) month period commencing on the Effective Date.
10.4 Effect of
Termination. In the event of termination of this Agreement
pursuant to Section 10.2 or Section 10.3, the following shall
apply:
(a) Retained
Products. ZIOPHARM shall be permitted to continue the
development and commercialization of any ZIOPHARM Product that, at the time of
termination, satisfies at least one of the following criteria (a “Retained
Product”):
(i)
is being Commercialized by ZIOPHARM,
(ii) has
received regulatory approval,
(iii) is
a subject of an application for regulatory approval in the Field that is pending
before the applicable regulatory authority, or
(iv) is
the subject of at least
(A) an
ongoing Phase 2 clinical trial in the Field (in the case of a termination by
Intrexon due to a ZIOPHARM uncured breach pursuant to Section 10.2(a) or a
termination by ZIOPHARM pursuant to Section 10.3), or
(B) an
ongoing Phase 1 clinical trial in the Field (in the case of a termination by
ZIOPHARM due to an Intrexon uncured breach pursuant to Section 10.2(a) or a
termination by Intrexon pursuant to Section 10.2(b) or 10.2(c)).
Such
right to continue development and commercialization shall be subject to
ZIOPHARM’s full compliance with the payment provisions in Article 5 and all
other provisions of this Agreement that survive termination.
(b) Termination of
Licenses. Except as necessary for ZIOPHARM to continue to
develop and commercialize the Retained Products as permitted by Section 10.4(a),
all rights and licenses granted by Intrexon to ZIOPHARM under this Agreement
shall terminate and shall revert to Intrexon without further action by either
Intrexon or ZIOPHARM. ZIOPHARM’s license with respect to Retained
Products shall be exclusive or non-exclusive, as the case may be, on the same
terms as set forth in Section 3.1.
(c) Reverted
Products. All ZIOPHARM Products other than the Retained
Products shall be referred to herein as the “Reverted
Products.” ZIOPHARM shall immediately cease, and shall cause
its Affiliates and, if applicable, (sub)licensees to immediately cease, all
development and commercialization of the Reverted Products, and ZIOPHARM shall
not use or practice, nor shall it cause or permit any of its Affiliates or, if
applicable, (sub)licensees to use or practice, directly or indirectly, any
Intrexon IP with respect to the Reverted Products. ZIOPHARM shall
immediately discontinue making any representation regarding its status as a
licensee or channel partner of Intrexon with respect to the Reverted
Products.
(d) Intrexon
Materials. ZIOPHARM shall promptly return, or at Intrexon’s
request, destroy, any Intrexon Materials in ZIOPHARM’s possession or control at
the time of termination, or other than any Intrexon Materials necessary for the
continued development and commercialization of the Retained
Products.
(e) Licenses to
Intrexon. ZIOPHARM is automatically deemed to grant to
Intrexon a worldwide, fully paid, royalty-free, exclusive (even as to ZIOPHARM
and its Affiliates), irrevocable, license (with full rights to sublicense) under
the ZIOPHARM Termination IP, to make, have made, import, use, offer for sale and
sell Reverted Products and to use the Intrexon Channel Technology, the Intrexon
Materials, and/or the Intrexon IP in the Field, subject to any exclusive rights
held by ZIOPHARM in Reverted Products pursuant to Section
10.4(c). ZIOPHARM shall also take such actions and execute such other
instruments and documents as may be necessary to document such license to
Intrexon.
(f) Regulatory
Filings. ZIOPHARM shall promptly assign to Intrexon, and will
provide full copies of, all regulatory approvals and regulatory filings that
relate specifically and solely to Reverted Products. ZIOPHARM shall
also take such actions and execute such other instruments, assignments and
documents as may be necessary to effect the transfer of rights thereunder to
Intrexon. To the extent that there exist any regulatory approvals and
regulatory filings that relate both to Reverted Products and other products,
ZIOPHARM shall provide copies of the portions of such regulatory filings that
relate to Reverted Products and shall reasonably cooperate to assist Intrexon in
obtaining the benefits of such regulatory approvals with respect to the Reverted
Products.
(g) Data
Disclosure. ZIOPHARM shall provide to Intrexon copies of the
relevant portions of all material reports and data, including clinical and
non-clinical data and reports, obtained or generated by or on behalf of ZIOPHARM
or its Affiliates to the extent that they relate to Reverted Products, within
sixty (60) days of such termination unless otherwise agreed, and Intrexon shall
have the right to use any such Information in developing and commercializing
Reverted Products and to license any Third Parties to do so.
(h) Third-Party
Licenses. At Intrexon’s request, ZIOPHARM shall promptly
provide to Intrexon copies of all Third-Party agreements under which ZIOPHARM or
its Affiliates obtained a license under Patents claiming inventions or know-how
specific to or used or incorporated into the development, manufacture and/or
commercialization of the Reverted Products. At Intrexon’s request,
ZIOPHARM shall promptly: (x) with respect to such Third Party
licenses relating solely to the applicable Reverted Products, immediately assign
(or cause to be assigned), such agreements to Intrexon, and (y) with respect to
all other Third Party licenses, at ZIOPHARM’s option either assign the agreement
or grant (or cause to be granted) to Intrexon a sublicense thereunder of a scope
equivalent to that described in Section 10.4(e), provided ZIOPHARM has the
ability to assign such agreement to Intrexon or grant a sublicense to Intrexon
thereunder. In any case, thereafter Intrexon shall be fully
responsible for all obligations due for its actions under the Third Party
agreements. Notwithstanding the above, if Intrexon does not wish to
assume any financial or other obligations associated with a particular
assignment or sublicense, then Intrexon shall so notify ZIOPHARM and ZIOPHARM
shall not make such assignment or grant such sublicense (or cause it to be made
or granted).
(i) Remaining
Materials. At the request of Intrexon, ZIOPHARM shall transfer
to Intrexon, all quantities of Reverted Product (including API or
work-in-process) in the possession of ZIOPHARM or its
Affiliates. ZIOPHARM shall transfer to Intrexon all such quantities
of Reverted Products without charge, except that Intrexon shall pay the
reasonable costs of shipping.
(j) Third Party
Vendors. At Intrexon’s request, ZIOPHARM shall promptly
provide to Intrexon copies of all agreements between ZIOPHARM or its Affiliates
and Third Party suppliers, vendors, or distributors that relate to the supply,
sale, or distribution of Reverted Products in the Territory. At
Intrexon’s request, ZIOPHARM shall promptly: (x) with respect to such
Third Party agreements relating solely to the applicable Reverted Products,
immediately assign (or cause to be assigned), such agreements to Intrexon, and
(y) with respect to all other such Third Party agreements, ZIOPHARM shall
reasonably cooperate to assist Intrexon in obtaining the benefits of such
agreements. ZIOPHARM shall be liable for any costs associated with
assigning a Third Party agreement to Intrexon or otherwise obtaining the
benefits of such agreement for Intrexon, to the extent such costs are directly
related to ZIOPHARM’s breach. For the avoidance of doubt, Intrexon
shall have no obligation to assume any of ZIOPHARM’s obligations under any Third
Party agreement.
(k) Commercialization. Intrexon
shall have the right to develop and commercialize the Reverted Products itself
or with one or more Third Parties, and shall have the right, without obligation
to ZIOPHARM, to take any such actions in connection with such activities as
Intrexon (or its designee), at its discretion, deems
appropriate.
(l) Confidential
Information. Each Party shall promptly return, or at the other
Party’s request destroy, any Confidential Information of the other Party in such
Party’s possession or control at the time of termination; provided, however,
that each Party shall be permitted to retain (i) a single copy of each item of
Confidential Information of the other Party in its confidential legal files for
the sole purpose of monitoring and enforcing its compliance with Article 7, (ii)
Confidential Information of the other Party that is maintained as archive copies
on the recipient Party’s disaster recovery and/or information technology backup
systems, or (iii) Confidential Information of the other Party necessary to
exercise such Party’s rights in Retained Products (in the case of ZIOPHARM) or
Reverted Products (in the case of Intrexon). The recipient of Confidential
Information shall continue to be bound by the terms and conditions of this
Agreement with respect to any such Confidential Information retained in
accordance with this Section 10.4(l).
10.5 Surviving
Obligations. Termination or expiration of this Agreement shall
not affect any rights of either Party arising out of any event or occurrence
prior to termination, including, without limitation, any obligation of ZIOPHARM
to pay any amount which became due and payable under the terms and conditions of
this Agreement prior to expiration or such termination. The following
portions of this Agreement shall survive termination or expiration of this
Agreement: Sections 5.5, 5.7, 6.1, 6.2 (with subsection (c) surviving
only to the extent relating to Intrexon Patents that are relevant to Retained
Products that, to Intrexon’s knowledge, are being developed or commercialized at
such time, if any), 10.4, and 10.5; Articles 7, 9, 11, and 12; and any relevant
definitions in Article 1.
ARTICLE
11
Dispute
Resolution
11.1 Disputes. It is the
objective of the Parties to establish procedures to facilitate the resolution of
disputes arising under this Agreement in an expedient manner by mutual
cooperation and without resort to litigation. In the event of any
disputes, controversies or differences which may arise between the Parties out
of or in relation to or in connection with this Agreement (other than disputes
arising from a Committee), including, without limitation, any alleged failure to
perform, or breach, of this Agreement, or any issue relating to the
interpretation or application of this Agreement, then upon the request of either
Party by written notice, the Parties agree to meet and discuss in good faith a
possible resolution thereof, which good faith efforts shall include at least one
in-person meeting between the Executive Officers of each Party. If
the matter is not resolved within thirty (30) days following the written request
for discussions, either Party may then invoke the provisions of Section
11.2. For the avoidance of doubt, any disputes, controversies or
differences arising from a Committee pursuant to Article 2 shall be resolved
solely in accordance with Section 2.4.
11.2 Arbitration. Any
dispute, controversy, difference or claim which may arise between the Parties
and not from a Committee, out of or in relation to or in connection with this
Agreement (including, without limitation, arising out of or relating to the
validity, construction, interpretation, enforceability, breach, performance,
application or termination of this Agreement) that is not resolved pursuant to
Section 11.1 shall, subject to Section 11.10, be settled by binding “baseball
arbitration” as follows. Either Party, following the end of the
thirty (30) day period referenced in Section 11.1, may refer such issue to
arbitration by submitting a written notice of such request to the other
Party. Promptly following receipt of such notice, the Parties shall
meet and discuss in good faith and seek to agree on an arbitrator to resolve the
issue, which arbitrator shall be neutral and independent of both Parties and all
of their respective Affiliates, shall have significant experience and expertise
in licensing and partnering agreements in the pharmaceutical and biotechnology
industries, and shall have some experience in mediating or arbitrating issues
relating to such agreements. If the Parties cannot agree on a single
arbitrator within fifteen (15) days of request by a Party for arbitration, then
each Party shall select an arbitrator meeting the foregoing criteria and the two
(2) arbitrators so selected shall select a third arbitrator meeting the
foregoing criteria. Within fifteen (15) days after an arbitrator(s)
is selected (in the case of the three-person panel, when the third arbitrator is
selected), each Party will deliver to both the arbitrator(s) and the other Party
a detailed written proposal setting forth its proposed terms for the resolution
for the matter at issue (the “Proposed Terms” of the Party)
and a memorandum (the “Support
Memorandum”) in support thereof. The Parties will also provide
the arbitrator(s) a copy of this Agreement, as it may be amended at such
time. Within fifteen (15) days after receipt of the other Party’s
Proposed Terms and Support Memorandum, each Party may submit to the
arbitrator(s) (with a copy to the other Party) a response to the other Party’s
Support Memorandum. Neither Party may have any other communications
(either written or oral) with the arbitrator(s) other than for the sole purpose
of engaging the arbitrator or as expressly permitted in this Section 11.2;
provided that, the arbitrator(s) may convene a hearing if the arbitrator(s) so
chooses to ask questions of the Parties and hear oral argument and discussion
regarding each Party’s Proposed Terms. Within sixty (60) days after
the arbitrator’s appointment, the arbitrator(s) will select one of the two
Proposed Terms (without modification) provided by the Parties that he or she
believes is most consistent with the intention underlying and agreed principles
set forth in this Agreement. The decision of the arbitrator(s) shall
be final, binding, and unappealable. For clarity, the arbitrator(s)
must select as the only method to resolve the matter at issue one of the two
sets of Proposed Terms, and may not combine elements of both Proposed Terms or
award any other relief or take any other action.
11.3 Governing Law. This
Agreement shall be governed by and construed under the substantive laws of the
State of New York, excluding any conflicts or choice of law rule or principle
that might otherwise refer construction or interpretation of this Agreement to
the substantive law of another jurisdiction.
11.4 Award. Any award to
be paid by one Party to the other Party as determined by the arbitrator(s) as
set forth above under Section 11.2 shall be promptly paid in United States
dollars free of any tax, deduction or offset; and any costs, fees or taxes
incident to enforcing the award shall, to the maximum extent permitted by law,
be charged against the losing Party. Each Party agrees to abide by
the award rendered in any arbitration conducted pursuant to this Article 11, and
agrees that, subject to the United States Federal Arbitration Act, 9 U.S.C. §§
1-16, judgment may be entered upon the final award in any United States District
Court located in New York and that other courts may award full faith and credit
to such judgment in order to enforce such award. The award shall
include interest from the date of any damages incurred for breach of the
Agreement, and from the date of the award until paid in full, at a rate fixed by
the arbitrator(s). With respect to money damages, nothing contained
herein shall be construed to permit the arbitrator(s) or any court or any other
forum to award consequential, incidental, special, punitive or exemplary
damages. By entering into this agreement to arbitrate, the Parties
expressly waive any claim for consequential, incidental, special, punitive or
exemplary damages. The only damages recoverable under this Agreement
are direct compensatory damages.
11.5 Costs. Each Party
shall bear its own legal fees. The arbitrator(s) shall assess his or
her costs, fees and expenses against the Party losing the
arbitration.
11.6 Injunctive
Relief. Nothing in this Article 11 will preclude either Party
from seeking equitable relief or interim or provisional relief from a court of
competent jurisdiction, including a temporary restraining order, preliminary
injunction or other interim equitable relief, concerning a dispute either prior
to or during any arbitration if necessary to protect the interests of such Party
or to preserve the status quo pending the arbitration
proceeding. Specifically, the Parties agree that a material breach by
either Party of its obligations in 3.4 of this Agreement may cause irreparable
harm to the other Party, for which damages may not be an adequate
remedy. Therefore, in addition to its rights and remedies otherwise
available at law, including, without limitation, the recovery of damages for
breach of this Agreement, upon an adequate showing of material breach of such
Section 3.4, and without further proof of irreparable harm other than this
acknowledgement, such non-breaching Party shall be entitled to seek (a)
immediate equitable relief, specifically including, but not limited to, both
interim and permanent restraining orders and injunctions, and (b) such other and
further equitable relief as the court may deem proper under the
circumstances. For the avoidance of doubt, nothing in this Section
11.6 shall otherwise limit a breaching Party’s opportunity to cure a material
breach as permitted in accordance with Section 10.2.
11.7 Confidentiality. The
arbitration proceeding shall be confidential and the arbitrator(s) shall issue
appropriate protective orders to safeguard each Party’s Confidential
Information. Except as required by law, no Party shall make (or
instruct the arbitrator(s) to make) any public announcement with respect to the
proceedings or decision of the arbitrator(s) without prior written consent of
the other Party. The existence of any dispute submitted to
arbitration, and the award, shall be kept in confidence by the Parties and the
arbitrator(s), except as required in connection with the enforcement of such
award or as otherwise required by applicable law.
11.8 Survivability. Any
duty to arbitrate under this Agreement shall remain in effect and be enforceable
after termination of this Agreement for any reason.
11.9 Jurisdiction. For
the purposes of this Article 11, the Parties acknowledge their diversity and
agree to accept the jurisdiction of any United States District Court located in
New York for the purposes of enforcing or appealing any awards entered pursuant
to this Article 11 and for enforcing the agreements reflected in this Article 11
and agree not to commence any action, suit or proceeding related thereto except
in such courts.
11.10 Patent
Disputes. Notwithstanding any other provisions of this Article
11, and subject to the provisions of Section 6.2, any dispute, controversy or
claim relating to the scope, validity, enforceability or infringement of any
Intrexon Patents shall be submitted to a court of competent jurisdiction in the
country in which such Patent was filed or granted.
ARTICLE
12
General
Provisions
12.1 Use of Name. No
right, express or implied, is granted by this Agreement to either Party to use
in any manner the name of the other or any other trade name or trademark of the
other in connection with the performance of this Agreement.
12.2 LIMITATION OF
LIABILITY. NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY
SPECIAL, CONSEQUENTIAL, INCIDENTAL, PUNITIVE, OR INDIRECT DAMAGES ARISING FROM
OR RELATING TO ANY BREACH OF THIS AGREEMENT, REGARDLESS OF ANY NOTICE OF THE
POSSIBILITY OF SUCH DAMAGES. NOTWITHSTANDING THE FOREGOING, NOTHING
IN THIS PARAGRAPH IS INTENDED TO LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR
OBLIGATIONS OF ANY PARTY UNDER ARTICLE 9, OR DAMAGES AVAILABLE FOR BREACHES OF
THE OBLIGATIONS SET FORTH IN ARTICLE 7.
12.3 Independent
Parties. The Parties are not employees or legal
representatives of the other Party for any purpose. Neither Party
shall have the authority to enter into any contracts in the name of or on behalf
of the other Party. This Agreement shall not constitute, create, or
in any way be interpreted as a joint venture, partnership, or business
organization of any kind.
12.4 Notice. All
notices, including notices of address change, required or permitted to be given
under this Agreement shall be in writing and deemed to have been given when
delivered if personally delivered or sent by facsimile (provided that the party
providing such notice promptly confirms receipt of such transmission with the
other party by telephone), on the business day after dispatch if sent by a
nationally-recognized overnight courier and on the third business day following
the date of mailing if sent by certified mail, postage prepaid, return receipt
requested. All such communications shall be sent to the address or facsimile
number set forth below (or any updated addresses or facsimile number
communicated to the other Party in writing):
If
to Intrexon:
|
Intrexon
Corporation
20358
Seneca Meadows Parkway
Germantown,
MD 20876
Attention: Legal
Department
Fax: (301)
556-9902
|
|
|
with
a copy to:
|
Cooley
LLP
3175
Hanover St.
Palo
Alto, CA 94304
Attention: Robert
Jones
Fax: (650)
849-7400
|
If
to ZIOPHARM:
|
ZIOPHARM
Oncology, Inc.
One
First Avenue
Parris
Building, 34
Navy
Yard Plaza
Boston,
MA 02129
Attention: Chief
Executive Officer
Fax: (617)
241-2855
|
|
|
with
a copy to:
|
WilmerHale
60
State Street
Boston,
MA 02109
Attention: Stuart
Falber
Fax: (617)
526-5000
|
12.5 Severability. In
the event any provision of this Agreement is held to be invalid or
unenforceable, the valid or enforceable portion thereof and the remaining
provisions of this Agreement will remain in full force and effect.
12.6 Waiver. Any waiver
(express or implied) by either Party of any breach of this Agreement shall not
constitute a waiver of any other or subsequent breach.
12.7 Entire Agreement;
Amendment. This Agreement and the exhibits attached hereto
constitute the entire, final, complete and exclusive agreement between the
Parties and supersede all previous agreements or representations, written or
oral, with respect to the subject matter of this Agreement (including any prior
confidentiality agreement between the Parties). All information of
Intrexon or ZIOPHARM to be kept confidential by the other Party under any prior
confidentiality agreement, as of the Effective Date, shall be maintained as
Confidential Information by such other Party under the obligations set forth in
Article 7 of this Agreement. This Agreement may not be modified or
amended except in a writing signed by a duly authorized representative of each
Party.
