EMPLOYMENT AGREEMENT

AGREEMENT (the “ Agreement ”), dated as of June 25, 2008, by and between ZIOPHARM Oncology, Inc., a Delaware corporation with principal executive offices at 1180 Avenue of the Americas, New York, NY 10036 (the “ Company ”), and RICHARD E. BAGLEY, residing at 197 Eighth Street, #503, Charlestown, MA 02129 (the “ Executive ”).

WHEREAS, the Company desires to continue to employ the Executive as President of the Company, and the Executive desires to serve the Company in that capacity, upon the terms and subject to the conditions contained in this Agreement;

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the parties hereto hereby agree as follows:

1.   Employment.

(a)   Services. During the Term (as hereinafter defined), the Executive will be employed by the Company as its President and Chief Operating Officer. The Executive will report to the Chief Executive Officer of the Company and shall perform such duties as are consistent with the position of President and Chief Operating Officer of the Company (the “Services” ). The Executive agrees to perform such duties faithfully, to use his best efforts to advance the best interests of the Company, to devote all of his business time, attention and energies to the business of the Company, and while he remains employed, not to engage in any other business activity, whether or not such business activity is pursued for gain, profit or other pecuniary advantage, that will interfere with the performance by the Executive of his duties hereunder or the Executive’s availability to perform such duties, or that will adversely affect, or negatively reflect upon, the Company.

(b)   Directorship. The Company shall use its best efforts to cause the Executive to be elected as a member of the Board of Directors of the Company (the “Board” ) throughout the Term (as defined below) and shall include him in the management slate for election as a director at every stockholders meeting during the Term at which his term as a director would otherwise expire. The Executive agrees to accept election, and to serve during the Term, as director of the Company, without any compensation therefor other than as specified in this Agreement.

(c)   Acceptance. Executive hereby accepts such employment and agrees to render the Services.

2.   Term.

The Executive's employment under this Agreement (the "Term" ) shall commence as of July 1, 2008 and shall continue for a term of three (3) years, unless sooner terminated pursuant to Section 8 of this Agreement. Notwithstanding anything to the contrary contained herein, the provisions of this Agreement governing protection of Confidential Information shall continue in effect as specified in Section 5 hereof and survive the expiration or termination hereof. The Term may be extended for additional one (1) year periods upon mutual written consent of the Executive and the Board. 

3.   Place of Performance. 

The duties to be performed by the Executive hereunder shall be performed primarily at the offices of the Company in Navy Yard Plaza, Boston, Massachusetts, subject to reasonable travel requirements on behalf of the Company, or such other place as the Board may reasonably designate. The Executive acknowledges that the Company’s executive offices are located in New York, New York, that the Company also maintains offices in New Haven, Connecticut, and that Executive will be required to travel frequently to such other offices of the Company.

4.   Compensation. As full compensation for the performance by the Executive of his duties under this Agreement, the Company shall pay the Executive as follows:

(a)   Base Salary. The Company shall pay Executive a salary (the “ Base   Salary ”) equal to Three Hundred Fifteen Thousand Dollars ($315,000) per year. Payment shall be made semi-monthly, on the fifteenth and the last day of each calendar month. The Board shall annually review the Base Salary to determine whether an increase in the amount thereof is warranted.

(b)   Performance Bonus. The Executive shall receive a targeted performance bonus (the “ Performance Bonus ”), based on his performance as determined by the Board for each calendar year or partial calendar year during the Term (each a “ Bonus Calculation Year ”). The target amount of the Performance Bonus shall be $100,000 per annum ($50,000 for each of the partial calendar years ending December 31, 2008 and June 30, 2011), with the amount of the actual bonus payable each year determined in accordance with the provisions of Schedule 4(b) attached hereto. The amount so determined shall be payable within 30 days following December 31 of each calendar year during the Term (and partial calendar years ending December 31, 2008 and June 30, 2011), provided that the Executive remains employed by the Company on such date.

(c)   Discretionary Bonus. At the sole discretion of the Board, the Executive shall be eligible to receive an additional annual bonus (the “ Discretionary Bonus ”) in such amount as may be determined by the Board based upon his performance on behalf of the Company during each Bonus Calculation Year. The Discretionary Bonus, if any, shall be payable at such times and in such manner as the Board may determine in its sole discretion.

