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Exhibit 10.2
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. A complete copy of this document
has been filed separately with the Securities and Exchange
Commission.
LICENSE AGREEMENT
This
License Agreement is entered into as of the 3rd day of
November, 2006 (“Effective Date”), by and among
Baxter Healthcare S.A. a Swiss corporation having offices
at Hertistrasse
2, CH-8304, Wallisellen
Switzerland
and Baxter International, Inc. a Delaware Corporation, having
offices at One Baxter Parkway, Deerfield, IL 60015
(collectively, “Baxter”) on the one hand, and
Ziopharm Oncology, Inc. a Delaware
corporation
having offices at 197
Eighth Street, Suite 300, Charlestown, MA 02129
(“Licensee”)
on the other hand.
WHEREAS,
Baxter possesses certain intellectual property rights related
to the
use of nanosuspension technology in the manufacture of a
suspension formulation of Indibulin and compositions
thereof
(“Licensed
Patents,” as further defined below);
WHEREAS,
Licensee is engaged in the pharmaceutical business and, more
particularly, in oncology;
WHEREAS,
Baxter and Licensee are, concurrently with this Agreement,
entering into a separate Asset Purchase Agreement
providing
for, among other things, the
transfer of certain assets
relative
to the Indibulin molecule and associated intellectual property
(the “Asset Purchase Agreement”);
WHEREAS,
Licensee desires to obtain certain rights in and to the
Licensed Patents;
WHEREAS,
Baxter has agreed to license to Licensee certain rights in and
to the Licensed Patents;
NOW,
THEREFORE, in consideration of the promises
and
the mutual covenants
contained
in this Agreement, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the
Parties agree
as follows:
ARTICLE 1
DEFINITIONS
| 1.1 |
Defined Terms .
As used in this Agreement, the following terms shall have the
following meanings:
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An
“
Affiliate ”
of a subject person or entity shall mean any corporation, firm,
business organization or legal entity that directly
or indirectly through one or more intermediaries
controls, is controlled by, or is under common control with the
subject person or entity. As used in this definition,
“control” (including, with its correlative meanings,
“controlled by” and “under common control
with”) means possession, directly or indirectly, of power to
direct or cause the direction of management and policies (whether
through ownership of securities, partnership or other ownership
interests, by contract or otherwise).
“
Asset Purchase Agreement ”
shall have the meaning ascribed in preamble of this
Agreement.
“
Assumed Patent ”
shall have the meaning set forth in
Section 5.1(a)(ii) .
“
Commercialize ”
shall mean the sale of a Licensed Product which has received
Marketing Approval.
“
Composite Product ”
shall mean a product combination encompassing one or more Licensed
Products and one or more separate products, wherein the Composite
Product is sold as a complete package for purposes of selling the
one or more Licensed Products.
“
CTA ”
shall mean the European
EMEA
equivalent of IND.
“
EMEA ”
means European Agency for the Evaluation of Medicinal Products, or
any successor agency thereto .
“
FDA ”
shall mean the United
States
Food
and Drug Administration .
“
Governmental
Authority ”
means any United States federal, state or local or any foreign
government, governmental, regulatory or administrative authority,
agency or commission or any court, tribunal or arbitral
body.
“
IND ”
shall mean an investigational new drug application submitted to the
FDA.
“
Indibulin-related
Nanosuspension ”
shall mean a compound as claimed in claim 1 of U.S. Patent
Application No. 11/266,518, filed on November 3, 2005, formulated
as particles and, optionally, suspended in a
composition.
“
Intangible Property Rights ”
shall mean intangible property rights (other than the Licensed
Patents) to the extent that such intangible property rights relate
to Indibulin-related Nanosuspension, whether or not patentable
including, but not limited to, inventions, discoveries, trade
secrets, technical information, know-how, copyrights and other
confidential business information.
