<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 21, 2000
REGISTRATION NO.
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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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)
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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)
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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. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS AMOUNT TO BE MAXIMUM OFFERING AGGREGATE OFFERING REGISTRATION
OF SECURITIES TO BE REGISTERED REGISTERED(1) PRICE PER SHARE(2) PRICE(1)(2) FEE(3)
<S> <C> <C> <C> <C>
Common Stock $0.001 par value 136,130 $32.69 $4,449,817 $1,174.75
</TABLE>
(1) Pursuant to Rule 416 under the Securities Act, this Registration Statement
also relates to a presumably indeterminable number of shares of Common Stock
which are issuable upon stock splits, stock dividends, recapitalizations or
other similar transactions.
(2) Estimated solely for the purpose of computing the registration fee and based
on the average high and low sale prices of the Common Stock of
SuperGen, Inc. as reported on the Nasdaq National Market on January 13,
2000.
(3) Computed pursuant to Rule 457(c) based on the average high and low sale
prices of the Common Stock of SuperGen, Inc. as reported on the Nasdaq
National Market on January 13, 2000.
------------------------------
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>
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PROSPECTUS
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DATED JANUARY 21, 2000
136,130 SHARES
SUPERGEN, INC.
COMMON STOCK
The selling stockholders of SuperGen, Inc. ("SuperGen," "we," or "the
Company") listed on page 17 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 January 20, 2000, the last reported sale price for the Common Stock
on the Nasdaq National Market was $48.56 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 January 21, 2000.
<PAGE>
SUMMARY
We are an emerging pharmaceutical company dedicated to the acquisition,
rapid development and commercialization of products for the treatment of
life-threatening diseases, particularly cancer. We seek to minimize the time,
expense and technical risk associated with drug commercialization by
identifying, acquiring and developing pharmaceutical compounds in the later
stages of development, rather than committing significant resources to the
research phase of drug discovery.
We are currently focusing our commercialization efforts on two drugs,
Nipent-Registered Trademark- and rubitecan (RFS 2000).
We are currently marketing Nipent-Registered Trademark- in the United States
for the treatment of hairy cell leukemia. We are also conducting clinical trials
of Nipent-Registered Trademark- to seek FDA approval to expand its use for the
treatment of additional forms of leukemia. Rubitecan is a drug compound in the
late stage of clinical development. Clinical studies indicate it has the
potential to treat a variety of solid tumors, including pancreatic, breast,
lung, colorectal, ovarian and prostate cancers, and hematological disorders.
On December 21, 1999, we entered into three agreements with Abbott
Laboratories ("Abbott") pursuant to which Abbott will undertake to market and
distribute the Company's products and invest in shares of common stock of the
Company. The Worldwide Sales, Distribution, and Development Agreement (the
"Worldwide Agreement") covers the development, marketing and distribution of
rubitecan, and grants Abbott an exclusive license to distribute and promote
rubitecan outside the United States and to co-promote rubitecan with us within
the United States. Under the Worldwide Agreement, we are responsible to pursue
the clinical development of rubitecan and to secure regulatory approval of the
product in the United States, Canada and the member states of the European
Union, while Abbott shall be responsible to obtain regulatory approval of the
product in the other countries in the world. While we are responsible for
manufacturing, packaging, sterilization and labeling of the product, Abbott
shall be the exclusive distributor of the product throughout the world. The
co-promotion activities within the United States and the clinical development
will be supervised and overseen by a U.S. Marketing Board and Clinical
Development Committee, respectively, each of which shall be comprised of
representatives from Abbott and SuperGen. The Worldwide Agreement specifies in
detail the pricing terms, sharing of expenses and profits, and royalty payments.
In the U.S. market, the profit from selling the product shall be shared between
the parties, fifty percent (50%) for SuperGen and fifty percent (50%) for
Abbott. Abbott shall pay us royalties and transfer fees based on product sales
outside of the United States.
In addition, Abbott is to make a series of equity investments in SuperGen of
up to $81,500,000 in nine tranches over a period of time along with certain
other cash payments to us, which when aggregated with the equity investments,
amount to approximately $150,000,000. The purchase price of the securities shall
be determined based on the market price at the time of the purchase. Each equity
investment and cash payment is tied to and conditioned upon the achievement of
certain milestones based on, among other things, steps in the regulatory
approval process both in the United States and other countries in the
international territory, the launch of the product in particular territories,
and the target sales of the product. Closing of Abbott's initial $26,500,000
equity investment and an unconditional $5,000,000 cash payment pursuant to the
terms of the U.S. Distribution Agreement occurred in January 2000. There can be
no guarantee that future milestones will be achieved. Abbott may request that we
register the equity securities purchased by Abbott.
We also granted Abbott an option to purchase up to 49% of the outstanding
shares of our common stock at an exercise price of $85 per share. Abbott's
ability to exercise the option is conditioned upon, among other things, the
continued effectiveness of the Worldwide Agreement.
2
<PAGE>
Under a separate U.S. Distribution Agreement, Abbott shall become the
exclusive U.S. distributor for Nipent-Registered Trademark-, our currently
marketed product for the treatment of hairy cell leukemia. We retain U.S.
marketing rights for Nipent-Registered Trademark-.
We are also developing our product line of enhanced generic anticancer drugs
using our Extra proprietary drug delivery technology. This technology,
consisting of a delivery system incorporating the active drug cyclodextrin, has
the following properties:
- The form of a ready to inject, stable solution that increases the ease and
safety of administration.
- Increased shelf life, facilitating multiple doses from a single vial.
- Less susceptibility to ulceration at the injection site due to shielding
properties of the Extra formulation. The drug is released only upon
circulation within the bloodstream.
- Our Extra technology is protected by a combination of exclusive and
non-exclusive licenses and related patents. These patents were issued
between 1991 and 1998. The licenses pertaining to the Extra platform
generally are effective for the terms of the related patents.
We seek to expand our portfolio of anticancer drugs through the acquisition
of products and product candidates, or companies owning such products or
candidates, which complement our portfolio and provide us with market
opportunities. In August 1999, we acquired Sparta Pharmaceuticals, Inc.
("Sparta"), a company with anti-cancer compounds in late-stage clinical
development. Sparta also has, in late stage clinical development, a novel drug
delivery system that allows compounds which are insoluble or poorly soluble in
water to be delivered intravenously (or by other routes) without the need for
organic solvents that may in themselves be toxic.
In September 1999, we acquired the worldwide rights to decitabine, a
chemotherapeutic agent owned by Pharmachemie, a subsidiary of Israel-based Teva
Pharmaceuticals. Decitabine, which has received "orphan drug" status from the
U.S. Food and Drug Administration, is currently in clinical testing for acute
leukemias and other hematological malignancies at Memorial Sloan-Kettering
Hospital in New York City, M.D. Anderson Cancer Center in Houston, and Johns
Hopkins Medical Center in Baltimore.
