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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 16, 2000
REGISTRATION NO. 333-95177
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
SUPERGEN, INC.
(Exact name of registrant as specified in its charter)
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<TABLE>
<S> <C> <C>
DELAWARE 2834 91-1841574
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
</TABLE>
TWO ANNABEL LANE, SUITE 220
SAN RAMON, CALIFORNIA 94583
(925) 327-0200
(ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES)
------------------------------
JOSEPH RUBINFELD, PH.D.
PRESIDENT AND CHIEF EXECUTIVE OFFICER
SUPERGEN, INC.
TWO ANNABEL LANE, SUITE 220
SAN RAMON, CALIFORNIA 94583
(925) 327-0200
(NAME, ADDRESS, AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
------------------------------
COPIES TO:
JOHN V. ROOS, ESQ.
WILSON SONSINI GOODRICH & ROSATI,
PROFESSIONAL CORPORATION
650 PAGE MILL ROAD
PALO ALTO, CALIFORNIA 94304-1050
(650) 493-9300
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Approximate date of commencement of proposed sale to the public: FROM TIME
TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective statement for the
same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY
DETERMINE.
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<PAGE>
----------------
PROSPECTUS
---------------------
DATED MARCH 16, 2000
136,130 SHARES
SUPERGEN, INC.
COMMON STOCK
The selling stockholders of SuperGen, Inc. ("SuperGen," "we," or "the
Company") listed on page 16 may offer and resell up to 136,130 shares of
SuperGen, Inc. Common Stock under this Prospectus, for their own account. We
will not receive any proceeds from such sales. We issued these shares of our
common stock to the selling stockholders in private transactions.
Our common stock is listed on the Nasdaq National Market under the symbol
"SUPG". On March 14, 2000, the last reported sale price for the Common Stock on
the Nasdaq National Market was $54.125 per share.
SEE "RISK FACTORS" BEGINNING AT PAGE 5 TO READ ABOUT CERTAIN FACTORS YOU
SHOULD CONSIDER BEFORE BUYING SHARES OF THE COMMON STOCK.
------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY SECURITIES COMMISSION
HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The date of this Prospectus is March 16, 2000.
<PAGE>
SUMMARY
We are an emerging pharmaceutical company dedicated to the acquisition,
rapid development and commercialization of oncology therapies for solid tumors
and hematological malignancies. We seek to minimize the time, expense and
technical risk associated with drug commercialization by identifying and
acquiring pharmaceutical compounds in the later stages of development, rather
than committing significant resources to the research phase of drug discovery.
We intend to retain significant participation in the commercialization of our
proprietary products by funding and undertaking human clinical development
ourselves. We believe this will allow us to maximize the commercial value of our
products by either directly marketing our products or licensing them on more
favorable terms than would be available if licensed earlier in the development
cycle.
Our lead product candidate is rubitecan, an oral chemotherapy compound in
the camptothecin class which is in pivotal Phase III clinical trials for
pancreatic cancer, the fourth leading cause of death by cancer in the United
States. Rubitecan is a second-generation topoisomerase I inhibitor that causes
single-strand breaks in the DNA of rapidly dividing tumor cells. We believe that
rubitecan may have significant advantages over many existing anticancer drugs.
These advantages include increased survival, oral dosing and a superior side
effect profile. We believe that rubitecan is a platform drug for leadership in
the treatment of a broad array of solid tumors and hematological malignancies.
Results of a Phase II clinical trial conducted by the Stehlin Foundation for
Cancer Research using rubitecan for treatment of pancreatic cancer indicate a
favorable comparison with historical treatment options in terms of quality of
life, survival data and tumor size reduction. In this Phase II trial the median
survival in the 60 evaluable patients who took the required eight week course of
therapy was nearly nine months, significantly greater than the average survival
time of four to five months under other treatment methods.
We are evaluating rubitecan in three separate stand-alone pivotal Phase III
clinical trials for pancreatic cancer. The trials are randomized, unblinded
studies being conducted in approximately 200 centers and are designed to include
up to 1,800 patients. The primary endpoint of these trials is survival. We
commenced these trials in November 1998 and we have over 700 patients currently
enrolled. If any one of these trials is successful we anticipate filing a New
Drug Application with the U.S. Food and Drug Administration, or FDA, by early
2001.
We are aggressively pursuing additional Phase II and III trials using
rubitecan both as a single therapeutic agent and in combination with other
anticancer agents in both solid tumors and hematological malignancies. We intend
to make available to physicians copies of peer-reviewed medical journal articles
and other validated scientific information related to these trials. We believe
this will provide physicians with more up-to-date product information and will
better enable them to meet their patients' medical needs.
In December 1999 we entered into an alliance with Abbott Laboratories under
which Abbott will market and distribute rubitecan and invest in shares of our
common stock. We will co-promote rubitecan with Abbott in the United States and
Abbott has exclusive rights to market rubitecan outside of the United States. In
the U.S. market, we will share profits from product sales equally with Abbott.
Outside the U.S. market, Abbott will pay us royalties and transfer fees based on
product sales. We will remain responsible for pursuing and funding the clinical
development of rubitecan and obtaining regulatory approval for the product in
the United States, Canada and the member states of the European Union.
We will receive a number of equity investments and cash payments from Abbott
which, when aggregated, amount to approximately $150 million. Each equity
investment and cash payment is conditioned upon the achievement of certain
developmental and sales milestones. In January 2000 we received a $26.5 million
equity investment from Abbott. In addition, we granted Abbott an option to
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<PAGE>
purchase up to 49% of the outstanding shares of our common stock at an exercise
price of $85 per share which expires in March 2003.
We are also pursuing the clinical development of Nipent and decitabine for
the treatment of certain solid tumor cancers and hematological disorders. We
acquired Nipent from Warner-Lambert Company in 1996 and we are selling this drug
in the United States for the treatment of hairy cell leukemia, a type of
B-lymphocytic leukemia. We believe that Nipent has a unique mechanism of action
and Phase II trials indicate that it may have activity in a variety of other
hematologic cancers. In oncology, we are pursuing treatments for lymphatic
malignancies and disorders, such as cutaneous T-cell lymphoma, chronic
lymphocytic leukemia, non-Hodgkin's lymphoma and peripheral T-cell lymphoma. In
addition, Nipent has shown activity in various autoimmune diseases, including
graft-versus-host disease which is not responsive to standard therapies, and
rheumatoid arthritis. We estimate the United States markets for both
graft-versus-host disease and rheumatoid arthritis are larger than the market
for Nipent's leukemia applications. We are conducting Phase I clinical trials in
both of these indications.
Decitabine has been successful in multiple Phase II trials in the United
States and Europe for treating myelodysplastic syndromes, or MDS, chronic
myeloid leukemia and acute myeloid leukemia. Based on positive results from
these studies, we are finalizing the protocol for a randomized Phase III study
comparing decitabine to best supportive care for MDS. We expect to commence
patient enrollment for this study in 2000. In addition, preliminary results
suggest that decitabine has activity in solid tumors such as non-small cell lung
cancer. Phase I clinical trials with decitabine are underway for this
indication.
We incorporated in March 1991 as a California corporation and changed our
state of incorporation to Delaware in November 1997. Our executive offices are
located at Two Annabel Lane, Suite 220, San Ramon, California, 94583, and our
telephone number at that address is (925) 327-0200. We maintain a website on the
internet at WWW.SUPERGEN.COM. Our website, and the information contained
therein, is not a part of this prospectus.
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RISK FACTORS
YOU SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED BELOW, TOGETHER WITH ALL
OF THE OTHER INFORMATION INCLUDED IN OR INCORPORATED BY REFERENCE INTO THIS
PROSPECTUS, BEFORE MAKING AN INVESTMENT DECISION. THE RISKS AND UNCERTAINTIES
DESCRIBED BELOW ARE NOT THE ONLY ONES WE FACE. IF ANY OF THE FOLLOWING RISKS
ACTUALLY OCCUR, OUR BUSINESS COULD BE HARMED. IN SUCH CASE, THE TRADING PRICE OF
OUR COMMON STOCK COULD DECLINE, AND YOU MAY LOSE ALL OR PART OF YOUR INVESTMENT.
IF THE RESULTS OF FURTHER CLINICAL TESTING INDICATE THAT OUR PROPOSED PRODUCTS
ARE NOT SAFE AND EFFECTIVE FOR HUMAN USE, OUR BUSINESS WILL SUFFER.
Most of our products are in the development stage and prior to their sale
will require the commitment of substantial resources. All of the potential
proprietary products that we are currently developing will require extensive
preclinical and clinical testing before we can submit any application for
regulatory approval. Before obtaining regulatory approvals for the commercial
sale of any of our products, we must demonstrate through pre-clinical testing
and clinical trials that our product candidates are safe and effective in
humans. Conducting clinical trials is a lengthy, expensive and uncertain
process. Completion of clinical trials may take several years or more. The
length of time generally varies substantially according to the type, complexity,
novelty and intended use of the product candidate. Our clinical trials may be
suspended at any time if we or the FDA believe the patients participating in our
studies are exposed to unacceptable health risks. We may encounter problems in
our studies which will cause us or the FDA to delay or suspend the studies. Our
commencement and rate of completion of clinical trials may be delayed by many
factors, including:
- ineffectiveness of the study compound, or perceptions by physicians that
the compound is not effective for a particular indication;
- inability to manufacture sufficient quantities of compounds for use in
clinical trials;
- failure of the FDA to approve our clinical trial protocols;
- slower than expected rate of patient recruitment;
- inability to adequately follow patients after treatment;
- unforeseen safety issues;
- lack of efficacy during the clinical trials; or
- government or regulatory delays.
The clinical results we have obtained to date do not necessarily predict
that the results of further testing, including later-stage controlled human
clinical testing, will be successful. If our trials are not successful, or are
perceived as not successful by the FDA or physicians, our business, financial
condition and results of operations will be harmed.
IF WE FAIL TO OBTAIN REGULATORY MARKETING APPROVALS IN A TIMELY MANNER, OUR
BUSINESS WILL SUFFER.
Even if we believe our trials are successful, the FDA may require additional
clinical testing and, therefore we would have to commit additional unanticipated
resources. The FDA has substantial discretion in the drug approval process. We
cannot assure you that we will obtain the necessary regulatory approvals to
market our products. The FDA and comparable agencies in foreign countries impose
substantial requirements for the introduction of both new pharmaceutical
products and generic products through lengthy and detailed clinical testing
procedures, sampling activities and other costly and time-consuming compliance
procedures. We have not yet received marketing approval for any of our
internally developed proprietary products. Our proprietary drugs and products
will require lengthy clinical trials along with FDA and comparable foreign
agency review as new drugs. Our generic drugs will also require regulatory
review and approval.
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We cannot predict with certainty if or when we might submit for regulatory
review those products currently under development. Once we submit our potential
products for review, we cannot assure you that the FDA or other regulatory
agencies will grant approvals for any of our pharmaceutical products on a timely
basis or at all. Sales of our products outside the United States will be subject
to regulatory requirements governing clinical trials and marketing approval.
These requirements vary widely from country to country and could delay the
introduction of our products in those countries.
IF OUR RELATIONSHIP WITH ABBOTT IS NOT SUCCESSFUL, OUR BUSINESS COULD BE HARMED.
Our strategic relationship with Abbott is important to our success. However,
that relationship may not be successful. We cannot assure you that we will
receive any additional payments from Abbott or that the relationship will be
commercially successful. The transactions contemplated by our agreements with
Abbott, including the equity purchases and cash payments, are subject to
numerous risks and conditions. For example:
- we may fail to achieve clinical and sales milestones;
- rubitecan may fail to achieve regulatory approval domestically and
internationally;
- rubitecan may not be commercially successful;
- Abbott may fail to perform its obligations under our agreements, such as
failing to devote sufficient resources to marketing rubitecan; and
- our agreements with Abbott may be terminated in their entirety or on a
territory-by-territory basis against our will.
The occurrence of any of these events could severely harm our business.
WE HAVE GRANTED CERTAIN RIGHTS TO ABBOTT THAT COULD NEGATIVELY AFFECT YOUR
INVESTMENT.
We have granted Abbott an option to purchase shares of our common stock so
that upon its exercise Abbott will own up to 49% of our outstanding common
stock. Our ability to satisfy this contractual obligation is subject to a number
of conditions outside of our control, including:
- stockholder approval of an increase in the number of shares of our
authorized common stock;
- stockholder approval of a potential change in control under the rules of
the Nasdaq National Market; and
- clearance of the purchase by federal antitrust regulators.
If we do not satisfy any of these conditions, Abbott could terminate our
relationship. If we obtain all necessary approvals and Abbott exercises its
option, the stock ownership of our other stockholders will be diluted and Abbott
will have significant influence over us. Abbott's right to exercise this option,
and Abbott's share ownership after exercise, may discourage other parties from
acquiring us.
Abbott has a right of first discussion with respect to our product portfolio
and a right of first refusal to acquire us. These rights may discourage third
parties from bidding on any assets that we wish to sell or license and may
discourage acquisition bids. These provisions may limit the price that investors
might be willing to pay in the future for shares of our common stock.
WE HAVE A HISTORY OF OPERATING LOSSES AND AN ACCUMULATED DEFICIT, WE MAY NOT
ACHIEVE OR MAINTAIN PROFITABILITY IN THE FUTURE, AND WE MAY NEED TO OBTAIN
ADDITIONAL FUNDING.
We incurred cumulative losses of $92.9 million for the period from inception
through December 31, 1999. These losses included non-cash charges of
$18.4 million for the acquisition of in-process research and development.
Currently we are not profitable and we expect to continue to incur substantial
operating losses at least through 2000 and into 2001. Our ability to achieve
profitability will depend primarily on our ability to obtain regulatory approval
for and successfully commercialize rubitecan. Our success will also depend, to a
lesser extent, on our ability to develop and
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obtain regulatory approval of Nipent for indications other than hairy cell
leukemia and to bring our proprietary products to market. Our ability to become
profitable will also depend upon a variety of other factors, including the
following:
- increases in the level of our research and development, including the
timing and costs of any expansion of clinical trials;
- regulatory approvals of competing products, or expanded labeling approvals
of existing products;
- increases in sales and marketing expenses related to the commercial launch
of rubitecan;
- delays in or inadequate commercial sales of rubitecan, once regulatory
approvals have been received; and
- expenditures associated with acquiring products, technologies or companies
and further developing these assets.
We cannot predict the outcome of these factors and we cannot assure you that we
will ever become profitable.
Even if we do become profitable, we may need substantial additional funding.
We expect that our rate of spending will accelerate as a result of increased
clinical trial costs and expenses associated with regulatory approval and
commercialization of our products now in development. We anticipate that our
capital resources after this offering will be adequate to fund operations and
capital expenditures at least through 2001. However, if we experience
unanticipated cash requirements during this period, we could require additional
funds much sooner. Our business, results of operations and cash flows will be
adversely affected if we fail to obtain adequate funding in a timely manner, or
at all. We may receive funds from the sale of equity securities, or the exercise
of outstanding warrants and stock options. Additionally, we may receive funds
upon the achievement of certain developmental and sales milestones pursuant to
our agreement with Abbott. However, we cannot assure you that any of those
fundings will occur, or if they occur, that they will be on terms favorable to
us. Also, the dilutive effect of those fundings could adversely affect our
results per share.
WE HAVE LIMITED SALES AND MARKETING CAPABILITIES AND NO DISTRIBUTION
CAPABILITIES AND MAY NOT BE ABLE TO SUCCESSFULLY COMMERCIALIZE OUR PRODUCTS.
We currently have limited sales and marketing resources and no distribution
capability. Although we have 18 sales and marketing personnel focusing on the
sale of our products to hospitals and hospital buying groups, we anticipate
relying on third parties to sell and market some of our primary products. For
instance, we will co-promote the potential sale of rubitecan with Abbott.
However, we may not be able to enter into additional sales and marketing
arrangements with others on acceptable terms, if at all. If our arrangements
with third parties are not successful, or if we are unable to enter into
third-party arrangements, then we may need to substantially expand our sales and
marketing force. We may not succeed in enhancing our sales and marketing
capabilities or have sufficient resources to do so. If we do develop such
capabilities, we will compete with other companies that have experienced and
well-funded sales and marketing operations. We currently rely on third parties
to distribute our products and expect to continue to do so in the future. If we
fail to establish successful sales and marketing capabilities or fail to enter
into successful marketing arrangements with third parties, or if our third party
distributors fail to perform their obligations, our business, financial
condition and results of operations will be materially and adversely affected.
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IF WE FAIL TO COMPLY WITH THE GOVERNMENTAL REGULATIONS, OUR BUSINESS WILL
SUFFER.
All new drugs, including our products under development, are subject to
extensive and rigorous regulation by the FDA, and comparable agencies in state
and local jurisdictions and in foreign countries. These regulations govern,
among other things, the development, testing, manufacturing, labeling, storage,
premarket approval, advertising, promotion, sale and distribution of our
products. Satisfaction of these requirements typically takes several years and
the time needed to satisfy them may vary substantially, based on the type,
complexity and novelty of the pharmaceutical product. The effect of government
regulation may be to delay or to prevent marketing of our potential products for
a considerable period of time and to impose costly procedures upon our
activities. If regulatory approval of our products is granted, such approval may
impose limitations on the indicated uses for which our products may be marketed.
Further, even if regulatory approval is obtained for a product, later discovery
of previously unknown problems may result in restrictions of the product,
including withdrawal of the product from the market.
Among the conditions for FDA approval of all of our products in development
is the requirement that the manufacturer's (at either our facilities or those of
a third party manufacturer) quality control and manufacturing procedures conform
to current Good Manufacturing Practices, or GMPs, which must be followed at all
times. The FDA and foreign regulatory authorities strictly enforce GMP
requirements through periodic unannounced inspections. We cannot assure you that
the FDA will determine that our facilities and manufacturing procedures or any
third party manufacturer of our products will conform to GMP requirements.
Additionally, we or our third party manufacturer must pass a preapproval
inspection before we can obtain marketing approval for any of our products in
development. Failure to comply with applicable FDA and other regulatory
requirements can result in sanctions being imposed on us or the manufacturers of
our products including warning letters, product recalls or seizures,
injunctions, refusals to permit products to be imported into or exported out of
the United States, refusals of the FDA to grant premarket approval or to allow
us to enter into government supply contracts, withdrawals of previsouly approved
marketing applications, civil fines and criminal prosecutions.
The FDA's policies may change and additional government regulations may be
promolgated which could prevent or delay regulatory approval of our products. We
cannot predict the likelihood of adverse governmental regulation which may arise
from future legislative or administrative action, either in the United States or
abroad.
IF WE FAIL TO COMPETE EFFECTIVELY, PARTICULARLY AGAINST LARGER, MORE ESTABLISHED
PHARMACEUTICAL COMPANIES WITH GREATER RESOURCES, OUR BUSINESS WILL SUFFER.