“
Licensed Patents ”
shall
mean all shall mean all U.S. and foreign patents, provisional and
non-provisional patent applications and invention records listed
on
Exhibit A and
(i) any continuations,
continuations-in-part, divisionals
and
reissue patent applications and resulting patents, derived from
such prior filed patents and patent applications, and any foreign
counterparts and any issued patents thereof and (ii) any patent
applications, filed patents and any continuations,
continuations-in-part, divisionals and
reissue patent applications and resulting patents and any foreign
counterparts and any issued patents thereof embraced by the
disclosures in such invention records.
“
Licensed Product ”
shall mean an
Indibulin-related Nanosuspension ,
the use, manufacture, sale, offer for sale or importation of which
falls within the scope of a Valid Claim .
“
Management ”
shall have the meaning set forth in
Section 5.1(a)(i) .
“
Marketing Approval ”
shall mean regulatory
approval of
the marketing of a Licensed Product by the FDA or the EMEA
.
“
Net Sales ”
shall mean the total amount invoiced in
U.S. dollars (or, if in another currency, as converted by
Licensee in
accordance with Section 3.7 by
Licensee or its subsidiaries, Affiliates or Sublicensees
for
the sale of any Licensed Product after
deducting the following costs, provided and to the extent such
costs are attributable to such sale of the Licensed Product in
accordance with U.S. generally accepted accounting principles as
consistently applied by Licensee and are actually borne by or on
behalf of Licensee or its subsidiaries, Affiliates or Sublicensees:
(i) invoiced freight, shipping and shipping insurance charges, (ii)
discounts allowed and taken, in amounts customary in the trade,
(iii) taxes, including sales, use, turnover, excise, import and
other taxes or duties, separately billed or invoiced and borne by
or on behalf of Licensee or its subsidiaries, Affiliates or
Sublicensees, imposed by a Governmental Authority on the
production, sale, use or transfer of the Licensed Product, (iv)
amounts repaid or credited by reason of rejection or return of any
previously sold Licensed Products and uncollectible portions of
invoiced amounts with respect to any previously sold Licensed
Products, and (v) rebates, chargebacks, retroactive price
reductions, allowances and fees paid or credited to customers,
wholesalers, distributors, third party payors, governmental
agencies, administrators and contractees with respect to Licensed
Products sold.
If
a Licensed Product is sold
as part
of a Composite Product, then Net Sales for such Composite
Product will be adjusted by
multiplying (x)
actual
Net Sales of the Composite Product for
the calendar quarter in the country in which the Composite
Product is being sold by (y)
the
fraction A/(A+B) where A is the average
invoice price
of the Licensed Product in
such country during such period ,
if sold separately (i.e., without one or more products), and B is
the average
invoice
price of the other products in the Composite Product
in
such country during such period ,
if sold separately .
If in a given country A
and/or B are not sold separately, the
related value of the Licensed Product and the other products in the
Composite Product shall be determined based on a
good faith estimate by License e
b ased
upon the respective fair
market values
of the Licensed Product as if it were sold separately and the other
product(s) as if they were sold separately, which good faith
estimate shall be subject to approval by Baxter, which approval
shall not be unreasonably withheld. In the event the Parties cannot
agree on a fair market value of the Licensed Product relative to
Composite Product sales, upon the request of any one of the
Parties, the Parties shall submit the valuation matter to a
mutually, agreed to independent consultant. The Parties shall
accept the fair market value as determined by the independent
consultant.
No
sales shall result from any transfer between Licensee or any
of its subsidiaries, Affiliates or Sublicensees for resale,
but shall result from the resale by the subsidiary, Affiliate
or Sublicensee.
“
Party ”
shall mean either Baxter or Licensee, or both, as the context
dictates.
“
Sublicensee ”
shall mean a third party other than an Affiliate who has received a
sublicense from Licensee or Licensee’s sublicensees pursuant
to
Section 2.3 .
“
Term ”
shall have the meaning set forth in
Section 10.1 .
“
Territory ”
shall mean the entire world.
“
Valid Claim ”
means a claim of an issued and unexpired patent within the Licensed
Patents that has not been (i) held permanently revoked,
unenforceable, unpatentable or invalid by a decision of a court or
governmental body of competent jurisdiction, unappealable or
unappealed within the time allowed for appeal, (ii) rendered
unenforceable through written disclaimer (iii) lapsed or
abandoned for failure to pay maintenance fees with no further
remedy available to reinstate, or (iv) lost through an
interference proceeding.