12.8 Nonassignability; Binding on
Successors. Any attempted assignment of the rights or
delegation of the obligations under this Agreement shall be void without the
prior written consent of the nonassigning or nondelegating Party; provided,
however, that either Party may assign its rights or delegate its
obligations under this Agreement without such consent (a) to an Affiliate of
such Party or (b) to its successor in interest in connection with any merger,
acquisition, consolidation, corporate reorganization, or similar transaction, or
sale of all or substantially all of its assets, provided that such assignee
agrees in writing to assume and be bound by the assignor’s obligations under
this Agreement. This Agreement shall be binding upon, and inure to
the benefit of, the successors, executors, heirs, representatives,
administrators and permitted assigns of the Parties
hereto. Notwithstanding the foregoing, in the event that either Party
assigns this Agreement to its successor in interest by way of merger,
acquisition, or sale of all or substantially all of its assets (whether this
Agreement is actually assigned or is assumed by such successor in interest or
its affiliate by operation of law (e.g., in the context of a reverse triangular
merger)), (a) the intellectual property rights of such successor in interest or
any of its affiliates shall be automatically excluded from the rights licensed
to the other Party under this Agreement, and (b) such successor in interest may
elect by written notice to have the restrictions set forth in Section 3.4 not
apply to the activities of such successor in interest (but, for purposes of
clarity, such restriction shall in any event continue to apply to the applicable
Party and all other Affiliates of such Party not related to such successor in
interest). In the event that a successor in interest to ZIOPHARM
elects to have the restrictions set forth in Section 3.4 not apply to the
activities of such successor in interest, Intrexon shall have the termination
right set forth in Section 10.2(c).
12.9 Force
Majeure. Neither Party shall be liable to the other for its
failure to perform any of its obligations under this Agreement, except for
payment obligations, during any period in which such performance is delayed
because rendered impracticable or impossible due to circumstances beyond its
reasonable control, including without limitation earthquakes, governmental
regulation, fire, flood, labor difficulties, civil disorder, acts of terrorism
and acts of God, provided that the Party experiencing the delay promptly
notifies the other Party of the delay.
12.10 No Other
Licenses. Neither Party grants to the other Party any rights
or licenses in or to any intellectual property, whether by implication,
estoppel, or otherwise, except to the extent expressly provided for under this
Agreement.
12.11 Legal
Compliance. The Parties shall review in good faith and
cooperate in taking such actions to ensure compliance of this Agreement with all
applicable laws.
12.12 Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original and all of which shall constitute together the same
instrument.
[Remainder
of page intentionally left blank.]
In Witness
Whereof, the Parties hereto have duly executed this Exclusive Channel
Partner Agreement.
Intrexon
Corporation
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Ziopharm
Oncology, Inc.
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By:
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/s/ Randal J. Kirk
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By:
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/S/ Jonathan Lewis
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Name:
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Randal J. Kirk
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Name:
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Jonathan Lewis
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Title:
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Chief Executive Officer
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Title:
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Chief Executive
Officer
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EXHIBIT
A
Financial
Terms for Calculating Allowable Expenses
As used
herein, the term “operating unit” shall mean the smallest operating unit in
which an operating profit and loss statement is prepared for management
accounting purposes in the applicable Party’s normal accounting procedures,
consistently applied within and across its operating units. To the
extent certain cost or expense items below are incurred with respect to multiple
products and some of such products are not ZIOPHARM Products, then such cost or
expense items shall be allocated on a pro rata basis based upon net
sales of each respective product by the applicable operating unit during the
most recent quarter.
1. Cost
of Goods Sold
“Cost of Goods Sold” means all Manufacturing
Costs that are directly and reasonably attributable to manufacturing of ZIOPHARM
Product for commercial sale in the countries where such ZIOPHARM Product has
been launched.
1.1 “Manufacturing Costs” means,
with respect to ZIOPHARM Products, the FTE costs (under a reasonable accounting
mechanism to be agreed upon by the Parties and out-of-pocket costs of a Party or
any of its Affiliates incurred in manufacturing such ZIOPHARM Products,
including costs and expenses incurred in connection with (1) the development or
validation of any manufacturing process, formulations or delivery systems, or
improvements to the foregoing; (2) manufacturing scale-up; (3) in-process
testing, stability testing and release testing; (4) quality assurance/quality
control development; (5) internal and Third Party costs and expenses incurred in
connection with qualification and validation of Third Party contract
manufacturers, including scale up, process and equipment validation, and initial
manufacturing licenses, approvals and inspections; (6) packaging development and
final packaging and labeling; (7) shipping configurations and shipping studies;
and (8) overseeing the conduct of any of the
foregoing. “Manufacturing Costs” shall further include:
(a) to
the extent that any such ZIOPHARM Product is Manufactured by a Third Party
manufacturer, the out-of-pocket costs incurred by such Party or any of its
Affiliates to the Third Party for the manufacture and supply (including
packaging and labeling) thereof, and any reasonable out-of-pocket costs and
direct labor costs incurred by such Party or any of its Affiliates in managing
or overseeing the Third Party relationship determined in accordance with the
books and records of such Party or its Affiliates maintained in accordance with
US GAAP; and
(b) to
the extent that any such ZIOPHARM Product is manufactured by such Party or any
of its Affiliates, direct material and direct labor costs attributable to such
ZIOPHARM Product, as well as reasonably allocable overhead expenses, determined
in accordance with the books and records of such Party or its Affiliates
maintained in accordance with US GAAP.
2. Marketing
Expenses.
“Marketing Expenses” means the
sum of Selling Expenses, Marketing Management Expenses, Market and Consumer
Research Expenses, Advertising Expenses, Trade Promotion Expenses, and Consumer
Promotion Expenses, each of which is specified below, in each case to the extent
directly and reasonably attributable to the sale, promotion or marketing of the
applicable ZIOPHARM Products in the countries where such ZIOPHARM Product has
been launched.
2.1 “Selling Expenses” shall mean
all reasonable costs and expenses directly associated with the efforts of field
sales representatives with respect to ZIOPHARM Products in the
Territory. The costs of detailing sales calls shall be allocated
based on field force time at an accounting charge rate reasonably and
consistently applied within and across its operating units and which is no less
favorable to the ZIOPHARM Products than the internal charge rate used by
ZIOPHARM for its own internal cost accounting purposes for products other than
ZIOPHARM Products (excluding internal profit margins and markups).
2.2 “Marketing Management Expenses”
means all reasonable product management and sales promotion management
compensation (including customary bonuses and benefits but excluding stock-based
compensation) and departmental expenses, including product related public
relations, relationships with opinion leaders and professional societies, health
care economics studies, contract pricing and administration, market information
systems, governmental affairs activities for reimbursement, formulary acceptance
and other activities directly related to the ZIOPHARM Products in the Territory,
management and administration of managed care and national accounts and other
activities associated with developing overall sales and marketing strategies and
planning for ZIOPHARM Products in the Territory.
2.3 “Market and Consumer Research
Expenses” means all reasonable compensation (including customary bonuses
and benefits but excluding stock-based compensation) and departmental expenses
for market and consumer research personnel and payments to Third Parties related
to and to the extent use for conducting and monitoring professional and consumer
appraisals of existing, new or proposed ZIOPHARM Products in the Territory such
as market share services (e.g., IMS data), special research testing and focus
groups.
2.4 “Advertising Expenses” shall
mean all reasonable costs reasonably incurred for the advertising and promotion
of ZIOPHARM Products in the Territory.
2.5 “Trade Promotion Expenses”
means the actual and reasonable allowances given to retailers, brokers,
distributors, hospital buying groups, etc. for purchasing, promoting, and
distribution of ZIOPHARM Products in the Territory. This shall
include purchasing, advertising, new distribution, and display allowances as
well as free goods, wholesale allowances and reasonable field sales samples (at
the out of pocket cost).
2.6 “Consumer Promotion Expenses”
means all reasonable expenses associated with programs to promote ZIOPHARM
Products directly to the end user in the Territory. This category
shall include expenses associated with promoting products directly to the
professional community such as professional samples, professional literature,
promotional material costs, patient aids and detailing aids.
3. Distribution
Expenses.
“Distribution Expenses” means the reasonable
costs, excluding overhead, incurred by ZIOPHARM that are directly and reasonably
allocable to the distribution of a ZIOPHARM Product with respect to a particular
country where such ZIOPHARM Product has been launched, excluding any costs
included as a deduction in calculating Net Sales.
4. Additional
Commercialization Expenses.
“Additional Commercialization
Expenses” means the sum of Regulatory and Related Costs, Third Party
Blocking IP Costs, Patent and Trademark Costs, Product Liability Costs, and
Additional Approved Expenses, each of which is specified below, in each case to
the extent directly and reasonably attributable to the commercialization of the
applicable ZIOPHARM Products.
4.1 “Regulatory and Related Costs”
means all reasonable costs and expenses associated with the preparation and
filing of marketing and pricing approval applications, and the maintenance of
marketing approvals, for ZIOPHARM Products, including (i) fees paid to
regulatory authorities directly related to NDAs and Marketing Approvals in the
Field, (ii) costs of any regulatory interactions with respect to ZIOPHARM
Products, (iii) costs incurred in securing reimbursement approvals from public
and private payers, and (iv) costs to establish and maintain a global safety
database.
4.2 [*****].
4.3 “Patent and Trademark Costs”
means all reasonable costs and expenses incurred by ZIOPHARM or its Affiliates
in connection with (i) the preparation, filing, prosecution, maintenance and
enforcement of ZIOPHARM Program Patents, and (ii) establishing, maintaining and
enforcing the Patents and trademarks for ZIOPHARM Products in the
Territory.
4.4 “Product Liability Costs” means
the reasonable costs associated with (i) any recall in the Territory, including
the cost of any investigations or corrective actions, (ii) any Excess Product
Liability Costs, and (iii) product liability insurance premiums for policies
covering the development, manufacture or Commercialization of ZIOPHARM Products
(as described in Section 9.5).
4.5 “Additional Approved Expenses”
means any additional costs and/or expenses that are incurred in connection with
the commercialization of ZIOPHARM Products and that are approved in advance, in
writing, by the Intrexon representatives on the CC.
5. Post-Launch
Product R&D Expenses.
“Post-Launch Product R&D
Expenses” means the reasonable costs, excluding administrative expenses
and costs that are included within Costs of Goods Sold, of Phase 4 clinical
trials and ongoing product support (including manufacturing and quality
assurance technical support, and laboratory and clinical efforts directed toward
the further understanding of product safety and efficacy) and medical affairs
(including regulatory support necessary for product maintenance), in each case
that are (a) specifically attributable to a ZIOPHARM Product in the countries of
the Territory where such ZIOPHARM Product has been launched and (b) approved by
both Parties in writing.
6. No
Duplication. No item of cost shall be duplicated in any of the
categories comprising Allowable Expenses or in the deductions permitted under
Net Sales or Sublicensing Revenue.
EXHIBIT
B
Press
Release
ZIOPHARM
Oncology and Intrexon Announce Worldwide Partnership for
Synthetic
Biology DNA-based Oncology Therapeutics
RJ
Kirk, CEO and Chairman of Intrexon, to Join ZIOPHARM Board of
Directors
NEW YORK, NY and GERMANTOWN, MD
(January 6, 2011) – ZIOPHARM Oncology, Inc. (Nasdaq: ZIOP), a small
molecule late-stage oncology drug development company, and Intrexon Corporation,
a next generation synthetic biology company, announced today a global exclusive
channel partnership in oncology where ZIOPHARM will develop and commercialize
DNA-based therapeutics using Intrexon’s UltraVector® Technology. Under the
partnership, ZIOPHARM will utilize Intrexon’s advanced transgene engineering
platform for the controlled and precise cellular production of anti-cancer
effectors. ZIOPHARM will have rights to Intrexon’s entire human in vivo effector platform
within the field of oncology which includes two lead clinical-stage product
candidates, one which is in an advanced phase I study and another which will be
the subject of an Investigational New Drug (“IND”) filing during the first half
of 2011. Ziopharm and Intrexon will host a conference call and audio webcast
today, Thursday, January 6th at 5:00
p.m. ET to discuss the global exclusive channel partnership.
Intrexon
employs its modular genetic engineering platform in the areas of therapeutics,
protein production, industrial, and agriculture products. The exclusive channel
partnership between Intrexon and ZIOPHARM has been established specifically for
the field of human oncologic therapeutics. Under the partnership, Intrexon
remains responsible for technology discovery efforts and managing the patent
estate as well as for certain aspects of manufacturing. ZIOPHARM will be
responsible for conducting preclinical and clinical development of candidates,
as well as for other aspects of manufacturing and the commercialization of the
candidates.
Intrexon’s
core synthetic biology technology is designed to create Better DNA™ at
industrial scale, enabling unprecedented control over the function and output of
living cells by providing external control over in vivo activation and
regulation of potent effectors. This platform, called UltraVector®, provides
speed, flexibility, consistency and precision to the design, production and
testing of rationally designed complex transgenes and their encoded genetic
circuits. These qualities allow an iterative and rational approach to
transgene design, which can be continually engineered until their performance is
optimized. Through
this process, Intrexon is able to overcome the challenges inherent in current
therapeutic strategies, including recombinant protein therapies and constitutive
gene therapies, thereby enhancing capabilities, improving safety and lowering
cost for human therapeutics. The lead oncology product candidate developed using
Intrexon’s technologies is currently in Phase Ib clinical study for metastatic
melanoma. ZIOPHARM expects to submit an Investigational New Drug (IND)
application with U.S. Food and Drug Administration for a second oncology product
candidate in the first half of this year.
“Controllable,
scalable synthetic biology, the tightly regulated delivery of therapeutic
proteins from within the body, is an aspirational and disruptive technology
which Intrexon has brought from scientific theory to medical application,” said
Jonathan Lewis, M.D., Ph.D., Chief Executive Officer and Chief Medical Officer
of ZIOPHARM. “As the sole channel partner for in vivo therapeutic
candidates for human oncology, ZIOPHARM plans to leverage this technology for
next-generation products targeting key pathways used by cancers to grow and
metastasize. Intrexon has developed a technology that is uniquely
flexible, scalable and controllable, adding significantly to our small molecule
drug development capabilities and our ability to translate science to the
patient using our world-class global team.”
“We are
very pleased to collaborate with ZIOPHARM, which, under the leadership of
Jonathan Lewis, is building an industry leading oncology company with a
strategic vision regarding cancer medicine. ZIOPHARM’s oncology expertise,
development capabilities, as well as its excellent reputation within the
oncology community make ZIOPHARM an exceptional investment for Intrexon and
ideal partner to rapidly achieve the full therapeutic benefit and commercial
potential of Intrexon’s disruptive technologies,” stated RJ Kirk, Intrexon’s
Chairman and CEO. “This collaboration leverages the capabilities and strengths
of each partner and has the potential to create significant value for
shareholders.”
Under
terms of the agreement:
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·
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Intrexon
will purchase 2,422,542 shares of ZIOPHARM ‘s common stock (representing
5% of ZIOPHARM’s currently outstanding shares) in a private placement for
a total purchase price of $11,464,438, or $4.7324 per share, which is the
trailing 10-day volume-weighted average price per share of ZIOPHARM’s
common stock;
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·
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ZIOPHARM
will simultaneously issue to Intrexon for no additional consideration an
additional 3,631,391 shares of its common stock, representing
7.495% of ZIOPHARM’s currently outstanding shares; ZIOPHARM has agreed to
issue to Intrexon additional shares of its common stock for no additional
consideration, representing an additional 7.495% under certain conditions
upon dosing of the first patient in a ZIOPHARM-conducted U.S. Phase II
clinical trial of a product candidate created, produced or developed by
ZIOPHARM using Intrexon technology;
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·
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Intrexon
has agreed to purchase up to $50 million in conjunction with securities
offerings that may be conducted by ZIOPHARM in the future, subject to
certain conditions and limitations;
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·
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Subject
to certain expense allocations, ZIOPHARM will pay Intrexon 50% of the
cumulative net quarterly profits derived from the sale of products
developed from the channel
partnership.
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Pursuant
to the agreement, Mr. Kirk has agreed to join the ZIOPHARM board of directors.
In addition to his responsibilities at Intrexon, Mr. Kirk has served, since
March 1999, as Senior Managing Director and Chief Executive Officer of Third
Security, LLC, an investment management firm founded by Mr. Kirk. Additionally,
Mr. Kirk founded and became Chairman of the Board of New River Pharmaceuticals
Inc. in 1996, and was President and Chief Executive Officer between October 2001
and April 2007. New River was acquired by Shire plc in 2007. Mr. Kirk
also currently serves as a member of the Board of Directors of Halozyme
Therapeutics, Inc. (Nasdaq: HALO), and as Chairman of the Board for Clinical
Data, Inc. (Nasdaq: CLDA). Previously, Mr. Kirk served as a member of the Board
of Directors of Scios, Inc. (acquired by Johnson & Johnson) between February
2000 and May 2002. Mr. Kirk served on the Board of Visitors of Radford
University from July 2003 to June 2009, was Rector of the Board from September
2006 to September 2008, and has served on the Board of Directors of the Radford
University Foundation, Inc. since September 1998. He has served on the Board of
Visitors of the University of Virginia and Affiliated Schools since July 2009,
on the Virginia Advisory Council on Revenue Estimates since July 2006, on the
Governor’s Economic Development and Jobs Creation Commission since April 2010,
and served as a member of the Board of Directors of the Virginia University
Research Partnership from July 2007 to November 2010. Mr. Kirk received a B.A.
in Business from Radford University and a J.D. from the University of
Virginia.
Regarding
Mr. Kirk’s appointment, Dr. Lewis added: “RJ is a visionary and a winner with a
long record of success and value creation in the life sciences. His addition to
the ZIOPHARM Board of Directors will be invaluable, and we look forward to his
many contributions in this role.”
Griffin
Securities, Inc. acted as an advisor to Intrexon on this
transaction.
Conference
Call and Webcast January 6, 2011 at 5pm ET
ZIOPHARM
and Intrexon will host a conference call and live audio webcast on January 6,
2011 at 5:00pm ET to discuss their global exclusive channel partnership. The
call can be accessed by dialing (877) 375-9144 (U.S. and Canada) or (253)
237-1150 (international). The passcode for the conference call is
‘ZIOPHARM.’ To access the live audio webcast, or the subsequent archived
recording, visit the "Investors - Events & Presentations" section of the
ZIOPHARM website at www.ziopharm.com. The webcast will be
recorded and available for replay on the company's website for two (2)
weeks.
About
ZIOPHARM Oncology, Inc.:
ZIOPHARM
Oncology is a biopharmaceutical company engaged in the development and
commercialization of a diverse portfolio of cancer drugs. The Company is
currently focused on three clinical programs.
Palifosfamide
(ZymafosTM or
ZIO-201) is a novel DNA cross-linker in class with bendamustine, ifosfamide, and
cyclophosphamide. ZIOPHARM is currently enrolling patients in a randomized,
double-blinded, placebo-controlled Phase III trial with palifosfamide
administered intravenously for the treatment of metastatic soft tissue sarcoma
in the front-line setting. The Company is also currently conducting a
Phase I intravenous study of palifosfamide in combination with standard of care
addressing small cell lung cancer and expects to initiate an additional study
with drug in the oral form treating solid tumors.
Darinaparsin
(ZinaparTM or
ZIO-101) is a novel mitochondrial-targeted agent (organic arsenic) being
developed intravenously for the treatment of peripheral T-cell lymphoma with a
pivotal study expected to begin in late 2011. An oral form is in a Phase I trial
in solid tumors.
Indibulin
(ZybulinTM or
ZIO-301) is a novel, oral tubulin binding agent that is expected to have several
potential benefits including oral dosing, application in multi-drug resistant
tumors, no neuropathy and minimal overall toxicity. It is currently being
studied in Phase I/II in metastatic breast cancer.