Factors affecting competition in the pharmaceutical industry vary depending
on the extent to which the competitor is able to achieve a competitive advantage
based on proprietary technology. These factors include financial resources,
research and development capabilities, and manufacturing and marketing
experience and resources. If we are able to establish and maintain a significant
proprietary position with respect to our proprietary products, competition will
likely depend primarily on the effectiveness of our products, their acceptance
in the marketplace and their pricing and the number, gravity and severity of
their unwanted side effects as compared to alternative products.
Our competitors have substantially greater financial, research and
development, manufacturing and marketing experience and resources than we do and
represent substantial long-term competition for us. These competitors and
probable competitors include established companies such as Eli Lilly & Co.,
Ortho-McNeil Pharmaceutical, Amgen Inc., Bristol-Myers Squibb Company and
Immunex Corp. If these companies succeed in developing pharmaceutical products
that are more effective or less costly than any that we may develop or market,
our business will suffer.
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THE PATENTS ON THE COMPOUNDS FOR WHICH WE ARE DEVELOPING GENERIC AND EXTRA
PRODUCTS ARE HELD BY THIRD PARTIES. IF THESE PATENTS ARE EXPANDED IN SCOPE OR DO
NOT EXPIRE WHEN ANTICIPATED, OUR BUSINESS COULD SUFFER.
We plan to develop and market several generic and Extra drugs based on
existing compounds, some of which are currently protected by one or more patents
held by others. If the existing patent protection for these drugs is maintained
or expanded, it is unlikely that we will be able to market our own generic and
Extra versions of those drugs without obtaining a license from the patent owner,
which may not be available on commercially acceptable terms, or at all.
WE DEPEND ON THIRD PARTIES FOR MANUFACTURING AND STORAGE OF OUR PRODUCTS AND OUR
BUSINESS MAY BE HARMED IF THE MANUFACTURE OF OUR PRODUCTS IS INTERRUPTED OR
DISCONTINUED.
We have no manufacturing facilities and we currently rely on third parties
for manufacturing activities related to all of our products. As we develop new
products and increase sales of our existing products, we must establish and
maintain relationships with manufacturers to produce and package sufficient
supplies of our finished pharmaceutical products, including rubitecan.
Our manufacturing strategy presents the following risks:
- delays in scale-up to quantities needed for multiple clinical trials could
delay clinical trials, regulatory submissions and commercialization of our
products in development;
- our current and future manufacturers are subject to ongoing periodic
unannounced inspection by the FDA and corresponding state agencies for
compliance with strictly enforced GMP regulations and similar foreign
standards, and we do not have control over our third-party manufacturers'
compliance with these regulations and standards;
- if we need to change to other commercial manufacturing contractors, the
FDA and comparable foreign regulators must approve these contractors prior
to our use. This would require new testing and compliance inspections. The
new manufacturers would have to be educated in, or themselves develop
substantially equivalent processes necessary for, the production of our
products. In addition, the FDA and comparable foreign regulators would
need to approve the new manufacturers;
- if market demand for our products increases suddenly, our current
manufacturers might not be able to fulfill our commercial needs, which
would require us to seek new manufacturing arrangements and may result in
substantial delays in meeting market demand; and
- we may not have intellectual property rights, or may have to share
intellecual rights, to any improvements in the manufacturing processes or
new manufacturing processes for our products.
Any of these factors could delay clinical trials or commercialization of our
products under development, interfere with current sales, entail higher costs
and result in our being unable to effectively sell our products.
In addition, we store the majority of the unpurified, bulk form of Nipent at
a single location. Improper storage, fire, natural disaster, theft or other
conditions at this location that may lead to the loss or destruction of the bulk
concentrate could adversely affect our business, results of operations and cash
flows. We are currently negotiating a long-term agreement with the vendor that
purifies our current supply of crude concentrate to continue its purification
services. However, we cannot assure you that we will be able to finalize the
agreement. If we are not able to do so, our supply of Nipent may be interrupted
while we seek to locate another facility and have that facility approved by the
FDA. The delay could adversely affect our business, results of operations and
cash flows.
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We do not currently intend to manufacture any pharmaceutical products,
although we may choose to do so in the future. If we decide to manufacture
products, we would be subject to the regulatory risks and requirements described
above. We will also be subject to similar risks regarding delays or difficulties
encountered in manufacturing these pharmaceutical products and we will require
additional facilities and substantial additional capital. In addition, we have
only limited experience in manufacturing pharmaceutical products. We cannot
assure you that we would be able to manufacture any of these products
successfully in accordance with regulatory requirements and in a cost-effective
manner.
ASSERTING, DEFENDING AND MAINTAINING INTELLECTUAL PROPERTY RIGHTS COULD BE
DIFFICULT AND COSTLY AND FAILURE TO DO SO WILL HARM OUR ABILITY TO COMPETE AND
THE RESULTS OF OUR OPERATIONS.
If competitors develop substantially equivalent proprietary information and
techniques or otherwise gain access to our trade secrets, if our trade secrets
are disclosed or if we cannot effectively protect our rights to unpatented trade
secrets, our business will be harmed.
The pharmaceutical fields are characterized by a large number of patent
filings. A substantial number of patents have already been issued to other
pharmaceutical companies, research or academic institutions or others.
Competitors may have filed applications for or have been issued patents and may
obtain additional patents and proprietary rights related to products or
processes that compete with or are similar to ours. We may not be aware of all
of the patents potentially adverse to our interests that may have been issued to
others.
We actively seek patent protection for our proprietary products and
technologies. We have a number of United States patents and also have licenses
to, or assignments of, numerous patents issued both in the United States and
elsewhere. We may also license our patents outside the United States.
Limitations on patent protection outside the United States, and differences in
what constitutes patentable subject matter in countries outside the United
States, may limit the protection we have on patents or licenses of patents
outside the United States.
Litigation may be necessary to protect our patent position, and we cannot be
certain that we will have the required resources to pursue the necessary
litigation or otherwise to protect our patent rights. Our efforts to protect our
patents may fail. In addition to pursuing patent protection in appropriate
cases, we also rely on trade secret protection for unpatented proprietary
technology. However, trade secrets are difficult to protect. Our trade secrets
or those of our collaborators may become known or may be independently
discovered by others.
Our proprietary products are dependent upon compliance with numerous
licenses and agreements. These licenses and agreements require us to make
royalty and other payments, reasonably exploit the underlying technology of the
applicable patents, and comply with regulatory filings. If we fail to comply
with these licenses and agreements, we could lose the underlying rights to one
or more of these potential products, which would adversely affect our business,
results of operations and cash flows.
From time to time we receive correspondence inviting us to license patents
from third parties. Although we know of no pending patent infringement suits,
discussions regarding possible patent infringements or threats of patent
infringement litigation either related to patents held by us or our licensors or
our products or proposed products, there has been, and we believe that there
will continue to be, significant litigation in the pharmaceutical industry
regarding patent and other intellectual property rights. Claims may be brought
against us in the future based on patents held by others. These persons could
bring legal actions against us claiming damages and seeking to enjoin clinical
testing, manufacturing and marketing of the affected product. If we become
involved in any litigation, it could consume a substantial portion of our
resources, regardless of the outcome of the litigation. If any of these actions
are successful, in addition to any potential liability for damages, we could be
required to obtain a license to continue to manufacture or market the affected
product. We cannot assure you whether we would prevail in any of these actions
or that we could obtain any licenses required under any of these patents on
acceptable terms, if at all.
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IF WE LOSE KEY PERSONNEL OR ARE UNABLE TO ATTRACT AND RETAIN ADDITIONAL, HIGHLY
SKILLED PERSONNEL REQUIRED FOR THE EXPANSION OF OUR ACTIVITIES, OUR BUSINESS
WILL SUFFER.
Our success is dependent on key personnel, including Dr. Rubinfeld, our
President and Chief Executive Officer, and members of our senior management and
scientific staff. To successfully expand our operations, we will need to attract
and retain additional, highly skilled individuals, particularly in the areas of
sales, marketing, clinical administration, manufacturing and finance. We compete
with other companies for the services of existing and potential employees. We
believe our compensation and benefits packages are competitive for our
geographical region and our industry group. However, we may be at a disadvantage
to the extent that potential employees may favor larger, more established
employers.
THE CONTINUING EFFORTS OF GOVERNMENT AND THIRD-PARTY PAYERS TO CONTAIN OR REDUCE
THE COSTS OF HEALTHCARE MAY ADVERSELY AFFECT OUR REVENUES AND PROFITABILITY.
Our revenues and profitability may be affected by the continuing efforts of
governmental and third-party payers to contain or reduce the costs of health
care. We cannot predict the effect that these health care reforms may have on
our business, and it is possible that any of these reforms will adversely affect
our business. In addition, in both the United States and elsewhere, sales of
prescription pharmaceuticals are dependent in part on the availability of
reimbursement to the consumer from third-party payers, like government and
private insurance plans. Third-party payers are increasingly challenging the
prices charged for medical products and services. If our current and proposed
products are not considered cost-effective, reimbursement to the consumer may
not be available or be sufficient to allow us to sell products on a competitive
basis.
WE MAY BE SUBJECT TO PRODUCT LIABILITY LAWSUITS AND OUR INSURANCE MAY BE
INADEQUATE TO COVER DAMAGES.
Clinical trials or marketing of any of our current and potential products
may expose us to liability claims from the use of these products. We currently
carry product liability insurance. However, we cannot be certain that we will be
able to maintain insurance on acceptable terms for clinical and commercial
activities or that the insurance would be sufficient to cover any potential
product liability claim or recall. If we fail to have sufficient coverage, our
business, results of operations and cash flows could be adversely affected.
IF WE ARE UNABLE TO COMPLY WITH ENVIRONMENTAL LAWS AND REGULATIONS, OUR BUSINESS
MAY BE HARMED.
We are subject to federal, state and local laws and regulations governing
the use, manufacture, storage, handling and disposal of hazardous materials and
waste products. We currently maintain a supply of several hazardous materials at
our facilities. In the event of an accident, we could be held liable for any
damages that result, and the liability could exceed our resources. While we
currently outsource our research and development programs involving the
controlled use of biohazardous materials, if in the future we conduct these
programs, we might be required to incur significant cost to comply with
environmental laws and regulations.
THE REDEMPTION OF OUR OUTSTANDING PUBLIC WARRANTS MAY CAUSE THE PRICE OF OUR
COMMON STOCK TO FALL AND MAY RESULT IN DILUTION.
On September 20, 1999, we issued a notice of redemption of warrants for the
purchase of shares of our common stock that we issued in connection with our
initial public offering. These warrants enable the holder to purchase shares of
our common stock at a price of $9.00 per share. As of January 31, 2000, there
were 3,062,452 of such warrants outstanding. We will redeem the warrants that
are outstanding as of April 16, 2000 at a price of $0.25 per share. We expect
that holders of the
10
<PAGE>
warrants will choose to exercise these warrants rather than have them redeemed
if the price of our common stock trades above $9.00 per share during the period
immediately preceding April 16, 2000. If these holders elect to sell the common
stock issued upon exercise of the warrants, the price of our common stock may
fall.
Our issuance of common stock at a price of $9.00 per share may result in
dilution to other holders of common stock and may cause the price of our common
stock to fall. In addition, if the price of our common stock for the 30 day
trading period following April 16, 2000 is less than $19.46, or in some cases
$17.56, we may be required to issue additional shares of common stock to
investors that bought our common stock in privately negotiated transactions in
September 1999. Any such issuance would have a dilutive effect on holders of our
common stock.
ANTI-TAKEOVER PROVISIONS MAY PREVENT YOU FROM REALIZING A PREMIUM RETURN.
Anti-takeover provisions of our certificate of incorporation and bylaws make
it more difficult for a third party to acquire us, even if doing so would be
beneficial to our stockholders. These provisions include:
- authorization of the issuance of up to 2,000,000 shares of our preferred
stock;
- elimination of cumulative voting; and
- elimination of stockholder action by written consent.
Our bylaws establish procedures, including notice procedures, with regard to
the nomination, other than by or at the direction of our board of directors, of
candidates for election as directors or for stockholder proposals to be
submitted at stockholder meetings.
We are also subject to Section 203 of the Delaware General Corporation Law,
an anti-takeover provision. In general, Section 203 of the Delaware General
Corporation Law prevents a stockholder owning 15% or more of a corporation's
outstanding voting stock from engaging in business combinations with a Delaware
corporation for three years following the date the stockholder acquired 15% or
more of a corporation's outstanding voting stock. This restriction is subject to
exceptions, including the approval of the board of directors and of the holders
of at least two-thirds of the outstanding shares of voting stock not owned by
the interested stockholder.
These provisions are expected to discourage different types of coercive
takeover practices and inadequate takeover bids and to encourage persons seeking
to acquire control of our company to first negotiate with us.
We believe that the benefits of increased protection of our potential
ability to negotiate with the proponents of unfriendly or unsolicited proposals
to acquire or restructure us outweigh the disadvantages of discouraging those
proposals because, among other things, negotiation of those proposals could
result in an improvement of their terms.
BECAUSE CURRENT OFFICERS, DIRECTORS, AND ABBOTT OWN A LARGE PERCENTAGE OF OUR
STOCK, THESE STOCKHOLDERS MAY BE ABLE TO CONTROL US AND ALSO PREVENT POTENTIALLY
BENEFICIAL ACQUISITIONS OF OUR COMPANY BY OTHERS.
As of January 31, 2000, our officers, directors, Abbott and their affiliates
owned approximately 20% of the outstanding shares of our common stock, not
including stock issuable upon exercise of options or warrants. If these
stockholders were to exercise all of their options and warrants, they would
collectively own a majority of our common stock. These stockholders, if acting
together, may be able to influence the election of our directors and other
matters requiring approval by our stockholders. This concentration of ownership
may also delay or prevent a third party from acquiring us. These stockholders
may have interests that differ from our other stockholders, particularly in the
context of
11
<PAGE>
potentially beneficial acquisitions of our company by others. For example, to
the extent that these stockholders are our employees, they may be less inclined
to vote for acquisitions of our company by others involving the termination of
their employment or diminution of their responsibilities or compensation.
THE TRADING PRICE OF OUR COMMON STOCK HAS BEEN VOLATILE AND MAY FLUCTUATE DUE TO
FACTORS BEYOND OUR CONTROL.
The trading price of our common stock is subject to significant fluctuations
in response to numerous factors, including:
- variations in anticipated or actual results of operations;
- announcements of new products or technological innovations by competitors;
- FDA approval or rejection of pending applications and regulatory
enforcement actions;
- changes in earnings estimates of operational results by analysts; and
- results of clinical trials.
Moreover, the stock market from time to time has experienced extreme price and
volume fluctuations, which have particularly affected the market prices for
emerging growth companies and which have often been unrelated to the operating
performance of these companies. These broad market fluctuations may adversely
affect the market price of our common stock. During the past two years from the
date of this prospectus, the market price per share of our common stock has
fluctuated between approximately $5 and $77.
12
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. Our filings are available to the public over the
internet at the SEC's web site at http://www.sec.gov. You may also read and copy
any document we file at the SEC's Public Reference Rooms in Washington, D.C.,
New York, New York and Chicago, Illinois. The Public Reference Room in
Washington D.C. is located at 450 Fifth Street, N.W. Please call the SEC at
1-800-SEC-0330 for further information on the Public Reference Rooms.
The SEC allows us to "incorporate by reference" the information we file with
it, which means that we can disclose important information to you by referring
you to those documents. The information incorporated by reference is an
important part of this prospectus, and information that we file later with the
SEC will automatically update and supersede this information. We incorporate by
reference the documents listed below and any future filings made with the SEC
under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934
until the selling stockholders listed on page 16 sell all of our common stock
registered under this prospectus:
- Annual Report on Form 10-K for the fiscal year ended December 31, 1999.
- Current Report on From 8-K filed on December 23, 1999 as amended on
January 7, 2000 and March 16, 2000.
- The description of our common stock contained in our registration
statement on Form 8-A, filed on January 18, 1996, including any amendment
or report filed for the purpose of updating the description.
- All other reports filed in accordance with Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 since December 31, 1999.
This Prospectus is part of a registration statement on Form S-3 filed with
the SEC under the Securities Act of 1933. This prospectus does not contain all
of the information set forth in the registration statement. You should read the
registration statement for further information about SuperGen and our common
stock. You may request a copy of these filings at no cost. Please direct your
requests to:
SuperGen, Inc.
Two Annabel Lane, Suite 220
San Ramon, California 94583
Attn: Investor Relations
(925)327-0200
You should rely only on the information incorporated by reference or
provided in this Prospectus or any Prospectus Supplement. We have not authorized
anyone else to provide you with different information. You should not assume
that the information in this Prospectus or any Prospectus Supplement is accurate
as of any date other than the date on the front page of those documents.
13
<PAGE>
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Forward-looking statements deal with our
current plans, intentions, beliefs and expectations and statements of future
economic performance. Statements containing terms such as "believes," "does not
believe," "plans," "expects," "intends," "estimates," "anticipates" and other
phrases of similar meaning are considered to contain uncertainty and are
forward-looking statements.
Forward looking statements involve known and unknown risks and uncertainties
which may cause our actual results in future periods to differ materially from
what is currently anticipated. We make cautionary statements in certain sections
of this Prospectus, including under "Risk Factors." You should read these
cautionary statements as being applicable to all related forward-looking
statements wherever they appear in:
- this Prospectus, in the materials referred to in this Prospectus;
- in the materials incorporated by reference into this Prospectus;
- in our press releases.
No forward-looking statement is a guarantee of future performance and you
should not place undue reliance on any forward-looking statement.
14
<PAGE>
USE OF PROCEEDS
We will not receive any proceeds from the sale of the common stock by the
selling stockholders.
DIVIDEND POLICY
We have not declared or paid cash dividends on our common stock. We
currently intend to retain all future earnings to fund the operation of our
business and, therefore, we do not anticipate paying dividends in the
foreseeable future. Future cash dividends, if any, will be determined by our
board of directors.
SELLING STOCKHOLDERS
The following table sets forth information for each selling stockholder, as
of March 15, 2000:
- The name of the selling stockholder;
- The number of shares and the percentage the selling stockholder
beneficially owns before this offering;
- How many shares of common stock the selling stockholder may resell under
this Prospectus; and
- Assuming the selling stockholder sells all the shares listed next to its
name, how many shares of common stock and the percentage the selling
stockholder will beneficially own after completion of the offering.
Beneficial ownership is determined in accordance with rules promulgated by
the SEC, and the information is not necessarily indicative of beneficial
ownership for any other purpose. The following table is based upon information
supplied to us by officers, directors and principal stockholders. Except as
otherwise indicated, we believe that the persons or entities named in the
following table have sole voting and investment power with respect to all shares
of the common stock shown as beneficially owned by them, subject to community
property laws where applicable.
In order to prevent dilution to the selling stockholders, the following
numbers may change because of (1) stock splits, (2) stock dividends or
(3) similar events involving our common stock.