In December 1999, we entered into licensing and research agreements with the
Clayton Foundation for Research and its technology transfer organization,
Research Development Foundation. Under the terms of the agreements, SuperGen has
acquired worldwide rights to inhaled versions of formulations of camptothecins,
including rubitecan, and taxanes, including paclitaxel
(Taxol-Registered Trademark-). Phase I clinical studies with inhaled rubitecan
(for the treatment of lung cancer and pulmonary metastatic disease) are
currently underway at M.D. Anderson Cancer Center and Baylor College of
Medicine.
In December 1999, we entered into an agreement with AVI BioPharma Inc.
("AVI") whereby we acquired seven and one half percent (7.5%) of AVI's
outstanding common stock for $2.5 million and 100,000 shares of our common
stock. As part of the agreement, we also acquired exclusive negotiating rights
for the United States market for Avicine-TM-, AVI's proprietary cancer vaccine
currently in late-stage clinical testing against a variety of solid tumors.
Avicine is a non-toxic immunotherapy that neutralizes the effect of a
tumor-associated antigen on cancer cells, while stimulating the body's immune
system to react against the foreign tumor. Avicine has completed five clinical
trials in approximately 180 patients.
We also have non-oncology programs in the large market areas of anemias and
other blood cell disorders, obesity/diabetes and autoimmune diseases. We intend
to seek partnerships with larger drug companies for the development and
marketing of these non-oncology drug candidates.
3
<PAGE>
Throughout this prospectus, we use the term "proprietary" to refer to some
of our products and technology. By use of this term, we mean to refer to those
products and technology that are protected from competition by patents,
licenses, manufacturing know-how or a combination of these competitive barriers.
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.
4
<PAGE>
RECENT DEVELOPMENTS
On December 21, 1999, we entered into three agreements with Abbott
Laboratories ("Abbott") pursuant to which Abbott will undertake to market and
distribute our products and invest in shares of our common stock. The Worldwide
Sales, Distribution, and Development Agreement (the "Worldwide Agreement")
covers the development, marketing and distribution of rubitecan, and grants
Abbott an exclusive license to distribute and promote rubitecan outside the
United States, and to co-promote rubitecan with us within the United States. In
addition, Abbott is to make a number of equity investments, and certain other
cash payments, all tied to and conditioned upon the achievement of certain
milestones based on, among other things, steps in the regulatory approval
process both in the United States and other countries in the international
territory, the launch of the product in particular territories, and the target
sales of the product. There can be no guarantee that such milestones will be
achieved. We also granted Abbott an option to purchase a number of shares of our
common stock equal to up to 49% of the outstanding shares of our common stock at
an exercise price of $85 per share. Under a separate U.S. Distribution
Agreement, Abbott shall become the exclusive U.S. distributor for
Nipent-Registered Trademark-, our currently marketed product for the treatment
of hairy cell leukemia. We retain U.S. marketing rights for
Nipent-Registered Trademark-. See "Summary."
RISK FACTORS
YOU SHOULD CAREFULLY CONSIDER THE RISKS DESCRIBED BELOW BEFORE MAKING AN
INVESTMENT DECISION. THE RISKS AND UNCERTAINTIES DESCRIBED BELOW ARE NOT THE
ONLY ONES FACING SUPERGEN. ADDITIONAL RISKS AND UNCERTAINTIES NOT PRESENTLY
KNOWN TO US OR THAT WE CURRENTLY DEEM IMMATERIAL MAY ALSO IMPAIR OUR BUSINESS
OPERATIONS.
IF ANY OF THE FOLLOWING RISKS ACTUALLY OCCUR, OUR BUSINESS, RESULTS OF
OPERATIONS OR CASH FLOWS COULD BE ADVERSELY AFFECTED. IN THOSE CASES, THE
TRADING PRICE OF OUR COMMON STOCK COULD DECLINE, AND YOU MAY LOSE ALL OR PART OF
YOUR INVESTMENT.
WE HAVE INCURRED LOSSES AND OUR BUSINESS WILL SUFFER IF WE FAIL TO ACHIEVE
SIGNIFICANT REVENUES OR PROFITABLE OPERATIONS.
We have incurred cumulative losses of $84.3 million for the period from
inception through September 30, 1999. These losses included non-cash charges of
$18.4 million for the acquisition of in-process research and development. We
have not achieved profitability and expect to continue to incur substantial
operating losses at least through 2000. Substantially all of our revenues have
come from sales of Nipent-Registered Trademark-, and we expect this trend to
continue for some time. Nipent-Registered Trademark- revenues were $2.8 million
for the first nine months of 1999, $2.7 million in 1998, $1.5 million in 1997
and $225,000 in 1996. All of these revenues resulted from commercial sales. Our
ability to achieve profitability will depend on our ability to develop, obtain
regulatory approval for and successfully market Nipent-Registered Trademark- for
other indications, and bring other proprietary products to market. Our ability
to become profitable will also depend upon a variety of other factors, including
the following:
- The price, volume and timing of sales of products.
- The mix between Nipent-Registered Trademark- sales in the United States
and those under a supply agreement with Warner-Lambert Company for sales
outside North America.
- Variations in gross margins of our products, which may be affected by
sales mix and competitive pricing pressures.
- Regulatory approvals of new products or expanded labeling of existing
products.
- Changes in the level of our research and development, including the timing
of any expansion of clinical trials. Clinical trials include the testing
of drug compounds upon human subjects.
- Acquisitions of products, technology or companies.
5
<PAGE>
Our long-term success will also be affected by expenses, difficulties and
delays frequently encountered in developing and commercializing new
pharmaceutical products, competition, and the burdensome regulatory environment
in which we operate. We cannot be certain that we will ever achieve significant
revenues or profitable operations.
OUR BUSINESS COULD SUFFER IF THE RESULTS OF FURTHER CLINICAL TESTING INDICATE
THAT OUR PROPOSED PRODUCTS ARE NOT SUITABLE FOR COMMERCIAL USE
Our proposed proprietary products are in the development rather than the
research stage. However, we must significantly develop all of our proposed
products before we can market them. Although we believe that the results of our
early stage clinical studies support further development of our proposed
proprietary products, the results we have obtained to date do not necessarily
indicate results of further testing, including controlled human clinical
testing. All of the potential proprietary products that we are currently
developing will require extensive clinical testing before we can submit any
regulatory application for their commercial use.
In contrast to our proposed proprietary products,
Nipent-Registered Trademark- and our generic version of mitomycin have been
approved for commercial use and we began sales of these drugs in 1996 and 1998,
respectively.