ARTICLE 2
LICENSE
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2.1 |
Grant .
Subject to the conditions hereunder,
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(a)
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Baxter
hereby grants to Licensee a world-wide, royalty bearing (pursuant
to
Article 3 )
exclusive right and license, with the right to grant sublicenses,
under Licensed Patents to use, market, sell
,
offer
to sell and
import (except
where a product is manufactured in a country where a Valid Claim
relative to such manufacture does not exist, and such product is
imported in a country where a Valid Claim relative to the
manufacture does exist) Licensed
Product s
in
the Territory; and
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(b)
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Baxter
hereby grants to Licensee a world-wide, non-royalty bearing
exclusive right and license, with the right to grant sublicenses,
under the Intangible Property Rights to use, market, sell, offer to
sell and import Licensed Products in the Territory.
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Notwithstanding
this
Section 2.1 ,
Baxter does not and shall not license to Licensee hereunder the
right and license under the Licensed Patents or the Intangible
Property Rights to make or have made Licensed Products or
Indibulin-related Nanosuspension in the Territory.
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2.2 |
Limitation on License Grants .
Except for the license expressly granted pursuant to
Section 2.1 ,
all right, title and interest in all Licensed Patents, and other
rights owned by Baxter or in which Baxter has an interest shall
remain the sole property of Baxter, and nothing herein shall be
construed to grant or establish any other rights to the
contrary.
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2.3 |
Sublicenses by Licensee .
Licensee shall notify
Baxter of any sublicense hereunder and
the
identity of each Sublicensee,
and
provide Baxter with a copy of the executed agreement involving such
sublicense with
such redactions of confidential terms as Licensee shall determine
to be appropriate ,
all within thirty (30) days of execution of the Agreement
.
Sublicenses shall not contain any provision contrary to, or
inconsistent with, this Agreement and shall provide that all
obligations of Licensee hereunder shall be binding upon each
S
ublicensee
as
if the S
ublicensee
were
a party to this Agreement. Additionally, Licensee shall be
responsible for and liable to Baxter
for
S
ublicensee
’s
compliance with the provisions hereo f
.
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| 2.4 |
Rights in Bankruptcy .
All rights and licenses granted under or pursuant to this Agreement
by Baxter are, and will otherwise be deemed to be, for purposes of
Section 365(n) of the U.S. Bankruptcy Code, licenses of rights to
“intellectual property” as defined under Section 101 of
the U.S. Bankruptcy Code.
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ARTICLE 3
PAYMENTS
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3.1
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Milestone Fees .
As part of the consideration for the rights granted by Baxter to
Licensee
hereunder,
Licensee shall pay to Baxter five hundred thousand United States
dollars ($500,000) within thirty (30) days of the first
effectiveness of an IND submitted to the FDA or a CTA submitted to
the EMEA permitting Licensee to initiate human clinical trials of
an Indibulin-related Nanosuspension in the United States or Europe,
whichever comes first.
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3.2
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License Royalties .
As part of the consideration for the rights granted by Baxter to
Licensee, Licensee shall pay ,
or cause to be paid to Baxter, the
following royalties based
on Net Sales of Licensed Products :
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| a) |
[****]
percent ([****]%) of worldwide calendar year annual Net Sales of
less than [**********] Dollars ($[**********]);
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| b) |
[****]
percent ([****]%) of worldwide calendar year annual Net Sales from
[**********] Dollars ($[**********]) up to [**********] Dollars
($[**********]); and
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| c) |
[****]
percent ([****]%) of worldwide calendar year annual Net Sales in
excess of [**********] U.S. Dollars ($[**********]).
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With
respect to each Licensed Product, royalties will be payable on
a country-by-country basis, so long as the importing, using or
selling of the Licensed Product was covered by a Valid Claim
in the country in which such Licensed Product was imported,
used or sold.
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3.3
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Reports, Audit and Payment Schedule .