The selling stockholders currently hold unregistered shares of our common
stock and/or warrants for the purchase of common stock. We agreed to register
136,130 shares of our common stock for resale by the selling stockholders. The
136,130 shares of our common stock being offered by the selling stockholders
were acquired from us in connection with private placement transactions pursuant
to a Subscription Agreement dated as of December 1, 1999 and two Research
Agreements dated November 15, 1999. The selling stockholders represented to us
that they would acquire those shares for investment and with no present
intention of distributing any such shares except pursuant to this Prospectus or
sales exempt from the registration requirements of the Securities Act of 1933.
Pursuant to our obligation under a Registration Rights Agreement dated as of
December 15, 1999 and two Research Agreements dated November 15, 1999, we filed
with the SEC under the Securities Act of 1933 a Registration Statement, of which
this Prospectus forms a part, with respect to the resale of such shares from
time to time on the Nasdaq National Market or in privately-negotiated
transactions.
Dr. Denis Burger is the President of AVI and a member of our Board of
Directors. Due to Dr. Burger's ability to vote and make investment decisions
related to the common stock owned by AVI, he is deemed to have a beneficial
ownership position in the common stock owned by AVI.
Other than the aforementioned relationship with Dr. Burger, the selling
stockholders have not held any positions or offices or had material
relationships with us or any of our affiliates within the past
15
<PAGE>
three years other than as a result of the ownership of our common stock. We may
amend or supplement this Prospectus from time to time to update the disclosure
set forth herein.
The following table shows information known to us about the beneficial
ownership of our common stock as of March 15, 2000, and as adjusted to reflect
the sale of common stock offered hereby by each selling stockholder known by us
to own beneficially the common stock.
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK SHARES OF COMMON STOCK
BENEFICIALLY OWNED TO BE BENEFICIALLY OWNED
BEFORE OFFER AFTER OFFERING
UNDER THIS PROSPECTUS UNDER THIS PROSPECTUS(1)
----------------------- SHARES TO BE -------------------------
NAME NUMBER PERCENTAGE OFFERED NUMBER PERCENTAGE
- ---- ---------- ---------- ------------ ----------- -----------
<S> <C> <C> <C> <C> <C>
AVI BioPharma, Inc.(2)................... 100,000 *% 100,000 0 0%
Clayton Foundation for Research.......... 36,130 *% 36,130 0 0%
</TABLE>
- ------------------------
* REPRESENTS LESS THAN 1% OF THE OUTSTANDING COMMON STOCK OF THE COMPANY
(1) Assumes the selling stockholders sell all of their shares offered hereby to
unaffiliated third parties pursuant to this Prospectus. The selling
stockholders may sell all or part of their shares.
(2) Dr. Burger has a beneficial ownership position due to his position as
President of AVI BioPharma, Inc.
16
<PAGE>
PLAN OF DISTRIBUTION
We will not receive any proceeds from the sale of the shares. The shares are
being offered on behalf of the selling stockholders. The shares may be sold or
distributed from time to time by the selling stockholders, or by pledgees,
donees or transferees of, or other successors in interest to, the selling
stockholders, directly to one or more purchasers (including pledgees) or through
brokers, dealers or underwriters who may act solely as agents or may acquire
shares as principals, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices, at negotiated prices, or at fixed
prices, which may be changed.
The sale of the shares may be effected in one or more of the following
methods:
- ordinary brokers' transactions, which may include long or short sales;
- transactions involving cross or block trades or otherwise on the Nasdaq
National Stock Market;
- purchases by brokers, dealers or underwriters as principal and resale by
such purchasers for their own accounts pursuant to this prospectus;
- "at the market" to or through market makers or into an existing market for
the shares;
- in other ways not involving market makers or established trading markets,
including direct sales to purchases or sales effected through agents;
- through transactions in options, swaps or other derivatives (whether
exchange-listed or otherwise); or
- any combination of the foregoing, or by any other legally available means.
In addition, the selling stockholders or their successors in interest may
enter into hedging transactions with broker-dealers who may engage in short
sales of shares in the course of hedging the positions they assume with the
selling stockholders. The selling stockholders or their successors in interest
may also enter into option or other transactions with broker-dealers that
require the delivery by such broker-dealers of the shares, which shares may be
resold thereafter pursuant to this prospectus.
Brokers, dealers, underwriters or agents participating in the distribution
of the shares as agents may receive compensation in the form of commissions,
discounts or concessions from the selling stockholders and/or purchasers of the
shares for whom such broker-dealers may act as agent, or to whom they may sell
as principal, or both (which compensation as to a particular broker-dealer may
be less than or in excess of customary commissions). The selling stockholders
and any broker-dealers who act in connection with the sale of shares hereunder
may be deemed to be "Underwriters" within the meaning of the Securities Act, and
any commissions they receive and proceeds of any sale of shares may be deemed to
be underwriting discounts and commissions under the securities act. Neither
SuperGen nor any selling stockholder can presently estimate the amount of such
compensation. SuperGen knows of no existing arrangements between any selling
stockholder, any other stockholder, broker, dealer, underwriter or agent
relating to the sale or distribution of the shares.
LEGAL MATTERS
The validity of the issuance of common stock will be passed upon for us by
Wilson Sonsini Goodrich & Rosati, P.C., Palo Alto, California.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements included in our Annual Report on Form 10-K for the year
ended December 31, 1999, as set forth in their report, which is incorporated by
reference in this prospectus and elsewhere in the registration statement. Our
financial statements are incorporated by reference in reliance on Ernst & Young
LLP's report, given on their authority as experts in accounting and auditing.
17
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON IS AUTHORIZED TO GIVE ANY INFORMATION
OR TO REPRESENT ANYTHING NOT CONTAINED IN THIS PROSPECTUS. YOU MUST NOT RELY ON
ANY UNAUTHORIZED INFORMATION OR REPRESENTATIONS. THIS PROSPECTUS IS AN OFFER TO
SELL ONLY THE SHARES OFFERED HEREBY, BUT ONLY UNDER CIRCUMSTANCES AND IN
JURISDICTIONS WHERE IT IS LAWFUL TO DO SO. THE INFORMATION CONTAINED IN THIS
PROSPECTUS IS CURRENT ONLY AS OF ITS DATE.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
--------
<S> <C>
Summary............................... 2
Risk Factors.......................... 4
Where You Can Find More Information... 13
Note Regarding Forward-Looking
Statements.......................... 14
Use of Proceeds....................... 15
Dividend Policy....................... 15
Selling Stockholders.................. 15
Plan Of Distribution.................. 17
Legal Matters......................... 17
Experts............................... 17
</TABLE>
136,130 SHARES
SUPERGEN, INC.
COMMON STOCK
---------------------
PROSPECTUS
---------------------
MARCH 16, 2000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The Registrant will pay all reasonable expenses incident to the registration
of the shares other than any commissions and discounts of underwriters, dealers
or agents. Such expenses are set forth in the following table. All of the
amounts shown are estimates except the SEC registration fee.
<TABLE>
<CAPTION>
AMOUNT TO BE PAID
-----------------
<S> <C>
SEC registration fee........................................ $ 1,175
Legal fees and expenses..................................... 10,000
Accounting fees and expense................................. 7,500
-------
Total....................................................... $18,675
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation's Law authorizes a
corporation to indemnify its directors, officers, employees or other agents in
terms sufficiently broad to permit indemnification (including reimbursement for
expenses incurred) under certain circumstances for liabilities arising under the
Securities Act. The Registrant's Certificate of Incorporation (Exhibit 3.1
hereto) and Bylaws (Exhibit 3.2 hereto) provide indemnification of its directors
and officers to the maximum extent permitted by the Delaware General Corporation
Law. In addition, the Registrant has entered into Indemnification Agreements
with its directors and officers.
Under the Registration Rights Agreement (Exhibits 4.1 hereto), the
Registrant has agreed to indemnify the selling stockholders and persons
controlling the selling stockholders against certain liabilities, including
liabilities under the Securities Act of 1933, and the selling stockholders have
agreed to indemnify the Registrant, its directors, its officers and certain
control and related persons against certain liabilities, including liabilities
under the Securities Act of 1933.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- --------------------- ------------------------------------------------------------
<C> <S>
3.1(a) Certificate of Incorporation of the Registrant
3.2(b) Bylaws, as amended, of the Registrant
4.1(c) Registration Rights Agreement dated December 15, 1999
between the Registrant and AVI BioPharma, Inc.
4.2(c) Subscription Agreement dated December 1, 1999 between the
Registrant and AVI BioPharma, Inc.
4.3* (c) Research Agreement (Camptothecin) dated November 15, 1999
between the Registrant and Clayton Foundation for
Research.
4.4* (c) Research Agreement (Paclitaxel) dated November 15, 1999
between the Registrant and Clayton Foundation for
Research.
4.5* License Agreement (Camptothecin) dated November 15, 1999
between the Registrant and Research Development
Foundation.
4.6* License Agreement (Paclitaxel) dated November 15, 1999
between the Registrant and Research Development
Foundation.
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
- --------------------- ------------------------------------------------------------
<C> <S>
5.1(c) Opinion of Wilson Sonsini Goodrich & Rosati, P.C.
23.1 Consent of Ernst & Young LLP, Independent Auditors
23.4(c) Consent of Counsel (included in Exhibit 5.1)
24.1(c) Power of Attorney (included on page II-4)
</TABLE>
- ------------------------
(a) Incorporated by reference from the Registrant's Proxy Statement filed with
the Securities and Exchange Commission on April 25, 1997.
(b) Incorporated by reference from the Registrant's Report on Form 10-K filed
with the Securities and Exchange Commission on March 19, 1998.
(c) Previously filed.
* Confidential treatment has been requested. Omitted information has been
separately filed with the Securities and Exchange Commission.
ITEM 17. UNDERTAKINGS.
SuperGen hereby undertakes:
1. To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(a) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(b) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;
(c) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement; provided,
however, that paragraphs (a) and (b) above do not apply if the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by us pursuant to Section 13 or Section
15(d) of the Exchange Act that are incorporated by reference in the
Registration Statement.
2. That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
3. To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
4. That, for the purpose of determining any liability under the Securities
Act, each filing of our annual report pursuant to Section 13(a) or
Section 15(d) of the Exchange Act, (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the Exchange
Act) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
5. To deliver or cause to be delivered with the prospectus, to each person
to whom the prospectus is sent or given, the latest annual report to security
holders that is incorporated by reference in the
II-2
<PAGE>
prospectus and furnished pursuant to and meeting the requirements of Rule 14a-3
or Rule 14c-3 under the Exchange Act; and, where interim financial information
required to be presented by Article 3 of Regulation S-X are not set forth in the
prospectus, to deliver, or cause to be delivered to each person to whom the
prospectus is sent or given, the latest quarterly report that is specifically
incorporated by reference in the prospectus to provide such interim financial
information.
6. Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of SuperGen
pursuant to the foregoing provisions, or otherwise, SuperGen has been advised
that in the opinion of the SEC such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by SuperGen of expenses incurred or paid by a director, officer, or
controlling person of SuperGen in the successful defense of any action, suit, or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, SuperGen will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of San Ramon, state of California, on March 16, 2000.
<TABLE>
<S> <C> <C>
SUPERGEN, INC.
By: /s/ JOSEPH RUBINFELD
-----------------------------------------
Joseph Rubinfeld, Ph.D.
CHIEF EXECUTIVE OFFICER,
PRESIDENT AND DIRECTOR
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ JOSEPH RUBINFELD
------------------------------- Chief Executive Officer, President and March 16, 2000
Joseph Rubinfeld Director (Principal Executive Officer)
/s/ RONALD H. SPAIR
------------------------------- Chief Financial Officer (Principal March 16, 2000
Ronald H. Spair Financial and Accounting Officer)
*
------------------------------- Director March 16, 2000
Denis Burger
------------------------------- Director
Lawrence J. Ellison
*
------------------------------- Director March 16, 2000
Julius A. Vida
*
------------------------------- Director March 16, 2000
Daniel Zurr
------------------------------- Director
Walter J. Lack
</TABLE>
<TABLE>
<S> <C> <C> <C>
*By: /s/ RONALD H. SPAIR
--------------------------------------
Ronald H. Spair
ATTORNEY-IN-FACT
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- --------------------- ------------------------------------------------------------
<C> <S>
3.1(a) Certificate of Incorporation of the Registrant
3.2(b) Bylaws, as amended, of the Registrant
4.1(c) Registration Rights Agreement dated December 15, 1999
between the Registrant and AVI BioPharma, Inc.
4.2(c) Subscription Agreement dated December 1, 1999 between the
Registrant and AVI BioPharma, Inc.
4.3* (c) Research Agreement (Camptothecin) dated November 15, 1999
between the Registrant and Clayton Foundation for
Research.
4.4* (c) Research Agreement (Paclitaxel) dated November 15, 1999
between the Registrant and Clayton Foundation for
Research.
4.5* License Agreement (Camptothecin) dated November 15, 1999
between the Registrant and Research Development
Foundation.
4.6* License Agreement (Paclitaxel) dated November 15, 1999
between the Registrant and Research Development
Foundation.
5.1(c) Opinion of Wilson Sonsini Goodrich & Rosati, P.C.
23.1 Consent of Ernst & Young LLP, Independent Auditors
23.4(c) Consent of Counsel (included in Exhibit 5.1)
24.1(c) Power of Attorney (included on page II-4)
</TABLE>
- ------------------------
(a) Incorporated by reference from the Registrant's Proxy Statement filed with
the Securities and Exchange Commission on April 25, 1997.
(b) Incorporated by reference from the Registrant's Report on Form 10-K filed
with the Securities and Exchange Commission on March 19, 1998.
(c) Previously filed.
* Confidential treatment has been requested. Omitted information has been
separately filed with the Securities and Exchange Commission.
II-5
<PAGE>
CONFIDENTIAL TREATMENT REQUEST
* Portions denoted with an asterisk have been omitted and filed separately with
the Securities and Exchange Commission pursuant to a request for confidential
treatment.
EXHIBIT 4.5
LICENSE AGREEMENT (CAMPTOTHECIN)
BETWEEN
RESEARCH DEVELOPMENT FOUNDATION
AND
SUPERGEN, INC.
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TABLE OF CONTENTS
<TABLE>
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PAGE
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ARTICLE I Definitions.............................................................................................2
ARTICLE II Grant of License.......................................................................................5
Scope of License.........................................................................................5
Right to Sublicense......................................................................................6
Reference and Review.....................................................................................6
ARTICLE III Patents and Improvements..............................................................................6
Patent Applications......................................................................................6
Patent Prosecution.......................................................................................6
Licensor Improvements....................................................................................7
Licensee Improvements; Reporting.........................................................................7
Licensee Improvements; Ownership.........................................................................7
Assistance...............................................................................................8
Improvements; Prosecution by Licensee....................................................................8
Inclusions...............................................................................................8
ARTICLE IV Royalties and Other Consideration......................................................................9
License Fee..............................................................................................9
Royalty.................................................................................................10
Term of Royalty Obligation..............................................................................10
Sublicenses.............................................................................................11
Deductions From Royalty Payments; Limitation on Deductions from Royalty Payments........................11
Milestone Payments......................................................................................12
Marketing Arrangements..................................................................................12
Conditions..............................................................................................12
ARTICLE V Payment and Reports....................................................................................13
Notice of Commercial Sale...............................................................................13
Payments and Reports....................................................................................13
U.S. Dollars............................................................................................13
Progress Reports........................................................................................13
Report on Termination...................................................................................14
Books and Records.......................................................................................14
Delinquent Payments.....................................................................................15
ARTICLE VI Effort to Commercialize...............................................................................15
Commercialization Obligation............................................................................15
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ARTICLE VII Protection of Patents................................................................................16
Protection..............................................................................................16
Notice of Infringement; Third Party Infringement........................................................17
Notice of Infringement; Claim of Licensee Infringement..................................................18
Assistance..............................................................................................18
ARTICLE VIII Disclaimer of Liability and/or Warranty.............................................................19
No Warranty.............................................................................................19
No Damages..............................................................................................20
No Warranty of Quality or Usefulness....................................................................20
Indemnification.........................................................................................20
Insurance...............................................................................................21
ARTICLE IX Term and Termination..................................................................................22
Term....................................................................................................22
Termination for Cause; Insolvency.......................................................................22
Default.................................................................................................22
Termination Upon Notice.................................................................................23
Discontinuance of Commercialization.....................................................................24
Provisions Surviving Termination........................................................................24
ARTICLE X Representations and Warranties.........................................................................24
Warranty to Title.......................................................................................24
No Other Information....................................................................................25
Power and Authority.....................................................................................25
Compliance with Laws....................................................................................25
ARTICLE XI Agency/Partnership/Use of Name........................................................................26
No Agency...............................................................................................26
No Partnership..........................................................................................26
Prohibition Against Use of Name.........................................................................26
ARTICLE XII Marking..............................................................................................27
ARTICLE XIII Nondisclosure of Confidential Information...........................................................27
Additional Permitted Disclosures........................................................................28
Non-Disclosure..........................................................................................29
ARTICLE XIV Miscellaneous........................................................................................30
Captions................................................................................................30
Notices.................................................................................................30
Assignment..............................................................................................31
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No Waiver...............................................................................................31
Choice of Law and Jurisdiction..........................................................................31
Severability............................................................................................31
Further Acts............................................................................................32
Entire Agreement........................................................................................32
Successors and Assigns..................................................................................32
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RESEARCH DEVELOPMENT FOUNDATION
LICENSE AGREEMENT
This License Agreement (hereinafter referred to as "Agreement") is made
and entered into as of the 15th day of November, 1999 (the "Effective Date" of
this Agreement), by and between RESEARCH DEVELOPMENT FOUNDATION (hereinafter
referred to as "Licensor"), a Nevada nonprofit corporation having its office at
402 North Division Street, Carson City, Nevada, 89703;
AND
SUPERGEN, INC. (hereinafter referred to as "Licensee"), a Delaware corporation
having an office at Two Annabel Lane, Suite 220, San Ramon, California, 94583.
WITNESSETH:
WHEREAS, Licensor is a nonprofit organization exempt from taxation
under Section 501(c)(3) of the Internal Revenue Code of 1986;
WHEREAS, Licensor is the owner of certain inventions, discoveries, and
know-how comprising certain Proprietary Property (as hereinafter defined);
WHEREAS, Licensor is the owner of all the right, title and interest in
and to said Proprietary Property and has determined that the grant of a license
to Licensee is the only practicable manner in which the Proprietary Property can
be utilized to benefit the public;
WHEREAS, Licensor has filed or intends to file for patents and/or other
protection therefor in the countries listed in Exhibit 2 hereto;
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WHEREAS, Licensee desires to obtain an exclusive, world-wide license
from Licensor as described herein to produce, have produced, make, have made,
manufacture, have manufactured, use, sell, rent and/or lease (hereafter referred
to as "make, use or sell") methods, processes, or products of Licensor's
Proprietary Property; and
WHEREAS, Clayton Foundation for Research ("Clayton"), Licensor and
Licensee have entered into a Research Agreement (Camptothecin) of even date
herewith whereby Clayton will conduct research in the field of interest relating
to 9-Nitrocamptothecin (hereafter the "Research Agreement"), which Research
Agreement is incorporated by reference herein for all purposes;
NOW, THEREFORE, in consideration of the above premises and the
covenants herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
-----------
As used in this Agreement, the following terms shall have the following
respective meanings:
1.1 The term "Proprietary Property" shall mean and include all Patent
Rights described in Exhibit 1 hereto and Know-How;
1.2 The term "Patent Rights" shall mean any pending United States
or foreign patent applications and issued patents now or hereafter owned or
controlled by, or assigned to, Licensor which cover the Proprietary Property
and any divisions, substitutions, continuations and continuations-in-part
based thereon, any reissues,
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reexaminations, patents of addition or importation, or other extensions
thereof.