OUR BUSINESS COULD SUFFER IF WE ARE UNABLE TO SUCCESSFULLY DEVELOP OUR GENERIC
PRODUCTS AND EXTRA PRODUCTS BASED ON GENERIC PRODUCTS BECAUSE THE PATENTS FOR
THE UNDERLYING DRUGS DO NOT EXPIRE
We plan to develop and market several generic and Extra drugs, 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 extended, it is unlikely that
we will be able to market our own generic and Extra versions of those drugs. We
do not believe it is financially prudent to proceed with substantial development
efforts for generic or Extra drugs if we do not know if or when existing patent
protection will cease.
In particular, we plan to develop and market a generic and an Extra version
of paclitaxel, as well as an Extra version of cisplatin. However, the original
patent protection for both drugs has been extended through the issuance of new
patents in the United States. The current cisplatin patent expires in 2013 and
the current use patent for paclitaxel expires in 2002. Other companies
interested in marketing generic versions of these drugs are actively disputing
the legality of these patents and we anticipate that these legal disputes will
be resolved within the next three years. If the patent protection for both these
products is upheld, we will not proceed with further development of these
products. If the patent protection is overturned, we plan to further develop
these products and we believe we can bring them to market within two years of a
favorable patent ruling.
OUR BUSINESS WILL SUFFER IF WE FAIL TO OBTAIN ADEQUATE FUNDING IN A TIMELY
MANNER
We expect that we will need substantial additional funding. Our business,
results of operations and cash flows will be adversely affected if we fail to
obtain adequate funding in a timely manner. Our funding requirements will depend
on many factors, including:
- The progress of our development programs.
- The availability of additional drugs or drug candidates for acquisition by
SuperGen or to be licensed to SuperGen.
- The availability of companies as potential acquisition or merger
candidates.
- Revenue growth, if any.
- The amount of cash generated, if any, by our operations.
6
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- The timing and receipt of regulatory approvals.
- The costs involved in preparing, filing, prosecuting, maintaining,
enforcing and defending patent claims and other intellectual property
rights.
- Developments related to reimbursement matters.
- Competing technological and market developments.
- The need for additional office and manufacturing facilities to accommodate
growth.
We anticipate that our existing capital resources as of the date of this
prospectus will be adequate to fund operations and capital expenditures at least
through June 30, 2001. However, if we experience unanticipated cash requirements
during this period, we could require additional funds much sooner. 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.
OUR BUSINESS WILL SUFFER IF WE FAIL TO OBTAIN REGULATORY MANUFACTURING OR
MARKETING APPROVALS IN A TIMELY MANNER, IF AT ALL
We cannot assure you that we will obtain the necessary regulatory approvals
to manufacture or market our proposed products. The United States Food and Drug
Administration and comparable agencies in foreign countries impose substantial
requirements for the introduction of new pharmaceutical products through lengthy
and detailed clinical testing procedures, sampling activities and other costly
and time-consuming compliance procedures. We have obtained marketing approval
for Nipent-Registered Trademark- and our internally developed generic version of
mitomycin and approval of sources of bulk drugs for our Extra and generic
products. However, we have not yet received marketing approval for any of our
internally developed proprietary products. Our proprietary drugs and Extra drugs
may require substantial clinical trials along with FDA and comparable foreign
agency review as new drugs. Our generic drugs require both approval of the bulk
source of the drug and FDA approval of their final formulation.
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. For example, we initially believed that the FDA would
abbreviate the approval process for our Extra products. However, the FDA is
reviewing Mito Extra, our first Extra product submission, as a new drug. 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.
OUR BUSINESS WILL SUFFER IF WE FAIL TO COMPLY WITH GOVERNMENTAL REGULATIONS
If we fail to comply with regulatory requirements, we may be subject to
regulatory or judicial enforcement actions. Those actions could include product
recalls or seizures, injunctions, civil penalties, criminal prosecution,
refusals to approve new products, withdrawal of existing approvals and
potentially enhanced product liability exposure. Our research, testing,
manufacturing, labeling, distribution, marketing and advertising activities are
regulated extensively by governmental authorities in the United States and other
countries.
7
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ASSERTING AND DEFENDING INTELLECTUAL PROPERTY RIGHTS WILL HARM OUR RESULTS OF
OPERATIONS REGARDLESS OF SUCCESS
Our business will be harmed 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.
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 issued United States patents. However,
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 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.
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 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.
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. If we become involved in any litigation, it could
consume a substantial portion of our resources, regardless of the outcome of the
litigation.
OUR BUSINESS WILL SUFFER IF WE FAIL TO COMPETE EFFECTIVELY, PARTICULARLY AGAINST
LARGER, MORE ESTABLISHED PHARMACEUTICAL COMPANIES WITH GREATER RESOURCES
Our competitors and probable competitors include, among others, Eli Lilly &
Co., Ortho-McNeil Pharmaceutical, Amgen Inc., Gensia-Sicor, Inc., Bristol-Myers
Squibb Company and Immunex Corp. These companies 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 companies may succeed in developing pharmaceutical products that are more
effective or less costly than any that we may develop or market.
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. 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 the product,
its acceptance in
8
<PAGE>
the marketplace, and its pricing and the number, gravity and severity of its
unwanted side effects as compared to alternative products.
Competition for generic products is based primarily on price and, to a
lesser extent, on name recognition and the reputation of the manufacturer in its
target markets. Moreover, the number of competitors offering a particular
generic product could dramatically affect price and gross margin for that
product, or an Extra product based on that generic product. We may be at a
disadvantage in competing with more established companies on the basis of price
or market reputation. In addition, a significant number of Extra products that
we are currently developing consist of, or are based upon, generic products for
which patent protection has expired or is expected to expire. Increased
competition in a particular generic market would likely lead to significant
price erosion for our generic products and Extra products based on those generic
products, which would adversely affect our sales and potential gross profit
margins.
For example, we believe that the total estimated U.S. sales for mitomycin,
bleomycin, etoposide and cisplatin, as well as other of our proposed generic
products and generic products upon which we propose to base Extra products, have
decreased in recent years due to increased competition. We also believe that
sales volumes and unit prices of these generics may continue to decrease as a
result of competitive factors, including the following:
- The introduction of additional generics as well as other anticancer drugs.
- The desire of some companies to increase their market share.
- New formulations for these drugs and the use of different therapies.
Extensive research and development efforts and rapid technological progress
characterize our industry. Although we believe that our proprietary position
gives us a competitive advantage with respect to our proposed non-generic drugs,
we anticipate that development will continue and discoveries by others may
render our current and potential products noncompetitive. In addition, we have
only limited experience in selling and marketing pharmaceutical products.