ZIOPHARM's
operations are located in Boston, MA with an executive office in New York City.
Further information about ZIOPHARM may be found at www.ziopharm.com.
ZIOP-G
About
Intrexon Corporation:
Intrexon
Corporation is a privately held synthetic biology company that employs modular
DNA control systems to enhance capabilities, improve safety and lower cost in
human therapeutics, protein production, industrial products and agricultural
biotechnology. The company’s advanced transgene engineering platform enables
Better DNA™ by combining breakthroughs in DNA control systems with corresponding
advancements in modular transgene design, assembly and optimization. The company
is currently using these advanced capabilities to undertake foremost challenges
across the spectrum for biological applications. More information about the
company is available at www.DNA.com.
Forward-Looking
Safe Harbor Statement:
This
press release contains forward-looking statements for ZIOPHARM Oncology, Inc.
that involve risks and uncertainties that could cause ZIOPHARM Oncology’s actual
results to differ materially from the anticipated results and expectations
expressed in these forward-looking statements. These statements are based on
current expectations, forecasts and assumptions that are subject to risks and
uncertainties, which could cause actual outcomes and results to differ
materially from these statements. Among other things, there can be no assurance
that any of ZIOPHARM Oncology’s development efforts relating to its product
candidates will be successful, or such product candidates will be successfully
commercialized. Other risks that affect forward-looking information contained in
this press release include the possibility of being unable to obtain regulatory
approval of ZIOPHARM Oncology’s product candidates, the risk that the results of
clinical trials may not support ZIOPHARM Oncology’s claims, the risk that
pre-clinical or clinical trials will proceed on schedules that are consistent
with ZIOPHARM Oncology’s current expectations or at all, risks related to
ZIOPHARM Oncology’s ability to protect its intellectual property and its
reliance on third parties to develop its product candidates, risks related to
the sufficiency of existing capital reserves to fund continued operations for a
particular amount of time and uncertainties regarding ZIOPHARM Oncology’s
ability to obtain additional financing to support its operations thereafter, as
well as other risks regarding ZIOPHARM Oncology’s that are discussed under the
heading "Risk Factors" in ZIOPHARM Oncology’s filings with the United States
Securities and Exchange Commission. Forward-looking statements can be identified
by the use of words such as "may," "will," "intend," " should," "could," "can,"
"would," "expect," "believe," "estimate," " predict," "potential," "plan," "is
designed to," "target" and similar expressions. ZIOPHARM Oncology assumes no
obligation to update these forward-looking statements, except as required by
law.
Contacts:
For
ZIOPHARM:
Tyler
Cook
ZIOPHARM
Oncology, Inc.
617-259-1982
tcook@ziopharm.com
Media:
David
Pitts
Argot
Partners
212-600-1902
david@argotpartners.com
For
Intrexon:
Robert
Beech
Intrexon
Corporation
Phone:
301.556.9812
rbeech@intrexon.com
Unassociated Document
EXECUTION
VERSION
STOCK
PURCHASE AGREEMENT
This
Agreement (“Agreement”) is made and
entered into as of January 6, 2011 (the “Effective Date”), by and among
ZIOPHARM Oncology, Inc., a Delaware corporation (the “Company”), and Intrexon
Corporation, a Virginia corporation (“Intrexon”).
A. Concurrently
with the execution of this Agreement, the Company is entering into a Channel
Partner Agreement with Intrexon (the “Channel Agreement”), pursuant
to which Intrexon is licensing the rights to certain technology to the Company;
and
B. In
partial consideration of Intrexon’s license under the Channel Agreement, the
Company has agreed to issue and sell to Intrexon certain shares of the Company’s
common stock in accordance with the terms and conditions of this
Agreement.
C. In
connection with the entry into the Channel Agreement, the Company has also
agreed to issue and sell to Intrexon, and Intrexon has agreed to purchase from
the Company, certain shares of the Company’s common stock for cash consideration
in accordance with the terms and conditions of this Agreement, namely the
Upfront Purchase Shares (as defined herein) and up to an additional $50,000,000
in shares of the Company’s common stock pursuant to the Equity Purchase
Commitment (as hereinafter defined).
D. At
the First Tranche Closing (as hereinafter defined), the parties have agreed to
enter into a Registration Rights Agreement in the form attached hereto as Exhibit A (the “Rights
Agreement”).
AGREEMENT
In
consideration of the mutual covenants contained in this Agreement and for other
good and valuable consideration, the receipt of which is hereby acknowledged,
the Company and Intrexon hereby agree as follows:
SECTION 1. Authorization
of Sale of Shares.
1.1 Authorization. Subject to the terms and
conditions of this Agreement, the Company has authorized the sale and issuance
to Intrexon of up to the following number of shares (the “Shares”) of the Company’s
common stock, par value $0.001 per share (“Common Stock”):
(a) that
number of Shares (the “First
Tranche Shares”) equal to 7.495% of the number of shares of Common Stock
issued and outstanding immediately prior to the First Tranche Closing (as
hereinafter defined and, for purpose of clarity, excluding the Upfront Purchase
Shares);
(b) that
number of Shares (the “Second
Tranche Shares”) equal to the lesser of (i) the number of shares of
Common Stock comprising the First Tranche Shares (subject to appropriate
adjustment for stock splits, dividends, combinations, recapitalizations and the
like affecting the Common Stock) (ii) subject to Section 6.8
hereof, the maximum number of Shares that the Company may issue to Intrexon that
will not result in the sum of the Upfront Purchase Shares, First Tranche Shares
and Second Tranche Shares exceeding 19.99% of the number of shares of Common
Stock of the Company issued and outstanding immediately prior to the First
Tranche Closing or (iii) subject to Section 6.10 hereof, the maximum number of
Shares that the Company may issue to Intrexon and its Affiliates (as defined in
Section 405 of the Securities Act (as defined below)) that will
not result in a change of control of the Company within the meaning of and in
contravention to Rule 5635(b) of the Nasdaq Stock Market listing rules (or its
successor); and
(c) that
number of Shares (the “Upfront
Purchase Shares”) equal to 5.00% of the number of shares of Common Stock
issued and outstanding immediately prior to the First Tranche Closing (and for
purposes of clarity, excluding the First Tranche Shares).
The
number of Shares to be issued under each of subsections (a), (b) and (c) of this
Section 1.1 shall be rounded down to the nearest whole share.
1.2 Capital
Adjustments. If after the date hereof (i) the outstanding
shares of the Company’s Common Stock shall be subdivided or split into a greater
number of shares or a dividend in Common Stock shall be paid in respect of such
Common Stock or (ii) the outstanding shares of Common Stock are combined, then
all share quantities in this Agreement not yet issued shall be appropriately
adjusted to reflect such stock split, stock dividend or
conjunction. If after the date hereof (i) the Company shall pay a
dividend in securities of the Company (other than in Common Stock) or of other
property (including cash) on the Common Stock, or (ii) there shall occur any
merger, consolidation, capital reorganization or reclassification in which the
Common Stock is converted or exchanged for securities, cash or other property,
the class or series of stock constituting the Common Stock for purposes of this
Agreement, shall be appropriately adjusted to reflect such other dividend,
merger, consolidation, capital reorganization or
reclassification. After any event referenced in clauses (i) through
(ii) of the immediately preceding sentence is consummated, if applicable, all
references herein to the Company’s Common Stock shall be deemed to refer to the
capital stock or property (including cash) into or for which the Common Stock
was converted or exchanged, with the necessary changes in detail.
1.3 Company
Sale. In the event that the Company consummates a Company Sale
(as defined below) prior to the Second Tranche Closing, Intrexon shall be
entitled to receive, upon the Second Tranche Closing and as the Second Tranche
Shares, the securities, cash or other property that it would have received upon
conversion or exchange of the Second Tranche Shares if immediately prior to the
consummation of the Company Sale the Company had calculated and issued the
Second Tranche Shares to Intrexon under Sections 1.1(b) and
2.2(b).
1.4 Second Tranche
Adjustment. In the event the number of Second Tranche Shares
issued by the Company at the Second Tranche Closing shall, in accordance with
Section 1.1(b), be less than the number of shares of Common Stock comprising the
First Tranche Shares (subject to appropriate adjustment for stock splits,
dividends, combinations, recapitalizations and the like affecting the Common
Stock) (with such shortfall being referred to herein as the “Second Tranche
Shortfall”), and if within 18 months subsequent to the Second Tranche Closing
the facts and circumstances applicable to such issuance have changed such that a
greater number of Second Tranche Shares would have been issuable in accordance
with Section 1.1(b) had the Second Tranche Closing occurred at a later date
within such 18 month period (including, without limitation, the receipt of
stockholder approval for such issuance in accordance with Section 6.10), then
the Company shall issue to Intrexon an additional number of shares equal to the
number of shares comprising the Second Tranche Shortfall (subject to appropriate
adjustment for stock splits, dividends, combinations, recapitalizations and the
like affecting the Common Stock) or such lesser amount as may be permitted in
accordance with Section 1.1(b), for the purchase price per share for the Second
Tranche Shares specified in Section 2.1(b).
SECTION
2. Closing
and Delivery
2.1 Sale and Purchase Price of
Shares. Subject to the
terms and conditions of this Agreement and in reliance upon the representations,
warranties and agreements contained herein, the Company will issue and sell to
Intrexon, and Intrexon will purchase from the Company, at each of the First
Tranche Closing and the Second Tranche Closing, the applicable number of Shares,
at a purchase price as follows:
(a) the
purchase price per share for the First Tranche Shares shall be equal to the par
value of each such share at such time, which price shall be deemed paid in
partial consideration for the execution and delivery by Intrexon of the Channel
Agreement;
(b) the
purchase price per share for the Second Tranche Shares shall be equal to the par
value of each such share at such time, which price shall be deemed paid in
partial consideration for the execution and delivery by Intrexon of the Channel
Agreement; and
(c) the
purchase price per share for the Upfront Purchase Shares shall be $4.80 per
share, which price shall be paid by Intrexon in cash and delivered by wire
transfer of same day funds at the First Tranche Closing to an account designated
by the Company.
2.2 Closings. The
closings of the purchase and sale of the Shares to be issued pursuant to this
Agreement shall be held at the offices of WilmerHale, 60 State Street, Boston,
Massachusetts 02109 or at such other place as the Company and Intrexon may
agree, as follows:
(a) the
closing of the purchase and sale of the First Tranche Shares and the Upfront
Purchase Shares will occur, subject to the conditions set forth in Section 8
hereof and applicable to the First Tranche Closing, on the fourth business day
following the date hereof or on such other date as Intrexon and the Company may
agree upon (the “First Tranche
Closing”); and
(b) the
closing of the purchase and sale of the Second Tranche Shares will occur,
subject to the conditions set forth in Section 8 hereof and applicable to the
Second Tranche Closing, on the earlier of (i) the tenth business day following
the dosing of the first patient in any Phase II Clinical Trial conducted by the
Company of a ZIOPHARM Product (as defined in the Channel Agreement), and (ii)
such other date as Intrexon and the Company may agree (the “Second Tranche
Closing”). For the purposes of this Agreement, “Phase II Clinical Trial” shall
mean a human clinical trial of a product candidate conducted in the United
States, the principal purpose of which is to evaluate the effectiveness of such
product candidate in the target patient population, as described in 21 C.F.R. §
312.21(b), or a similar clinical study as the Company and Intrexon may mutually
agree upon that is prescribed by the applicable regulatory authority in a
country other than the United States.
Each of
the First Tranche Closing and the Second Tranche Closing are collectively
hereinafter referred to as the “Closings” and individually as
a “Closing”.
2.3 Delivery of the
Shares. Promptly following a Closing, the Company shall
deliver to Intrexon a certificate representing the number of Shares purchased at
such Closing, registered in the name of Intrexon.
SECTION 3. Representations
and Warranties of the Company.
Subject
to and except as set forth in the SEC Documents or on the Schedule of Exceptions
which is arranged in sections corresponding to the sub-section numbered
provisions contained below in this Section, the Company hereby represents and
warrants to, and covenants with, Intrexon as of the date hereof as
follows:
3.1 Organization, Good Standing
and Power. The Company is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Delaware
and has the requisite corporate power to own, lease and operate its properties
and assets and to conduct its business as it is now being conducted and as
described in the reports filed by the Company with the Securities and Exchange
Commission (the “Commission”) pursuant to the
reporting requirements of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), since
the end of its most recently completed fiscal year through the date hereof,
including, without limitation, its most recent report on Form
10-Q. The Company does not have any subsidiaries. The
Company is qualified to do business as a foreign corporation and is in good
standing in every jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary, except for any
jurisdiction(s) (alone or in the aggregate) in which the failure to be so
qualified will not have a Material Adverse Effect. For the purposes
of this Agreement, “Material
Adverse Effect” means any effect on the business, operations, properties
or financial condition of the Company that is material and adverse to the
Company, taken as a whole, and any condition, circumstance or situation that
would prohibit the Company from entering into and performing any of its
obligations hereunder.
3.2 Authorization;
Enforcement. The Company has the requisite corporate power and
authority to enter into and perform this Agreement and to issue and sell the
Shares in accordance with the terms hereof. The execution, delivery
and performance of this Agreement by the Company and the consummation by it of
the transactions contemplated hereby have been duly and validly authorized by
all necessary corporate action, and no further consent or authorization of the
Company, its board of directors or stockholders is required, except pursuant to
Section 7. When executed and delivered by the Company, this Agreement
shall constitute a valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, reorganization, moratorium,
liquidation, conservatorship, receivership or similar laws relating to, or
affecting generally the enforcement of, creditor’s rights and remedies or by
other equitable principles of general application. The Company’s board of
directors, at a meeting duly called and held, adopted resolutions approving the
transactions contemplated hereby, including the issuance of the First Tranche
Shares, Second Tranche Shares and Upfront Purchase Shares in a manner consistent
with and that meets the requirements of Section 203(a)(1) of the Delaware
General Corporation Law.
3.3 Issuance of
Shares. The Shares to be issued and sold hereunder have been
duly authorized by all necessary corporate action and, when paid for and issued
in accordance with the terms hereof, will be validly issued, fully paid and
nonassessable. In addition, such Shares will be free and clear of all
liens, claims, charges, security interests or agreements, pledges, assignments,
covenants, restrictions or other encumbrances created by, or imposed by, the
Company (collectively, “Encumbrances”) and rights of
refusal of any kind imposed by the Company (other than restrictions on transfer
under applicable securities laws) and the holder of such Shares shall be
entitled to all rights accorded to a holder of Common Stock. As of
the date hereof, 48,466,561 shares of the Company’s Common Stock are issued and
outstanding.
3.4 No Conflicts; Governmental
Approvals. The execution, delivery and performance of the
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby do not and will not (i) violate any provision of the
Company’s Amended and Restated Certificate of Incorporation or Bylaws, each as
amended to date, (ii) conflict with, or constitute a default (or an event which
with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of,
any agreement, mortgage, deed of trust, indenture, note, bond, license, lease
agreement, instrument or obligation to which the Company is a party or by which
the Company’s properties or assets are bound, or (iii) result in a violation of
any federal, state, local or foreign statute, rule, regulation, order, judgment
or decree (including federal and state securities laws and regulations)
applicable to the Company or by which any property or asset of the Company is
bound or affected, except for such conflicts, defaults, terminations,
amendments, acceleration, cancellations and violations as would not,
individually or in the aggregate, have a Material Adverse Effect. The
Company is not required under federal, state, foreign or local law, rule or
regulation to obtain any consent, authorization or order of, or make any filing
or registration with, any court or governmental agency in order for it to
execute, deliver or perform any of its obligations under this Agreement or issue
and sell the Shares in accordance with the terms hereof (other than any filings,
consents and approvals which may be required to be made by the Company under
applicable state and federal securities laws, rules or regulations prior to or
subsequent to the Closing).
3.5 Commission Documents,
Financial Statements. The Common Stock of the Company is
registered pursuant to Section 12(b) of the Exchange Act. During the
two year period preceding the First Tranche Closing Date, the Company has timely
filed all reports, schedules, forms, statements and other documents required to
be filed by it with the Commission pursuant to the reporting requirements of the
Exchange Act (the “SEC
Documents”). At the times of their respective filing, all such
reports, schedules, forms, statements and other documents complied in all
material respects with the requirements of the Exchange Act and the rules and
regulations of the Commission promulgated thereunder. At the times of
their respective filings, such reports, schedules, forms, statements and other
documents did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. As of the date hereof, the Company meets the
“registrant eligibility” requirements set forth in the general instructions to
Form S-3 to enable the registration of its Common Stock. As of their respective
dates, the financial statements of the Company included in the Commission
Documents complied in all material respects with applicable accounting
requirements and the published rules and regulations of the Commission or other
applicable rules and regulations with respect thereto. Such financial
statements have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the periods involved (except (i)
as may be otherwise indicated in such financial statements or the notes thereto
or (ii) in the case of unaudited interim statements, to the extent they may not
include footnotes or may be condensed or summary statements), and fairly present
in all material respects the consolidated financial position of the Company as
of the dates thereof and the results of operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments).
3.6 Accountants. Caturano
and Company, Inc. (formerly Caturano and Company, P.C.) whose report on the
financial statements of the Company is filed with the SEC in the Company’s
Annual Report on Form 10-K for the year ended December 31, 2009, were, at the
time such report was issued, independent registered public accountants as
required by the Securities Act of 1933 and the rules and regulations promulgated
thereunder (together, the “Securities
Act”). Except as described in the SEC Documents and as
preapproved in accordance with the requirements set forth in Section 10A of the
Exchange Act, to the Company’s knowledge, Caturano and Company, Inc. has not
engaged in any non-audit services prohibited by subsection (g) of Section 10A of
the Exchange Act on behalf of the Company.
3.7 Internal
Controls. The Company has established and maintains a system
of internal accounting controls sufficient to provide reasonable assurances
that: (i) transactions are executed in accordance with management’s
general or specific authorization; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles in the United States and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
3.8 Corporate
Governance. The Company’s board of directors meets the
independence requirements of, and has established an audit committee that meets
the independence requirements of, the rules and regulations of the Commission
and the Nasdaq Capital Market. The Audit Committee has reviewed the
adequacy of its charter within the past 12 months.
3.9 Disclosure
Controls. The Company has established and maintains disclosure
controls and procedures (as such term is defined in Rules 13a-15 and 15d-15
under the Exchange Act). Since the date of the most recent evaluation
of such disclosure controls and procedures, there have been no significant
changes in internal controls or in other factors that could significantly affect
internal controls, including any corrective actions with regard to significant
deficiencies and material weaknesses. The Company is in compliance in
all material respects with all provisions currently in effect and applicable to
the Company of the Sarbanes-Oxley Act of 2002, and all rules and regulations
promulgated thereunder or implementing the provisions thereof.
3.10 No Material Adverse
Change. Except as disclosed in the Commission Documents, since
December 31, 2009, the Company has not (i) experienced or suffered any Material
Adverse Effect, (ii) incurred any material liabilities, obligations, claims or
losses (whether liquidated or unliquidated, secured or unsecured, absolute,
accrued, contingent or otherwise) other than those incurred in the ordinary
course of the Company’s business or (iii) declared, made or paid any dividend or
distribution of any kind on its capital stock.
3.11 No Undisclosed Events or
Circumstances. Except as disclosed in the Commission
Documents, since December 31, 2009, except for the consummation of the
transactions contemplated herein, to the Company’s knowledge, no event or
circumstance has occurred or exists with respect to the Company or its
businesses, properties, prospects, operations or financial condition, which,
under applicable law, rule or regulation, requires public disclosure or
announcement by the Company but which has not been so publicly announced or
disclosed.