(d)   Stock Options Awards. As additional compensation for the services to be rendered by the Executive pursuant to this Agreement, the Company shall grant the Executive an award of 60,000 options to purchase Common Stock of the Company (“Stock Options”), which grant shall be effective as of the date of this Agreement. The Stock   Options   shall be governed by the terms of the Company’s Stock Option Plan, as the same may be amended from time to time, and shall vest, if at all, in three equal annual installments on June 25, 2009, June 25, 2010, and June 25, 2011, subject in each case to the provisions of Section 9 below. In connection with such grant, the Executive shall enter into a Stock   Option Agreement with the Company, which will incorporate the foregoing vesting schedule and the Stock   Option   provisions contained in Section 9 below. 

(e)   Expenses. The Company shall reimburse the Executive for all reasonable out of pocket expenses incurred by the Executive in furtherance of the business and affairs of the Company, including reasonable travel and entertainment, upon timely receipt by the Company of appropriate vouchers or other proof of the Executive’s expenditures and otherwise in accordance with any expense reimbursement policy as may from time to time be adopted by the Company. The Company’s expense reimbursement policy generally requires that application for reimbursement be made as soon as practicable after the expense is incurred, but in no event more than one year after the date of the expense. Reimbursements are made by the Company no less frequently than monthly.

(f)   Vacation. The Executive shall, during the Term, be entitled to a vacation of four (4) weeks per annum, in addition to holidays observed by the Company. The Executive shall not be entitled to carry any vacation forward to the next year of employment and shall not receive any compensation for unused vacation days.

(g)   Other Benefits. The Executive shall be entitled to all rights and benefits for which he shall be eligible under any benefit or other plans (including, without limitation, dental, medical, medical reimbursement and hospital plans, pension plans, employee stock purchase plans, profit sharing plans, bonus plans and other so-called "fringe" benefits) as the Company shall make available to its senior executives from time to time. In addition, the Company shall reimburse the Executive for his reasonable professional dues.

5.   Confidential Information and Inventions.

(a)   The Executive recognizes and acknowledges that in the course of his duties he is likely to receive confidential or proprietary information owned by the Company, its affiliates or third parties with whom the Company or any of such affiliates has an obligation of confidentiality. Accordingly, during and after the Term, the Executive agrees to keep confidential and not disclose or make accessible to any other person or use for any other purpose other than in connection with the fulfillment of his duties under this Agreement, any Confidential and Proprietary Information (as defined below) owned by, or received by or on behalf of, the Company or any of its affiliates. “ Confidential   and   Proprietary   Information ” shall include, but shall not be limited to, confidential or proprietary scientific or technical information, data, formulas and related concepts, business plans (both current and under development), client lists, promotion and marketing programs, trade secrets, or any other confidential or proprietary business information relating to development programs, costs, revenues, marketing, investments, sales activities, promotions, credit and financial data, manufacturing processes, financing methods, plans or the business and affairs of the Company or of any affiliate or client of the Company. The Executive expressly acknowledges the trade secret status of the Confidential and Proprietary Information and that the Confidential and Proprietary Information constitutes a protectable business interest of the Company. The Executive agrees: (i) not to use any such Confidential and Proprietary Information for himself or others; and (ii) not to take any Company material or reproductions (including but not limited to writings, correspondence, notes, drafts, records, invoices, technical and business policies, computer programs or disks) thereof from the Company’s offices at any time during his employment by the Company, except as required in the execution of the Executive’s duties to the Company. The Executive agrees to return immediately all Company material and reproductions (including but not limited, to writings, correspondence, notes, drafts, records, invoices, technical and business policies, computer programs or disks) thereof in his possession to the Company upon request and in any event immediately upon termination of employment.

(b)   Except in furtherance of the business of the Company, or otherwise with prior written authorization by the Company, the Executive agrees not to disclose or publish any of the Confidential and Proprietary Information, or any confidential, scientific, technical or business information of any other party to whom the Company or any of its affiliates owes an obligation of confidence, at any time during or after his employment with the Company. Nothing in the foregoing shall be construed to prevent the Executive from disclosing or using any Confidential or Proprietary Information that:

(i)   Executive can evidence through written documentation was in the Executive’s possession or control prior to the date of disclosure;

(ii)   Executive can evidence through written documentation was in the public domain or enters into the public domain through no improper act by Executive

(iii)   is approved for public release by written authorization of the Board;

(iv)   is required to be disclosed by legal, administrative or judicial process; or

(v)   is rightfully granted to Executive by sources independent of the Company, its officers, employees, agents, affiliates and consultants.