WE ARE DEPENDENT ON THIRD PARTIES FOR MANUFACTURING AND OUR BUSINESS MAY BE
HARMED IF THE MANUFACTURE OF OUR PRODUCTS IS INTERRUPTED OR DISCONTINUED AND
WE CANNOT OBTAIN THIRD PARTY MANUFACTURING ON ACCEPTABLE TERMS
We currently rely on vendors for manufacturing activities related to
Nipent-Registered Trademark- and our generic version of mitomycin. The
facilities used by these vendors have passed plant inspections required by the
FDA prior to market clearance of all pharmaceutical products. The FDA conducts
these inspections to ensure compliance with current Good Manufacturing Practices
regulations enforced by the FDA. If the facilities fail to maintain their Good
Manufacturing Practices status, or there is an interruption at any of these
facilities due to the occurrence of a fire, natural disaster, equipment failure
or other condition, we will need to locate other facilities. However, we may not
be able to locate facilities that are FDA-approved for manufacturing activities
in a timely manner and on commercially acceptable terms.
In addition, we store the majority of our Nipent-Registered Trademark- crude
concentrate, the unpurified, bulk form of the drug, at a single storage
location. Improper storage, fire, natural disaster, theft or other conditions at
this location that may lead to the loss or destruction of our
Nipent-Registered Trademark- crude 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-Registered Trademark- may be interrupted while we seek to
locate another facility and to have that facility approved by the FDA. The delay
could adversely affect our business, results of operations and cash flows.
9
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We will encounter similar issues with respect to any potential products that
the FDA clears for sale. We must establish and maintain relationships with
manufacturers to produce and package our finished pharmaceutical products,
including rubitecan (RFS 2000). In addition, the FDA must clear the facilities
used by these contract manufacturers. If we are unable to obtain or retain
third-party manufacturing on commercially acceptable terms or obtain necessary
FDA clearances to manufacture the products currently being developed, we may not
be able to commercialize pharmaceutical products as planned. Our dependence upon
third parties for the manufacture of pharmaceutical products may adversely
affect our profit margins and our ability to develop and deliver pharmaceutical
products on a timely and competitive basis.
We currently rely on foreign and domestic manufacturers to obtain bulk drug
substances that are incorporated into our various products. We currently rely on
domestic manufacturers for the production of our unique single source, Extra and
generic formulations and to supply sufficient quantities of products to conduct
clinical trials on Extra and other proposed proprietary products. If we are
unable to contract for or obtain a sufficient supply of bulk drug substance or
potential pharmaceutical products on acceptable terms, or these supplies are
delayed or contaminated, we could experience:
- Significant reductions in sales.
- Delays in bringing our proposed Extra and other single source proprietary
and generic products to market.
- Delays in preclinical and human clinical testing schedules.
- Delays in submitting products for regulatory approval and initiating new
development programs.
Any of these factors could adversely affect our business, results of
operations and cash flows.
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 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 and in a cost-effective manner.
OUR BUSINESS WILL SUFFER IF WE LOSE KEY PERSONNEL OR ARE UNABLE TO ATTRACT AND
RETAIN THE ADDITIONAL, HIGHLY SKILLED PERSONNEL REQUIRED FOR THE EXPANSION OF
OUR ACTIVITIES
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
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
10
<PAGE>
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
pharmaceutical products may expose us to liability claims from the use of these
pharmaceutical 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. 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. In the event of an accident,
we could be held liable for any damages that result, and the liability could
exceed our resources.
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.
- 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 law. In general, Section 203 of the Delaware General
Corporation Law prevents stockholders 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 those stockholders 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 SuperGen to first negotiate with us.
11
<PAGE>
We believe that the benefits of increased protection of SuperGen's potential
ability to negotiate with the proponents of unfriendly or unsolicited proposals
to acquire or restructure SuperGen outweigh the disadvantages of discouraging
those proposals because, among other things, negotiation of those proposals
could result in an improvement of their terms.
THE IMPACT OF OUR AGREEMENTS WITH ABBOTT MAY ADVERSELY AFFECT YOUR INVESTMENT
Consummation of the transactions contemplated by the three agreements
entered into with Abbott, including without limitation, the equity purchases and
cash payments, are subject to numerous risks and conditions, including without
limitation, failure to achieve milestones, failure to achieve regulatory
approval, commercial viability or market acceptance of rubitecan, and continued
effectiveness of the agreements. In addition, Abbott's option to purchase a
number of shares of common stock equal to up to 49% of our outstanding common
stock may not be approved by our stockholders, may not receive regulatory
approval, and if approved may dilute our stockholders and may provide Abbott
with significant influence over our management. If exercised, Abbott's share
ownership, together with Abbott's contractual right of first discussion with
respect to our product portfolio and its right of first refusal to acquire
SuperGen, may discourage other third parties from acquiring us. Additionally,
the Worldwide Agreements may be terminated in its entirety or on a
territory-by-territory basis for a variety of reasons, including reasons related
to approval or market acceptance of rubitecan.
BECAUSE CURRENT OFFICERS, DIRECTORS, AND ABBOTT OWN A LARGE PERCENTAGE OF OUR
STOCK, THESE STOCKHOLDERS MAY BE ABLE TO CONTROL SUPERGEN AND ALSO PREVENT
POTENTIALLY BENEFICIAL ACQUISITIONS OF SUPERGEN
As of January 19, 2000, our officers, directors, and Abbott beneficially
owned approximately 55.4% of the outstanding shares of our common stock.
Beneficial ownership includes shares of our common stock subject to options and
warrants exercisable within sixty days of January 19, 2000. Abbott's ability to
obtain a number of shares of our common stock equal to up to 49% of our
outstanding common stock is subject to stockholder and regulatory approval.
These stockholders, if acting together, may be able to elect all of our
directors and otherwise significantly influence matters requiring approval by
our stockholders. This concentration of ownership and the lack of cumulative
voting may also delay or prevent a third party from acquiring us.
These stockholders may have interests that differ from other stockholders of
SuperGen, particularly in the context of potentially beneficial acquisitions of
SuperGen. For example, to the extent that these stockholders are employees of
SuperGen, they may be less inclined to vote for acquisitions of SuperGen
involving the termination of their employment or diminution of their
responsibilities or compensation.
THE TRADING PRICE OF YOUR STOCK MAY DECREASE DUE TO FACTORS BEYOND OUR CONTROL
The trading prices of our common stock are 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.
- Changes in earnings estimates of operational results by analysts.
- 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
12
<PAGE>
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 three years from the date of this prospectus, the market
price per share of our common stock has fluctuated between approximately $5.125
and $48.813.
OUR BUSINESS MAY BE HARMED IF WE BECOME SUBJECT TO SECURITIES CLASS ACTION
LITIGATION
In the past, following periods of volatility in the market price of a
company's common stock, securities class action litigation has been brought
against the issuing company. This type of litigation could be brought against us
in the future. The litigation could be expensive and divert management's
attention and resources, which could adversely affect our business and results
of operations whether or not our defense is successful. If the litigation is
determined against us, we could also be subject to significant liabilities.
THE MARKET PRICE OF OUR STOCK MAY FALL IF OTHER STOCKHOLDERS SELL THEIR STOCK
If our stockholders sell substantial amounts of our common stock in the
public market the price of our common stock could fall. These sales also might
make it more difficult for us to sell equity or equity-related securities in the
future at a price we deem appropriate.