1.3 The term "Know-How" shall mean all information, data, know-how,
processes, materials, procedures, compositions, devices, protocols, designs,
specifications, techniques, software, methods, and any clinical diagnostic and
regulatory information or filings or other subject matter necessary or useful
for the practice of inventions covered by the Patent Rights or Licensor
Improvements which is owned by Licensor. Know-How specifically includes existing
data and/or regulatory filings related to the Patent Rights, made or contributed
to or by Licensor or an Other Corporation (as defined herein), or Vernon Knight,
M.D.
1.4 The term "Licensed Proprietary Property" shall mean and include
the Patent Rights and Know-How which are licensed hereunder to Licensee.
1.5 The term "Product" shall mean a product or portion of a product
that embodies an invention claimed, or which is specifically intended to be used
to practice a method or process, within the Licensed Proprietary Property and
which is made, used or sold by or for Licensee (or its Affiliates or
sublicensees).
1.6 The term "Improvements" shall mean any improvement and/or
modification of the Licensed Proprietary Property, wherein aerosol droplets
contain one or more liposome particles.
1.7 The term "Affiliate" shall mean any present or future companies,
corporations, partnerships, joint ventures, business trusts or other business
entities organized under the laws of any nation (a) with respect to which: (i)
at least fifty percent (50%) in value of the total equity interests, (ii) at
least fifty percent (50%) of the total
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combined voting power of all classes of shares entitled to vote, or (iii) at
least fifty percent (50%) of the profits interest in the case of a partnership,
joint venture or other non-stock entity, is directly or indirectly under the
control of Licensee, or (b) with respect to which Licensee has effective
control, directly or indirectly. "Control" shall mean the possession of the
power to direct or cause the direction of the management and the policies of an
entity, whether through an ownership interest or by contract or otherwise. The
term "Licensee" wherever used herein shall include any Affiliate of Licensee.
1.8 The term "Gross Revenues" shall mean the total amount received
from third parties for the use or sale of Products less:
(a) usual trade, cash and quantity credits, discounts,
refunds or government rebates;
(b) amounts for claims, allowances or credits for
returns, retroactive price reductions or chargebacks;
(c) special packaging charges and handling fees, and
prepaid freight, sales taxes, duties and other
governmental charges (including value added tax)
imposed directly on the seller with respect to such
sales; and
(d) credits for goods returned (not to exceed the
original billing or invoice amount).
No other allowance or deduction shall be made by whatever name
known.
1.9 The terms "commercialize" and "commercialization" shall mean the
making, using, selling, or licensing by Licensee of the Product under such
circumstances as may be
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permitted by applicable international, federal, and state laws and regulations.
1.10 The term "Field of Use" shall mean the applications described in
Exhibit 1A hereto.
1.11 The term "Valid Claim" shall mean a claim of an issued and
unexpired patent or a claim of a pending patent application which has not been
held unpatentable, invalid or unenforceable by a court or other government
agency of competent jurisdiction and has not been admitted to be invalid or
unenforceable through reissue, re-examination, disclaimer or otherwise;
provided, however, that if any holding of invalidity, unenforceability or
unpatentability is later reversed by a court or agency with overriding
authority, the relevant claim shall be reinstated as a Valid Claim hereunder
with respect to sales made after the date of such reversal. Notwithstanding the
foregoing provisions of this Section 1.11, if a claim of a pending patent
application has not issued as a claim of an issued patent within five (5) years
after the date from which such claim takes priority, such pending claim shall
not be a Valid Claim for purposes of this Agreement unless and until the patent
is issued including such claim.
1.12 The term "Final Report" shall mean a report by a principal
investigator who has conducted a completed human clinical trial on a Product
wherein the report provides primary and summary data and results from the
completed human clinical trial on the Product.
ARTICLE II
GRANT OF LICENSE
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2.1 SCOPE OF LICENSE. Licensor hereby grants and Licensee hereby
accepts a worldwide, exclusive license under the Licensed Proprietary Property
to make, use or sell Products for the Field of Use. Licensor shall not license
any other party rights to deliver camptothecin or analogues thereof, alone or in
combination with another drug, in liposomes, lipid complexes or other liposome
particles, to the respiratory tract via aerosol droplets.
2.2 RIGHT TO SUBLICENSE. Licensor hereby grants and Licensee hereby
accepts the right to grant sublicenses to others within the scope of and under
the terms and conditions herein set forth. Licensee shall give written notice of
such sublicenses to Licensor.
2.3 REFERENCE AND REVIEW. Licensee will also have the right to review
and reference the Know-How in any application or filing relating to the
Proprietary Property with any governmental or regulatory authority before, on,
or after the Effective Date and that was, is, or will be made or contributed to
by Licensor, an Other Corporation (as defined herein), or Vernon Knight, M.D.
ARTICLE III
PATENTS AND IMPROVEMENTS
------------------------
3.1 PATENT APPLICATIONS. Licensor agrees, at its own expense, to
timely file patent applications relating to the Proprietary Property in the
countries listed on Exhibit 2 hereto with regard to the Proprietary Property
listed in Exhibit 1 as of the Effective Date and with regard to Licensor
Improvements as set forth in Section 3.3.
3.2 PATENT PROSECUTION. Licensor further agrees to use its best
efforts to
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prosecute such patent applications and to maintain any patents issued thereon.
Notwithstanding the foregoing sentence, in the event that Licensor within its
sole judgment and discretion determines that prosecution or maintenance of a
patent in a particular country is not economically viable or otherwise feasible,
Licensor shall promptly notify Licensee of Licensor's intention to abandon such
patent application or patent. Licensor shall not otherwise abandon a patent or
patent application within the Patent Rights. Upon receipt of such notice,
Licensee, in its sole discretion, may elect to assume responsibility (and to pay
associated fees and expenses generated after Licensee assumes such
responsibility) with respect to a patent application or patent which Licensor
intends to abandon. The notice shall be provided sufficiently in advance of any
deadlines or due dates such that Licensee has a reasonable time within which to
assume responsibility and comply with the deadlines or due dates. Licensee may,
in its sole discretion, abandon any patent application or patent for which it
has previously assumed responsibility and will not be liable to Licensor in any
way for such abandonment.
3.3 LICENSOR IMPROVEMENTS. Licensor agrees to make available promptly
to Licensee during the term of this Agreement any Improvements now or hereafter
found, owned, or controlled by Licensor, and to submit to Licensee all available
Know-How pertaining thereto. Such Improvements in or to the Licensed Proprietary
Property and the corresponding rights throughout the world in patents or
copyrights shall be the property of Licensor, and shall be included in the
Licensed Proprietary Property licensed to Licensee subject to all of the terms
and conditions set forth in this Agreement.
3.4 LICENSEE IMPROVEMENTS; REPORTING. Licensee shall promptly submit
to
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Licensor during the term of this Agreement all available information and
Know-How on any Improvements, whether patentable, copyrightable or not, now or
hereafter found, discovered, invented, owned, or controlled by Licensee.
3.5 LICENSEE IMPROVEMENTS; OWNERSHIP. Any Improvements, whether
patentable, copyrightable or not, now or hereafter made and found by agents or
employees of Licensee either independently of agents or employees of Licensor
(or an "Other Corporation"), or jointly with others, shall be owned by Licensor
and shall be considered as part of the Licensed Proprietary Property. The
world-wide rights in the corresponding patents, patent applications, copyrights
and/or know-how shall be the property of Licensor subject to all the terms and
conditions of this Agreement, but licensed hereunder to Licensee by Licensor.
Licensee agrees to do all things necessary and required to vest in Licensor all
right, title and interest in and to any such Improvements.
3.6 ASSISTANCE. If patentable or otherwise protectable Improvements
are now or hereafter made and found by agents or employees of Licensee or
Licensor, either independently or jointly with others, and Licensor or Licensee
considers it desirable to obtain patent, copyright or other protection thereon,
the other party agrees to cooperate fully and to do all proper things necessary
or desirable to obtain and maintain patent, copyright or other protection
therefor throughout the world. Upon request, each party agrees to provide
reasonable technical assistance and advice for purposes of filing and
prosecuting patent applications and engaging in opposition, interference and
enforcement proceedings with respect to patent applications and patents within
the Patent Rights or for Improvements.
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3.7 IMPROVEMENTS; PROSECUTION BY LICENSEE. Notwithstanding the
provisions in Section 3.6 above, if Licensor fails to file an application for
patent or other protection therefor within six (6) months after receipt of a
written request from Licensee to do so, Licensor shall be deemed to have
consented to Licensee obtaining and maintaining the necessary protection
therefor at Licensee's expense.
3.8 INCLUSIONS. If either Licensor or Licensee files patent
applications or otherwise obtains patent rights or copyrights which relate to
the Licensed Proprietary Property, such patent application, patent rights or
copyrights shall be included in the Licensed Proprietary Property, and Licensee
shall have a license therefor under the terms and conditions set forth in this
Agreement.
ARTICLE IV
ROYALTIES AND OTHER CONSIDERATION
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4.1 LICENSE FEE. Upon Licensee's execution of this Agreement,
Licensee shall pay Licensor an up-front non-refundable license fee consisting
of Four Hundred and Ten Thousand Dollars ($410,000) payable in shares of and
by transferring to Licensor shares of the common stock of SuperGen, Inc.
Licensee guarantees, as described herein, the value of such shares to be no
less than such dollar amount (the "Guaranteed Value") on the one (1) year
anniversary of the date on which the shares are transferred to Licensor
(hereafter the "Anniversary Date"). If, during the thirty (30) days preceding
the Anniversary Date (or the next trading date if the Anniversary Date is not
a trading date), the common stock of Licensee has not traded on a public
stock exchange for an average price resulting in such shares being worth on
average at least the Guaranteed Value, then within thirty (30) days Licensee
will pay to Licensor a sum in cash (or, at Licensor's option, in the
equivalent value of additional unrestricted shares of the common stock of
SuperGen, Inc.) equal to the difference between (a) the Guaranteed Value and
(b) the average price at which the common stock of SuperGen, Inc. traded
publicly during the thirty (30) days preceding the Anniversary Date
multiplied by the number of shares transferred as the up-front non-refundable
license fee under this Section 4.1. Any shares provided to Licensor will not
be sold for at least one (1) year following the Anniversary Date, and no more
than three thousand (3,000) of the shares shall be sold on any one trading
date.
4.2 ROYALTY. Licensee shall pay Licensor during the term of this
Agreement an earned royalty of [ * ] on Gross Revenues. Only one (1) royalty
shall be payable on a Product, regardless of the number of licensed applications
and licensed patents of the Licensed Proprietary Property under which such
Product has been manufactured, used or
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sold. In the event that a Product is sold in combination as a single product
with another product ("Combination Product"), active component or service (which
product, component or service is not a portion of the Product) and whose sale
and use are not covered by a Valid Claim of the Product in the country for which
the combination product is sold, Gross Revenues from such sales for purposes of
calculating the amounts due under this Agreement shall be calculated by
multiplying the Gross Revenues of that combination by the fraction A/(A+B),
where A is the gross selling price of the Product sold separately and B is the
gross selling price of the other product, active component or service sold
separately. In the event that no such separate sales are made by Licensee or its
Sublicensee, Gross Revenues for royalty determination shall be reasonably
allocated between the Product and such other product, active component or
service, based upon their relative importance and proprietary protection.
Without limitation, liposomal compounds, camptothecin and analogues thereof, and
aerosol containers (nebulizers) are deemed to be portions of the Product.
4.3 TERM OF ROYALTY OBLIGATION. Royalty payments shall be paid on the
Products commencing on the Effective Date, and unless earlier terminated as
provided herein, shall continue on a country-by-country and Product-by-Product
basis until there are no remaining royalty payment obligations in a country, at
which time the Agreement shall expire in its entirety in such country. Royalty
payments shall cease for any patent which has been declared invalid or
unenforceable by a final determination or judgment, or if this Agreement is
terminated as hereinafter specified and provided.
4.4 SUBLICENSES. Licensee will pay to Licensor [ * ] of all
consideration
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(including, but not limited to, royalties, minimum royalties, up-front payments,
marketing, distribution, franchise, option, license or documentation fees, bonus
and milestone payments, license maintenance fees, and equity-related securities)
received from sublicensees of the Licensed Proprietary Property or the amount of
royalty Licensee would have owed pursuant to Section 4.2 had it engaged in the
same licensed conduct as said sublicensees, whichever is greater, as determined
on a quarterly basis. Notwithstanding the above, it is understood and agreed
that Licensor shall not be entitled to any share of amounts received by Licensee
for pilot studies, research and development, the license or sublicense of any
intellectual property other than the Licensed Proprietary Property,
reimbursement for patent or other expenses, or as consideration for equity or
debt of Licensee.
4.5 DEDUCTIONS FROM ROYALTY PAYMENTS; LIMITATION ON DEDUCTIONS FROM
ROYALTY PAYMENTS. If Licensee or its Sublicensee is required to pay a third
party under a Valid Claim with respect to the third party's intellectual
property or technology in order to make, use or sell a Product, Licensee may
deduct such amount from royalties due to Licensor for such Product.
Notwithstanding the foregoing provisions of this Section 4.5, wherever this
Agreement provides that Licensee may deduct expenses, payments or other amounts
from royalties payable to Licensor, (a) such deduction shall be applied only
against royalties payable from the territory with respect to which such
deduction arose, and (b) such deduction shall be prorated over such time as is
necessary to assure that the royalties payable to Licensor from such territory
in any period shall not be reduced by more than fifty percent (50%) of the
amount that otherwise would be due Licensor
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pursuant to this Agreement.
4.6 MILESTONE PAYMENTS. In addition to the up-front license fee and
royalties required under this Article IV, Licensee shall make milestone payments
to Licensor as set forth in Exhibit 3 hereto. Such payments shall be made in
common stock of Licensee in the amounts recited in Exhibit 3 and shall be
transferred to Licensor within thirty (30) days of occurrence of each of the
events indicated on such exhibit. Such common stock will not be sold for at
least one (1) year following the date on which the stock is transferred to
Licensor, and no more than three thousand (3,000) of the shares shall be sold on
any one trading date. Licensee guarantees the value of such shares to be the
Guaranteed Value calculated in the same manner as set forth in Section 4.1 of
this Agreement.
4.7 MARKETING ARRANGEMENTS. Where Products are marketed by an entity
other than Licensee under any type of commercial arrangement (including, without
limitation, a sublicense, joint venture, distributorship, or collaboration
agreement), the sales of the Products by such entity shall be used in
calculating Gross Revenues for purposes of determining royalties payable to
Licensor hereunder.
4.8 CONDITIONS. The obligations of Licensee under this License
Agreement are conditioned on Licensee's satisfaction in its sole discretion at
or prior to the date this License Agreement is executed with the results of its
due diligence with respect to the business, operations, affairs, properties,
assets, liabilities, obligations, profits and condition (financial or otherwise)
of Licensor; provided that compliance with any such conditions or parts thereof
may be waived in writing by Licensee. Licensor agrees to provide Licensee with
any information, including clinical or laboratory data or regulatory
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filings, that Licensor requests as part of the due diligence performed under
this Section 4.8.
ARTICLE V
PAYMENT AND REPORTS
5.1 NOTICE OF COMMERCIAL SALE. Licensee shall notify Licensor, in
writing, within thirty (30) days of the date of the first commercial making,
using or selling of Products.
5.2 PAYMENTS AND REPORTS. Licensee agrees that Licensee shall provide
within sixty (60) days after the end of each quarter of each calendar year:
(a) payment of amounts due to Licensor pursuant to this
Agreement, including, but not limited to, amounts
pursuant to Articles IV and VI; and
(b) a report summarizing the information and basis on
which such amounts have been calculated.
5.3 U.S. DOLLARS. All amounts payable in cash by Licensee shall be
paid in U.S. Dollars. Conversion from currencies other than U.S. Dollars shall
be at the rate of exchange used by Licensee for its general accounting purposes,
consistent with generally accepted accounting principles.
5.4 PROGRESS REPORTS. Until such time as earned royalties become
payable pursuant to this Agreement, Licensee agrees to make an annual report to
Licensor on each annual anniversary of the Effective Date covering Licensee's
progress during the previous year toward research, development and
commercialization.
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5.5 REPORT ON TERMINATION. Licensee also agrees to make a written
report to Licensor within ninety (90) days after the termination of this
Agreement, stating in such report the royalties payable hereunder and the basis
therefor not previously reported to Licensor. Licensee shall also continue to
make annual reports pursuant to the provisions of this Agreement covering
making, using or selling of Products after termination thereof, such as the
selling of stock on hand at termination which is specifically contemplated by
this Agreement and the applicable earned royalties hereunder, until such time as
all such makings, uses or sales shall have terminated. Concurrent with the
submittal of each post-termination report, Licensee shall pay Licensor all
applicable royalties.
5.6 BOOKS AND RECORDS. Licensee shall keep accurate books and records
with respect to the Products and/or Licensed Proprietary Property sufficient to
enable the calculation of royalties payable hereunder to be verified. Upon
thirty (30) days prior notice to Licensee, independent accountants selected by
Licensor, reasonably acceptable to Licensee, after entering into a
confidentiality agreement with Licensee, may have access to the books and
records of Licensee to conduct a review or audit once per calendar year, for the
sole purpose of verifying the accuracy of Licensee's payments and compliance
with this Agreement. The accounting firm shall report to Licensor only whether
there has been a royalty underpayment and, if so, the amount thereof. Such
access shall be permitted during Licensee's normal business hours during the
term of this Agreement and for three (3) years after the period to which the
audit pertains. Any such inspection or audit shall be at Licensor's expense;
provided that in the event the examination or audit results in a discrepancy in
the correctness of the payments due under this Agreement in an amount in
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excess of five percent (5%) of the payments due Licensor for any single quarter
audited, Licensee shall pay any and all costs or fees associated with such
examination or audit. Neither such right to review or audit nor Licensor's right
to receive any such underpayment shall be affected by any statement to the
contrary appearing on checks or otherwise, unless such statements appear in a
letter, signed by the party having such right and delivered to the other party,
expressly waiving such right. Notwithstanding the foregoing, Licensor may
require Licensee to furnish any other information reasonably requested to enable
Licensor to evaluate Licensee's performance under this Agreement.