3.12 Litigation. No
action, suit, proceeding or investigation is currently pending or, to the
knowledge of the Company, has been threatened in writing against the Company
that: (i) concerns or questions the validity of this Agreement; (ii) concerns or
questions the right of the Company to enter into this Agreement; or (iii) is
reasonably likely to have a Material Adverse Effect. The Company is
neither a party to nor subject to the provisions of any material order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality. There is no action, suit, proceeding or
investigation by the Company currently pending or that the Company intends to
initiate that would have a Material Adverse Effect.
3.13 Compliance. Except
for defaults or violations which are not reasonably likely to have a Material
Adverse Effect, the Company is not (i) in default under or in violation of (and
no event has occurred that has not been waived that, with notice or lapse of
time or both, would result in a default by the Company under), nor has the
Company received notice of a claim that it is in default under or that it is in
violation of, any indenture, loan or credit agreement or any other agreement or
instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), (ii) is in
violation of any order of any court, arbitrator or governmental body, or (iii)
is or has been in violation of any statute, rule or regulation of any
governmental authority, including without limitation all foreign, federal, state
and local laws, applicable to its business, except in each case for such
defaults or violations as would not have a Material Adverse Effect.
3.14 Intellectual
Property
(a) To
the best of its knowledge, the Company has entered into agreements with each of
its current and former officers, employees and consultants involved in research
and development work, including development of the Company’s products and
technology providing the Company, to the extent permitted by law, with title and
ownership to patents, patent applications, trade secrets and inventions
conceived, developed, reduced to practice by such person, solely or jointly with
other of such persons, during the period of employment by the Company except
where the failure to have entered into such an agreement would not have a
Material Adverse Effect. The Company is not aware that any of its
employees or consultants is in material violation thereof.
(b) To
the Company’s knowledge, the Company owns or possesses adequate rights to use
all trademarks, service marks, trade names, domain names, copyrights, patents,
patent applications, inventions, know how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information, systems
or procedures), and other intellectual property rights (“Intellectual Property”) as are
necessary for the conduct of its business as described in the Commission
Documents. Except as described in the Commission Documents, (i) to
the knowledge of the Company, there is no infringement, misappropriation or
violation by third parties of any such Intellectual Property; (ii) there is
no pending or, to the knowledge of the Company, threatened action, suit,
proceeding or claim by others against the Company challenging the Company’s
rights in or to any such Intellectual Property; (iii) the Intellectual
Property owned by the Company and, to the knowledge of the Company, the
Intellectual Property licensed to the Company has not been adjudged invalid or
unenforceable by a court of competent jurisdiction or applicable government
agency, in whole or in part, and there is no pending or, to the knowledge of the
Company, threatened action, suit, proceeding or claim by others challenging the
validity or scope of any such Intellectual Property; (iv) there is no pending
or, to the knowledge of the Company, threatened action, suit, proceeding or
claim by others against the Company that the Company infringes, misappropriates
or otherwise violates any Intellectual Property or other proprietary rights of
others, and the Company has not received any written notice of such claim; and
(v) to the Company’s knowledge, no employee of the Company is the subject
of any claim or proceeding involving a violation of any term of any employment
contract, patent disclosure agreement, invention assignment agreement,
non-competition agreement, non-solicitation agreement, nondisclosure agreement
or any restrictive covenant to or with a former employer where the basis of such
violation relates to such employee’s employment with the Company or actions
undertaken by the employee while employed with the Company, in each of (i)
through (v), for any instances which would not, individually or in the
aggregate, result in a Material Adverse Effect.
3.15 FDA
Compliance.
(a) Except as described in
the Commission Documents, the Company: (i) is in material compliance
with all statutes, rules or regulations applicable to the ownership, testing,
development, manufacture, packaging, processing, use, distribution, marketing,
labeling, promotion, sale, offer for sale, storage, import, export or disposal
of any product that is under development, manufactured or distributed by the
Company (“Applicable
Laws”); (ii) has not received any FDA Form 483, notice of adverse
finding, warning letter, untitled letter or other correspondence or notice from
the U.S. Food and Drug Administration (the “FDA”) or any other federal,
state, local or foreign governmental or regulatory authority alleging or
asserting material noncompliance with any Applicable Laws or any licenses,
certificates, approvals, clearances, authorizations, permits and supplements or
amendments thereto required by any such Applicable Laws (“Authorizations”), which would
not, individually or in the aggregate, result in a Material Adverse Effect;
(iii) possesses all material Authorizations necessary for the operation of its
business as described in the Commission Documents and such Authorizations are
valid and in full force and effect and the Company is not in material violation
of any term of any such Authorizations; and (iv) since January 1, 2008: (A) has
not received notice of any claim, action, suit, proceeding, hearing,
enforcement, investigation, arbitration or other action from the FDA or any
other federal, state, local or foreign governmental or regulatory authority or
third party alleging that any product operation or activity is in material
violation of any Applicable Laws or Authorizations and has no knowledge that the
FDA or any other federal, state, local or foreign governmental or regulatory
authority or third party is considering any such claim, litigation, arbitration,
action, suit, investigation or proceeding; (B) has not received notice that the
FDA or any other federal, state, local or foreign governmental or regulatory
authority has taken, is taking or intends to take action to limit, suspend,
modify or revoke any material Authorizations and has no knowledge that the FDA
or any other federal, state, local or foreign governmental or regulatory
authority is considering such action; (C) has filed, obtained, maintained or
submitted all material reports, documents, forms, notices, applications,
records, claims, submissions and supplements or amendments as required by any
Applicable Laws or Authorizations and that all such reports, documents, forms,
notices, applications, records, claims, submissions and supplements or
amendments were materially complete and correct on the date filed (or were
corrected or supplemented by a subsequent submission); and (D) has not, either
voluntarily or involuntarily, initiated, conducted, or issued or caused to be
initiated, conducted or issued, any recall, market withdrawal or replacement,
safety alert, post sale warning, “dear doctor” letter, or other notice or action
relating to the alleged lack of safety or efficacy of any product or any alleged
product defect or violation and, to the Company’s knowledge, no third party has
initiated, conducted or intends to initiate any such notice or
action.
(b) Since January 1, 2008,
and except to the extent disclosed in the Commission Documents, the Company has
not received any notices or correspondence from the FDA or any other federal,
state, local or foreign governmental or regulatory authority requiring the
termination, suspension or material modification of any studies, tests or
preclinical or clinical trials conducted by or on behalf of the
Company.
3.16 General Healthcare
Regulatory Compliance.
(a) As
used in this subsection:
(i) “Governmental Entity” means any
national, federal, state, county, municipal, local or foreign government, or any
political subdivision, court, body, agency or regulatory authority thereof, and
any Person exercising executive, legislative, judicial, regulatory, taxing or
administrative functions of or pertaining to any of the foregoing.
(ii) “Law” means any federal, state,
local, national or foreign law, statute, code, ordinance, rule, regulation,
order, judgment, writ, stipulation, award, injunction, decree or arbitration
award or finding.
(b) The
Company has not committed any act, made any statement or failed to make any
statement that would reasonably be expected to provide a basis for the FDA or
any other Governmental Entity to invoke its policy with respect to “Fraud,
Untrue Statements of Material Facts, Bribery, and Illegal Gratuities”, or
similar policies, set forth in any applicable Laws. Neither the
Company, nor, to the knowledge of the Company, any of its officers, key
employees or agents has been convicted of any crime or engaged in any conduct
that has resulted, or would reasonably be expected to result, in debarment under
applicable Law, including, without limitation, 21 U.S.C. Section
335a. No claims, actions, proceedings or investigations that would
reasonably be expected to result in such a material debarment or exclusion are
pending, or to the knowledge of the Company, threatened, against the Company or
any of its respective officers, employees or agents.
(c) Each
of the Company and, to its knowledge, its directors, officers, employees, and
agents (while acting in such capacity) is, and at all times has been, in
material compliance with all health care Laws applicable to the Company or by
which any of its properties, businesses, products or other assets is bound or
affected, including, without limitation, the federal Anti-kickback Statute (42
U.S.C. § 1320a-7b(b)), the Anti-Inducement Law (42 U.S.C.
§ 1320a-7a(a)(5)), the civil False Claims Act (31 U.S.C. §§ 3729 et seq.),
the administrative False Claims Law (42 U.S.C. § 1320a-7b(a)), the Health
Insurance Portability and Accountability Act of 1996 (42 U.S.C. § 1320d et
seq.), the exclusion laws (42 U.S.C. § 1320a-7), the Food Drug and Cosmetic Act
(21 U.S.C. §§ 301 et seq.) (collectively, “Health Care
Laws”). The Company has not received any notification,
correspondence or any other written or oral communication from any Governmental
Entity, including, without limitation, the FDA, the Centers for Medicare and
Medicaid Services, and the Department of Health and Human Services Office of
Inspector General, of potential or actual material non-compliance by, or
liability of, the Company under any Health Care Laws.
(d) The
Company is not a party to any corporate integrity agreements, monitoring
agreements, consent decrees, settlement orders, or similar agreements with or
imposed by any Governmental Entity.
3.17 Application of Takeover
Protections. The issuance of the Shares hereunder and
Intrexon’s ownership thereof is not prohibited by the business combination
statutes of the state of Delaware. The Company has not adopted any
stockholder rights plan, “poison pill” or similar arrangement that would trigger
any right, obligation or event as a result of the issuance of such Shares and
Intrexon’s ownership of such Shares and there are no similar anti-takeover
provisions under the Company's charter documents.
3.18 Listing and Maintenance
Requirements. The Company is in compliance with the
requirements of the Nasdaq Capital Market for continued listing of the Company
common stock thereon and has not received any notification that, and has no
knowledge that Nasdaq Capital Market is contemplating terminating such
listing. The issuance and sale of the Shares hereunder does not
contravene the rules and regulations of the Nasdaq Capital Market in any
material respect.
3.19 Private
Placement. Neither the Company nor its Affiliates, nor any
Person acting on its or their behalf, (i) has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D under
the Securities Act) in connection with the offer or sale of the Shares
hereunder, (ii) has, directly or indirectly, made any offers or sales of any
security or solicited any offers to buy any security, under any circumstances
that would require registration of the sale and issuance by the Company of the
First Tranche Shares, Second Tranche Shares and Upfront Purchase Shares under
the Securities Act or (iii) has issued any shares of Common Stock or shares of
any series of preferred stock or other securities or instruments convertible
into, exchangeable for or otherwise entitling the holder thereof to acquire
shares of Common Stock which would be integrated with the sale of the Shares to
Intrexon for purposes of the Securities Act or of any applicable stockholder
approval provisions, including, without limitation, under the rules and
regulations of any exchange or automated quotation system on which any of the
securities of the Company are listed or designated, nor will the Company or any
of its subsidiaries or affiliates take any action or steps that would require
registration of any of the Shares under the Securities Act or cause the offering
of the Shares to be integrated with other offerings. Assuming the
accuracy of the representations and warranties of Intrexon, the offer and sale
of the Shares by the Company to Intrexon pursuant to this Agreement will be
exempt from the registration requirements of the Securities
Act.
3.20 No Manipulation of
Stock. The
Company has not taken and will not, in violation of applicable law, take, any
action outside the ordinary course of business designed to or that might
reasonably be expected to cause or result in unlawful manipulation of the price
of the Common Stock.
3.21 Brokers. Neither
the Company nor any of the officers, directors or employees of the Company has
employed any broker or finder in connection with the transaction contemplated by
this Agreement. The Company shall indemnify Intrexon from and against
any broker’s, finder’s or agent’s fees for which the Company is
responsible.
SECTION 4. Representations,
Warranties and Covenants of Intrexon.
4.1 Purchaser
Sophistication. Intrexon represents and warrants to, and
covenants with, the Company that Intrexon (a) is knowledgeable, sophisticated
and experienced in making, and is qualified to make decisions with respect to,
investments in shares presenting an investment decision like that involved in
the purchase of the Shares, including investments in securities issued by the
Company and investments in comparable companies, and has requested, received,
reviewed and considered all information it deemed relevant in making an informed
decision to purchase the Shares, (b) Intrexon, in connection with its decision
to purchase the Shares, relied only upon the SEC Documents, other publicly
available information, and the representations and warranties of the Company
contained herein. Intrexon is an "accredited investor" pursuant to
Rule 501 of Regulation D under the Securities Act, (c) Intrexon is acquiring the
Shares for its own account for investment only and with no present intention of
distributing any of such Shares or any arrangement or understanding with any
other persons regarding the distribution of such Shares; (d) Intrexon has not
been organized, reorganized or recapitalized specifically for the purpose of
investing in the Shares; (e) Intrexon will not, directly or indirectly,
offer, sell, pledge, transfer or otherwise dispose of (or solicit any offers to
buy, purchase or otherwise acquire to take a pledge of) any of the Shares except
in compliance with the Securities Act and applicable state securities laws, (f)
Intrexon understands that the Shares are being offered and sold to it in
reliance upon specific exemptions from the registration requirements of the
Securities Act and state securities laws, and that the Company is relying upon
the truth and accuracy of, and Intrexon’s compliance with, the representations,
warranties, agreements, acknowledgments and understandings of Intrexon set forth
herein in order to determine the availability of such exemptions and the
eligibility of Intrexon to acquire the Shares, (g) Intrexon understands that its
investment in the Shares involves a significant degree of risk, including a risk
of total loss of Intrexon’s investment (provided that such acknowledgment in no
way diminishes the representations, warranties and covenants made by the Company
hereunder) and (h) Intrexon understands that no United States federal or state
agency or any other government or governmental agency has passed upon or made
any recommendation or endorsement of the Shares.
4.2 Authorization and
Power. Intrexon has the requisite power and authority to enter
into and perform this Agreement and to purchase the Shares being sold to it
hereunder. The execution, delivery and performance of this Agreement
by Intrexon and the consummation by it of the transactions contemplated hereby
have been duly authorized by all necessary corporate action, and no further
consent or authorization of Intrexon or its board of directors or stockholders
is required. When executed and delivered by Intrexon, this Agreement
shall constitute a valid and binding obligation of Intrexon enforceable against
Intrexon in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation, conservatorship, receivership or similar laws relating to, or
affecting generally the enforcement of, creditor’s rights and remedies or by
other equitable principles of general application.
4.3 No
Conflict. The execution, delivery and performance of this
Agreement by Intrexon and the consummation by Intrexon of the transactions
contemplated hereby do not and will not (i) violate any provision of Intrexon’s
charter or organizational documents, (ii) conflict with, or constitute a default
(or an event which with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, mortgage, deed of trust, indenture, note, bond,
license, lease agreement, instrument or obligation to which Intrexon is a party
or by which Intrexon’s properties or assets are bound, or (iii) result in a
violation of any federal, state, local or foreign statute, rule, regulation,
order, judgment or decree (including federal and state securities laws and
regulations) applicable to Intrexon or by which any property or asset of
Intrexon are bound or affected, except, in all cases, other than violations
(with respect to federal and state securities laws) above, for such conflicts,
defaults, terminations, amendments, acceleration, cancellations and violations
as would not, individually or in the aggregate, materially and adversely affect
Intrexon’s ability to perform its obligations under the Agreement.
4.4 Restricted
Shares. Intrexon acknowledges that the First Tranche Shares,
Second Tranche Shares and Upfront Purchase Shares are restricted securities and
must be held indefinitely unless subsequently registered under the Securities
Act or the Company receives an opinion of counsel reasonably satisfactory to the
Company that such registration is not required. Intrexon is aware of
the provisions of Rule 144 promulgated under the Securities Act which permit
limited resale of stock purchased in a private placement subject to the
satisfaction of certain conditions, including, among other things, the existence
of a public market for the stock, the availability of certain current public
information about the Company, the resale occurring not less than one year after
a party has purchased and paid for the stock to be sold, the sale being through
a “broker’s transaction” or a transaction directly with a “market maker” and the
number of shares of the stock being sold during any three-month period not
exceeding specified limitations. Intrexon further acknowledges and
understands that the Company may not be satisfying the current public
information requirement of Rule 144 at the time Intrexon wishes to sell the
Shares and, if so, Intrexon would be precluded from selling the Shares under
Rule 144 even if the one year minimum holding period has been
satisfied.
4.5 Ownership of Common
Stock. As of the date hereof, excluding the Shares, Intrexon
and its Affiliates beneficially own no shares of Common Stock of the
Company.
4.6 Stock
Legends. Intrexon acknowledges that certificates evidencing
the Shares shall bear a restrictive legend in substantially the following form
(and including related stock transfer instructions and record
notations):
THESE
SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY.
SECTION 5. Survival of
Representations, Warranties and Agreements.
Notwithstanding
any investigation made by any party to this Agreement, all representations and
warranties made by the Company and Intrexon herein shall survive the execution
of this Agreement and the issuance and sale to Intrexon of the Shares and shall
terminate two years after the First Tranche Closing, provided, however, the
representations and warranties in Sections 3.1, 3.2 and 3.3 shall survive for so
long as Intrexon continues to hold any of the Shares sold
hereunder.
SECTION 6. Covenants.
6.1 Notifications.
(a) During
the period prior to the First Tranche Closing, the Company will promptly advise
Intrexon in writing of (i) any Material Adverse Effect, or (ii) any notice or
other communication from any third person or entity alleging that the consent of
the third person is required in connection with the transactions contemplated by
this Agreement.
(b) During
the period prior to the Second Tranche Closing, each party shall promptly notify
the other of any action, suit or proceeding that is instituted or specifically
threatened in writing against such party to restrain, prohibit or otherwise
challenge the legality of any transaction contemplated by this
Agreement.
(c) Information
received by Intrexon pursuant to this Section 6.1 shall be considered
“Confidential Information” as such term is defined in the Channel Agreement and
Intrexon agrees to treat such information in accordance with the provisions of
Article 7 of the Channel Agreement.
6.2 Compliance. The
Company shall use commercially reasonable best efforts to (i) cause the Common
Stock to continue to be registered under the Exchange Act, file all periodic
reports thereunder and continue the listing or trading of the Common Stock on
the Nasdaq Capital Market or any successor market in good standing and to comply
in all material respects with all applicable rules and regulations of the
Commission and all reporting requirements under the rules and regulations of the
Exchange Act and (ii) to satisfy the current public information requirement of
Rule 144, in each case for so long as and at all times during which Intrexon
holds any Shares.
6.3 Use of
Proceeds. The Company shall apply the proceeds from the sale
of the Shares hereunder to ongoing operations, or for such other uses as
determined by the Company’s board of directors.
6.4 Best
Efforts. Each party will use its reasonable best efforts to
satisfy in a timely fashion each of the conditions to be satisfied by it under
Section 8 of this Agreement.
6.5 Press
Release. The Company shall issue a press release announcing
the transaction contemplated by this Agreement and the Channel Agreement prior
to the opening of the financial markets in New York City on the business day
immediately following the date hereof. The Company shall provide
Intrexon with a reasonable opportunity to review and comment on the press
release.
6.6 Board Representation;
Observer Rights.
(a) At
or prior to the First Tranche Closing, the Company shall cause Randal J. Kirk to
be appointed a director of the Company to fill the vacancy created on the
Company’s board of directors by the resignation of George B. Abercrombie (or, if
such vacancy has otherwise been eliminated, shall create another vacancy by
increasing the authorized size of the Company’s board of directors, which
vacancy Mr. Kirk shall instead be appointed to fill). The Company shall, at each
annual or special meeting of stockholders of the Company at which directors are
to be elected, nominate and recommend for election an individual designated by
Intrexon to serve as a member of the board of directors of the Company (with Mr.