As of January 19, 2000, we had 26,978,775 shares of our common stock
outstanding. Of these shares, approximately 25,461,100 shares were eligible for
sale in the public market.
As of January 19, 2000, we had reserved an additional 10,507,681 shares of
our common stock for future issuance upon exercise of outstanding options and
warrants. If these securities are exercised, and subsequently sold in the public
market, this may cause the price of our common stock to fall.
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 19, 2000 there
were 3,715,444 of such warrants outstanding. We will redeem any of these
warrants that are outstanding as of April 16, 2000 at a price of $0.25 per
share. We expect that holders of the 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.
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 thirty day
trading period following April 16, 2000 is less than $19.46, 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.
WE CONTINUE TO MONITOR YEAR 2000 COMPLIANCE ISSUES
Many computer systems and software products were coded to accept only two
digit entries in the year code field. These date code fields will need to accept
four digit entries to distinguish 21st century dates from 20th century dates.
We, and third parties with whom we do business, rely on numerous computer
programs in our day-to-day operations. Due to the proximity of the date of this
prospectus to January 1, 2000, we continue to monitor year 2000 issues as they
relate to our internal systems and those of third parties with whom we interact.
We believe that modifications and conversions of our internal systems and
equipment have allowed us to achieve year 2000 compliance in a timely manner.
There can be no assurance, however, that our internal systems or equipment will
be entirely error-free,
13
<PAGE>
or those external parties on which we rely will be year 2000 compliant in a
timely manner, or that our or external parties' contingency plans will mitigate
sufficiently the effects of any noncompliance. Based upon currently available
information and considering our year 2000 project status, management believes
that the year 2000 issue will not impact business operations. However, there is
still the possibility that future year 2000 related failures in our systems or
equipment and/or failure of external parties to achieve year 2000 compliance
could have a material adverse effect on us.
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 12 sell all of our common stock
registered under this prospectus:
- Annual Report on Form 10-K for the fiscal year ended December 31, 1998.
- Amendment No.1 to Annual Report on Form 10-K for the fiscal year ended
December 31, 1998.
- Quarterly Report on Form 10-Q for the quarter ended March 31, 1999.
- Quarterly Report on Form 10-Q for the quarter ended June 30, 1999.
- Quarterly Report on Form 10-Q for the quarter ended September 30, 1999.
- Proxy Statement for the 1999 Annual Meeting of Stockholders.
- 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.
- The description of our acquisition of Sparta Pharmaceuticals, Inc. on
August 12, 1999, contained in our Current Report on Form 8-K filed on
August 26, 1999, and Form 8-K/A filed on October 13, 1999.
- The description of our Warrant redemption call contained in our Current
Report on Form 8-K filed on October 4, 1999.
- The description of our agreements entered into with Abbott Laboratories on
December 21, 1999 contained in our current report on Form 8-K filed on
December 23, 1999, and Form 8K/A filed on January 7, 2000.
- All other reports filed in accordance with Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 since December 31, 1998.
14
<PAGE>
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.
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.
15
<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 January 19, 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
16
<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 January 19, 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. As of January 19, 2000, there were
26,978,775 shares of common stock outstanding.
The following table sets forth the beneficial ownership of each selling
stockholder. Beneficial ownership is determined in accordance with the rules of
the SEC. In computing the number of shares beneficially owned by a person and
the percentage ownership of that person, shares of common stock subject to
warrants held by that person that are currently exercisable are deemed
outstanding, (while these shares are not deemed outstanding for purposes of
computing percentage ownership of any other person). Unless otherwise indicated
in the footnotes below, the persons and entities named in the table have sole
voting and investment power as to all shares beneficially owned, subject to
community property laws where applicable.
<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.
17
<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, 1998, as set forth in their report, which is incorporated by
reference in this prospectus and elsewhere in the registration
18
<PAGE>
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.
The consolidated financial statements of Sparta Pharmaceuticals, Inc., one
of our wholly-owned subsidiaries, included in our report on Form 8-K dated
August 26, 1999, have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report with respect thereto, and are
incorporated herein by reference in reliance upon the authority of said firm as
experts in giving said reports. Reference is made to said report, which includes
an explanatory paragraph with respect to the uncertainty regarding Sparta's
ability to continue as a going concern as discussed in Note 1 to the financial
statements.
19
<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
Recent Developments................... 5
Risk Factors.......................... 5
Where You Can Find More Information... 14
Note Regarding Forward-Looking
Statements.......................... 15
Use of Proceeds....................... 16
Dividend Policy....................... 16
Selling Stockholders.................. 16
Plan Of Distribution.................. 18
Legal Matters......................... 18
Experts............................... 18
</TABLE>
136,130 SHARES
SUPERGEN, INC.
COMMON STOCK
---------------------
PROSPECTUS
---------------------
JANUARY 21, 2000
<PAGE>
- -------------------------------------------
- -------------------------------------------
<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 Registration Rights Agreement dated December 15, 1999
between the Registrant and AVI BioPharma, Inc.
4.2 Subscription Agreement dated December 1, 1999 between the
Registrant and AVI BioPharma, Inc.
4.3* Research Agreement (Camptothecin) dated November 15, 1999
between the Registrant and Clayton Foundation for
Research.
4.4* 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 Opinion of Wilson Sonsini Goodrich & Rosati, P.C.
23.1 Consent of Ernst & Young LLP, Independent Auditors
23.2 Consent of Arthur Andersen LLP
23.3 Consent of Ernst & Young LLP, Independent Auditors
23.4 Consent of Counsel (included in Exhibit 5.1)
24.1 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.
* Confidential treatment has been requested.
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 January 19, 2000.
<TABLE>
<S> <C> <C>
SUPERGEN, INC.
By: /s/ JOSEPH RUBINFELD
-----------------------------------------
Joseph Rubinfeld, Ph.D.
CHIEF EXECUTIVE OFFICER,
PRESIDENT AND DIRECTOR
</TABLE>
POWER OF ATTORNEY
We, the undersigned officers and directors of SuperGen, Inc. hereby
constitute Joseph Rubinfeld our true and lawful attorney with full power to sign
for us and in our names in the capacities indicated below the Registration
Statement filed herewith and any and all amendments to said Registration
Statement, and generally to do all such things in our name and behalf in our
capacities as officers and directors to enable SuperGen, Inc. to comply with the
provisions of the Securities Act of 1933, as amended, and all requirements of
the Securities and Exchange Commission, hereby ratifying and confirming our
signatures as they may be signed by our said attorney to said Registration
Statement and any and all amendments thereto.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement and Power of Attorney 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 January 19, 2000
Joseph Rubinfeld Director (Principal Executive Officer)
/s/ RONALD H. SPAIR
------------------------------- Chief Financial Officer (Principal January 19, 2000
Ronald H. Spair Financial and Accounting Officer)
/s/ DENIS BURGER
------------------------------- Director January 19, 2000
Denis Burger
------------------------------- Director
Lawrence J. Ellison
/s/ JULIUS A. VIDA
------------------------------- Director January 19, 2000
Julius A. Vida
/s/ DANIEL ZURR
------------------------------- Director January 19, 2000
Daniel Zurr
</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 Registration Rights Agreement dated December 15, 1999
between the Registrant and AVI BioPharma, Inc.