Licensee
shall keep and maintain detailed records of all sales of Licensed
Product worldwide; and
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| a) |
Licensee
shall make quarterly payments to Baxter within forty-five
(
45
)
days of the close of each calendar quarter (March 31, June 30,
September 30 and December 31) based
on Net
Sales in such
quarter, and shall additionally provide ,
together with such payment, a
sales report detailing Net
Sales
of
Licensed Products sold per country and the royalty calculation,
pursuant to
Section 3.2 ;
and
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Baxter
shall have the right annually, at Baxter’s expense, to audit
Licensee ’s
records,
or Licensee’s subsidiaries, Affiliates or Sublicensees in
order to verify the calculation of Net Sales of Licensed Products.
Licensee shall reasonably cooperate with Baxter to provide Licensee
access to such records; provided that:
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(i)
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Such
audit shall be conducted by Baxter’s independent
auditors;
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(ii)
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Such
audit shall be conducted during normal business hours, upon
reasonable advance notice and in a manner that does not cause
unreasonable disruption to the conduct of the business of Licensee,
its subsidiaries, Affiliates or Sublicensees;
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(iii) |
Baxter
shall treat all information reviewed or learned of in the course of
such audit in accordance with
Section 11.13 ;
and
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(iv)
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prior
to such audit, Baxter shall cause its auditors to enter into a
reasonably acceptable confidentiality agreement with Licensee
obligating such auditors to maintain confidentiality of all
financial statements.
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3.
4
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No Multiple Payments .
For payments pursuant to
Section 3.2 ,
only one payment shall be paid for each Licensed Product sold,
regardless of the number of Licensed Patents or claims thereof that
cover such Licensed Product. Additionally, in the event Licensee
has paid Baxter a sales-based
contingent payment on
the Net Sales of a unit of Licensed Product pursuant to
Section 2.4 of
the Asset Purchase Agreement, Licensee shall not pay Baxter a
royalty, pursuant to
Section 3.2 of
this Agreement, on the Net Sales of that unit of Licensed
Product.
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3.
5
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Royalty Reduction .
In the event Licensee or its subsidiaries, Affiliates or
Sublicensees licenses third party patent rights in order to have
freedom to make, have made or sell Licensed Product without
infringing such patent rights, Licensee shall be allowed to deduct
from the royalties due pursuant to
Section 3.2 ,
fifty percent (50%) of any royalties or any other license fees paid
or incurred in connection with such license up to a maximum of
fifty percent (50%) of the royalties due pursuant to Section 3.2
(with any amount not deducted due to such deduction limitation
carried forward to subsequent calendar quarters for deduction, but
subject to the fifty percent (50%) maximum deduction limitation
provided by this
Section 3.5 for
such subsequent calendar quarters).
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3.6
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Royalty Credits .
Licensee shall be allowed to deduct from the royalty payments due
to Baxter under
Section 3.2 any
payments made by it to Baxter pursuant to
Section 2.3 of
the Asset Purchase Agreement.
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3.7
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Currency Exchange .
In the event sales are invoiced in a currency other than United
States dollars, Net Sales shall be calculated in the following
manner: cumulative non-United States dollars sales invoiced by
month shall be converted to United States dollars by multiplying or
dividing, whichever is applicable, this amount by the simple
average of the daily NY close rates for each day in the month as
published by Bloomberg, Reuters or some other generally accepted
source for publishing NY close foreign currency rates. The rate
source shall be reviewed with Baxter prior to commencing payment of
royalty payments to Baxter.
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3.8
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Withholding Taxes .
Licensee may withhold taxes in the event that revenue authorities
in any country require the withholding of taxes on amounts paid
hereunder to Baxter. Licensee will deduct such taxes from such
payment and such taxes will be paid by Licensee to the proper
taxing authority on behalf of Baxter. In the event such taxing
authority routinely provides a tax receipt upon payment, Licensee
will procure such tax receipt and forward it to Baxter. Licensee
agrees to assist Baxter in claiming exemption from such deductions
or withholdings under any applicable double taxation or similar
agreement or treaty.
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3.
9
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Late Penalty .
Milestone fees and royalties not received within the required
timeframe shall bear interest at the
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