Kirk being the initial designee); provided however that the Company shall only
be obligated hereunder to nominate such individuals as the Company’s Board of
Directors determines, in its sole discretion and acting reasonably and in
accordance with its fiduciary duties, to be a suitable candidate (it being
understood and agreed that Mr. Kirk is a suitable candidate). Upon
the death, disability, retirement, resignation or other removal of the director
designated by Intrexon pursuant to this Section 6.6, the Company’s board of
directors shall as promptly as practicable elect and appoint another individual
designated by Intrexon as a director to fill the vacancy so created; provided
however that the Company shall only be obligated hereunder to nominate such
individuals as the Company’s Board of Directors determines, in its sole
discretion and acting reasonably and in accordance with its fiduciary duties, to
be a suitable candidate. If the individual designated by Intrexon and
nominated by the Company to serve as a member of the Board of Directors of the
Company is, for any reason, not elected to the Company’s Board of Directors by
the stockholders of the Company, then, at Intrexon’s election, such designee
shall be entitled to attend all meetings of the Company’s Board of Directors and
committees thereof as an observer (with no power to vote on any matter before
the board of directors) and shall be entitled to receive copies of all materials
provided to members of the Company’s Board of Directors; provided that such
designee enters into a confidentiality agreement with the Company in a form
reasonably satisfactory to the Company; and provided, further, that the Company
reserves the right to (i) exclude such designee from access to any Board of
Directors’ material or meeting or portion thereof if the Company believes that
such exclusion is reasonably necessary to preserve the attorney-client
privilege, to protect highly confidential information or for other similar
reasons, or if the Company believes in good faith that such designee has a
conflict of interest, (ii) at the discretion of the applicable
committee, exclude such designee from access to any meeting materials or meeting
(or portion thereof) of the nominating committee of the Company’s Board of
Directors, compensation committee of the Company’s Board of Directors, audit
committee of the Company’s Board of Directors and any other committee of the
Company’s Board of Directors performing similar functions or which the listing
rules of the Nasdaq Stock Market require to have such
discretion.
(b) If,
and for so long as, Intrexon owns twenty percent or more of the issued and
outstanding stock of the Company, Intrexon shall have the right to designate a
second director for nomination and election to the Company’s board of directors,
provided such director shall not be an officer, director or employee of Intrexon
or Third Security, LLC and shall qualify as an “independent director” under the
listing standards of the Nasdaq Stock Market (or such other exchange on which
the Company’s stock may be listed); provided however that the Company shall only
be obligated hereunder to nominate or elect such individual as the Company’s
Board of Directors determines, in its sole discretion and acting reasonably and
in accordance with its fiduciary duties, to be a suitable candidate; and
provided further, that such right to designate a second director for nomination
and election to the Company’s board of directors shall not apply to the extent
that Intrexon’s nominees under Section 6.6(a) and (b) would constitute
nominations for more than one-third of the Company’s authorized number of
directors, it being acknowledged that nothing herein shall require
the Company to increase the size of its board of directors for such
purpose. Upon any such initial designation, the Company shall cause
such designee to be appointed a director of the Company to fill an existing
vacancy, or, if no vacancies exist on the Company’s board of directors, the
Company shall increase the authorized size of the Company’s board of directors
by one director and the Company shall then cause such designee to be appointed a
director of the Company to fill such newly created vacancy. The Company shall,
at each annual or special meeting of stockholders of the Company at which
directors are to be elected, nominate and recommend for election such second
individual designated by Intrexon to serve as a member of the board of directors
of the Company. Upon the death, disability, retirement, resignation
or other removal of the director designated by Intrexon pursuant to this Section
6.6(b), the Company’s board of directors shall as promptly as practicable elect
and appoint another individual designated by Intrexon as a director to fill the
vacancy so created.
(c) Subject
to Section 10.14, Intrexon’s rights and the Company’s obligations under this
Section 6.6 shall terminate upon the termination of the Channel
Agreement.
6.7 No Poison
Pill. The Company will not adopt any stockholder rights plan,
“poison pill” or similar arrangement, or adopt any anti-takeover provisions
under its Charter documents, that would trigger any right, obligation or event
as a result of the issuance of the Shares hereunder to Intrexon or Intrexon’s
ownership of such Shares, or the accumulation of shares of Common Stock acquired
in the market by Intrexon or its affiliates, provided that Intrexon complies
with Section 6.9 below.
6.8 No Reduction in Outstanding
Number of Shares. Prior to the earlier of (i) the issuance of
the Second Tranche Shares and (ii) the fifth year anniversary of the date
hereof, the Company shall take no action that would reduce the number of its
issued and outstanding shares of Common Stock (such as a repurchase or
redemption thereof except in the context of a repurchase or forfeiture of
restricted stock issued to an employee, officer, director, consultant or
advisor) such that the sum of the First Tranche Shares, the Upfront Purchase
Shares and 7.495% of the number of shares of Common Stock issued and outstanding
immediately prior to the First Tranche Closing (which for clarity equals the
number of First Tranche Shares) (subject to appropriate adjustment for stock
splits, dividends, combinations, recapitalizations and the like affecting the
Common Stock) would, at the time of the Second Tranche Closing, exceed 19.99% of
the issued and outstanding number of shares of Common Stock of the Company,
unless the Company had first obtained the approval of its stockholders for the
issuance at the Second Tranche Closing of Shares in an amount equal to 7.495% of
the number of shares of Common Stock issued and outstanding immediately prior to
the First Tranche Closing (subject to appropriate adjustment for stock splits,
dividends, combinations, recapitalizations and the like affecting the Common
Stock) or such stockholder approval is not required under the Nasdaq Stock
Market listing requirements in order to effect such full issuance in compliance
therewith.
6.9 Standstill
Provision.
(a) Intrexon
hereby agrees that, for a period of three years from the date hereof, unless
specifically invited in writing by the Company to do so, neither Intrexon nor
any of its Affiliates will, or will cause or knowingly permit any of its or
their directors, officers, employees, investment bankers, attorneys, accountants
or other advisors or representatives to, in any manner, directly or
indirectly:
(i) effect
or seek, initiate, offer or propose (whether publicly or otherwise) to effect,
or cause or participate in or in any way advise or, assist any other person to
effect or seek, initiate, offer or propose (whether publicly or otherwise) to
effect or cause or participate in, any acquisition of any securities (or
beneficial ownership thereof) or assets of the Company; any tender or exchange
offer, merger, consolidation or other business combination involving the
Company; any recapitalization, restructuring, liquidation, dissolution or other
extraordinary transaction with respect to the Company; or any “solicitation” of
“proxies” (as such terms are used in the proxy rules of the Commission) or
consents to vote any voting securities of the Company;
(ii)
form, join or in any way participate in a “group” (as defined under
the Exchange Act, hereafter a “Group”) with respect to any securities of the
Company;
(iii) otherwise
act, alone or in concert with others, to seek to control or influence the
management, Board of Directors or policies of the Company (except as
contemplated by Section 6.6 of this Agreement, and provided further that nothing
herein shall limit the ability of the directors nominated to the Board of
Directors by Intrexon from fully exercising their rights and duties as directors
of the Company, which shall include the ability, in such capacity, to freely
communicate with the executive management of the Company and its board of
directors);
(iv) take
any action which could reasonably be expected to force the Company to make a
public announcement regarding any of the types of matters set forth in this
Section 6.9; or
(v) enter
into any agreements, discussions or arrangements with any third party with
respect to any of the foregoing.
(b) Notwithstanding
the foregoing, the Company hereby agrees that the provisions of this Section 6.9
shall not apply to the following:
(i) the
purchase by Intrexon and/or its Affiliates after the date hereof (and not
pursuant to this Agreement) of up to an aggregate number of shares of Common
Stock that does not exceed 10% of the number of shares of Common Stock then
issued and outstanding;
(ii) the
exercise by Intrexon and/or its Affiliates, if applicable, of any
voting rights available to Company stockholders generally pursuant to any
transaction described Section 6.9(a)(i) above, provided that Intrexon has not
then either directly, indirectly, or as a member of a Group made, effected,
initiated or caused such transaction to occur or otherwise violated this Section
6.9;
(iii) the
exercise by Intrexon and/or its Affiliates, if applicable, of any
voting rights generally available to it or them as non-Affiliate security
holders of a third party that is a participant in an action or transaction
described in Section 6.9(a)(i) above, provided that Intrexon has not then either
directly, indirectly, or as a member of a Group made, effected, initiated or
caused such action or transaction to occur or otherwise violated this
Section 6.9;
(iv) any
activity by Intrexon after the Company has made any public
announcement of its intent to solicit or engage in any transaction which would
result in a Company Sale; and
(v)
making any communication to Company executive management on a confidential basis
solely that Intrexon would be interested in engaging in discussions with the
Company that could result in a negotiated transaction described in Section
6.9(a)(i) so long as Intrexon does not propose any such transaction or discuss
or refer to potential terms thereof without the Company’s prior
consent.
Notwithstanding
any of the foregoing provisions of this Section 6.9, the Company further agrees
that nothing herein shall limit the ability of Mr. Kirk (or, if not Mr.
Kirk, Intrexon’s designee to the Company’s board of directors pursuant to
Section 6.6(a)) to confidentially propose to the executive management of the
Company and its board of directors, and/or advocate for, any transaction between
the Company and any third party unaffiliated with Intrexon or its Affiliates to
the extent that such proposal and/or advocacy is made in his (or her) capacity
as a director of the Company and in the exercise of his (or her) rights and
duties as a director of the Company.
6.10 Stockholder Approval and
Subsequent Issuance. In the event the Company determines that
a Second Tranche Shortfall will occur, then the Company shall (i) at its next
annual meeting of stockholders after the date of such determination, hold a vote
with respect to the issuance by the Company to Intrexon of an amount
of Shares equal to the number of shares comprising the Second Tranche Shortfall
(subject to appropriate adjustment for stock splits, dividends, combinations,
recapitalizations and the like affecting the Common Stock); (ii) solicit the
approval of its stockholders with respect to such issuance, (iii) recommend that
its stockholders approve such issuance and, (iv) if requisite stockholder
approval is obtained therefor in accordance with the Nasdaq Stock Market listing
rules, effect such issuance in accordance with Section 1.4.
SECTION
7. Equity
Purchase Commitment
7.1 Intrexon
Commitment. Subject to Section 7.2, if requested by the
Company, Intrexon will participate in each Qualified Financing (as
hereinafter defined) conducted by Company and will purchase as part of, or in
connection with, such Qualified Financing an amount of Common Stock or other
Company securities equal to 19.99% of the number of shares of Common Stock (or
other Company securities) issued and sold by the Company in the Qualified
Financing (excluding the securities sold pursuant to this Section 7.1) or, in
the case of a Qualified Financing that is completed following the two year
anniversary of the date of the Channel Agreement, a lesser number of shares of
Common Stock (or other Company securities) having a purchase price in such
Qualified Financing equal to 50% of the Use of Proceeds Commitment Amount (as
hereinafter defined) (collectively, the “Equity Purchase Commitment”),
provided, however, that in no event shall Intrexon have any obligation to
purchase more than a total of $50,000,000 of Common Stock or other Company
securities pursuant to this Section 7. For the purposes of this
Section 7, a “Qualified
Financing” shall mean a sale by the Company of Common Stock, or equity
securities convertible into Common Stock, in a public or private offering,
raising gross proceeds of at least $10,000,000 where the shares sold are either
registered under the Securities Act on issuance, or the Company agrees to
register such shares following the issuance of such shares. The price
per share paid by Intrexon in any such Qualified Financing shall be the same as
that paid by the other investors in such Qualified Financing, and Intrexon shall
receive securities of the same type and with the same rights, preferences and
privileges as the other investors in such Qualified Financing, including, for
example, any warrant coverage, subject to the execution by Intrexon of the
investment documents entered into by the other investors in the Qualified
Financing. In case the Qualified Financing is for convertible debt
instruments of the Company or non-convertible preferred stock of the Company and
the Company requests that Intrexon participate in the Qualified Financing, then
notwithstanding the foregoing, Intrexon shall not be required to purchase such
securities pursuant to this Section 7.1, but may, at its election, do so, and if
so elected by Intrexon, such purchase(s) shall be deemed part of the Equity
Purchase Commitment.
In the event that the Qualified
Financing is a public offering made pursuant to a registration statement filed
with the Commission pursuant to the Securities Act:
(a) Upon
receipt of the prospectus and other offering documents prepared by the Company
in connection with such public offering, Intrexon shall be under no obligation
to participate in such public offering but may, at its election, do so
up to the Equity Purchase Commitment calculated based on the amount
raised in such public offering. Upon such election, and subject to
Section 7.1(b), the Company shall permit Intrexon to participate in such public
offering in the amount elected by Intrexon in accordance with the preceding
sentence.
(b) Unless
Intrexon elects to participate in such public offering in the full amount of its
Equity Purchase Commitment (calculated based on the amount raised in such public
offering) and/or counsel to the Company or counsel to any underwriter in such
public offering advises the Company that such inclusion is not permissible under
and in compliance with applicable securities laws (including without limitation
Section 5 of the Securities Act), the offering and sale of securities to
Intrexon pursuant to this Section 7 shall be made by the Company in a concurrent
private placement and not in such public offering. In any such
private placement: (i) the offer of the securities in such private
placement shall be made on the same terms and conditions as the offer of the
securities in the public offering, (ii) the closing of the private placement
shall occur concurrently with the closing of the Qualified Financing, (iii) the
securities offered and sold to Intrexon in the private placement shall be deemed
to have been issued in such Qualified Financing for the purpose of calculating
Intrexon’s purchase obligation, and (iv) the Company shall provide registration
rights similar to those provided in the Rights Agreement with respect to the
securities purchased in the private placement.
7.2 Conditions Precedent to
Equity Purchase Commitment. Notwithstanding the foregoing,
Intrexon shall not be obligated to purchase shares of the Company’s Common Stock
pursuant to this Section 7 (a) unless the Company shall then be in substantial
compliance with its obligations under the Channel Agreement, and such agreement
shall not have been terminated, and (b) with respect to a Qualified Financing
that is completed following the one year anniversary of the date of the Channel
Agreement, the Company shall have confirmed in writing to Intrexon the Company’s
intent that an amount equal to 40% of the net proceeds (the “Use of Proceeds Commitment
Amount”) from the Qualified Financing shall have been spent, or in the
next year will be spent, by the Company under the Channel
Agreement.
SECTION 8. Conditions
to Closing.
8.1 The
obligation hereunder of the Company to issue and sell Shares to Intrexon at each
Closing is subject to the satisfaction or waiver, at or before the Closing of
the conditions set forth below. These conditions are for the
Company’s sole benefit and may be waived by the Company at any time in its sole
discretion.
(a) Accuracy of Intrexon’s
Representations and Warranties. The representations and
warranties of Intrexon shall be true and correct as of the date when made and as
of the Closing Date as though made at that time, except for representations and
warranties that are expressly made as of a particular date, which shall be true
and correct as of such date.
(b) No
Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction which
prohibits the consummation of any of the transactions contemplated by this
Agreement.
(c) Delivery of Purchase
Price. With respect only to the Company’s obligation to issue
and sell the Upfront Purchase Shares, the cash purchase price for the Upfront
Purchase Shares shall have been delivered to the Company on the Closing
Date.
(d) Performance by
Intrexon. Intrexon shall have performed, satisfied and
complied in all material respects with all covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied by Intrexon at
or prior to the Closing Date.
(e) Channel Partnership
Agreement. The Channel Agreement shall have been entered into
by the Company and Intrexon and shall be in full force and effect.
(f) No Proceedings or
Litigation. No action, suit or proceeding before any
arbitrator or any governmental authority shall have been commenced, and no
investigation by any governmental authority shall have been threatened in
writing against Intrexon or any of the officers, directors or Affiliates of
Intrexon seeking to restrain, prevent or change the transactions contemplated by
this Agreement, or seeking damages in connection with such
transactions.
8.2 The
obligation hereunder of Intrexon to purchase Shares and consummate the
transactions contemplated by this Agreement is subject to the satisfaction or
waiver, at or before each Closing, of each of the conditions set forth
below. These conditions are for Intrexon’s sole benefit and may be
waived by Intrexon at any time in its sole discretion.
(a) Accuracy of the Company’s
Representations and Warranties. Each of the representations
and warranties of the Company in this Agreement shall be true and correct as of
the Closing Date, except for representations and warranties that speak as of a
particular date, which shall be true and correct as of such date.
(b) Performance by the
Company. The Company shall have performed, satisfied and
complied in all material respects with all covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by the
Company at or prior to the Closing Date.
(c) Channel Partnership
Agreement. The Channel Agreement shall have been entered into
by the Company and Intrexon and shall be in full force and effect.
(d) No Suspension,
Etc. Trading in the common stock shall not have been suspended
by the Commission or the Nasdaq Capital Market.
(e) No
Injunction. No statute, rule, regulation, executive order,
decree, ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent jurisdiction which
prohibits the consummation of any of the transactions contemplated by this
Agreement.
(f) No Proceedings or
Litigation. No action, suit or proceeding before any
arbitrator or any governmental authority shall have been commenced, and no
investigation by any governmental authority shall have been threatened in
writing against the Company or any of the officers, directors or Affiliates of
the Company seeking to restrain, prevent or change the transactions contemplated
by this Agreement, or seeking damages in connection with such
transactions.
(g) Execution of Rights
Agreement. On the First Tranche Closing Date, each party shall
have delivered its signature to the Rights Agreement to the other party, and
such agreement shall be in full force and effect as of the Closing
Date.
(h) Opinion. Counsel
for the Company shall have delivered to Purchaser opinion letters containing
legal opinions substantially in the form attached hereto as Exhibit
B.
(i) Officer’s
Certificate. On each Closing, the Company shall have delivered
to Intrexon a certificate signed by the chief executive officer on behalf of the
Company (the “Officer’s
Certificate”), dated as of such Closing, confirming on behalf of the
Company the conditions precedent set forth in paragraphs (a), (b), (d), (e),
(f), (j) and (k) of this Section 8.2 as of such Closing, and attaching and
certifying a copy of the resolutions of the Company’s board of directors
referred to in the last sentence of Section 3.2.
(j) No Material Adverse
Effect. Since the date of this Agreement, there shall not have
occurred any Material Adverse Effect.
(k) Board
Appointment. With respect to the First Tranche Closing, the
authorized size of the Company’s board of directors shall have been set at a
membership not exceeding nine (9) in number and Randal J. Kirk shall have been
appointed a director of the Company.
SECTION 9. Notices.
All
notices or other communications which are required or permitted hereunder shall
be in writing and addressed as follows:
If
to the Company:
|
ZIOPHARM
Oncology, Inc.
|
|
1180
Avenue of the Americas
|
|
Suite
1920
|
|
New
York, NY 10036
|
|
Attention:
Chief Executive Officer
|
|
Fax
No.: (646) 214-0711
|
with
copies (which copies
|
|
shall
not constitute notice
|
|
to
the Company) to:
|
Maslon
Edelman Borman & Brand, LLP
|
|
3300
Wells Fargo Center
|
|
90
South 7th
Street
|
|
Minneapolis,
MN 55402
|
|
Attention:
Alan M. Gilbert
|
|
Fax
No.: (612) 642-8381
|
|
|
If
to Intrexon:
|
Intrexon
Corporation
|
|
20358
Seneca Meadows Parkway
|
|
Germantown,
MD 20876
|
|
Attention:
Legal Department
|
|
Fax
No.: (301) 556-9902
|
|
|
with
copies (which copies
|
|
shall
not constitute notice
|
|
to
Intrexon) to:
|
Cooley
LLP
|
|
3175
Hanover Street
|
|
Palo
Alto, CA 94304
|
|
Attention:
Robert Jones
|
|
Fax
No.: (650) 849-7400
|
or to
such other address as the party to whom notice is to be given may have furnished
to the other party in writing in accordance herewith. Any such
communication shall be deemed to have been given when delivered if personally
delivered or sent by facsimile (provided that the party providing such notice
promptly confirms receipt of such transmission with the other party by
telephone), on the business day after dispatch if sent by a
nationally-recognized overnight courier and on the third business day following
the date of mailing if sent by certified mail, postage prepaid, return receipt
requested.