4.2 Subscription Agreement dated December 1, 1999 between the
Registrant and AVI BioPharma, Inc.
4.3* Research Agreement (Camptothecin) dated November 15, 1999
between the Registrant and Clayton Foundation for
Research.
4.4* 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 Opinion of Wilson Sonsini Goodrich & Rosati, P.C.
23.1 Consent of Ernst & Young LLP, Independent Auditors
23.2 Consent of Arthur Andersen LLP
23.3 Consent of Ernst & Young LLP, Independent Auditors
23.4 Consent of Counsel (included in Exhibit 5.1)
24.1 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.
* Confidential treatment has been requested.
II-5
<PAGE>
Exhibit 4.1
SUPERGEN, INC.
REGISTRATION RIGHTS AGREEMENT
- --------------------------------------------------------------------------------
THIS REGISTRATION RIGHTS AGREEMENT (this "Registration Rights
Agreement") is entered into as of the 15th day of December, 1999, by and among
SUPERGEN, INC., a Delaware corporation (the "Company"), and AVI BIOPHARMA, INC.,
an Oregon corporation ("Investor"), in connection with the purchase of certain
shares of the Company's common stock (the "Common Shares") under the terms of
that certain Subscription Agreement of even date herewith (the "Subscription
Agreement"). The Common Shares shall be referred to hereinafter as the
"Registrable Securities."
RECITALS
WHEREAS, the Company proposes to sell the Shares pursuant to
the Subscription Agreement;
WHEREAS, as a condition of entering into the Subscription
Agreement, the Investor has requested that the Company extend to it certain
registration rights and other rights as set forth below; and
WHEREAS, promptly after the Closing under the Subscription
Agreement, the Company shall file a registration statement with the Securities
and Exchange Commission relating to the Shares.
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in this
Registration Rights Agreement and in the Subscription Agreement, the parties
mutually agree as follows:
1. DEFINITIONS. As used in this Registration Rights Agreement the
following terms shall have the following respective meanings:
"CLOSING" has the meaning ascribed thereto in the Subscription
Agreement.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"FORM S-3" means such form under the Securities Act as in
effect on the date hereof or any successor registration form under the
Securities Act subsequently adopted by the SEC which permits inclusion or
incorporation of substantial information by reference to other documents filed
by the Company with the SEC.
"REGISTER," "REGISTERED," and "REGISTRATION" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of
effectiveness of such registration statement.
"REGISTRABLE SECURITIES" means the Shares.
1
<PAGE>
"REGISTRATION STATEMENT" means any registration statement of
the Company that covers the Shares pursuant to the provisions of this
Registration Rights Agreement, including the Prospectus included therein, all
amendments and supplements thereto (including post-effective amendments) and all
exhibits and material incorporated by reference or deemed to be incorporated by
reference therein.
"SEC" or "COMMISSION" means the Securities and Exchange
Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.
2. REGISTRATION OF SHARES.
2.1 REGISTRATION STATEMENT. Promptly after the Closing, the
Company shall prepare and file with the Commission a Registration Statement on
Form S-3 pursuant to Rule 415 under the Securities Act. In addition, the Company
shall:
(a) Use its best efforts to cause such Registration
Statement to become effective as promptly as practicable after the Closing and
to keep such Registration Statement continuously effective for a period of two
years following the date on which the Registration Statement becomes effective
under the Securities Act, or such shorter period ending on the earlier of the
date (i) when all Registrable Securities covered by this Registration Statement
have been sold or (ii) when all Registrable Securities covered by the
Registration Statement may be sold without registration under the Securities Act
pursuant to the exemptions provided by Rule 144 under the Securities Act (and
are not restricted as to volume) (the "Registration Period").
(b) Prepare and file with the SEC such pre-effective
and post-effective amendments and supplements to such Registration Statement and
the prospectus used in connection with such Registration Statement as may be
necessary to cause the Registration Statement to become effective, to keep the
Registration Statement continuously effective during the Registration Period and
not misleading, and as may otherwise be required or applicable under, and to
comply with the provisions of, the Securities Act with respect to the
disposition of all securities covered by such Registration Statement during the
Registration Period.
(c) Furnish to the Investor such number of copies of
a prospectus, including a preliminary prospectus, and each amendment or
supplement thereto, in conformity with the requirements of the Securities Act,
and such other documents as they may reasonably request in order to facilitate
the disposition of Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the
securities covered by such Registration Statement under such other securities or
Blue Sky laws of such jurisdictions as shall be necessary to permit the sale of
the Registrable Securities.
(e) Notify promptly the Investor (and in the case of
(i)(A) in no event less than two business days prior to such filing) and (if
requested) confirm such notice in writing, (i)(A) when a prospectus or any
prospectus supplement or post-effective amendment is proposed to be filed, and
(B) with respect to a Registration Statement or any post-effective amendment,
when the same has become effective, (ii) of any request by the SEC or any other
federal or state governmental authority for amendments or supplements to a
Registration Statement or related prospectus or for additional information,
(iii) of the issuance by the SEC of any stop order suspending the effectiveness
of a Registration Statement or the initiation of any proceedings for that
purpose, (iv) of the receipt by the Company of any notification with respect to
the suspension of the
2
<PAGE>
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of any
proceeding for such purpose, and (v) of the happening of any event that makes
any statement made in such Registration Statement or related prospectus or any
document incorporated or deemed to be incorporated therein by reference untrue
in any material respect or that requires the making of any changes in such
Registration Statement, prospectus or documents so that, in the case of the
Registration Statement, it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and that in the case of
the prospectus, it will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
(f) Use its reasonable best efforts to avoid the
issuance of, or, if issued, obtain the withdrawal of, any order suspending the
effectiveness of a Registration Statement, or the lifting of any suspension of
the qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, at the earliest practicable moment.
(g) If requested by the Investor, (i) promptly
incorporate in a prospectus supplement or post-effective amendment such
information as the Investor reasonably requests should be included therein
regarding Investor or the plan of distribution of the Registrable Securities,
and (ii) make all required filings of the prospectus supplement or such
post-effective amendment as soon as practicable after the Company has received
notification of such matters to be incorporated in such prospectus supplement or
post-effective amendment: PROVIDED, HOWEVER, that the Company shall not be
required to take any action pursuant to this Section 2.1(g) that would, in the
opinion of outside counsel for the Company, violate applicable law.