5.7 DELINQUENT PAYMENTS. Payments provided for in this Agreement
shall, when overdue, bear interest at the then existing prime rate at Citibank
of New York (or its successor) plus four percent (4%) per annum until paid, but
in no event shall such interest exceed the usury limit, if any, as may exist
from time to time in the State of Nevada.
ARTICLE VI
EFFORT TO COMMERCIALIZE
6.1 COMMERCIALIZATION OBLIGATION. Licensee shall undertake to use
commercially reasonable efforts with regard to commercialization of the
Products.
6.2 MINIMUM ROYALTIES. Licensee shall pay to Licensor within ninety
(90) days after the date specified at least the following amounts of minimum
royalties within the time periods specified:
(a) on or before the third anniversary of the Effective
Date, at least [ * ].
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(b) on or before the fourth anniversary of the Effective
Date, at least [ * ].
(c) on or before the fifth anniversary of the Effective
Date, at least [ * ].
(d) on or before each succeeding anniversary of the
Effective Date, at least [ * ].
Minimum royalties paid in excess of earned royalties in a given
year shall not be creditable to earned royalties for future years. Minimum
royalties paid under this Section 6.2 may, at Licensee's option, be paid in
shares of the common stock of Licensee. Common stock transferred under this
Section 6.2 will not be sold for at least one (1) year following the date on
which the stock is transferred to Licensor, and no more than three thousand
(3,000) of the shares shall be sold on any one trading date. Licensee guarantees
the value of such shares to be the Guaranteed Value calculated in the same
manner as set forth in Section 4.1 of this Agreement.
ARTICLE VII
PROTECTION OF PATENTS
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7.1 PROTECTION. Licensor agrees, where economically justified and
within reasonable limits, to protect the Licensed Proprietary Property from
infringement or misappropriation by third parties in the Field of Use and to
prosecute such infringers or defendants, but the decision to undertake such
protection shall be in the sole discretion of Licensor, and Licensor's decision
as to whether any such action shall be taken by it shall be accepted by
Licensee. In the event that Licensor shall recover profits and/or damages from
said infringer or defendant in the Field of Use, Licensor agrees to turn over to
Licensee twenty-five percent (25%) of any amounts paid to it by said infringer
or defendant after deducting any of its expenses, including costs and legal fees
incurred in such litigation. Each party agrees to cooperate fully with the other
party in protection of the Licensed Proprietary Property, including by joining
as a party to any proceeding if required by applicable law.
7.2 NOTICE OF INFRINGEMENT; THIRD PARTY INFRINGEMENT. Licensor and
Licensee shall each give immediate written notice to the other of any
infringement of a Patent Right or misappropriation of Know-How or Improvements
by any third party in the Field of Use as may come to its knowledge.
Notwithstanding Section 7.1, if Licensor has not within six (6) months from the
date on which it is notified or otherwise becomes aware of an infringement or
misappropriation of the Licensed Proprietary Property in the Field of Use either
terminated such infringement or initiated legal action against the infringer or
defendant, it shall, upon written request of Licensee, grant to Licensee the
right to prosecute an action against the infringer or defendant at Licensee's
expense. Licensor agrees, in the event that Licensee cannot prosecute such
infringement or misappropriation
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CONFIDENTIAL TREATMENT REQUEST
in its own name, to sign and give to Licensee, as soon as practicable, all
necessary documents in order for Licensee to prosecute at Licensee's expense but
in the name of Licensor, such infringement or misappropriation. Licensee shall
be entitled to deduct all of its expenses, including costs and legal fees
incurred in bringing and prosecuting such infringement or misappropriation
action, from royalties due Licensor with respect to the country in which such
action is prosecuted after commencement of such infringement or misappropriation
action. In the event Licensee desires to settle or compromise such suit or
action in a manner that may adversely impact Licensor or Licensed Proprietary
Property, Licensee shall not so settle or compromise such suit or action without
the prior written consent of Licensor. In the event Licensee shall recover
profits and/or damages from said infringer or defendant, Licensee agrees to pay
to Licensor twenty-five percent (25%) of any amounts paid to it by said
infringer or defendant after deducting any of its expenses, including costs and
legal fees incurred in such litigation.
7.3 NOTICE OF INFRINGEMENT; CLAIM OF LICENSEE INFRINGEMENT. Licensee
shall promptly advise Licensor in writing of any notice or claim of any
infringement and of the commencement against it of any suit or action for
infringement of a third party patent made or brought against Licensee and based
upon the use hereunder by Licensee of the Licensed Proprietary Property.
Licensee shall have the right either to:
(a) request that Licensor enter into negotiations with
such third party to obtain rights for Licensee under
the third party patent; or
(b) request that Licensor defend such suit or action at
Licensor's expense.
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7.4 ASSISTANCE. Licensor is neither obligated to enter into
negotiations with such third party to obtain rights for Licensee under the third
party patent nor obligated to defend such suit or action. If Licensor, at its
sole discretion, elects to enter into negotiations with such third party to
obtain rights for Licensee under the third party patent or if Licensor, at its
sole discretion, elects to undertake at its own expense the defense of any such
suit or action to the extent that the alleged infringement is based upon such
use hereunder of the Licensed Proprietary Property, Licensee shall render to
Licensor all reasonable assistance that may be required by Licensor in the
negotiations or in the defense of such suit or action. Licensor has the primary
right to control the defense of any such suit or action by counsel of its own
choice, and Licensee shall have the right, at its own expense, to be represented
in any such suit or action in respect of which Licensee is a defendant by
counsel of its own choice, subject to Licensor's right of control.
Notwithstanding the foregoing, if Licensor has not within ninety (90) days (or
such lesser period of time as is necessary to avoid entry of a default judgment
against Licensor or Licensee) from the date of receipt of a request from
Licensee under Section 7.3 either entered into negotiations with such third
party to obtain rights for Licensee under the third party patent or initiated
legal action to defend such suit, it shall, upon written request of Licensee,
grant to Licensee the right to enter such negotiations or defend such suit.
Licensee shall be entitled to deduct all its expenses, including attorneys' fees
and specifically including costs and legal fees incurred in entering into such
negotiations or defending such suit from royalties due Licensor after
commencement of such action. Licensee shall not settle or compromise any such
suit or action without the prior written
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consent of Licensor, which consent shall not be unreasonably withheld.
ARTICLE VIII
DISCLAIMER OF LIABILITY AND/OR WARRANTY
---------------------------------------
8.1 NO WARRANTY. Nothing in this Agreement shall be construed as:
(a) a warranty or representation by Licensor as to the
validity or scope of any Licensed Proprietary
Property; or
(b) a warranty or representation that anything sold,
used, produced or otherwise disposed of under any
license granted in this Agreement is or will be free
from infringement of patents, copyrights, and/or
trademarks of third parties; or
(c) an express or implied warranty of merchantability or
fitness for a particular purpose.
8.2 NO DAMAGES. Licensor shall exercise reasonable care in verifying
the accuracy of information provided under this Agreement but, subject to the
provisions of the last sentence of Section 8.4, Licensor shall not be liable for
any damages arising out of or resulting from any information made available
hereunder or of the use thereof, nor shall it be liable to Licensee for
consequential damages under any circumstances.
8.3 NO WARRANTY OF QUALITY OR USEFULNESS. Licensor shall have no
responsibility for the ability of Licensee to use such information, the quality
or performance of any process or any product produced by Licensee with the aid
of such information, or with respect to claims of third parties arising from
Licensee's use of such information.
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8.4 INDEMNIFICATION. Licensee shall assume all responsibility and
liability for the sale, use, production, and/or commercialization of the
Products, including, but not limited to, the safety, effectiveness, and
reliability of the process and/or products produced pursuant to this Agreement.
Licensee further agrees to defend, indemnify, and hold Licensor, its trustees,
directors, officers, employees, agents, representatives, successors, assigns,
affiliated entities and controlled corporations (as defined herein) harmless
from and against any and all liability, demands, damages, expenses and losses
for death, personal injury, illness, or property damage, including the cost of
defense against same, which may be asserted, or any claims which may be brought
by third parties resulting from the sale, use, production, commercialization, or
other disposition of the Licensed Proprietary Property or Products by Licensee.
Licensee agrees that any sublicenses granted hereunder will include a similar
indemnification provision for the benefit of Licensor. Licensee acknowledges
that the Licensed Proprietary Property included herein is experimental and
agrees to take all reasonable precautions to prevent death, personal injury,
illness, and property damage. Licensor shall defend, indemnify, and hold
Licensee and its directors, officers, employees and agents harmless as against
any and all judgements, fees, expenses, liabilities, or other costs arising from
or incidental to any product liability or other lawsuit, claim, demand or other
action resulting from any claim, suit or proceeding brought by a third party
against any of the foregoing entities, arising out of or in connection with any
misrepresentation by Licensor with regard to, or in breach of, the
representations and warranties set forth in Article X or to the extent due to
the gross negligence or willful misconduct of Licensor.
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8.5 INSURANCE. Licensee agrees to purchase and/or maintain insurance
coverage sufficient, taking into account its other assets, to establish the
ability of Licensee to honor the indemnity made herein, and Licensor shall be
listed as an additional named insured on any such insurance coverage. Licensee
shall furnish evidence of its insurance coverage upon request of Licensor. For
purposes of this agreement, the initial amount of insurance coverage required is
in the face amount of Two Million Dollars ($2,000,000.00).
ARTICLE IX
TERM AND TERMINATION
--------------------
9.1 TERM. The Term of this Agreement shall be for a period of ten
(10) years extending from the first commercial revenue actually collected or for
the life of the last to expire of the patents or patent applications of the
Licensed Proprietary Property, whichever is earlier, unless sooner terminated as
herein provided.
9.2 TERMINATION FOR CAUSE; INSOLVENCY. If Licensee shall determine
that it intends to declare itself insolvent or file for bankruptcy or
reorganization, it shall give immediate written notice to Licensor. Failure to
give such notice shall cause immediate termination of this Agreement, and all
rights of Licensee in the Licensed Proprietary Property shall automatically
revert to Licensor. If Licensee shall become bankrupt or insolvent; if the
business or any assets or property of Licensee shall be placed in the hands of a
receiver, assignee or trustee, whether by the voluntary act of Licensee or
otherwise; if Licensee institutes or suffers to be instituted any procedure in
bankruptcy court for reorganization or rearrangement of its financial affairs;
or if Licensee makes a general
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assignment for the benefit of creditors, this Agreement shall immediately
terminate, and all rights of Licensee in the Licensed Proprietary Property shall
automatically revert to Licensor. Upon occurrence of any of the foregoing
events, Licensee shall give immediate written notice thereof to Licensor.
9.3 DEFAULT. Upon any breach or default under this Agreement by
Licensee, or upon any breach or default by Licensee under other legal agreements
between Licensor and Licensee, Licensor may give written notice thereof to
Licensee, and Licensee shall have thirty (30) days thereafter to cure such
breach or default. If such breach or default is not so cured, Licensor may then
in its sole discretion and option: (a) convert this exclusive License Agreement
into a non-exclusive License Agreement, or (b) terminate this Agreement and the
licenses granted by it, or (c) seek such other relief as may be provided by law
in such circumstances by giving written notice thereof to Licensee.
Notwithstanding the foregoing, in the event of any termination of this
Agreement, any sublicenses granted by Licensee shall remain in force and effect
and shall be assigned by Licensee to Licensor; provided that such sublicensee is
currently in good standing with regard to its obligations under the sublicense
or has cured any default or breach within the period provided in such
sublicense; and further provided that (a) the financial obligations of each such
sublicensee shall be limited to those due Licensor hereunder for the practice of
such a sublicense; and (b) Licensor shall have no greater obligations,
liabilities or duties to the sublicensee than Licensor has to Licensee under the
terms of this Agreement.
9.4 TERMINATION UPON NOTICE. Any provision herein not withstanding,
Licensee may terminate this Agreement, in its entirety or as to any particular
patent or patent
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application or item of Know-How within the Licensed Proprietary Property, at any
time by giving Licensor at least thirty (30) days prior written notice. From and
after the effective date of such termination under this Section 9.4 with respect
to a particular patent or patent application, such patent(s) or patent
application(s) in the particular country shall cease to be within the Licensed
Proprietary Property for all purposes of this Agreement. Likewise, from and
after the effective date of such termination under this Section 9.4 with respect
to a particular item of Know-How, such item of Know-How shall cease to be within
the Licensed Proprietary Property for all purposes of this Agreement. From and
after the effective date of termination of a patent, patent application or item
of Know-How under this Section 9.4, all rights and obligations of Licensee with
respect to such patent, patent application or item of Know-How shall terminate
with respect to a particular Product, and the license to the terminated patent,
patent application or item of Know-How granted to Licensee under Section 2.1
shall terminate with respect to such Product. Upon termination of this Agreement
in its entirety under this Section 9.4, all rights and obligations of the
parties shall terminate except as provided in Section 9.6 below.
9.5 DISCONTINUANCE OF COMMERCIALIZATION. Upon termination hereof for
any reason, Licensee agrees to discontinue the commercialization of the Licensed
Proprietary Property, and (except as expressly provided herein) all sublicenses
granted hereunder by Licensee shall terminate, or at the option of Licensor, be
deemed to have been assigned to Licensor.
9.6 PROVISIONS SURVIVING TERMINATION. Article V, Article XIII and
Sections 8.1, 8.2, 8.3, 8.4, 10.4 and 11.3 of this Agreement, as well as all
provisions relating to
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Guaranteed Value, shall survive termination of this Agreement.
ARTICLE X
REPRESENTATIONS AND WARRANTIES
------------------------------
10.1 WARRANTY TO TITLE. Licensor represents and warrants that (i) it
is a Nevada nonprofit corporation exempt from taxation under Section 501(c)(3)
of the Internal Revenue Code of 1986; (ii) it owns the Licensed Proprietary
Property; (iii) it has the legal power and authority to extend the rights
granted to Licensee pursuant to this Agreement; (iv) the execution, delivery and
performance of this Agreement have been duly authorized by all necessary
corporate action on the part of Licensor; (v) the Licensed Proprietary Property
is free and clear of any lien, encumbrance, security interest or restriction on
license in the Field of Use; (vi) it has not previously granted, and will not
grant during the term of this Agreement, any right, license or interest in or to
the Licensed Proprietary Property, or any portion thereof, in the Field of Use
inconsistent with the license granted to Licensee herein; and (vii) to
Licensor's best knowledge, there are no threatened or pending actions, suits,
investigations, claims or proceedings in any way relating to the Licensed
Proprietary Property.
10.2 NO OTHER INFORMATION. Licensor represents that it has no
knowledge of any information likely to have a material effect on the validity or
enforceability of any patents within Patent Rights or any claim thereof which
was not disclosed to the Patent Office at the time that the patent applications
therefor were filed or during the pendency of said applications.
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10.3 POWER AND AUTHORITY. Licensee represents and warrants that it has
full power and authority to enter into this Agreement and to carry out the
transactions contemplated hereby.
10.4 COMPLIANCE WITH LAWS. Licensee represents and warrants that it
will comply with all applicable laws and regulations, including without
limitation, all United States laws and regulations controlling the export of
commodities and technical data. Licensee will be solely responsible for any
violation of such laws or regulations by Licensee or its sublicensee, and it
will defend and hold Licensor harmless in the event of any legal action of any
nature occasioned by such violation.
ARTICLE XI
AGENCY/PARTNERSHIP/USE OF NAME
11.1 NO AGENCY. Neither party shall be deemed to be an agent of the
other party as a result of any transaction under or related to this Agreement,
and shall not in any way pledge the other party's credit or incur any
obligations on behalf of the other party.
11.2 NO PARTNERSHIP. This Agreement shall not constitute either a
partnership or a joint venture, and neither party may be bound by the other to
any contract, arrangement or understanding except as specifically stated herein.
11.3 PROHIBITION AGAINST USE OF NAME. Except to the extent required to
comply with applicable laws and regulations and subject to Section 13.3, without
prior written consent obtained from Licensor, which shall not be unreasonably
withheld, Licensee (including any Affiliate or sublicensee of Licensee) shall
not use for purposes of sales,
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advertising, marketing, marking of goods, promotion to investors, press releases
or other publicity, etc.: (i) the name of (or any other information which would
identify) Licensor or any corporation which is controlled by the same persons
who control Licensor ("Other Corporation"); (ii) the names of trustees,
directors, officers, or employees of Licensor or an Other Corporation; or (iii)
any trademarks (or adaptations thereof) of Licensor or an Other Corporation.
Without prior written consent obtained from Licensee, which shall not be
unreasonably withheld, Licensor (including Other Corporations and any other
Affiliate of Licensor) shall not use for purposes of sales, advertising,
marketing, marking of goods, promotion to investors, press releases or other
publicity: (i) the name of (or any other information which would identify)
Licensee or any corporation which is controlled by the same persons who control
Licensee ("Controlled Corporation"); (ii) the names of trustees, directors,
officers, or employees of Licensee or a Controlled Corporation; or (iii) any
trademarks (or adaptations thereof) of Licensee or a Controlled Corporation.
ARTICLE XII
MARKING
Licensee agrees to apply or have applied to all articles and to all
containers containing Products manufactured by it or any sublicensee(s) under
this Agreement such patent notices as may be required by the laws of the
territories where manufactured or as may reasonably be requested by Licensor.
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ARTICLE XIII
NONDISCLOSURE OF CONFIDENTIAL INFORMATION
13.1 CONFIDENTIAL INFORMATION. All Proprietary Property and
confidential scientific and technical information communicated by one party to
the other party under this Agreement, including information contained in patent
applications, if identified in writing as Confidential Information at the time
of disclosure, shall be kept confidential by such other party. Notwithstanding
the foregoing, either party shall be relieved of the confidentiality obligations
herein and not be prevented by this Agreement from utilizing any information
received by it from the other party if:
(a) the information, at the time of disclosure, is in the
public domain or, after disclosure, becomes part of
the public domain through no fault of the receiving
party;
(b) the receiving party can show that the information was
in its possession at the time of disclosure and was
not acquired, directly or indirectly, from the
disclosing party;
(c) the information is lawfully obtained or received from
a third party, other than the disclosing party,
having the legal right to transmit same;
(d) the disclosure of such information is essential for
the commercial exploitation of the Proprietary
Property under this Agreement, provided that such
information is disclosed subject to a secrecy
agreement;
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(e) was independently developed by the receiving party
without reference to any information or materials
disclosed by the disclosing party; or
(f) was subsequently disclosed to the receiving party by
a person other than a party without breach of any
legal obligation to the disclosing party.