SECTION 10.
Miscellaneous.
10.1 Fees and
Expenses. Each party shall pay the fees and expenses of its
advisors, counsel, accountants and other experts, if any, and all other
expenses, incurred by such party incident to the negotiation, preparation,
execution, delivery and performance of this Agreement.
10.2 Waivers and
Amendments. Neither this Agreement nor any provision hereof
may be changed, waived, discharged, terminated, modified or amended except upon
the written consent of the parties hereto.
10.3 Headings. The
headings of the various sections of this Agreement have been inserted for
convenience of reference only and shall not be deemed to be part of this
Agreement.
10.4 Severability. If
any provision hereof should be held invalid, illegal or unenforceable in any
respect, then, to the fullest extent permitted by law, (a) all other provisions
hereof shall remain in full force and effect and shall be liberally construed in
order to carry out the intentions of the Parties as nearly as may be possible
and (b) the parties shall use their best efforts to replace the invalid, illegal
or unenforceable provision(s) with valid, legal and enforceable provision(s)
which, insofar as practical, implement the purposes of such provision(s) in this
Agreement.
10.5 Governing
Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York as applied to contracts
entered into and performed entirely in the State of New York by New York
residents, without regard to conflicts of law principles.
10.6 Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall
constitute an original, but all of which, when taken together, shall constitute
but one instrument, and shall become effective when one or more counterparts
have been signed by each party hereto and delivered to the other
parties.
10.7 Successors and
Assigns. Except as otherwise expressly provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto,
provided that Intrexon shall not assign its rights or obligations hereunder
unless Intrexon assigns such rights in whole and not in part to an assignee of
such rights and obligations which shall agree in writing with the Company to be
bound by this Agreement and that Intrexon’s rights under Sections 6.7, 6.8 and
6.9 and obligations under Section 7 shall not be assignable.
10.8 No Third Party
Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective permitted successors and assigns and is
not for the benefit of, nor may any provision hereof be enforced by, any other
person.
10.9 Expenses. Each
party shall pay all costs and expenses that it incurs with respect to the
negotiation, execution, delivery and performance of this Agreement.
10.10 Entire
Agreement. This Agreement (including the Schedule of
Exceptions), the Channel Agreement, the Rights Agreement and other documents
delivered pursuant hereto and thereto, including the exhibits, constitute the
full and entire understanding and agreement between the parties with regard to
the subjects hereof and thereof.
10.11 Publicity. Except
as otherwise provided herein, no party shall issue any press releases or
otherwise make any public statement with respect to the transactions
contemplated by this Agreement without the prior written consent of the other
party, except as may be required by applicable law or regulations, in which case
such party shall provide the other parties with reasonable notice of such
publicity and/or opportunity to review such disclosure.
10.12 Waiver of Rule of
Construction. Each Party has had the
opportunity to consult with counsel in connection with the review, drafting and
negotiation of this Agreement. Accordingly, the rule of construction
that any ambiguity in this Agreement shall be construed against the drafting
Party shall not apply.
10.13 Further
Assurances. From and after the date of this Agreement, upon
the reasonable request of Intrexon or the Company, the Company and Intrexon
shall execute and deliver such instruments, documents and other writings as may
be reasonably necessary or desirable to confirm and carry out and to effectuate
fully the intent and purposes of this Agreement.
10.14 Company
Sale. Upon the consummation of a Company Sale, the Company’s
obligations under Sections 1.4, 6 and 7 shall terminate and be of no further
force or effect. For purposes of this Agreement, a “Company Sale”
shall mean a merger or consolidation in which (i) the Company is a constituent
party, or (ii) a subsidiary of the Company is a constituent party and the
Company issues shares of its capital stock pursuant to such merger or
consolidation, except in the case of either clause (i) or (ii) any such merger
or consolidation involving the Company or a Company subsidiary in which the
shares of capital stock of the Company outstanding immediately prior to such
merger or consolidation continue to represent, or are converted into or
exchanged for shares of capital stock which represent, immediately following
such merger or consolidation, more than 50% by voting power of the capital stock
of (A) the surviving or resulting corporation or (B) if the surviving or
resulting corporation is a wholly owned subsidiary of another corporation
immediately following such merger or consolidation, the parent corporation of
such surviving or resulting corporation.
[Remainder
of page intentionally left blank.]
In Witness
Whereof, the parties hereto have caused this Stock Purchase Agreement to
be executed by their duly authorized representatives as of the day and year
first above written.
ZIOPHARM
ONCOLOGY, INC.
|
|
By:
|
/s/ Jonathan Lewis
|
Name: Jonathan
Lewis, MD, PhD
|
Title:
Chief Executive Officer
|
|
INTREXON
CORPORATION
|
|
By:
|
/s/ Randal J. Kirk
|
Name: Randal
J. Kirk
|
Title:
Chief Executive
Officer
|
Exhibit
A
FORM
OF REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS
AGREEMENT
This
Registration Rights Agreement (this “Agreement”) is made and
entered into as of ______________, 201__, by and among ZIOPHARM Oncology, Inc.,
a Delaware corporation (the “Company”), and Intrexon
Corporation, a Virginia corporation (“Intrexon”).
This
Agreement is being entered into pursuant to the Stock Purchase Agreement between
the Company and Intrexon dated as of January 6, 2011 (the “Purchase
Agreement”).
The
Company and Intrexon hereby agree as follows:
Capitalized
terms used and not otherwise defined herein shall have the meanings given such
terms in the Purchase Agreement. As used in this Agreement, the
following terms shall have the following meanings:
“Affiliate” means, with respect
to any Person, any other Person that directly or indirectly controls or is
controlled by or under common control with such Person. For the
purposes of this definition, “control,” when used with
respect to any Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities, by contract or
otherwise; and the terms of “affiliated,” “controlling” and “controlled” have meanings
correlative to the foregoing.
“Board” means the Company’s
Board of Directors.
“Business Day” means any day
except Saturday, Sunday and any day which shall be a legal holiday or a day on
which banking institutions in the state of Delaware generally are authorized or
required by law or other government actions to close.
“Closing Date” means the date
of the closing of the purchase and sale of the Shares pursuant to the Purchase
Agreement.
“Commission” means the
Securities and Exchange Commission.
“Common Stock” means the
Company’s Common Stock, par value $0.001 per share.
“Effectiveness Period” shall
have the meaning set forth in Section 2.
“Exchange Act” means the
Securities Exchange Act of 1934, as amended.
“Filing Date” means [120 days
from date of this Agreement], 2011.
“Holder” or “Holders” means the holder or
holders, as the case may be, from time to time of Registrable
Securities.
“Indemnified Party” shall have
the meaning set forth in Section 5(c).
“Indemnifying Party” shall have
the meaning set forth in Section 5(c).
“Losses” shall have the meaning
set forth in Section 5(a).
“Person” means an individual or
a corporation, partnership, trust, incorporated or unincorporated association,
joint venture, limited liability company, joint stock company, government (or an
agency or political subdivision thereof) or other entity of any
kind.
“Proceeding” means an action,
claim, suit, investigation or proceeding (including, without limitation, an
investigation or partial proceeding, such as a deposition), whether commenced or
threatened.
“Prospectus” means the
prospectus included in the Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from a
prospectus filed as part of an effective registration statement in reliance upon
Rule 430A promulgated under the Securities Act), as amended or supplemented by
any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Securities covered by the Registration Statement, and
all other amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference in such
Prospectus.
“Registrable Securities” means
the First Tranche Shares, Second Tranche Shares and Up Front Purchase Shares (as
such terms are defined in the Purchase Agreement) issued or issuable to Intrexon
and any securities issued with respect to, or in exchange for or in replacement
of such shares of Common Stock upon any stock split, stock dividend,
recapitalization, subdivision, merger or similar event; provided, however, that
the applicable Holder has completed and delivered to the Company a Selling
Stockholder Questionnaire; and provided further that such securities shall no
longer be deemed Registrable Securities if such securities have been sold
pursuant to a Registration Statement, or (ii) such shares have been sold in
compliance with Rule 144 or all such shares may be sold without limitation
pursuant to Rule 144.
“Registration Statement” means
the registration statements and any additional registration statements
contemplated by Section 2, including (in each case) the Prospectus, amendments
and supplements to such registration statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto, and all material incorporated
by reference in such registration statement.
“Rule 144” means Rule 144
promulgated by the Commission pursuant to the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same effect as such
Rule.
“Rule 415” means Rule 415
promulgated by the Commission pursuant to the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission having substantially the same effect as such
Rule.
“Securities Act” means the
Securities Act of 1933, as amended.
“Selling Stockholder
Questionnaire” means a questionnaire in the form attached as Annex B
hereto, or such other form of questionnaire as may reasonably be requested by
the Company from time to time.
2. Registration Obligations;
Filing Date Registration. On or prior to the Filing Date the
Company shall prepare and file with the Commission a Registration Statement
covering the resale of the Registrable Securities as would permit or facilitate
the sale and distribution of all the Registrable Securities in the manner
reasonably requested by the Holder; provided, however, that if the Filing Date
falls on a day that is not a Business Day, such deadline shall be extended to
the next Business Day. The Registration Statement shall be on Form
S-3 (except if the Company is not then eligible to register for resale the
Registrable Securities on Form S-3, in which case such registration shall be on
another appropriate form in accordance with the Securities Act and the rules
promulgated thereunder and the Company shall undertake to register the
Registrable Securities on Form S-3 as soon as practicable following the
availability of such form, provided that the Company shall use reasonable best
efforts to maintain the effectiveness of the Registration Statement then in
effect until such time as a Registration Statement on Form S-3 covering the
Registrable Securities has been declared effective by the
Commission). The Registration Statement shall contain the “Plan of
Distribution” section in substantially the form attached hereto as Annex
A. The Company shall use reasonable best efforts to cause the
Registration Statement to be declared effective under the Securities Act as
promptly as practicable after the filing thereof, and, subject to Section 3(j)
hereof, to keep such Registration Statement continuously effective under the
Securities Act until such date as is the earlier of (x) the date when all
Registrable Securities covered by such Registration Statement have been sold
under such Registration Statement; or (y) the date on which the Registrable
Securities may be sold pursuant to Rule 144, without limitations, as determined
by the counsel to the Company pursuant to a written opinion letter, addressed to
the Company’s transfer agent to such effect (the “Effectiveness Period”). By
9:30 am Eastern Time on the Business Day following the Effective Date, the
Company shall file with the Commission in accordance with Rule 424 under the
Securities Act the final prospectus to be used in connection with sales pursuant
to such Registration Statement. Intrexon acknowledges and agrees that
securities other than the Registrable Securities may be included in the
Registration Statement.
3. Registration
Procedures.
In
connection with the Company’s registration obligations hereunder, the Company
shall:
(a) Prepare
and file with the Commission on or prior to the Filing Date, a Registration
Statement on Form S-3 (or if the Company is not then eligible to register for
resale the Registrable Securities on Form S-3 such registration shall be on
another appropriate form in accordance with the Securities Act and the rules and
regulations promulgated thereunder) in accordance with the method or methods of
distribution thereof as described on Annex A hereto (except if otherwise
directed by all of the Holders), and use reasonable best efforts to cause the
Registration Statement to become effective and remain effective as provided
herein.
(b) Prepare
and file with the Commission such amendments, including post-effective
amendments, to the Registration Statement as may be necessary to keep the
Registration Statement continuously effective (subject to Section 3(l)) as to
the applicable Registrable Securities for the Effectiveness Period and prepare
and file with the Commission such additional Registration Statements, if
necessary, in order to register for resale under the Securities Act all of the
Registrable Securities; (ii) cause the related Prospectus to be amended or
supplemented by any required Prospectus supplement, and as so supplemented or
amended to be filed pursuant to Rule 424 (or any similar provisions then in
force) promulgated under the Securities Act; (iii) respond promptly to any
comments received from the Commission with respect to the Registration Statement
or any amendment thereto and promptly provide the Holders true and complete
copies of all correspondence from and to the Commission relating to the
Registration Statement; and (iv) comply in all material respects with the
provisions of the Securities Act and the Exchange Act with respect to the
disposition of all Registrable Securities covered by the Registration Statement
during the applicable period in accordance with the intended methods of
disposition by the Holders thereof set forth in the Registration Statement as so
amended or in such Prospectus as so supplemented.
(c) Promptly
notify the Holders of Registrable Securities (i)(A) when a Prospectus or any
Prospectus supplement or post-effective amendment to the Registration Statement
is filed; (B) when the Commission notifies the Company whether there will be a
“review” of such Registration Statement and whenever the Commission comments in
writing on such Registration Statement, and if requested by such Holders,
furnish to them a copy of such comments and the Company’s responses thereto and
(C) with respect to the Registration Statement or any post-effective amendment,
when the same has become effective; (ii) of any request by the Commission or any
other Federal or state governmental authority for amendments or supplements to
the Registration Statement or Prospectus or for additional information; (iii) of
the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement covering any or all of the Registrable Securities or
the initiation of any Proceedings for that purpose; (iv) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and (v) of the occurrence of any event that makes any statement made in
the Registration Statement or Prospectus or any document incorporated or deemed
to be incorporated therein by reference untrue in any material respect or that
requires any revisions to the Registration Statement, Prospectus or other
documents so that, in the case of the Registration Statement or the Prospectus,
as the case may be, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.
(d) Use
reasonable best efforts to avoid the issuance of, or, if issued, obtain the
withdrawal of, (i) any order suspending the effectiveness of the Registration
Statement or (ii) any suspension of the qualification (or exemption from
qualification) of any of the Registrable Securities for sale in
any U.S. jurisdiction.
(e) If
requested by the Holders of a majority of the Registrable Securities, (i)
promptly incorporate in a Prospectus supplement or post-effective amendment to
the Registration Statement such information as the Company reasonably agrees
should be included therein and (ii) make all required filings of such Prospectus
supplement or such post-effective amendment as soon as practicable after the
Company has received notification of the matters to be incorporated in such
Prospectus supplement or post-effective amendment.
(f) Furnish
to each Holder, without charge and upon request, at least one conformed copy of
each Registration Statement and each amendment thereto, including financial
statements and schedules, and, to the extent requested by such Person, all
documents incorporated or deemed to be incorporated therein by reference, and
all exhibits (including those previously furnished or incorporated by reference)
promptly after the filing of such documents with the Commission.
(g) Promptly
deliver to each Holder, without charge, as many copies of the Prospectus or
Prospectuses (including each form of prospectus) and each amendment or
supplement thereto as such Persons may reasonably request; and the Company
hereby consents to the use of such Prospectus and each amendment or supplement
thereto by each of the selling Holders in connection with the offering and sale
of the Registrable Securities covered by such Prospectus and any amendment or
supplement thereto.
(h) Prior
to any public offering of Registrable Securities, use commercially reasonable
efforts to register or qualify or cooperate with the selling Holders in
connection with the registration or qualification (or exemption from such
registration or qualification) of such Registrable Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions within the United
States as any Holder reasonably requests in writing, to keep each such
registration or qualification (or exemption therefrom) effective during the
Effectiveness Period and to do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the Registrable
Securities covered by a Registration Statement; provided, however, the Company
shall in no event be required to (x) qualify to do business in any state where
it is not then qualified or (y) take any action that would subject it to tax or
to the general service of process in any such state where it is not then
subject, or (z) comply with state securities or “blue sky” laws of any state for
which registration by coordination is unavailable to the Company.
(i) Cooperate
with the Holders to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold pursuant to a
Registration Statement.
(j) Upon
the occurrence of any event contemplated by Section 3(c)(v), promptly prepare a
supplement or amendment, including a post-effective amendment, to the
Registration Statement or a supplement to the related Prospectus or any document
incorporated or deemed to be incorporated therein by reference, and file any
other required document so that, as thereafter delivered, neither the
Registration Statement nor such Prospectus will contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(k) Use
commercially reasonable efforts to cause all Registrable Securities relating to
the Registration Statement to be listed on the Nasdaq Stock Market or any
subsequent securities exchange, quotation system or market, if any, on which
similar securities issued by the Company are then listed or traded.
(l) The
Company may require each selling Holder to furnish to the Company information
regarding such Holder and the distribution of such Registrable Securities as is
required by law to be disclosed in the Registration Statement, and the Company
may exclude from such registration the Registrable Securities of any such Holder
who fails to furnish such information within fifteen (15) days after receiving
such request.
Each
Holder covenants and agrees that (i) it will not sell any Registrable Securities
under the Registration Statement until it has received copies of the Prospectus
as then amended or supplemented as contemplated in Section 3(g) and notice from
the Company that such Registration Statement and any post-effective amendments
thereto have become effective as contemplated by Section 3(c) and (ii) it and
its officers, directors or Affiliates, if any, will comply with the prospectus
delivery requirements of the Securities Act as applicable to them in connection
with sales of Registrable Securities pursuant to the Registration
Statement.
Each
Holder agrees by its acquisition of such Registrable Securities that, upon
receipt of a notice from the Company of the occurrence of any event of the kind
described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v) or 3(m), such Holder
will forthwith discontinue disposition of such Registrable Securities under the
Registration Statement until such Holder’s receipt of the copies of the
supplemented Prospectus and/or amended Registration Statement contemplated by
Section 3(j), or until it is advised in writing by the Company that the use of
the applicable Prospectus may be resumed, and, in either case, has received
copies of any additional or supplemental filings that are incorporated or deemed
to be incorporated by reference in such Prospectus or Registration
Statement.
(m) If
(i) there is material non-public information regarding the Company which the
Board reasonably determines not to be in the Company’s best interest to disclose
and which the Company is not otherwise required to disclose, or (ii) there is a
significant business opportunity (including, but not limited to, the acquisition
or disposition of assets (other than in the ordinary course of business) or any
merger, consolidation, tender offer or other similar transaction) available to
the Company which the Board reasonably determines not to be in the Company’s
best interest to disclose, then the Company may postpone or suspend filing or
effectiveness of a registration statement for a period not to exceed thirty (30)
consecutive days, provided that the Company may not postpone or suspend its
obligation under this Section 3(m) for more than sixty (60) days in the
aggregate during any 12 month period; provided, however, that no such
postponement or suspension shall be permitted for consecutive thirty (30) day
periods, arising out of the same set of facts, circumstances or
transactions.
(n) Any
legend indicating, directly or indirectly, that the Registrable Securities
constitute “restricted securities” (as such term is defined in Rule 144) stamped
on a certificate evidencing the Registrable Securities, and the related stock
transfer instructions and record notations with respect to such Registrable
Securities, shall be removed and the Company shall approve the issuance of a
certificate without such legend to the holder of such Securities if the Holder
thereof provides the Company with reasonable assurances that such securities can
be sold pursuant to Rule 144. Following the receipt by the Company of
such assurances, the Company will, no later than five trading days following the
delivery by a holder to the Company or the Company’s transfer agent of a
legended certificate representing such securities, deliver or cause to be
delivered to such Holder a certificate representing such securities that is free
from all restrictive and other legends.
4. Registration
Expenses.