(h) Upon the occurrence of any event contemplated by
Section 2.1(e)(v), as promptly as practicable, prepare a supplement or
amendment, including a post-effective amendment, to each Registration Statement
or a supplement to the related prospectus or any document incorporated or deemed
to be incorporated therein by reference, and file any other required document so
that, as thereafter delivered, such prospectus will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(i) Use its reasonable best efforts to cause all
Registrable Securities relating to such Registration Statement to be listed on
each securities exchange or automated quotation system, if any, on which similar
securities issued by the Company are then listed.
2.2 SELLER INFORMATION. The Company may require Investor as to
which any registration is being effected to furnish to the Company such
information regarding Investor, such Investor's Registrable Securities and
Investor's intended method of disposition as the Company may from time to time
reasonably request; PROVIDED that such information shall be used only in
connection with such registration.
If the Registration Statement refers to Investor,
then Investor shall promptly (i) notify the Company and its counsel of the
existence of any fact of which Investor becomes aware and the happening of any
event which relates to Investor or the distribution of the securities owned by
Investor which results in the Registration Statement containing an untrue
statement of material fact or omitting to state a material fact required to be
stated therein or necessary to make any statements therein not misleading, or
the Prospectus included in such Registration Statement
3
<PAGE>
containing an untrue statement of material fact or omitting to state a material
fact required to be stated therein or necessary to make any statements therein,
in light of the circumstances under which they were made, not misleading, and
(ii) provide to the Company such information which relates to Investor or the
distribution of the securities owned by Investor as shall be necessary to enable
the Company to prepare a supplement or post-effective amendment to such
Registration Statement or related Prospectus or any document incorporated
therein by reference or file any other documents required so that such
Registration Statement will not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and such Prospectus shall not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
2.3 NOTICE TO DISCONTINUE. Investor agrees that, upon receipt
of any notice from the Company of the happening of any event of the kind
described in Section 2.1(e)(ii) through (v), Investor shall forthwith
discontinue disposition of Registrable Securities pursuant to the Registration
Statement covering such Registrable Securities until Investor's receipt of the
copies of the supplemented or amended prospectus contemplated by Section 2.1(h)
and, if so directed by the Company, Investor shall deliver to the Company (at
the Company's expense) all copies, other than permanent file copies, then in
Investor's possession of the Prospectus covering such Registrable Securities
which is current at the time of receipt of such notice.
2.4 EXPENSES OF REGISTRATION. Except only as specifically
provided herein, all expenses incident to the performance under or compliance
with this Registration Rights Agreement by the Company shall be borne by the
Company, regardless of whether the Registration Statement becomes effective,
including, without limitation, (i) all registration and filing fees and expenses
(including filings made with the National Association of Securities Dealers
("NASD"), if applicable); (ii) fees and expenses (including fees and expenses of
counsel for the Company) of compliance with federal securities and state Blue
Sky or other securities laws; (iii) expenses of printing, messenger and delivery
services, duplication, word processing and telephone incurred by the Company
(but not by Investor); (iv) fees and disbursements of counsel for the Company;
(v) all application and filing fees in connection with listing Common Shares on
a national securities exchange or automated quotation system pursuant to the
requirements hereof; and (vi) all fees and disbursements of independent
certified public accountants of the Company (including the expenses of any
special audit and "cold comfort" letters required by or incident to such
performance). The Company will, in any event, bear its own internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expenses of any annual
audit and the fees and expenses of any person, including special experts,
retained by the Company. Investor shall bear its own legal fees and expenses and
any underwriting fees or brokerage commissions incident to their disposition of
the Registered Securities.
2.5 INDEMNIFICATION.
(a) INDEMNIFICATION BY COMPANY. To the extent
permitted by law, the Company will indemnify and hold harmless Investor, the
partners, officers and directors of Investor and each person, if any, who
controls Investor within the meaning of the Securities Act or the Exchange Act,
against any losses, claims, damages, or liabilities (joint or several) to which
they may become subject under the Securities Act, the Exchange Act or other
federal or state law, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any of the following
statements, omissions or violations (collectively a "Violation") by the Company:
(i) any untrue statement or alleged untrue statement of a material fact
contained in the
4
<PAGE>
Registration Statement or any amendments or supplements thereto, or the omission
or alleged omission to state therein a material fact required to be stated
therein, or necessary to make the statements therein not misleading, (ii) any
untrue statement or alleged untrue statement of a material fact contained in the
Prospectus (including any preliminary, final or summary prospectus, amendment or
supplement thereto) included in such Registration Statement or any omission or
alleged omission to state a material fact required to be stated therein or
necessary to make any statement therein, in light of the circumstances under
which they were made, not misleading, or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any state
securities law or any rule or regulation promulgated under the Securities Act,
the Exchange Act or any state securities law in connection with the offering
covered by the Registration Statement; PROVIDED, HOWEVER, that the Company will
not be liable for indemnification in any such case to the extent that any
losses, claims, damages or liabilities arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact or omission or alleged
omission of a material fact so made in reliance upon and in conformity with
information furnished to the Company by or on behalf of Investor. The Company
will pay to Investor, partner, officer, director or controlling person any legal
or other expenses reasonably incurred by them in connection with investigating
or defending any such loss, claim, damage, liability or action if it is finally
judicially determined (which determination is not subject to appeal) that there
was such a violation.
(b) INDEMNIFICATION BY INVESTOR. To the extent
permitted by law, Investor will, if Registrable Securities held by Investor are
included in the securities as to which such registration, qualification or
compliance is being effected, indemnify and hold harmless the Company, each of
its directors, its officers, agents and each person, if any, who controls the
Company within the meaning of the Securities Act or the Exchange Act against any
losses, claims, damages or liabilities (joint or several) to which the Company
or any such director, officer, agent or controlling person may become subject
under the Securities Act, the Exchange Act or other federal or state law,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereto) arise out of or are based upon any Violation, in each case to the
extent (and only to the extent) that such Violation occurs in reliance upon and
in conformity with written information furnished by or on behalf of Investor
under an instrument executed by Investor and stated to be specifically for use
in connection with such registration; and Investor will pay as incurred any
legal or other expenses reasonably incurred by the Company or any such director,
officer, agent, controlling person or other person in connection with
investigating or defending any such loss, claim, damage, liability or action if
it is finally judicially determined (which determination is not subject to
appeal) that there was such a Violation; PROVIDED, HOWEVER, that in no event
shall any indemnity under this Section 2.5(b) exceed the dollar amount of
proceeds from the offering received by Investor.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. Promptly
after receipt by an indemnified party under this Section 2.5 of notice of the
commencement of any action (including any governmental action), such indemnified
party will, if a claim in respect thereof is to be made against any indemnifying
party under this Section 2.5, deliver to the indemnifying party a written notice
of the commencement thereof and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume the defense
thereof with counsel mutually satisfactory to the parties; PROVIDED, HOWEVER,
that an indemnified party shall have the right to retain its own counsel, with
the fees and expenses to be paid by the indemnifying party, if, in the
reasonable judgment of such indemnified party, based upon advice of counsel, a
conflict of interest may exist between such indemnified party and the
indemnifying party with respect to such claims (in which case, if the
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume
5
<PAGE>
the defense of such claim on behalf of such indemnified party; PROVIDED,
HOWEVER, that the indemnified party shall be entitled to select only one counsel
at the expense of the indemnifying party and such counsel shall be reasonably
acceptable to the indemnifying party). The failure to deliver written notice to
the indemnifying party within a reasonable time of the commencement of any such
action, if it is finally determined in a court of competent jurisdiction (which
determination is not subject to appeal) that such failure is materially
prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
2.5, but the omission so to deliver written notice to the indemnifying party
will not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 2.5. No indemnifying party shall be liable for
any settlement of any claim or action effected without its written consent.