(c)   The Executive agrees that all inventions, discoveries, improvements and patentable or copyrightable works (“ Inventions ”) initiated, conceived or made by him, either alone or in conjunction with others, during the Term shall be the sole property of the Company to the maximum extent permitted by applicable law and, to the extent permitted by law, shall be “works made for hire” as that term is defined in the United States Copyright Act (17 U.S.C.A., Section 101). The Company shall be the sole owner of all patents, copyrights, trade secret rights, and other intellectual property or other rights in connection therewith. The Executive hereby assigns to the Company all right, title and interest he may have or acquire in all such Inventions; provided, however, that the Board may in its sole discretion agree to waive the Company’s rights pursuant to this Section 6(c) with respect to any Invention that is not directly or indirectly related to the Company’s business. The Executive further agrees to assist the Company in every proper way (but at the Company’s expense) to obtain and from time to time enforce patents, copyrights or other rights on such Inventions in any and all countries, and to that end the Executive will execute all documents necessary:

(i)   to apply for, obtain and vest in the name of the Company alone (unless the Company otherwise directs) letters patent, copyrights or other analogous protection in any country throughout the world and when so obtained or vested to renew and restore the same; and

(ii)   to defend any opposition proceedings in respect of such applications and any opposition proceedings or petitions or applications for revocation of such letters patent, copyright or other analogous protection.

(d)   The Executive acknowledges that while performing the services under this Agreement the Executive may locate, identify and/or evaluate patented or patentable inventions having commercial potential in the fields of pharmacy, pharmaceutical, biotechnology, healthcare, technology and other fields which may be of potential interest to the Company (the “ Third Party Inventions ”). The Executive understands, acknowledges and agrees that all rights to, interests in or opportunities regarding, all Third-Party Inventions identified by the Company, any of its officers, directors, employees (including the Executive), agents or consultants during the Term as being of potential interest to the Company shall be and remain the sole and exclusive property of the Company and the Executive shall have no rights whatsoever to such Third-Party Inventions and will not pursue for himself or for others any transaction relating to the Third-Party Inventions which is not on behalf of the Company.

(e)   The provisions of this Section 5 shall survive any termination of this Agreement.

6.   Non-Competition, Non-Solicitation and Non-Disparagement.

(a)   The Executive understands and recognizes that his services to the Company are special and unique and that in the course of performing such services the Executive will have access to and knowledge of Confidential and Proprietary Information (as defined in Section 5) and the Executive agrees that, during the Term and for a period of twelve (12) months thereafter (subject to the provisions of Section 9(e) hereof), he shall not without the consent of the Company in any manner, directly or indirectly, on behalf of himself or any person, firm, partnership, joint venture, corporation or other business entity (“ Person ”), enter into or engage in any business which is engaged in any business directly or indirectly competitive with the Company’s Business (as defined below), either as an individual for his own account, or as a partner, joint venturer, owner, executive, employee, independent contractor, principal, agent, consultant, salesperson, officer, director or shareholder of a Person in a business competitive with the Company within the geographic area of the Company’s Business, which is deemed by the parties hereto to be worldwide. The Executive acknowledges that, due to the nature of the Company’s Business, and the importance to the Company’s Business of its Confidential and Proprietary Information, a violation of this Section 6(a) could cause substantial damage to the Company and its affiliates and, therefore, the Company has a strong legitimate business interest in protecting the continuity of its business interests and the restriction herein agreed to by the Executive narrowly and fairly serves such an important and critical business interest of the Company. For purposes of this Agreement, the “ Company’s   Business ” shall mean the business or businesses set forth on the attached Schedule 6(a), which shall be amended from time to time upon the mutual written agreement of the parties, but which will automatically include the research, development and commercialization of any technologies that are licensed or otherwise acquired by the Company. Notwithstanding the foregoing, nothing contained in this Section 6(a) shall be deemed to prohibit the Executive from (i) acquiring or holding, solely for investment, publicly traded securities of any corporation, some or all of the activities of which are competitive with the business of the Company so long as such securities do not, in the aggregate, constitute more than three percent (3%) of any class or series of outstanding securities of such corporation.

(b)   During the Term and for a period of twelve (12) months thereafter (subject to the provisions of Section 9(e) hereof), the Executive shall not, directly or indirectly, without the prior written consent of the Company:

(i)   solicit or induce any employee of the Company to leave the employ of the Company; or hire for any purpose any employee of the Company or any employee who has left the employment of the Company within six months of the termination of such employee’s em