All
reasonable fees and expenses incident to the performance of or compliance with
this Agreement by the Company (excluding underwriters’ discounts and commissions
and all fees and expenses of legal counsel, accountants and other advisors for
any Holder except as specifically provided below), except as and to the extent
specified in this Section 4, shall be borne by the Company whether or not the
Registration Statement is filed or becomes effective and whether or not any
Registrable Securities are sold pursuant to the Registration
Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including, without limitation, fees and expenses (A) with respect to filings
required to be made with the Nasdaq Stock Market and each other securities
exchange or market on which Registrable Securities are required hereunder to be
listed, (B) with respect to filings required to be made with the Financial
Industry Regulatory Authority and (C) in compliance with state securities or
Blue Sky laws, (ii) messenger, telephone and delivery expenses, (iii) fees and
disbursements of counsel for the Company, (iv) Securities Act liability
insurance, if the Company so desires such insurance, and (v) fees and expenses
of all other Persons retained by the Company in connection with the consummation
of the transactions contemplated by this Agreement, including, without
limitation, the Company’s independent public accountants. In
addition, the Company shall be responsible for all of its internal expenses
incurred in connection with the consummation of the transactions contemplated by
this Agreement (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expense of
any annual audit, the fees and expenses incurred in connection with the listing
of the Registrable Securities on any securities exchange as required
hereunder.
5. Indemnification.
(a) Indemnification by the
Company. The Company shall, notwithstanding any termination of
this Agreement, indemnify and hold harmless each Holder, its permitted
assignees, officers, directors, agents, brokers (including brokers who offer and
sell Registrable Securities as principal as a result of a pledge or any failure
to perform under a margin call of Common Stock), underwriters, investment
advisors and employees, each Person who controls any such Holder or permitted
assignee (within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act) and the officers, directors, agents and employees of each
such controlling Person, and the respective successors, assigns, estate and
personal representatives of each of the foregoing, to the fullest extent
permitted by applicable law, from and against any and all claims, losses,
damages, liabilities, penalties, judgments, costs (including, without
limitation, costs of investigation) and expenses (including, without limitation,
reasonable attorneys’ fees and expenses) (collectively, “Losses”), arising out of or
relating to any untrue or alleged untrue statement of a material fact contained
in the Registration Statement, any Prospectus, as supplemented or amended, if
applicable, or arising out of or relating to any omission or alleged omission of
a material fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus or form of prospectus or
supplement thereto, in the light of the circumstances under which they were
made) not misleading, except (i) to the extent, but only to the extent, that
such untrue statements or omissions are based upon information regarding such
Holder furnished in writing to the Company by such Holder expressly for use in
the Registration Statement, such Prospectus or such form of Prospectus or in any
amendment or supplement thereto (it being understood that each Holder
has approved Annex A hereto for this purpose); (ii) as a result of the failure
of such Holder to deliver a Prospectus, as amended or supplemented, to a
purchaser in connection with an offer or sale; or (iii) in the case of an
occurrence of an event of the type specified in Section 3(c)(ii)-(v), the use by
a Holder of an outdated or defective Prospectus after the Company has notified
such Holder in writing that the Prospectus is outdated or defective and prior to
the receipt by such Holder of notice that use of the applicable prospectus may
be resumed (and, if applicable, receipt of additional or supplemental filings
that are incorporated or deemed to be incorporated by referenced in such
Prospectus or Registration Statement), but only if and to the extent that
following such receipt the misstatement or omission giving rise to such Loss
would have been corrected; provided, however, that the indemnity agreement
contained in this Section 5(a) shall not apply to amounts paid in settlement of
any Losses if such settlement is effected without the prior written consent of
the Company, which consent shall not be unreasonably withheld. The
Company shall notify such Holder promptly of the institution, threat or
assertion of any Proceeding of which the Company is aware in connection with the
transactions contemplated by this Agreement. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of an Indemnified Party (as defined in Section 5(c) hereof) and shall
survive the transfer of the Registrable Securities by the Holder.
(b) Indemnification by
Holders. Each Holder and its permitted assignees shall,
severally and not jointly, indemnify and hold harmless the Company, its
directors, officers, agents and employees, each Person who controls the Company
(within the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act), and the directors, officers, agents or employees of such
controlling Persons, and the respective successors, assigns, estate and personal
representatives of each of the foregoing, to the fullest extent permitted by
applicable law, from and against all Losses, as incurred, arising out of or
relating to any untrue or alleged untrue statement of a material fact contained
in the Registration Statement, any Prospectus, as supplemented or amended, if
applicable, or arising out of or relating to any omission or alleged omission of
a material fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus or supplement thereto, in the
light of the circumstances under which they were made) not misleading, to the
extent, but only to the extent, that such untrue statement or omission is
contained in or omitted from any information regarding such Holder furnished in
writing to the Company by such Holder expressly for use in therein, and that
such information was reasonably relied upon by the Company for use therein, or
to the extent that such information relates to such Holder or such Holder’s
proposed method of distribution of Registrable Securities and was furnished in
writing by such Holder expressly for use therein (it being understood that each
Holder has approved Annex A hereto for this purpose). Notwithstanding
anything to the contrary contained herein, in no event shall the liability of
any Purchaser under this Section 5(b) exceed the net proceeds to such Purchaser
as a result of the sale of Registrable Securities pursuant to a Registration
Statement in connection with which the untrue or alleged untrue statement or
material omission was provided.
(c) Conduct of Indemnification
Proceedings. If any Proceeding shall be brought or asserted
against any Person entitled to indemnity hereunder (an “Indemnified Party”), such
Indemnified Party promptly shall notify the Person from whom indemnity is sought
(the “Indemnifying
Party”) in writing, and the Indemnifying Party shall assume the defense
thereof, including the employment of counsel reasonably satisfactory to the
Indemnified Party and the payment of all fees and expenses incurred in
connection with defense thereof; provided, that the failure of any Indemnified
Party to give such notice shall not relieve the Indemnifying Party of its
obligations or liabilities pursuant to this Agreement, except (and only) to the
extent that it shall be finally determined by a court of competent jurisdiction
(which determination is not subject to appeal or further review) that such
failure shall have proximately and materially adversely prejudiced the
Indemnifying Party.
An
Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (1) the Indemnifying Party has agreed in writing to pay such fees and
expenses; or (2) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel reasonably satisfactory to such
Indemnified Party in any such Proceeding; or (3) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified Party
and the Indemnifying Party, and such Indemnified Party shall have been advised
by counsel (which shall be reasonably acceptable to the Indemnifying Party) that
a conflict of interest is likely to exist if the same counsel were to represent
such Indemnified Party and the Indemnifying Party (in which case, the
Indemnifying Party shall be responsible for reasonable fees and expenses of no
more than one counsel for the Indemnified Parties). The Indemnifying
Party shall not be liable for any settlement of any such Proceeding effected
without its written consent, which consent shall not be unreasonably withheld or
delayed. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, effect any settlement of any pending
Proceeding in respect of which any Indemnified Party is a party, unless such
settlement includes an unconditional release of such Indemnified Party from all
liability on claims that are the subject matter of such Proceeding.
All fees
and expenses of the Indemnified Party (including reasonable fees and expenses to
the extent incurred in connection with investigating or preparing to defend such
Proceeding in a manner not inconsistent with this Section) shall be paid to the
Indemnified Party, as incurred, within twenty (20) Business Days of written
notice thereof to the Indemnifying Party (regardless of whether it is ultimately
determined that an Indemnified Party is not entitled to indemnification
hereunder; provided, that the
Indemnifying Party may require such Indemnified Party to undertake to reimburse
all such fees and expenses to the extent it is finally judicially determined
that such Indemnified Party is not entitled to indemnification
hereunder).
(d) Contribution. If
a claim for indemnification under Section 5(a) or 5(b) is unavailable to an
Indemnified Party because of a failure or refusal of a governmental authority to
enforce such indemnification in accordance with its terms (by reason of public
policy or otherwise), then each Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable
considerations. The relative fault of such Indemnifying Party and
Indemnified Party shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission of a material fact, has been
taken or made by, or relates to information supplied by, such Indemnifying,
Party or Indemnified Party, and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent
such action, statement or omission. The amount paid or payable by a
party as a result of any Losses shall be deemed to include, subject to the
limitations set forth in Section 5(c), any reasonable attorneys’ or other
reasonable fees or expenses incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for such fees or
expenses if the indemnification provided for in this Section was available to
such party in accordance with its terms.
The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5(d) were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph. No
Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
The
indemnity and contribution agreements contained in this Section are in addition
to any liability that the Indemnifying Parties may have to the Indemnified
Parties. Notwithstanding anything to the contrary contained herein,
the Holders shall be liable under this Section 5(d) for only that amount as does
not exceed the aggregate amount invested by such Holder under the Purchase
Agreement.
6. Rule
144.
As long
as any Holder owns any Registrable Securities, the Company covenants to use its
commercially reasonable efforts to timely file (or obtain extensions in respect
thereof and file within the applicable grace period) all reports required to be
filed by the Company after the date hereof pursuant to Section 13(a) or 15(d) of
the Exchange Act. As long as any Holder owns any Registrable
Securities, if the Company is not required to file reports pursuant to Section
13(a) or 15(d) of the Exchange Act, it will prepare and furnish to the Holders
and make publicly available in accordance with Rule 144 annual and quarterly
financial statements, together with a discussion and analysis of such financial
statements in form and substance substantially similar to those that would
otherwise be required to be included in reports required by Section 13(a) or
15(d) of the Exchange Act, as well as any other information required thereby, in
the time period that such filings would have been required to have been made
under the Exchange Act. The Company further covenants that it will
take such further action as any Holder may reasonably request, all to the extent
required from time to time to enable such Person to sell the Shares without
registration under the Securities Act within the limitation of the exemptions
provided by Rule 144 promulgated under the Securities Act, including providing
any legal opinions relating to such sale pursuant to Rule 144. Upon
the request of any Holder, the Company shall deliver to such Holder a written
certification of a duly authorized officer as to whether it has complied with
such requirements.
7. Miscellaneous.
(a) Remedies. In
the event of a breach by the Company or by a Holder, of any of their obligations
under this Agreement, each Holder or the Company, as the case may be, in
addition to being entitled to exercise all rights granted by law and under this
Agreement, including recovery of damages, will be entitled to specific
performance of its rights under this Agreement. The
Company and each Holder agree that monetary damages would not provide adequate compensation
for any losses incurred by reason of a breach by it of any of the provisions of
this Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.
(b) Entire Agreement;
Amendment. This Agreement and the Purchase Agreement contain
the entire understanding and agreement of the parties with respect to the
matters covered hereby and, except as specifically set forth herein or in the
Purchase Agreement, neither the Company nor any Holder make any representation,
warranty, covenant or undertaking with respect to such matters, and they
supersede all prior understandings and agreements with respect to said subject
matter, all of which are merged herein. No provision of this
Agreement may be waived or amended other than by a written instrument signed by
the Company and the Holders of at least a majority of all Registrable Securities
then outstanding. Any amendment or waiver effected in accordance with
this Section 7(b) shall be binding upon each Holder (and their permitted
assigns) and the Company.
(c) Notices. Any
notice, demand, request, waiver or other communication required or permitted to
be given hereunder shall be in writing and shall be deemed to have been given
when delivered if personally delivered or sent by facsimile (provided that the
party providing such notice promptly confirms receipt of such transmission with
the other party by telephone), on the business day after dispatch if sent by a
nationally-recognized overnight courier and on the third business day following
the date of mailing if sent by certified mail, postage prepaid, return receipt
requested. The addresses for such communications shall
be:
If
to the Company:
|
ZIOPHARM
Oncology, Inc.
|
|
1180
Avenue of the Americas, 19th
Floor
|
|
New
York, NY 10036
|
|
Attention:
Chief Executive Officer
|
|
Fax
No.: (646)
214-0711
|
with
copies (which copies
|
|
shall
not constitute notice
|
|
to
the Company) to:
|
Maslon
Edelman Borman & Brand, LLP
|
|
3300
Wells Fargo Center
|
|
90
South 7th
Street
|
|
Minneapolis,
MN 55402
|
|
Attention:
Alan M. Gilbert
|
|
Fax
No.: (612) 642-8381
|
|
|
If
to Intrexon:
|
Intrexon
Corporation
|
|
20358
Seneca Meadows Parkway
|
|
Germantown,
MD 20876
|
|
Attention:
Legal Department
|
|
Fax
No.: (301)
556-9902
|
with
copies (which copies
|
|
shall
not constitute notice
|
|
to
Intrexon) to:
|
Cooley
LLP
|
|
3175
Hanover Street
|
|
Palo
Alto, CA 94304
|
|
Attention:
Robert Jones
|
|
Fax
No.: (650)
849-7400
|
Any party
hereto may from time to time change its address for notices by giving written
notice of such changed address to the other party hereto.
(d) Waivers. No
waiver by either party of any default with respect to any provision, condition
or requirement of this Agreement shall be deemed to be a continuing waiver in
the future or a waiver of any other provision, condition or requirement hereof,
nor shall any delay or omission of any party to exercise any right hereunder in
any manner impair the exercise of any such right accruing to it
thereafter.
(e) Successors and
Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties and their successors and permitted assigns and shall
inure to the benefit of each Holder and its successors and
assigns. The Company may not assign this Agreement or any of its
rights or obligations hereunder without the prior written consent of each
Holder.
(f) Assignment of Registration
Rights. The rights of each Holder hereunder, including the
right to have the Company register for resale Registrable Securities in
accordance with the terms of this Agreement, shall be assignable by each Holder
of all or a portion of the Registrable
Securities if: (i) the Holder agrees in writing with the transferee
or assignee to assign such rights, and a copy of such agreement is furnished to
the Company within a reasonable time after such assignment, (ii) the Company is,
within a reasonable time after such transfer or assignment, furnished with
written notice of (a) the name and address of such transferee or assignee, and
(b) the securities with respect to which such registration rights are being
transferred or assigned, (iii) following such transfer or assignment the further
disposition of such securities by the transferee or assignees is restricted
under the Securities Act and applicable state securities laws, and (iv) at or
before the time the Company receives the written notice contemplated by clause
(ii) of this Section, the transferee or assignee agrees in writing with the
Company to be bound by all of the provisions of this Agreement. The
rights to assignment shall apply to the Holders (and to subsequent) successors
and assigns.
(g) Counterparts. This
Agreement may be executed in any number of counterparts, each of which when so
executed shall be deemed to be an original and, all of which taken together
shall constitute one and the same Agreement. In the event that any
signature is delivered by facsimile transmission, such signature shall create a
valid binding obligation of the party executing (or on whose behalf such
signature is executed) the same with the same force and effect as if such
facsimile signature were the original thereof.
(h) Termination. This
Agreement shall terminate on the earlier of (i) the date on which all remaining
Registrable Securities may be sold without restriction pursuant to Rule 144 of
the Securities Act or (ii) the date when all Registrable Securities have been
sold pursuant to a Registration Statement.
(i) Governing
Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to principles
of conflicts of law thereof.
(j) Cumulative
Remedies. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law.
(k) Severability. The
provisions of this Agreement are severable and, in the event that any court of
competent jurisdiction shall determine that any one or more of the provisions or
part of the provisions contained in this Agreement shall, for any reason, be
held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision or part of a
provision of this Agreement and this Agreement shall be reformed and construed
as if such invalid or illegal or unenforceable provision, or part of such
provision, had never been contained herein, so that such provisions would be
valid, legal and enforceable to the maximum extent possible.
(l) Headings. The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof.
IN
WITNESS WHEREOF, the parties hereto have caused this Registration Rights
Agreement to be duly executed by their respective authorized officers as of the
date first above written.
ZIOPHARM
ONCOLOGY, INC.
|
|
By:
|
|
Name:
Jonathan Lewis, MD, PhD
|
Title:
Chief Executive Officer
|
INTREXON
CORPORATION
|
|
By:
|
|
|
Name:
Randal J. Kirk
|
|
Title: Chief
Executive Officer
|
SIGNATURE
PAGE TO
REGISTRATION
RIGHTS AGREEMENT
ANNEX
A
PLAN
OF DISTRIBUTION
The
Selling Stockholders and any of their pledgees, donees, transferees, assignees
or other successors-in-interest may, from time to time, sell, transfer or
otherwise dispose of any or all of their shares of Common Stock or interests in
shares of Common Stock on any stock exchange, market or trading facility on
which the shares are traded or in private transactions. These dispositions
may be at fixed prices, at prevailing market prices at the time of sale, at
prices related to the prevailing market price, at varying prices determined at
the time of sale, or at negotiated prices. The Selling Stockholders
may use one or more of the following methods when disposing of the shares or
interests therein:
|
•
|
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
|
|
•
|
block
trades in which the broker-dealer will attempt to sell the shares as agent
but may position and resell a portion of the block as principal to
facilitate the transaction;
|
|
•
|
purchases
by a broker-dealer as principal and resale by the broker-dealer for its
account;
|
|
•
|
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
|
•
|
privately
negotiated transactions;
|
|
•
|
through
the writing or settlement of options, swaps, derivatives or other hedging
transactions, whether through an options exchange or
otherwise;
|
|
•
|
broker-dealers
may agree with the Selling Stockholders to sell a specified number of such
shares at a stipulated price per
share;
|
|
•
|
in
the over the counter market;
|
|
•
|
a
combination of any such methods of disposition;
and
|
|
•
|
any
other method permitted pursuant to applicable
law.
|
The
Selling Stockholders may also sell shares under Rule 144 under the Securities
Act, if available, rather than under this prospectus.
Broker-dealers
engaged by the Selling Stockholders may arrange for other broker-dealers to
participate in sales. Broker-dealers may receive commissions or discounts
from the Selling Stockholders (or, if any broker-dealer acts as agent for the
purchaser of shares, from the purchaser) in amounts to be negotiated, but,
except as set forth in a supplement to this prospectus, in the case of an agency
transaction will not be in excess of a customary brokerage commission in
compliance with FINRA Rule 2440; and in the case of a principal transaction a
markup or markdown in compliance with FINRA IM-2440 or the successor to such
FINRA rules.
The
Selling Stockholders may from time to time pledge or grant a security interest
in some or all of the Shares owned by them and, if they default in the
performance of their secured obligations, the pledgees or secured parties may
offer and sell shares of Common Stock from time to time under the prospectus, or
under an amendment to the prospectus under Rule 424(b) or other applicable
provision of the Securities Act of 1933, as amended (the “Securities Act”),
amending the list of selling stockholders to include the pledgee, transferee or
other successors in interest as selling stockholders under the prospectus. The
Selling Stockholders do not expect these commissions and discounts to exceed
what is customary in the types of transactions involved.
There can
be no assurance that any Selling Stockholder will sell any or all of the shares
of Common Stock pursuant to the registration statement, of which this prospectus
forms a part.
The Selling Stockholders may enter into
option or other transactions with broker-dealers or other financial institutions
or the creation of one or more derivative securities which require the delivery
to such broker-dealer or other financial institution of shares offered by the
prospectus, which shares such broker-dealer or other financial institution may
resell pursuant to the prospectus (as supplemented or amended to reflect such
transaction).
The
Selling Stockholders and any broker-dealer or agents that are involved in
selling the shares of Common Stock may be deemed to be “underwriters” within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of Common Stock purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. . In no
event shall any broker-dealer receive fees, commission and markups which, in the
aggregate, would exceed eight percent (8%). Each Selling Stockholder has
informed the Company that it does not have any written or oral agreement or
understanding, directly or indirectly, with any person to distribute the Common
Stock.
We have
advised each Selling Stockholder that it may not use shares registered on the
registration statement of which this prospectus is a part to cover short sales
of Common Stock made prior to the date on which the registration statement shall
have been declared effective by the Securities and Exchange
Commission. If a Selling Stockholder uses this prospectus for any
sale of shares of our Common Stock, it will be subject to the prospectus
delivery requirements of the Securities Act. The Selling Stockholders and any
other person participating in such distribution will be subject to applicable
provisions of the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder, including, without limitation, Regulation M
of the Exchange Act, which may limit the timing of purchases and sales of any of
the shares of Common Stock by the Selling Stockholders and any other
participating person. Regulation M may also restrict the ability of
any person engaged in the distribution of the shares of Common Stock to engage
in market-making activities with respect to the shares of Common
Stock. All of the foregoing may affect the marketability of the
shares of Common Stock and the ability of any person or entity to engage in
market-making activities with respect to the shares of Common
Stock.