13.2 ADDITIONAL PERMITTED DISCLOSURES. In addition, either party may
disclose Confidential Information of the other (i) to their legal
representatives, employees and Affiliates, and legal representatives and
employees of Affiliates, consultants and sublicensees, to the extent such
disclosure is reasonably necessary to achieve the purposes of this Agreement,
and provided such representatives, employees, consultants and sublicensees have
agreed in writing to obligations of confidentiality with respect to such
information no less stringent than those set forth herein; (ii) in connection
with the filing and support of patent applications; (iii) as reasonably required
in the course of a contemplated public offering or private financing; (iv) to a
potential sublicensee or corporate partner that has agreed in writing to
confidentiality obligations no less stringent than set forth herein; or (v) if
disclosure is compelled to be disclosed by a court order or applicable law or
regulation, provided that the party compelled to make such disclosure (a)
requests confidential treatment of such information; (b) provides the other
party with sufficient advance notice of the compelled disclosure to provide
adequate time to seek a protective order; and (c) discloses only the minimum
necessary to comply with the requirement to disclose.
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13.3 NON-DISCLOSURE. The terms of this Agreement shall not be
disclosed by Licensee or Licensor to any third party or be published unless both
parties expressly agree otherwise in writing. Either party shall allow at least
three (3) business days notice of any proposed public disclosure for the other
party's review and comment or to provide written consent. The text of any press
release to be issued by Licensee and/or Licensor concerning this Agreement as
well as the precise date and timing of the press release shall be agreed between
the parties in writing in advance, such agreement not to be unreasonably
withheld or delayed. However, this restriction shall not apply to announcements
required by law or regulation, except that in such event the parties shall
coordinate to the extent possible with respect to the details of any such
announcement. This restriction shall not apply to disclosure of this Agreement
to certain private third parties such as the shareholders, investment bankers,
attorneys and other professional consultants of, and prospective investors in,
Licensee or Licensor. Once a particular disclosure has been approved, further
disclosures to similarly situated private third parties under this provision
that do not differ materially therefrom may be made without obtaining any
further consent of the other party.
ARTICLE XIV
MISCELLANEOUS
14.1 CAPTIONS. The captions herein are for convenience only and shall
not be deemed to limit or otherwise affect the construction hereof.
14.2 NOTICES. Any notice or other communication hereunder must be
given in
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writing and (a) delivered in person, (b) transmitted by telex, telefax or other
telecommunications mechanism, (c) mailed by certified or registered mail,
postage prepaid, receipt requested, or (d) sent by overnight delivery with
charges prepaid and receipt acknowledged, as follows:
If to Licensor, addressed to:
Research Development Foundation
c/o Andrew MacKenzie, Esq.
402 North Division Street
Carson City, Nevada 89703
Attn: C. W. Wellen, President
cc: James F. Weiler, Esq.
If to Licensee, addressed to:
SuperGen, Inc.
Two Annabel Lane, Suite 220
San Ramon, California 94583
Attn: Dr. Joseph Rubinfeld, CEO and President
cc: Ms. Lucy Chang, Senior Director, Planning and Legal
Affairs
or to such other address or to such other person as the party shall have last
designated by such notice to the other party. Each such notice or other
communication shall be effective (i) if given by mail, three (3) days after such
communication is deposited in the mails with postage prepaid, addressed as
aforesaid, or (ii) if given by telecommunication or any other means, when
actually received at such address.
14.3 ASSIGNMENT. This Agreement, in whole or in part, shall not be
assignable by either party without prior written consent of the other party,
which consent shall not be unreasonably withheld (unless to a successor entity
to the assigning party by merger, acquisition or other non-bankruptcy
reorganization), and any attempted assignment
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without such consent shall be void.
14.4 NO WAIVER. The failure of either party to enforce at any time any
of the provisions of this Agreement, or any rights in respect thereto, or to
exercise any election herein provided, shall in no way be considered to be a
waiver of such provisions, rights, or elections, or in any way to affect the
validity of this Agreement. The exercise by either party of any of its rights
herein or any of its elections under the terms or covenants herein shall not
preclude either party from exercising the same or any other rights it may have
under this Agreement, irrespective of any previous action or proceeding taken by
either party hereunder.
14.5 CHOICE OF LAW AND JURISDICTION. This Agreement shall be governed
and construed in accordance with the laws of the State of Nevada, U.S.A.
applicable to contracts made in such State without regard to conflicts of law
doctrines, and the parties agree that jurisdiction and venue for any dispute
regarding this Agreement will be in such State.
14.6 SEVERABILITY. If any provision of this Agreement is judicially
determined to be void or unenforceable, such provision shall be construed to be
severable from the other provisions of this Agreement, which shall retain full
force and effect.
14.7 FURTHER ACTS. The parties hereto agree promptly to execute,
forward, or otherwise provide all documents and material necessary or desirable
to effectuate this Agreement.
14.8 ENTIRE AGREEMENT. Except for a pre-existing confidentiality
agreement, the terms and conditions herein contained together with the Research
Agreement constitute
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the entire agreement between the parties and shall supersede all previous
communications, either oral or written, between the parties hereto with respect
to the subject matter hereof. No agreement or understanding bearing on the same
shall be binding upon either party hereto unless it shall be in writing and
signed by the duly authorized officer or representative of each of the parties
and shall expressly refer to this Agreement.
14.9 SUCCESSORS AND ASSIGNS. This Agreement shall be binding on and
shall inure to the benefit of the parties hereto, and their respective
successors and assigns.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed in multiple originals by their duly authorized representatives.
RESEARCH DEVELOPMENT FOUNDATION
By: /s/ Andrew MacKenzie
------------------------------------
Print Name: Andrew MacKenzie
---------------------------------
Title: Vice President
--------------------------
SUPERGEN, INC.
By: /s/ Joseph Rubinfeld
------------------------------------
Print Name: Joseph Rubinfeld
--------------------------------
Title: President & Chief Executive Officer
--------------------------------------
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EXHIBIT 1
Proprietary Property
[ * ]
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EXHIBIT 1A
Field of Use
[ * ]
This Field of Use is subject to modification pursuant to Section 6 b.
of the Research Agreement.
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EXHIBIT 2
List of Countries
United States
PCT *
* PCT Countries: All countries will be designated in the initial PCT filing.
Within 30 months of the U.S. filing date, Licensor must select
the specific PCT countries in which to actually file, which
countries are currently expected to be as follows: Australia,
Austria, Belgium, Canada, China, France, Germany, Ireland,
Israel, Italy, Japan, Republic of Korea, New Zealand,
Netherlands, Russian Federation, South Africa, Spain, Sweden,
Switzerland, Taiwan, United Kingdom
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EXHIBIT 3
Milestone Payments
Licensee shall make the following milestone payments to Licensor with
respect to each Product subject to this Agreement:
(a) [ * ] upon the earlier of (i) approval, or (ii) the
date of effectiveness, of an "IND" filed with the FDA
for such Product;
(b) [ * ] upon completion of a "Phase I" human clinical
trial for such Product and the Final Report thereon;
(c) [ * ] upon completion of a "Phase II" human clinical
trial for such Product and the Final Report thereon;
(d) [ * ] upon completion of any other phase of human
clinical trials for such Product required by the FDA
and the Final Report thereon; and
(e) [ * ] upon approval by the FDA of an "NDA" for such
Product.
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* Portions denoted with an asterisk have been omitted and filed separately with
the Securities and Exchange Commission pursuant to a request for confidential
treatment.
EXHIBIT 4.6
LICENSE AGREEMENT (PACLITAXEL)
BETWEEN
RESEARCH DEVELOPMENT FOUNDATION
AND
SUPERGEN, INC.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I Definitions.............................................................................................2
ARTICLE II Grant of License.......................................................................................5
Scope of License.........................................................................................5
Right to Sublicense......................................................................................6
Reference and Review.....................................................................................6
ARTICLE III Patents and Improvements..............................................................................6
Patent Applications......................................................................................6
Patent Prosecution.......................................................................................6
Licensor Improvements....................................................................................7
Licensee Improvements; Reporting.........................................................................7
Licensee Improvements; Ownership.........................................................................7
Assistance...............................................................................................8
Improvements; Prosecution by Licensee....................................................................8
Inclusions...............................................................................................8
ARTICLE IV Royalties and Other Consideration......................................................................9
License Fee..............................................................................................9
Royalty.................................................................................................10
Term of Royalty Obligation..............................................................................10
Sublicenses.............................................................................................11
Deductions From Royalty Payments; Limitation on Deductions from Royalty Payments........................11
Milestone Payments......................................................................................12
Marketing Arrangements..................................................................................12
Conditions..............................................................................................12
ARTICLE V Payment and Reports....................................................................................13
Notice of Commercial Sale...............................................................................13
Payments and Reports....................................................................................13
U.S. Dollars............................................................................................13
Progress Reports........................................................................................13
Report on Termination...................................................................................14
Books and Records.......................................................................................14
Delinquent Payments.....................................................................................15
ARTICLE VI Effort to Commercialize...............................................................................15
Commercialization Obligation............................................................................15
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ARTICLE VII Protection of Patents................................................................................16
Protection..............................................................................................16
Notice of Infringement; Third Party Infringement........................................................17
Notice of Infringement; Claim of Licensee Infringement..................................................18
Assistance..............................................................................................18
ARTICLE VIII Disclaimer of Liability and/or Warranty.............................................................19
No Warranty.............................................................................................19
No Damages..............................................................................................20
No Warranty of Quality or Usefulness....................................................................20
Indemnification.........................................................................................20
Insurance...............................................................................................21
ARTICLE IX Term and Termination..................................................................................21
Term....................................................................................................22
Termination for Cause; Insolvency.......................................................................22
Default.................................................................................................22
Termination Upon Notice.................................................................................23
Discontinuance of Commercialization.....................................................................24
Provisions Surviving Termination........................................................................24
ARTICLE X Representations and Warranties.........................................................................24
Warranty to Title.......................................................................................24
No Other Information....................................................................................25
Power and Authority.....................................................................................25
Compliance with Laws....................................................................................25
ARTICLE XI Agency/Partnership/Use of Name........................................................................25
No Agency...............................................................................................25
No Partnership..........................................................................................26
Prohibition Against Use of Name.........................................................................26
ARTICLE XII Marking..............................................................................................27
ARTICLE XIII Nondisclosure of Confidential Information...........................................................27
Additional Permitted Disclosures........................................................................28
Non-Disclosure..........................................................................................29
ARTICLE XIV Miscellaneous........................................................................................29
Captions................................................................................................29
Notices.................................................................................................30
Assignment..............................................................................................30
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No Waiver...............................................................................................31
Choice of Law and Jurisdiction..........................................................................31
Severability............................................................................................31
Further Acts............................................................................................31
Entire Agreement........................................................................................31
Successors and Assigns..................................................................................32
-iii-
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RESEARCH DEVELOPMENT FOUNDATION
LICENSE AGREEMENT
This License Agreement (hereinafter referred to as "Agreement") is made
and entered into as of the 15th day of November, 1999 (the "Effective Date" of
this Agreement), by and between RESEARCH DEVELOPMENT FOUNDATION (hereinafter
referred to as "Licensor"), a Nevada nonprofit corporation having its office at
402 North Division Street, Carson City, Nevada, 89703;
AND
SUPERGEN, INC. (hereinafter referred to as "Licensee"), a Delaware corporation
having an office at Two Annabel Lane, Suite 220, San Ramon, California, 94583.
WITNESSETH:
WHEREAS, Licensor is a nonprofit organization exempt from taxation
under Section 501(c)(3) of the Internal Revenue Code of 1986;
WHEREAS, Licensor is the owner of certain inventions, discoveries, and
know-how comprising certain Proprietary Property (as hereinafter defined);
WHEREAS, Licensor is the owner of all the right, title and interest in
and to said Proprietary Property and has determined that the grant of a license
to Licensee is the only practicable manner in which the Proprietary Property can
be utilized to benefit the public;
WHEREAS, Licensor has filed or intends to file for patents and/or other
protection therefor in the countries listed in Exhibit 2 hereto;
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WHEREAS, Licensee desires to obtain an exclusive, world-wide license
from Licensor as described herein to produce, have produced, make, have made,
manufacture, have manufactured, use, sell, rent and/or lease (hereafter referred
to as "make, use or sell") methods, processes, or products of Licensor's
Proprietary Property; and
WHEREAS, Clayton Foundation for Research ("Clayton"), Licensor and
Licensee have entered into a Research Agreement (Paclitaxel) of even date
herewith whereby Clayton will conduct research in the field of interest relating
to paclitaxel (hereafter the "Research Agreement"), which Research Agreement is
incorporated by reference herein for all purposes;
NOW, THEREFORE, in consideration of the above premises and the
covenants herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the following
respective meanings:
1.1 The term "Proprietary Property" shall mean and include all Patent
Rights described in Exhibit 1 hereto and Know-How;
1.2 The term "Patent Rights" shall mean any pending United States or
foreign patent applications and issued patents now or hereafter owned or
controlled by, or assigned to, Licensor which cover the Proprietary Property and
any divisions, substitutions, continuations and continuations-in-part based
thereon, any reissues,
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reexaminations, patents of addition or importation, or other extensions thereof.
1.3 The term "Know-How" shall mean all information, data, know-how,
processes, materials, procedures, compositions, devices, protocols, designs,
specifications, techniques, software, methods, and any clinical diagnostic and
regulatory information or filings or other subject matter necessary or useful
for the practice of inventions covered by the Patent Rights or Licensor
Improvements which is owned by Licensor. Know-How specifically includes existing
data and/or regulatory filings related to the Patent Rights, made or contributed
to or by Licensor or an Other Corporation (as defined herein), or Vernon Knight,
M.D.
1.4 The term "Licensed Proprietary Property" shall mean and include the
Patent Rights and Know-How which are licensed hereunder to Licensee.
1.5 The term "Product" shall mean a product or portion of a
product that embodies an invention claimed, or which is specifically intended to
be used to practice a method or process, within the Licensed Proprietary
Property and which is made, used or sold by or for Licensee (or its Affiliates
or sublicensees).
1.6 The term "Improvements" shall mean any improvement and/or
modification of the Licensed Proprietary Property, wherein aerosol droplets
contain one or more liposome particles.
1.7 The term "Affiliate" shall mean any present or future companies,
corporations, partnerships, joint ventures, business trusts or other business
entities organized under the laws of any nation (a) with respect to which: (i)
at least fifty percent (50%) in value of the total equity interests, (ii) at
least fifty percent (50%) of the total
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combined voting power of all classes of shares entitled to vote, or (iii) at
least fifty percent (50%) of the profits interest in the case of a partnership,
joint venture or other non-stock entity, is directly or indirectly under the
control of Licensee, or (b) with respect to which Licensee has effective
control, directly or indirectly. "Control" shall mean the possession of the
power to direct or cause the direction of the management and the policies of an
entity, whether through an ownership interest or by contract or otherwise. The
term "Licensee" wherever used herein shall include any Affiliate of Licensee.
1.8 The term "Gross Revenues" shall mean the total amount received from
third parties for the use or sale of Products less:
(a) usual trade, cash and quantity credits, discounts, refunds or
government rebates;
(b) amounts for claims, allowances or credits for returns,
retroactive price reductions or chargebacks;
(c) special packaging charges and handling fees, and prepaid
freight, sales taxes, duties and other governmental charges
(including value added tax) imposed directly on the seller
with respect to such sales; and
(d) credits for goods returned (not to exceed the original billing
or invoice amount).
No other allowance or deduction shall be made by whatever name
known.
1.9 The terms "commercialize" and "commercialization" shall mean the
making, using, selling, or licensing by Licensee of the Product under such
circumstances as may be
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permitted by applicable international, federal, and state laws and regulations.
1.10 The term "Field of Use" shall mean the applications described in
Exhibit 1A hereto.
1.11 The term "Valid Claim" shall mean a claim of an issued and
unexpired patent or a claim of a pending patent application which has not been
held unpatentable, invalid or unenforceable by a court or other government
agency of competent jurisdiction and has not been admitted to be invalid or
unenforceable through reissue, re-examination, disclaimer or otherwise;
provided, however, that if any holding of invalidity, unenforceability or
unpatentability is later reversed by a court or agency with overriding
authority, the relevant claim shall be reinstated as a Valid Claim hereunder
with respect to sales made after the date of such reversal. Notwithstanding the
foregoing provisions of this Section 1.11, if a claim of a pending patent
application has not issued as a claim of an issued patent within five (5) years
after the date from which such claim takes priority, such pending claim shall
not be a Valid Claim for purposes of this Agreement unless and until the patent
is issued including such claim.
1.12 The term "Final Report" shall mean a report by a principal
investigator who has conducted a completed human clinical trial on a Product
wherein the report provides primary and summary data and results from the
completed human clinical trial on the Product.
ARTICLE II
GRANT OF LICENSE
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2.1 SCOPE OF LICENSE. Licensor hereby grants and Licensee hereby
accepts a worldwide, exclusive license under the Licensed Proprietary Property
to make, use or sell Products for the Field of Use. Licensor shall not license
any other party rights to deliver paclitaxel or analogues thereof, alone or in
combination with another drug, in liposomes, lipid complexes or other liposome
particles, to the respiratory tract via aerosol droplets.
2.2 RIGHT TO SUBLICENSE. Licensor hereby grants and Licensee hereby
accepts the right to grant sublicenses to others within the scope of and under
the terms and conditions herein set forth. Licensee shall give written notice of
such sublicenses to Licensor.
2.3 REFERENCE AND REVIEW. Licensee will also have the right to review
and reference the Know-How in any application or filing relating to the
Proprietary Property with any governmental or regulatory authority before, on,
or after the Effective Date and that was, is, or will be made or contributed to
by Licensor, an Other Corporation (as defined herein), or Vernon Knight, M.D.
ARTICLE III
PATENTS AND IMPROVEMENTS
3.1 PATENT APPLICATIONS. Licensor agrees, at its own expense, to timely
file patent applications relating to the Proprietary Property in the countries
listed on Exhibit 2 hereto with regard to the Proprietary Property listed in
Exhibit 1 as of the Effective Date and with regard to Licensor Improvements as
set forth in Section 3.3.
3.2 PATENT PROSECUTION. Licensor further agrees to use its best efforts
to prosecute such patent applications and to maintain any patents issued
thereon.
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Notwithstanding the foregoing sentence, in the event that Licensor within its
sole judgment and discretion determines that prosecution or maintenance of a
patent in a particular country is not economically viable or otherwise feasible,
Licensor shall promptly notify Licensee of Licensor's intention to abandon such
patent application or patent. Licensor shall not otherwise abandon a patent or
patent application within the Patent Rights. Upon receipt of such notice,
Licensee, in its sole discretion, may elect to assume responsibility (and to pay
associated fees and expenses generated after Licensee assumes such
responsibility) with respect to a patent application or patent which Licensor
intends to abandon. The notice shall be provided sufficiently in advance of any
deadlines or due dates such that Licensee has a reasonable time within which to
assume responsibility and comply with the deadlines or due dates. Licensee may,
in its sole discretion, abandon any patent application or patent for which it
has previously assumed responsibility and will not be liable to Licensor in any
way for such abandonment.