We may indemnify the Selling
Stockholders against certain liabilities, including some liabilities under the
Securities Act, in accordance with an agreement between us and the Selling
Stockholders. We may be indemnified by the Selling Stockholders
against civil liabilities, including liabilities under the Securities Act, that
may arise from any written information furnished to us by the Selling
Stockholders specifically for use in this prospectus, in accordance with the
related registration rights agreement, or we may be entitled to
contribution.
Annex
B
ZIOPHARM
Oncology, Inc.
Selling Stockholder Notice
and Questionnaire
The
undersigned beneficial owner of common stock, $0.001 par value per share (the
“Common
Stock”), of ZIOPHARM Oncology, Inc. (the “Company”), (the
“Registrable
Securities”) understands that the Company has filed or intends to file
with the Securities and Exchange Commission (the “Commission”) a
registration statement (the “Registration
Statement”) for the registration and resale under Rule 415 of the
Securities Act of 1933, as amended (the “Securities Act”), of
the Registrable Securities, in accordance with the terms of the Registration
Rights Agreement, dated as of ____________, 201___ (the “Registration Rights
Agreement”), among the Company and the Purchasers named
therein. The purpose of this Questionnaire is to facilitate the
filing of the Registration Statement under the Act that will permit you to
resell the Registrable Securities in the future. The information
supplied by you will be used in preparing the Registration
Statement. All capitalized terms not otherwise defined herein shall
have the meanings ascribed thereto in the Registration Rights
Agreement.
Certain
legal consequences arise from being named as a selling stockholder in the
Registration Statement and the related Prospectus. Accordingly,
holders and beneficial owners of Registrable Securities are advised to consult
their own securities law counsel regarding the consequences of being named or
not being named as a selling stockholder in the Registration Statement and the
related Prospectus.
NOTICE
The
undersigned beneficial owner (the “Selling Stockholder”)
of Registrable Securities hereby elects to include the Registrable Securities
owned by it and listed below in Item 3 (unless otherwise specified under such
Item 3) in the Registration Statement.
|
(a)
|
Full
Legal Name of Selling Stockholder
|
|
(b)
|
Full
Legal Name of Registered Holder (if not the same as (a) above) through
which Registrable Securities Listed in Item 3 below are
held:
|
|
(c)
|
Full
Legal Name of Natural Control Person (which means a natural person who
directly or indirectly alone or with others has power to vote or dispose
of the securities covered by the
questionnaire):
|
2.
|
Address
for Notices to Selling
Stockholder:
|
Telephone:
___________________________________________________________________________________________
Fax:
________________________________________________________________________________________________
Contact
Person:
_______________________________________________________________________________________
E-mail
address of Contact
Person:___________________________________________________________
3. Beneficial
Ownership of Registrable Securities:
|
(a)
|
Type
and Number of Registrable Securities beneficially
owned:
|
4. Broker-Dealer
Status:
|
(a)
|
Are
you a broker-dealer?
|
Yes ¨ No ¨
|
Note:
|
If
yes, the Commission’s staff has indicated that you should be identified as
an underwriter in the Registration
Statement.
|
|
(b)
|
Are
you an affiliate of a
broker-dealer?
|
Yes ¨ No ¨
|
Note:
|
If
yes, provide a narrative explanation
below:
|
|
(c)
|
If
you are an affiliate of a broker-dealer, do you certify that you bought
the Registrable Securities in the ordinary course of business, and at the
time of the purchase of the Registrable Securities to be resold, you had
no agreements or understandings, directly or indirectly, with any person
to distribute the Registrable
Securities?
|
Yes ¨ No ¨
|
Note:
|
If
no, the Commission’s staff has indicated that you should be identified as
an underwriter in the Registration
Statement.
|
5. Beneficial
Ownership of Other Securities of the Company Owned by the Selling
Stockholder.
Except
as set forth below in this Item 5, the undersigned is not the beneficial or
registered owner of any securities of the Company other than the Registrable
Securities listed above in Item 3.
|
(a)
|
As
of ___________, 201___, the Selling Stockholder owned outright (including
shares registered in Selling Stockholder's name individually or jointly
with others, shares held in the name of a bank, broker, nominee,
depository or in "street name" for its account), _________ shares of the
Company's capital stock (excluding the Registrable
Securities). If “zero,” please so
state.
|
|
(b)
|
In
addition to the number of shares Selling Stockholder owned outright as
indicated in Item 5(a) above, as of ________________, 201___, the Selling
Stockholder had or shared voting power or investment power, directly or
indirectly, through a contract, arrangement, understanding, relationship
or otherwise, with respect to ______________ shares of the Company's
capital stock (excluding the Registrable Securities). If
“zero,” please so state.
|
|
If
the answer to Item 5(b) is not “zero,” please complete the following
tables:
|
Sole
Voting Power:
|
|
Nature of Relationship Resulting in Sole
Voting Power
|
|
|
|
|
|
|
|
|
|
|
|
|
Shared
Voting Power:
Sole
Investment power:
|
|
Nature of Relationship Resulting in Sole
Investment power
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shared
Investment power:
|
(c)
|
As
of _____________, 201___, the Selling Stockholder had the right to acquire
the following shares of the Company's common stock pursuant to the
exercise of outstanding stock options, warrants or other rights (excluding
the Registrable Securities). Please describe the number, type
and terms of the securities, the method of ownership, and whether the
undersigned holds sole or shared voting and investment
power. If “none”, please so
state.
|
6. Relationships
with the Company:
Except
as set forth below, neither the undersigned nor any of its affiliates, officers,
directors or principal equity holders (owners of 5% of more of the equity
securities of the undersigned) has held any position or office or has had any
other material relationship with the Company (or its predecessors or affiliates)
during the past three years.
State any
exceptions here:
The
undersigned has reviewed the form of Plan of Distribution attached as Annex A to the
Registration Rights Agreement, and hereby confirms that, except as set forth
below, the information contained therein regarding the undersigned and its plan
of distribution is correct and complete.
State any
exceptions here:
The
undersigned agrees to promptly notify the Company of any inaccuracies or changes
in the information provided herein that may occur subsequent to the date hereof
and prior to the effective date of any applicable Registration Statement filed
pursuant to the Registration Rights Agreement.
By
signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items 1 through 7 and the inclusion of such
information in each Registration Statement filed pursuant to the Registration
Rights Agreement and each related Prospectus. The undersigned
understands that such information will be relied upon by the Company in
connection with the preparation or amendment of any such Registration Statement
and the related Prospectus.
By
signing below, the undersigned acknowledges that it understands its obligation
to comply, and agrees that it will comply, with the provisions of the Exchange
Act and the rules and regulations thereunder, particularly Regulation M. The
undersigned also acknowledges that it understands that the answers to this
Questionnaire are furnished for use in connection with Registration Statements
filed pursuant to the Registration Rights Agreement and any amendments or
supplements thereto filed with the Commission pursuant to the Securities
Act.
The
undersigned hereby acknowledges and is advised of the following Interpretation
A.65 of the July 1997 SEC Manual of Publicly Available Telephone Interpretations
regarding short selling:
“An
Issuer filed a Form S-3 registration statement for a secondary offering of
common stock which is not yet effective. One of the selling
shareholders wanted to do a short sale of common stock “against the box” and
cover the short sale with registered shares after the effective date. The issuer
was advised that the short sale could not be made before the registration
statement become effective, because the shares underlying the short sale are
deemed to be sold at the time such sale is made. There would,
therefore, be a violation of Section 5 if the shares were effectively sold prior
to the effective date.”
By
returning this Questionnaire, the undersigned will be deemed to be aware of the
foregoing interpretation.
I confirm
that, to the best of my knowledge and belief, the foregoing statements
(including without limitation the answers to this Questionnaire) are
correct.
IN
WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Questionnaire to be executed and delivered either in person or by its duly
authorized agent.
Unassociated Document
Exhibit
99.1
ZIOPHARM
Oncology and Intrexon Announce Worldwide Partnership for Synthetic Biology
DNA-based Oncology Therapeutics
RJ
Kirk, CEO and Chairman of Intrexon, to Join ZIOPHARM Board of
Directors
NEW YORK, NY and GERMANTOWN, MD
(January 6, 2011) – ZIOPHARM Oncology, Inc. (Nasdaq: ZIOP), a small
molecule late-stage oncology drug development company, and Intrexon Corporation,
a next generation synthetic biology company, announced today a global exclusive
channel partnership in oncology where ZIOPHARM will develop and commercialize
DNA-based therapeutics using Intrexon’s UltraVector® Technology. Under the
partnership, ZIOPHARM will utilize Intrexon’s advanced transgene engineering
platform for the controlled and precise cellular production of anti-cancer
effectors. ZIOPHARM will have rights to Intrexon’s entire human in vivo effector platform
within the field of oncology which includes two lead clinical-stage product
candidates, one which is in an advanced Phase I study and another which will be
the subject of an Investigational New Drug (“IND”) filing during the first half
of 2011. ZIOPHARM and Intrexon will host a conference call and audio webcast
today, Thursday, January 6th at 5:00
p.m. ET to discuss the global exclusive channel partnership.
Intrexon
employs its modular genetic engineering platform in the areas of therapeutics,
protein production, industrial, and agriculture products. The exclusive channel
partnership between Intrexon and ZIOPHARM has been established specifically for
the field of human oncologic therapeutics. Under the partnership, Intrexon
remains responsible for technology discovery efforts and managing the patent
estate as well as for certain aspects of manufacturing. ZIOPHARM will be
responsible for conducting preclinical and clinical development of candidates,
as well as for other aspects of manufacturing and the commercialization of the
candidates.
Intrexon’s
core synthetic biology technology is designed to create Better DNA™ at
industrial scale, enabling unprecedented control over the function and output of
living cells by providing external control over in vivo activation and
regulation of potent effectors. This platform, called UltraVector®, provides
speed, flexibility, consistency and precision to the design, production and
testing of rationally designed complex transgenes and their encoded genetic
circuits. These qualities allow an iterative and rational approach to
transgene design, which can be continually engineered until their performance is
optimized. Through
this process, Intrexon is able to overcome the challenges inherent in current
therapeutic strategies, including recombinant protein therapies and constitutive
gene therapies, thereby enhancing capabilities, improving safety and lowering
cost for human therapeutics. The lead oncology product candidate developed using
Intrexon’s technologies is currently in Phase Ib clinical study for metastatic
melanoma. ZIOPHARM expects to submit an Investigational New Drug (IND)
application with U.S. Food and Drug Administration for a second oncology product
candidate in the first half of this year.
“Controllable,
scalable synthetic biology, the tightly regulated delivery of therapeutic
proteins from within the body, is an aspirational and disruptive technology
which Intrexon has brought from scientific theory to medical application,” said
Jonathan Lewis, M.D., Ph.D., Chief Executive Officer and Chief Medical Officer
of ZIOPHARM. “As the sole channel partner for in vivo therapeutic
candidates for human oncology, ZIOPHARM plans to leverage this technology for
next-generation products targeting key pathways used by cancers to grow and
metastasize. Intrexon has developed a technology that is uniquely
flexible, scalable and controllable, adding significantly to our small molecule
drug development capabilities and our ability to translate science to the
patient using our world-class global team.”
“We are
very pleased to collaborate with ZIOPHARM, which, under the leadership of
Jonathan Lewis, is building an industry leading oncology company with a
strategic vision regarding cancer medicine. ZIOPHARM’s oncology expertise,
development capabilities, as well as its excellent reputation within the
oncology community make ZIOPHARM an exceptional investment for Intrexon and
ideal partner to rapidly achieve the full therapeutic benefit and commercial
potential of Intrexon’s disruptive technologies,” stated RJ Kirk, Intrexon’s
Chairman and CEO. “This collaboration leverages the capabilities and strengths
of each partner and has the potential to create significant value for
shareholders.”
Under
terms of the agreement:
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·
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Intrexon
will purchase 2,422,542 shares of ZIOPHARM ‘s common stock (representing
5% of ZIOPHARM’s currently outstanding shares) in a private placement for
a total purchase price of $11,628,202, or $4.80 per share, which is the
trailing 10-day volume-weighted average price per share of ZIOPHARM’s
common stock;
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|
·
|
ZIOPHARM
will simultaneously issue to Intrexon for no additional consideration an
additional 3,631,391 shares of its common stock, representing
7.495% of ZIOPHARM’s currently outstanding shares; ZIOPHARM has agreed to
issue to Intrexon additional shares of its common stock for no additional
consideration, representing an additional 7.495% under certain conditions
upon dosing of the first patient in a ZIOPHARM-conducted U.S. Phase II
clinical trial of a product candidate created, produced or developed by
ZIOPHARM using Intrexon technology;
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|
·
|
Intrexon
has agreed to purchase up to $50 million in conjunction with securities
offerings that may be conducted by ZIOPHARM in the future, subject to
certain conditions and limitations;
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·
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Subject
to certain expense allocations, ZIOPHARM will pay Intrexon 50% of the
cumulative net quarterly profits derived from the sale of products
developed from the channel
partnership.
|
Pursuant
to the agreement, Mr. Kirk has agreed to join the ZIOPHARM Board of Directors.
In addition to his responsibilities at Intrexon, Mr. Kirk has served, since
March 1999, as Senior Managing Director and Chief Executive Officer of Third
Security, LLC, an investment management firm founded by Mr. Kirk. Additionally,
Mr. Kirk founded and became Chairman of the Board of New River Pharmaceuticals
Inc. in 1996, and was President and Chief Executive Officer between October 2001
and April 2007. New River was acquired by Shire plc in 2007. Mr. Kirk
also currently serves as a member of the Board of Directors of Halozyme
Therapeutics, Inc. (Nasdaq: HALO), and as Chairman of the Board for Clinical
Data, Inc. (Nasdaq: CLDA). Previously, Mr. Kirk served as a member of the Board
of Directors of Scios, Inc. (acquired by Johnson & Johnson) between February
2000 and May 2002. Mr. Kirk served on the Board of Visitors of Radford
University from July 2003 to June 2009, was Rector of the Board from September
2006 to September 2008, and has served on the Board of Directors of the Radford
University Foundation, Inc. since September 1998. He has served on the Board of
Visitors of the University of Virginia and Affiliated Schools since July 2009,
on the Virginia Advisory Council on Revenue Estimates since July 2006, on the
Governor’s Economic Development and Jobs Creation Commission since April 2010,
and served as a member of the Board of Directors of the Virginia University
Research Partnership from July 2007 to November 2010. Mr. Kirk received a B.A.
in Business from Radford University and a J.D. from the University of
Virginia.
Regarding
Mr. Kirk’s appointment, Dr. Lewis added: “RJ is a visionary and a winner with a
long record of success and value creation in the life sciences. His addition to
the ZIOPHARM Board of Directors will be invaluable, and we look forward to his
many contributions in this role.”
Griffin
Securities, Inc. acted as an advisor to Intrexon on this
transaction.
Conference
Call and Webcast January 6, 2011 at 5:00pm ET
ZIOPHARM
and Intrexon will host a conference call and live audio webcast on January 6,
2011 at 5:00pm ET to discuss their global exclusive channel partnership. The
call can be accessed by dialing (877) 375-9144 (U.S. and Canada) or (253)
237-1150 (international). The passcode for the conference call is
‘ZIOPHARM.’ To access the live audio webcast, or the subsequent archived
recording, visit the "Investors - Events & Presentations" section of the
ZIOPHARM website at www.ziopharm.com. The
webcast will be recorded and available for replay on the company's website for
two (2) weeks.
About
ZIOPHARM Oncology, Inc.:
ZIOPHARM
Oncology is a biopharmaceutical company engaged in the development and
commercialization of a diverse portfolio of cancer drugs. The Company is
currently focused on three clinical programs.
Palifosfamide
(ZymafosTM or
ZIO-201) is a novel DNA cross-linker in class with bendamustine, ifosfamide, and
cyclophosphamide. ZIOPHARM is currently enrolling patients in a randomized,
double-blinded, placebo-controlled Phase III trial with palifosfamide
administered intravenously for the treatment of metastatic soft tissue sarcoma
in the front-line setting. The Company is also currently conducting a
Phase I intravenous study of palifosfamide in combination with standard of care
addressing small cell lung cancer and expects to initiate an additional study
with drug in the oral form treating solid tumors.
Darinaparsin
(ZinaparTM or
ZIO-101) is a novel mitochondrial-targeted agent (organic arsenic) being
developed intravenously for the treatment of peripheral T-cell lymphoma with a
pivotal study expected to begin in late 2011. An oral form is in a Phase I trial
in solid tumors.
Indibulin
(ZybulinTM or
ZIO-301) is a novel, oral tubulin binding agent that is expected to have several
potential benefits including oral dosing, application in multi-drug resistant
tumors, no neuropathy and minimal overall toxicity. It is currently being
studied in Phase I/II in metastatic breast cancer.
ZIOPHARM's
operations are located in Boston, MA with an executive office in New York City.
Further information about ZIOPHARM may be found at www.ziopharm.com.
ZIOP-G
About
Intrexon Corporation:
Intrexon
Corporation is a privately held synthetic biology company that employs modular
DNA control systems to enhance capabilities, improve safety and lower cost in
human therapeutics, protein production, industrial products and agricultural
biotechnology. The company’s advanced transgene engineering platform enables
Better DNA™ by combining breakthroughs in DNA control systems with corresponding
advancements in modular transgene design, assembly and optimization. The company
is currently using these advanced capabilities to undertake foremost challenges
across the spectrum for biological applications. More information about the
company is available at www.DNA.com.
Forward-Looking
Safe Harbor Statement:
This
press release contains forward-looking statements for ZIOPHARM Oncology, Inc.
that involve risks and uncertainties that could cause ZIOPHARM Oncology’s actual
results to differ materially from the anticipated results and expectations
expressed in these forward-looking statements. These statements are based on
current expectations, forecasts and assumptions that are subject to risks and
uncertainties, which could cause actual outcomes and results to differ
materially from these statements. Among other things, there can be no assurance
that any of ZIOPHARM Oncology’s development efforts relating to its product
candidates will be successful, or such product candidates will be successfully
commercialized. Other risks that affect forward-looking information contained in
this press release include the possibility of being unable to obtain regulatory
approval of ZIOPHARM Oncology’s product candidates, the risk that the results of
clinical trials may not support ZIOPHARM Oncology’s claims, the risk that
pre-clinical or clinical trials will proceed on schedules that are consistent
with ZIOPHARM Oncology’s current expectations or at all, risks related to
ZIOPHARM Oncology’s ability to protect its intellectual property and its
reliance on third parties to develop its product candidates, risks related to
the sufficiency of existing capital reserves to fund continued operations for a
particular amount of time and uncertainties regarding ZIOPHARM Oncology’s
ability to obtain additional financing to support its operations thereafter, as
well as other risks regarding ZIOPHARM Oncology’s that are discussed under the
heading "Risk Factors" in ZIOPHARM Oncology’s filings with the United States
Securities and Exchange Commission. Forward-looking statements can be identified
by the use of words such as "may," "will," "intend," " should," "could," "can,"
"would," "expect," "believe," "estimate," " predict," "potential," "plan," "is
designed to," "target" and similar expressions. ZIOPHARM Oncology assumes no
obligation to update these forward-looking statements, except as required by
law.
[Missing Graphic Reference]
Contacts:
For
ZIOPHARM:
Tyler
Cook
ZIOPHARM
Oncology, Inc.
617-259-1982
tcook@ziopharm.com
Media:
David
Pitts
Argot
Partners
212-600-1902
david@argotpartners.com
For
Intrexon:
Robert
Beech
Intrexon
Corporation
Phone:
301.556.9812
rbeech@intrexon.com