3.3 LICENSOR IMPROVEMENTS. Licensor agrees to make available promptly
to Licensee during the term of this Agreement any Improvements now or hereafter
found, owned, or controlled by Licensor, and to submit to Licensee all available
Know-How pertaining thereto. Such Improvements in or to the Licensed Proprietary
Property and the corresponding rights throughout the world in patents or
copyrights shall be the property of Licensor, and shall be included in the
Licensed Proprietary Property licensed to Licensee subject to all of the terms
and conditions set forth in this Agreement.
3.4 LICENSEE IMPROVEMENTS; REPORTING. Licensee shall promptly submit to
Licensor during the term of this Agreement all available information and
Know-How on
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any Improvements, whether patentable, copyrightable or not, now or hereafter
found, discovered, invented, owned, or controlled by Licensee.
3.5 LICENSEE IMPROVEMENTS; OWNERSHIP. Any Improvements, whether
patentable, copyrightable or not, now or hereafter made and found by agents or
employees of Licensee either independently of agents or employees of Licensor
(or an "Other Corporation"), or jointly with others, shall be owned by Licensor
and shall be considered as part of the Licensed Proprietary Property. The
world-wide rights in the corresponding patents, patent applications, copyrights
and/or know-how shall be the property of Licensor subject to all the terms and
conditions of this Agreement, but licensed hereunder to Licensee by Licensor.
Licensee agrees to do all things necessary and required to vest in Licensor all
right, title and interest in and to any such Improvements.
3.6 ASSISTANCE. If patentable or otherwise protectable Improvements are
now or hereafter made and found by agents or employees of Licensee or Licensor,
either independently or jointly with others, and Licensor or Licensee considers
it desirable to obtain patent, copyright or other protection thereon, the other
party agrees to cooperate fully and to do all proper things necessary or
desirable to obtain and maintain patent, copyright or other protection therefor
throughout the world. Upon request, each party agrees to provide reasonable
technical assistance and advice for purposes of filing and prosecuting patent
applications and engaging in opposition, interference and enforcement
proceedings with respect to patent applications and patents within the Patent
Rights or for Improvements.
3.7 IMPROVEMENTS; PROSECUTION BY LICENSEE. Notwithstanding the
provisions in
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Section 3.6 above, if Licensor fails to file an application for patent or
other protection therefor within six (6) months after receipt of a written
request from Licensee to do so, Licensor shall be deemed to have consented to
Licensee obtaining and maintaining the necessary protection therefor at
Licensee's expense.
3.8 INCLUSIONS. If either Licensor or Licensee files patent
applications or otherwise obtains patent rights or copyrights which relate to
the Licensed Proprietary Property, such patent application, patent rights or
copyrights shall be included in the Licensed Proprietary Property, and Licensee
shall have a license therefor under the terms and conditions set forth in this
Agreement.
ARTICLE IV
ROYALTIES AND OTHER CONSIDERATION
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4.1 LICENSE FEE. Upon Licensee's execution of this Agreement, Licensee
shall pay Licensor an up-front non-refundable license fee consisting of
Four Hundred and Ten Thousand Dollars ($410,000) payable in shares of and by
transferring to Licensor shares of the common stock of SuperGen, Inc. Licensee
guarantees, as described herein, the value of such shares to be no less than
such dollar amount (the "Guaranteed Value") on the one (1) year anniversary of
the date on which the shares are transferred to Licensor (hereafter the
"Anniversary Date"). If, during the thirty (30) days preceding the Anniversary
Date (or the next trading date if the Anniversary Date is not a trading date),
the common stock of Licensee has not traded on a public stock exchange for an
average price resulting in such shares being worth on average at least the
Guaranteed Value, then within thirty (30) days Licensee will pay to Licensor a
sum in cash (or, at Licensor's option, in the equivalent value of additional
unrestricted shares of the common stock of SuperGen, Inc.) equal to the
difference between (a) the Guaranteed Value and (b) the average price at which
the common stock of SuperGen, Inc. traded publicly during the thirty (30) days
preceding the Anniversary Date multiplied by the number of shares transferred as
the up-front non-refundable license fee under this Section 4.1. Any shares
provided to Licensor will not be sold for at least one (1) year following the
Anniversary Date, and no more than three thousand (3,000) of the shares shall be
sold on any one trading date.
4.2 ROYALTY. Licensee shall pay Licensor during the term of this
Agreement an earned royalty of [ * ] on Gross Revenues. Only one (1) royalty
shall be payable on a Product, regardless of the number of licensed applications
and licensed patents of the Licensed Proprietary Property under which such
Product has been manufactured, used or
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sold. In the event that a Product is sold in combination as a single product
with another product ("Combination Product"), active component or service (which
product, component or service is not a portion of the Product) and whose sale
and use are not covered by a Valid Claim of the Product in the country for which
the combination product is sold, Gross Revenues from such sales for purposes of
calculating the amounts due under this Agreement shall be calculated by
multiplying the Gross Revenues of that combination by the fraction A/(A+B),
where A is the gross selling price of the Product sold separately and B is the
gross selling price of the other product, active component or service sold
separately. In the event that no such separate sales are made by Licensee or its
Sublicensee, Gross Revenues for royalty determination shall be reasonably
allocated between the Product and such other product, active component or
service, based upon their relative importance and proprietary protection.
Without limitation, liposomal compounds, paclitaxel and analogues thereof, and
aerosol containers (nebulizers) are deemed to be portions of the Product.
4.3 TERM OF ROYALTY OBLIGATION. Royalty payments shall be paid on the
Products commencing on the Effective Date, and unless earlier terminated as
provided herein, shall continue on a country-by-country and Product-by-Product
basis until there are no remaining royalty payment obligations in a country, at
which time the Agreement shall expire in its entirety in such country. Royalty
payments shall cease for any patent which has been declared invalid or
unenforceable by a final determination or judgment, or if this Agreement is
terminated as hereinafter specified and provided.
4.4 SUBLICENSES. Licensee will pay to Licensor [ * ] of all
consideration
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(including, but not limited to, royalties, minimum royalties, up-front payments,
marketing, distribution, franchise, option, license or documentation fees, bonus
and milestone payments, license maintenance fees, and equity-related securities)
received from sublicensees of the Licensed Proprietary Property or the amount of
royalty Licensee would have owed pursuant to Section 4.2 had it engaged in the
same licensed conduct as said sublicensees, whichever is greater, as determined
on a quarterly basis. Notwithstanding the above, it is understood and agreed
that Licensor shall not be entitled to any share of amounts received by Licensee
for pilot studies, research and development, the license or sublicense of any
intellectual property other than the Licensed Proprietary Property,
reimbursement for patent or other expenses, or as consideration for equity or
debt of Licensee.
4.5 DEDUCTIONS FROM ROYALTY PAYMENTS; LIMITATION ON DEDUCTIONS FROM
ROYALTY PAYMENTS. If Licensee or its Sublicensee is required to pay a third
party under a Valid Claim with respect to the third party's intellectual
property or technology in order to make, use or sell a Product, Licensee may
deduct such amount from royalties due to Licensor for such Product.
Notwithstanding the foregoing provisions of this Section 4.5, wherever this
Agreement provides that Licensee may deduct expenses, payments or other amounts
from royalties payable to Licensor, (a) such deduction shall be applied only
against royalties payable from the territory with respect to which such
deduction arose, and (b) such deduction shall be prorated over such time as is
necessary to assure that the royalties payable to Licensor from such territory
in any period shall not be reduced by more than fifty percent (50%) of the
amount that otherwise would be due Licensor
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pursuant to this Agreement.
4.6 MILESTONE PAYMENTS. In addition to the up-front license fee and
royalties required under this Article IV, Licensee shall make milestone
payments to Licensor as set forth in Exhibit 3 hereto. Such payments shall be
made in common stock of Licensee in the amounts recited in Exhibit 3 and
shall be transferred to Licensor within thirty (30) days of occurrence of
each of the events indicated on such exhibit. Such common stock will not be
sold for at least one (1) year following the date on which the stock is
transferred to Licensor, and no more than three thousand (3,000) of the
shares shall be sold on any one trading date. Licensee guarantees the value
of such shares to be the Guaranteed Value calculated in the same manner as
set forth in Section 4.1 of this Agreement.
4.7 MARKETING ARRANGEMENTS. Where Products are marketed by an entity
other than Licensee under any type of commercial arrangement (including,
without limitation, a sublicense, joint venture, distributorship, or
collaboration agreement), the sales of the Products by such entity shall be
used in calculating Gross Revenues for purposes of determining royalties
payable to Licensor hereunder.
4.8 CONDITIONS. The obligations of Licensee under this License
Agreement are conditioned on Licensee's satisfaction in its sole discretion
at or prior to the date this License Agreement is executed with the results
of its due diligence with respect to the business, operations, affairs,
properties, assets, liabilities, obligations, profits and condition
(financial or otherwise) of Licensor; provided that compliance with any such
conditions or parts thereof may be waived in writing by Licensee. Licensor
agrees to provide Licensee with any information, including clinical or
laboratory data or regulatory
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filings, that Licensor requests as part of the due diligence performed under
this Section 4.8.
ARTICLE V
PAYMENT AND REPORTS
5.1 NOTICE OF COMMERCIAL SALE. Licensee shall notify Licensor, in
writing, within thirty (30) days of the date of the first commercial making,
using or selling of Products.
5.2 PAYMENTS AND REPORTS. Licensee agrees that Licensee shall
provide within sixty (60) days after the end of each quarter of each calendar
year:
(a) payment of amounts due to Licensor pursuant to this
Agreement, including, but not limited to, amounts
pursuant to Articles IV and VI; and
(b) a report summarizing the information and basis on
which such amounts have been calculated.
5.3 U.S. DOLLARS. All amounts payable in cash by Licensee shall be
paid in U.S. Dollars. Conversion from currencies other than U.S. Dollars
shall be at the rate of exchange used by Licensee for its general accounting
purposes, consistent with generally accepted accounting principles.
5.4 PROGRESS REPORTS. Until such time as earned royalties become
payable pursuant to this Agreement, Licensee agrees to make an annual report
to Licensor on each annual anniversary of the Effective Date covering
Licensee's progress during the previous year toward research, development and
commercialization.
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5.5 REPORT ON TERMINATION. Licensee also agrees to make a written
report to Licensor within ninety (90) days after the termination of this
Agreement, stating in such report the royalties payable hereunder and the
basis therefor not previously reported to Licensor. Licensee shall also
continue to make annual reports pursuant to the provisions of this Agreement
covering making, using or selling of Products after termination thereof, such
as the selling of stock on hand at termination which is specifically
contemplated by this Agreement and the applicable earned royalties hereunder,
until such time as all such makings, uses or sales shall have terminated.
Concurrent with the submittal of each post-termination report, Licensee shall
pay Licensor all applicable royalties.
5.6 BOOKS AND RECORDS. Licensee shall keep accurate books and
records with respect to the Products and/or Licensed Proprietary Property
sufficient to enable the calculation of royalties payable hereunder to be
verified. Upon thirty (30) days prior notice to Licensee, independent
accountants selected by Licensor, reasonably acceptable to Licensee, after
entering into a confidentiality agreement with Licensee, may have access to
the books and records of Licensee to conduct a review or audit once per
calendar year, for the sole purpose of verifying the accuracy of Licensee's
payments and compliance with this Agreement. The accounting firm shall report
to Licensor only whether there has been a royalty underpayment and, if so,
the amount thereof. Such access shall be permitted during Licensee's normal
business hours during the term of this Agreement and for three (3) years
after the period to which the audit pertains. Any such inspection or audit
shall be at Licensor's expense; provided that in the event the examination or
audit results in a discrepancy in the correctness of the payments due under
this Agreement in an amount in
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excess of five percent (5%) of the payments due Licensor for any single
quarter audited, Licensee shall pay any and all costs or fees associated with
such examination or audit. Neither such right to review or audit nor
Licensor's right to receive any such underpayment shall be affected by any
statement to the contrary appearing on checks or otherwise, unless such
statements appear in a letter, signed by the party having such right and
delivered to the other party, expressly waiving such right. Notwithstanding
the foregoing, Licensor may require Licensee to furnish any other information
reasonably requested to enable Licensor to evaluate Licensee's performance
under this Agreement.
5.7 DELINQUENT PAYMENTS. Payments provided for in this Agreement
shall, when overdue, bear interest at the then existing prime rate at
Citibank of New York (or its successor) plus four percent (4%) per annum
until paid, but in no event shall such interest exceed the usury limit, if
any, as may exist from time to time in the State of Nevada.
ARTICLE VI
EFFORT TO COMMERCIALIZE
6.1 COMMERCIALIZATION OBLIGATION. Licensee shall undertake to use
commercially reasonable efforts with regard to commercialization of the
Products.
6.2 MINIMUM ROYALTIES. Licensee shall pay to Licensor within ninety
(90) days after the date specified at least the following amounts of minimum
royalties within the time periods specified:
(a) on or before the third anniversary of the Effective
Date, at least [ * ].
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(b) on or before the fourth anniversary of the Effective
Date, at least [ * ].
(c) on or before the fifth anniversary of the Effective
Date, at least [ * ].
(d) on or before each succeeding anniversary of the
Effective Date, at least [ * ].
Minimum royalties paid in excess of earned royalties in a
given year shall not be creditable to earned royalties for future years.
Minimum royalties paid under this Section 6.2 may, at Licensee's option, be
paid in shares of the common stock of Licensee. Common stock transferred
under this Section 6.2 will not be sold for at least one (1) year following
the date on which the stock is transferred to Licensor, and no more than
three thousand (3,000) of the shares shall be sold on any one trading date.
Licensee guarantees the value of such shares to be the Guaranteed Value
calculated in the same manner as set forth in Section 4.1 of this Agreement.
ARTICLE VII
PROTECTION OF PATENTS
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7.1 PROTECTION. Licensor agrees, where economically justified and
within reasonable limits, to protect the Licensed Proprietary Property from
infringement or misappropriation by third parties in the Field of Use and to
prosecute such infringers or defendants, but the decision to undertake such
protection shall be in the sole discretion of Licensor, and Licensor's decision
as to whether any such action shall be taken by it shall be accepted by
Licensee. In the event that Licensor shall recover profits and/or damages from
said infringer or defendant in the Field of Use, Licensor agrees to turn over to
Licensee twenty-five percent (25%) of any amounts paid to it by said infringer
or defendant after deducting any of its expenses, including costs and legal fees
incurred in such litigation. Each party agrees to cooperate fully with the other
party in protection of the Licensed Proprietary Property, including by joining
as a party to any proceeding if required by applicable law.
7.2 NOTICE OF INFRINGEMENT; THIRD PARTY INFRINGEMENT. Licensor and
Licensee shall each give immediate written notice to the other of any
infringement of a Patent Right or misappropriation of Know-How or Improvements
by any third party in the Field of Use as may come to its knowledge.
Notwithstanding Section 7.1, if Licensor has not within six (6) months from the
date on which it is notified or otherwise becomes aware of an infringement or
misappropriation of the Licensed Proprietary Property in the Field of Use
either terminated such infringement or initiated legal action against the
infringer or defendant, it shall, upon written request of Licensee, grant to
Licensee the right to prosecute an action against the infringer or defendant
at Licensee's expense. Licensor agrees, in the event that Licensee cannot
prosecute such infringement or misappropriation
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in its own name, to sign and give to Licensee, as soon as practicable, all
necessary documents in order for Licensee to prosecute at Licensee's expense
but in the name of Licensor, such infringement or misappropriation. Licensee
shall be entitled to deduct all of its expenses, including costs and legal
fees incurred in bringing and prosecuting such infringement or
misappropriation action, from royalties due Licensor with respect to the
country in which such action is prosecuted after commencement of such
infringement or misappropriation action. In the event Licensee desires to
settle or compromise such suit or action in a manner that may adversely
impact Licensor or Licensed Proprietary Property, Licensee shall not so
settle or compromise such suit or action without the prior written consent of
Licensor. In the event Licensee shall recover profits and/or damages from
said infringer or defendant, Licensee agrees to pay to Licensor twenty-five
percent (25%) of any amounts paid to it by said infringer or defendant after
deducting any of its expenses, including costs and legal fees incurred in
such litigation.
7.3 NOTICE OF INFRINGEMENT; CLAIM OF LICENSEE INFRINGEMENT. Licensee
shall promptly advise Licensor in writing of any notice or claim of any
infringement and of the commencement against it of any suit or action for
infringement of a third party patent made or brought against Licensee and
based upon the use hereunder by Licensee of the Licensed Proprietary
Property. Licensee shall have the right either to:
(a) request that Licensor enter into negotiations with
such third party to obtain rights for Licensee under
the third party patent; or
(b) request that Licensor defend such suit or action at
Licensor's expense.
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7.4 ASSISTANCE. Licensor is neither obligated to enter into
negotiations with such third party to obtain rights for Licensee under the third
party patent nor obligated to defend such suit or action. If Licensor, at its
sole discretion, elects to enter into negotiations with such third party to
obtain rights for Licensee under the third party patent or if Licensor, at its
sole discretion, elects to undertake at its own expense the defense of any such
suit or action to the extent that the alleged infringement is based upon such
use hereunder of the Licensed Proprietary Property, Licensee shall render to
Licensor all reasonable assistance that may be required by Licensor in the
negotiations or in the defense of such suit or action. Licensor has the primary
right to control the defense of any such suit or action by counsel of its own
choice, and Licensee shall have the right, at its own expense, to be represented
in any such suit or action in respect of which Licensee is a defendant by
counsel of its own choice, subject to Licensor's right of control.
Notwithstanding the foregoing, if Licensor has not within ninety (90) days (or
such lesser period of time as is necessary to avoid entry of a default judgment
against Licensor or Licensee) from the date of receipt of a request from
Licensee under Section 7.3 either entered into negotiations with such third
party to obtain rights for Licensee under the third party patent or initiated
legal action to defend such suit, it shall, upon written request of Licensee,
grant to Licensee the right to enter such negotiations or defend such suit.
Licensee shall be entitled to deduct all its expenses, including attorneys' fees
and specifically including costs and legal fees incurred in entering into such
negotiations or defending such suit from royalties due Licensor after
commencement of such action. Licensee shall not settle or compromise any such
suit or action without the prior written
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consent of Licensor, which consent shall not be unreasonably withheld.
ARTICLE VIII
DISCLAIMER OF LIABILITY AND/OR WARRANTY
8.1 NO WARRANTY. Nothing in this Agreement shall be construed as:
(a) a warranty or representation by Licensor as to the
validity or scope of any Licensed Proprietary
Property; or
(b) a warranty or representation that anything sold,
used, produced or otherwise disposed of under any
license granted in this Agreement is or will be free
from infringement of patents, copyrights, and/or
trademarks of third parties; or
(c) an express or implied warranty of merchantability or
fitness for a particular purpose.
8.2 NO DAMAGES. Licensor shall exercise reasonable care in verifying
the accuracy of information provided under this Agreement but, subject to the
provisions of the last sentence of Section 8.4, Licensor shall not be liable for
any damages arising out of or resulting from any information made available
hereunder or of the use thereof, nor shall it be liable to Licensee for
consequential damages under any circumstances.
8.3 NO WARRANTY OF QUALITY OR USEFULNESS. Licensor shall have no
responsibility for the ability of Licensee to use such information, the quality
or performance of any process or any product produced by Licensee with the aid
of such information, or with respect to claims of third parties arising from
Licensee's use of such information.
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8.4 INDEMNIFICATION. Licensee shall assume all responsibility and
liability for the sale, use, production, and/or commercialization of the
Products, including, but not limited to, the safety, effectiveness, and
reliability of the process and/or products produced pursuant to this Agreement.
Licensee further agrees to defend, indemnify, and hold Licensor, its trustees,
directors, officers, employees, agents, representatives, successors, assigns,
affiliated entities and controlled corporations (as defined herein) harmless
from and against any and all liability, demands, damages, expenses and losses
for death, personal injury, illness, or property damage, including the cost of
defense against same, which may be asserted, or any claims which may be brought
by third parties resulting from the sale, use, production, commercialization, or
other disposition of the Licensed Proprietary Property or Products by Licensee.
Licensee agrees that any sublicenses granted hereunder will include a similar
indemnification provision for the benefit of Licensor. Licensee acknowledges
that the Licensed Proprietary Property included herein is experimental and
agrees to take all reasonable precautions to prevent death, personal injury,
illness, and property damage. Licensor shall defend, indemnify, and hold
Licensee and its directors, officers, employees and agents harmless as against
any and all judgements, fees, expenses, liabilities, or other costs arising from
or incidental to any product liability or other lawsuit, claim, demand or other
action resulting from any claim, suit or proceeding brought by a third party
against any of the foregoing entities, arising out of or in connection with any
misrepresentation by Licensor with regard to, or in breach of, the
representations and warranties set forth in Article X or to the extent due to
the gross negligence or willful misconduct of Licensor.
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8.5 INSURANCE. Licensee agrees to purchase and/or maintain insurance
coverage sufficient, taking into account its other assets, to establish the
ability of Licensee to honor the indemnity made herein, and Licensor shall be
listed as an additional named insured on any such insurance coverage. Licensee
shall furnish evidence of its insurance coverage upon request of Licensor. For
purposes of this agreement, the initial amount of insurance coverage required is
in the face amount of Two Million Dollars ($2,000,000.00).
ARTICLE IX
TERM AND TERMINATION
9.1 TERM. The Term of this Agreement shall be for a period of ten (10)
years extending from the first commercial revenue actually collected or for the
life of the last to expire of the patents or patent applications of the Licensed
Proprietary Property, whichever is earlier, unless sooner terminated as herein
provided.
9.2 TERMINATION FOR CAUSE; INSOLVENCY. If Licensee shall determine that
it intends to declare itself insolvent or file for bankruptcy or reorganization,
it shall give immediate written notice to Licensor. Failure to give such notice
shall cause immediate termination of this Agreement, and all rights of Licensee
in the Licensed Proprietary Property shall automatically revert to Licensor. If
Licensee shall become bankrupt or insolvent; if the business or any assets or
property of Licensee shall be placed in the hands of a receiver, assignee or
trustee, whether by the voluntary act of Licensee or otherwise; if Licensee
institutes or suffers to be instituted any procedure in bankruptcy court for
reorganization or rearrangement of its financial affairs; or if Licensee makes a
general
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assignment for the benefit of creditors, this Agreement shall immediately
terminate, and all rights of Licensee in the Licensed Proprietary Property shall
automatically revert to Licensor. Upon occurrence of any of the foregoing
events, Licensee shall give immediate written notice thereof to Licensor.
9.3 DEFAULT. Upon any breach or default under this Agreement by
Licensee, or upon any breach or default by Licensee under other legal agreements
between Licensor and Licensee, Licensor may give written notice thereof to
Licensee, and Licensee shall have thirty (30) days thereafter to cure such
breach or default. If such breach or default is not so cured, Licensor may then
in its sole discretion and option: (a) convert this exclusive License Agreement
into a non-exclusive License Agreement, or (b) terminate this Agreement and the
licenses granted by it, or (c) seek such other relief as may be provided by law
in such circumstances by giving written notice thereof to Licensee.
Notwithstanding the foregoing, in the event of any termination of this
Agreement, any sublicenses granted by Licensee shall remain in force and effect
and shall be assigned by Licensee to Licensor; provided that such sublicensee is
currently in good standing with regard to its obligations under the sublicense
or has cured any default or breach within the period provided in such
sublicense; and further provided that (a) the financial obligations of each such
sublicensee shall be limited to those due Licensor hereunder for the practice of
such a sublicense; and (b) Licensor shall have no greater obligations,
liabilities or duties to the sublicensee than Licensor has to Licensee under the
terms of this Agreement.
9.4 TERMINATION UPON NOTICE. Any provision herein not withstanding,
Licensee may terminate this Agreement, in its entirety or as to any particular
patent or patent
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application or item of Know-How within the Licensed Proprietary Property, at any
time by giving Licensor at least thirty (30) days prior written notice. From and
after the effective date of such termination under this Section 9.4 with respect
to a particular patent or patent application, such patent(s) or patent
application(s) in the particular country shall cease to be within the Licensed
Proprietary Property for all purposes of this Agreement. Likewise, from and
after the effective date of such termination under this Section 9.4 with respect
to a particular item of Know-How, such item of Know-How shall cease to be within
the Licensed Proprietary Property for all purposes of this Agreement. From and
after the effective date of termination of a patent, patent application or item
of Know-How under this Section 9.4, all rights and obligations of Licensee with
respect to such patent, patent application or item of Know-How shall terminate
with respect to a particular Product, and the license to the terminated patent,
patent application or item of Know-How granted to Licensee under Section 2.1
shall terminate with respect to such Product. Upon termination of this Agreement
in its entirety under this Section 9.4, all rights and obligations of the
parties shall terminate except as provided in Section 9.6 below.
9.5 DISCONTINUANCE OF COMMERCIALIZATION. Upon termination hereof for
any reason, Licensee agrees to discontinue the commercialization of the Licensed
Proprietary Property, and (except as expressly provided herein) all sublicenses
granted hereunder by Licensee shall terminate, or at the option of Licensor, be
deemed to have been assigned to Licensor.
9.6 PROVISIONS SURVIVING TERMINATION. Article V, Article XIII and
Sections 8.1, 8.2, 8.3, 8.4, 10.4 and 11.3 of this Agreement, as well as all
provisions relating to
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Guaranteed Value, shall survive termination of this Agreement.
ARTICLE X
REPRESENTATIONS AND WARRANTIES
10.1 WARRANTY TO TITLE. Licensor represents and warrants that (i) it is
a Nevada nonprofit corporation exempt from taxation under Section 501(c)(3) of
the Internal Revenue Code of 1986; (ii) it owns the Licensed Proprietary
Property; (iii) it has the legal power and authority to extend the rights
granted to Licensee pursuant to this Agreement; (iv) the execution, delivery and
performance of this Agreement have been duly authorized by all necessary
corporate action on the part of Licensor; (v) the Licensed Proprietary Property
is free and clear of any lien, encumbrance, security interest or restriction on
license in the Field of Use; (vi) it has not previously granted, and will not
grant during the term of this Agreement, any right, license or interest in or to
the Licensed Proprietary Property, or any portion thereof, in the Field of Use
inconsistent with the license granted to Licensee herein; and (vii) to
Licensor's best knowledge, there are no threatened or pending actions, suits,
investigations, claims or proceedings in any way relating to the Licensed
Proprietary Property.
10.2 NO OTHER INFORMATION. Licensor represents that it has no knowledge
of any information likely to have a material effect on the validity or
enforceability of any patents within Patent Rights or any claim thereof which
was not disclosed to the Patent Office at the time that the patent applications
therefor were filed or during the pendency of said applications.
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10.3 POWER AND AUTHORITY. Licensee represents and warrants that it has
full power and authority to enter into this Agreement and to carry out the
transactions contemplated hereby.
10.4 COMPLIANCE WITH LAWS. Licensee represents and warrants that it
will comply with all applicable laws and regulations, including without
limitation, all United States laws and regulations controlling the export of
commodities and technical data. Licensee will be solely responsible for any
violation of such laws or regulations by Licensee or its sublicensee, and it
will defend and hold Licensor harmless in the event of any legal action of any
nature occasioned by such violation.
ARTICLE XI
AGENCY/PARTNERSHIP/USE OF NAME
11.1 NO AGENCY. Neither party shall be deemed to be an agent of the
other party as a result of any transaction under or related to this Agreement,
and shall not in any way pledge the other party's credit or incur any
obligations on behalf of the other party.
11.2 NO PARTNERSHIP. This Agreement shall not constitute either a
partnership or a joint venture, and neither party may be bound by the other to
any contract, arrangement or understanding except as specifically stated herein.
11.3 PROHIBITION AGAINST USE OF NAME. Except to the extent required to
comply with applicable laws and regulations and subject to Section 13.3, without
prior written consent obtained from Licensor, which shall not be unreasonably
withheld, Licensee (including any Affiliate or sublicensee of Licensee) shall
not use for purposes of sales,
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advertising, marketing, marking of goods, promotion to investors, press releases
or other publicity, etc.: (i) the name of (or any other information which would
identify) Licensor or any corporation which is controlled by the same persons
who control Licensor ("Other Corporation"); (ii) the names of trustees,
directors, officers, or employees of Licensor or an Other Corporation; or (iii)
any trademarks (or adaptations thereof) of Licensor or an Other Corporation.
Without prior written consent obtained from Licensee, which shall not be
unreasonably withheld, Licensor (including Other Corporations and any other
Affiliate of Licensor) shall not use for purposes of sales, advertising,
marketing, marking of goods, promotion to investors, press releases or other
publicity: (i) the name of (or any other information which would identify)
Licensee or any corporation which is controlled by the same persons who control
Licensee ("Controlled Corporation"); (ii) the names of trustees, directors,
officers, or employees of Licensee or a Controlled Corporation; or (iii) any
trademarks (or adaptations thereof) of Licensee or a Controlled Corporation.
ARTICLE XII
MARKING
Licensee agrees to apply or have applied to all articles and to all
containers containing Products manufactured by it or any sublicensee(s) under
this Agreement such patent notices as may be required by the laws of the
territories where manufactured or as may reasonably be requested by Licensor.
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ARTICLE XIII
NONDISCLOSURE OF CONFIDENTIAL INFORMATION
13.1 CONFIDENTIAL INFORMATION. All Proprietary Property and
confidential scientific and technical information communicated by one party to
the other party under this Agreement, including information contained in patent
applications, if identified in writing as Confidential Information at the time
of disclosure, shall be kept confidential by such other party. Notwithstanding
the foregoing, either party shall be relieved of the confidentiality obligations
herein and not be prevented by this Agreement from utilizing any information
received by it from the other party if:
(a) the information, at the time of disclosure, is in the
public domain or, after disclosure, becomes part of
the public domain through no fault of the receiving
party;
(b) the receiving party can show that the information was
in its possession at the time of disclosure and was
not acquired, directly or indirectly, from the
disclosing party;
(c) the information is lawfully obtained or received from
a third party, other than the disclosing party,
having the legal right to transmit same;
(d) the disclosure of such information is essential for
the commercial exploitation of the Proprietary
Property under this Agreement, provided that such
information is disclosed subject to a secrecy
agreement;
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(e) was independently developed by the receiving party
without reference to any information or materials
disclosed by the disclosing party; or
(f) was subsequently disclosed to the receiving party by
a person other than a party without breach of any
legal obligation to the disclosing party.
13.2 ADDITIONAL PERMITTED DISCLOSURES. In addition, either party may
disclose Confidential Information of the other (i) to their legal
representatives, employees and Affiliates, and legal representatives and
employees of Affiliates, consultants and sublicensees, to the extent such
disclosure is reasonably necessary to achieve the purposes of this Agreement,
and provided such representatives, employees, consultants and sublicensees have
agreed in writing to obligations of confidentiality with respect to such
information no less stringent than those set forth herein; (ii) in connection
with the filing and support of patent applications; (iii) as reasonably required
in the course of a contemplated public offering or private financing; (iv) to a
potential sublicensee or corporate partner that has agreed in writing to
confidentiality obligations no less stringent than set forth herein; or (v) if
disclosure is compelled to be disclosed by a court order or applicable law or
regulation, provided that the party compelled to make such disclosure (a)
requests confidential treatment of such information; (b) provides the other
party with sufficient advance notice of the compelled disclosure to provide
adequate time to seek a protective order; and (c) discloses only the minimum
necessary to comply with the requirement to disclose.
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13.3 NON-DISCLOSURE. The terms of this Agreement shall not be disclosed
by Licensee or Licensor to any third party or be published unless both parties
expressly agree otherwise in writing. Either party shall allow at least three
(3) business days notice of any proposed public disclosure for the other party's
review and comment or to provide written consent. The text of any press release
to be issued by Licensee and/or Licensor concerning this Agreement as well as
the precise date and timing of the press release shall be agreed between the
parties in writing in advance, such agreement not to be unreasonably withheld or
delayed. However, this restriction shall not apply to announcements required by
law or regulation, except that in such event the parties shall coordinate to the
extent possible with respect to the details of any such announcement. This
restriction shall not apply to disclosure of this Agreement to certain private
third parties such as the shareholders, investment bankers, attorneys and other
professional consultants of, and prospective investors in, Licensee or Licensor.
Once a particular disclosure has been approved, further disclosures to similarly
situated private third parties under this provision that do not differ
materially therefrom may be made without obtaining any further consent of the
other party.
ARTICLE XIV
MISCELLANEOUS
14.1 CAPTIONS. The captions herein are for convenience only and shall
not be deemed to limit or otherwise affect the construction hereof.
14.2 NOTICES. Any notice or other communication hereunder must be given
in
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writing and (a) delivered in person, (b) transmitted by telex, telefax or
other telecommunications mechanism, (c) mailed by certified or registered
mail, postage prepaid, receipt requested, or (d) sent by overnight delivery
with charges prepaid and receipt acknowledged, as follows:
If to Licensor, addressed to:
Research Development Foundation
Andrew MacKenzie, Esq.
402 North Division Street
Carson City, Nevada 89703
Attn: C. W. Wellen, President
cc: James F. Weiler, Esq.
If to Licensee, addressed to:
SuperGen, Inc.
Two Annabel Lane, Suite 220
San Ramon, California 94583
Attn: Dr. Joseph Rubinfeld, CEO and President
cc: Ms. Lucy Chang, Senior Director, Planning and Legal
Affairs
or to such other address or to such other person as the party shall have last
designated by such notice to the other party. Each such notice or other
communication shall be effective (i) if given by mail, three (3) days after
such communication is deposited in the mails with postage prepaid, addressed
as aforesaid, or (ii) if given by telecommunication or any other means, when
actually received at such address.
14.3 ASSIGNMENT. This Agreement, in whole or in part, shall not be
assignable by either party without prior written consent of the other party,
which consent shall not be unreasonably withheld (unless to a successor
entity to the assigning party by merger, acquisition or other non-bankruptcy
reorganization), and any attempted assignment
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without such consent shall be void.
14.4 NO WAIVER. The failure of either party to enforce at any time
any of the provisions of this Agreement, or any rights in respect thereto, or
to exercise any election herein provided, shall in no way be considered to be
a waiver of such provisions, rights, or elections, or in any way to affect
the validity of this Agreement. The exercise by either party of any of its
rights herein or any of its elections under the terms or covenants herein
shall not preclude either party from exercising the same or any other rights
it may have under this Agreement, irrespective of any previous action or
proceeding taken by either party hereunder.
14.5 CHOICE OF LAW AND JURISDICTION. This Agreement shall be
governed and construed in accordance with the laws of the State of Nevada,
U.S.A. applicable to contracts made in such State without regard to conflicts
of law doctrines, and the parties agree that jurisdiction and venue for any
dispute regarding this Agreement will be in such State.
14.6 SEVERABILITY. If any provision of this Agreement is judicially
determined to be void or unenforceable, such provision shall be construed to
be severable from the other provisions of this Agreement, which shall retain
full force and effect.
14.7 FURTHER ACTS. The parties hereto agree promptly to execute,
forward, or otherwise provide all documents and material necessary or
desirable to effectuate this Agreement.
14.8 ENTIRE AGREEMENT. Except for a pre-existing confidentiality
agreement, the terms and conditions herein contained together with the
Research Agreement constitute
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the entire agreement between the parties and shall supersede all previous
communications, either oral or written, between the parties hereto with
respect to the subject matter hereof. No agreement or understanding bearing
on the same shall be binding upon either party hereto unless it shall be in
writing and signed by the duly authorized officer or representative of each
of the parties and shall expressly refer to this Agreement.
14.9 SUCCESSORS AND ASSIGNS. This Agreement shall be binding on and
shall inure to the benefit of the parties hereto, and their respective
successors and assigns.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed in multiple originals by their duly authorized representatives.
RESEARCH DEVELOPMENT FOUNDATION
By: /s/ Andrew Mackenzie
---------------------------------------
Print Name: Andrew Mackenzie
-------------------------------
Title: Vice President
------------------------------------
SUPERGEN, INC.
By: /s/ Joseph Rubinfeld
-----------------------------------------
Print Name: Joseph Rubinfeld
--------------------------------
Title: President & Chief Executive Officer
-------------------------------------
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EXHIBIT 1
Proprietary Property
[ * ]
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EXHIBIT 1A
Field of Use
[ * ]
This Field of Use is subject to modification pursuant to Section 6 b.
of the Research Agreement.
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EXHIBIT 2
List of Countries
United States
PCT *
* PCT Countries: All countries will be designated in the initial PCT filing.
Within 30 months of the U.S. filing date, Licensor must select
the specific PCT countries in which to actually file, which
countries are currently expected to be as follows: Australia,
Austria, Belgium, Canada, China, France, Germany, Ireland,
Israel, Italy, Japan, Republic of Korea, New Zealand,
Netherlands, Russian Federation, South Africa, Spain, Sweden,
Switzerland, Taiwan, United Kingdom
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EXHIBIT 3
Milestone Payments
Licensee shall make the following milestone payments to Licensor with
respect to each Product subject to this Agreement:
(a) [ * ] upon the earlier of (i) approval, or (ii) the
date of effectiveness, of an "IND" filed with the FDA
for such Product;
(b) [ * ] upon completion of a "Phase I" human clinical
trial for such Product and the Final Report thereon;
(c) [ * ] upon completion of a "Phase II" human clinical
trial for such Product and the Final Report thereon;
(d) [ * ] upon completion of any other phase of human
clinical trials for such Product required by the FDA
and the Final Report thereon; and
(e) [ * ] upon approval by the FDA of an "NDA" for such
Product.
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EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of SuperGen, Inc. for
the registration of 136,130 shares of its common stock and to the incorporation
by reference therein of our report dated February 18, 2000, with respect to the
consolidated financial statements of SuperGen, Inc. included in its Annual
Report (Form 10-K) for the year ended December 31, 1999, filed with the
Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Palo Alto, California
March 14, 2000