(d) CONTRIBUTION. If the indemnification provided for
in this Section 2.5 is held by a court of competent jurisdiction to be
unavailable to an indemnified party with respect to any losses, claims, damages
or liabilities referred to herein, the indemnifying party, in lieu of
indemnifying such indemnified party thereunder, shall to the extent permitted by
applicable law contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability in such proportion as
is appropriate to reflect the relative fault of the indemnifying party on the
one hand and of the indemnified party on the other in connection with the
Violation(s) that resulted in such loss, claim, damage or liability, as well as
any other relevant equitable considerations. The relative fault of the
indemnifying party and of the indemnified party shall be determined by a court
of law by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact relates to
information supplied by the indemnifying party or by the indemnified party and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission; PROVIDED, that in no event
shall any contribution by Investor hereunder exceed the dollar amount of
proceeds from the offering received by Investor.
(e) SURVIVAL; SETTLEMENT. The obligations of the
Company and Investor under this Section 2.5 shall survive completion of any
offering of Registrable Securities in a registration statement and the
termination of this Registration Rights Agreement. No indemnifying party, in the
defense of any such claim or litigation, shall, except with the consent of each
indemnified party, consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such indemnified party of a release from all liability
in respect to such claim or litigation.
3. RULE 144. The Company covenants that it will file the reports
require to be filed by it (if so required) under the Securities Act and the
Exchange Act and the Rules and Regulations adopted by the SEC thereunder in a
timely manner and, if at any time the Company is not required to file such
reports, it will, upon the request of Investor, make publicly available other
information so long as necessary to permit sales pursuant to Rule 144 under the
Securities Act. The Company further covenants that it will take such further
action as Investor may reasonably request, all to the extent required from time
to time to enable Investor to sell Registrable Securities without registration
under the Securities Act pursuant to the exemptions provided by Rule 144 under
the Securities Act. Upon the request of Investor, the Company will deliver to
Investor a written statement as to whether it has complied with such information
requirements.
4. MISCELLANEOUS.
4.1 GOVERNING LAW. This Registration Rights Agreement shall
be governed by and construed under the laws of the State of Delaware.
6
<PAGE>
4.2 SURVIVAL. The representations, warranties, covenants, and
agreements made herein shall survive any investigation made by Investor and the
closing of the transactions contemplated hereby.
4.3 ENTIRE AGREEMENT. This Registration Rights Agreement,
including any exhibits hereto, the Purchase Agreement and the other documents
delivered pursuant thereto constitute the full and entire understanding and
agreement between the parties with regard to the subjects hereof and no party
shall be liable or bound to any other in any manner by any representations,
warranties, covenants and agreements except as specifically set forth herein and
therein.
4.4 SEVERABILITY. In case any provision of the Agreement shall
be invalid, illegal, or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
4.5 AMENDMENT AND WAIVER. The provisions of this Registration
Rights Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Company has obtained the written
consent of Investor.
4.6 DELAYS OR OMISSIONS. It is agreed that no delay or
omission to exercise any right, power or remedy accruing to Investor, upon any
breach, default or noncompliance of the Company under this Registration Rights
Agreement shall impair any such right, power or remedy, nor shall it be
construed to be a waiver of any such breach, default or noncompliance, or any
acquiescence therein, or of any similar breach, default or noncompliance
thereafter occurring. It is further agreed that any waiver, permit, consent or
approval of any kind or character on Investor's part of any breach, default or
noncompliance under the Agreement or any waiver on Investor's part of any
provisions or conditions of this Registration Rights Agreement must be in
writing and shall be effective only to the extent specifically set forth in such
writing. All remedies, either under this Registration Rights Agreement, by law,
or otherwise afforded to Investor, shall be cumulative and not alternative.
4.7 NOTICES. All notices, requests, consents and other
communications hereunder shall be in writing and shall be deemed effectively
given: (a) upon personal delivery to the party to be notified, (b) when sent by
confirmed facsimile if sent during normal business hours of the recipient; if
not, then on the next business day, (c) upon receipt when sent by first-class
registered or certified mail, return receipt requested, postage prepaid, or (d)
upon receipt after deposit with a nationally recognized overnight express
courier, postage prepaid, specifying next day delivery with written verification
of receipt. All communications shall be sent to the party to be notified at the
address as set forth below or at such other address as such party may designate
by ten (10) days advance written notice to the Company. All communications shall
be addressed as follows:
7
<PAGE>
(a) if to the Company, to:
Dr. Joseph Rubinfeld
President & CEO
SuperGen, Inc.
Two Annabel Lane
San Ramon, CA 94583
Telephone: 925-327-0200
Facsimile: 925-327-7347
and to:
John Roos, Esq.
Wilson Sonsini Goodrich & Rosati,
Professional Corporation
650 Page Mill Road
Palo Alto, CA 94304-1050
Telephone: 650-493-9300
Facsimile: 650-493-6811
(b) if to the Investor, at the address as set
forth on the Execution Page of this
Registration Rights Agreement.
4.8 ATTORNEYS' FEES. In the event that any dispute among the
parties to this Registration Rights Agreement should result in litigation, the
prevailing party in such dispute shall be entitled to recover from the losing
party all fees, costs and expenses of enforcing any right of such prevailing
party under or with respect to this Registration Rights Agreement, including
without limitation, such reasonable fees and expenses of attorneys and
accountants, which shall include, without limitation, all fees, costs and
expenses of appeals.
4.9 TITLES AND SUBTITLES. The titles of the sections and
subsections of this Registration Rights Agreement are for convenience of
reference only and are not to be considered in construing this Registration
Rights Agreement.
4.10 COUNTERPARTS. This Registration Rights Agreement may be
executed in any number of counterparts, each of which shall be an original, but
all of which together shall constitute one instrument.
SUPERGEN, INC.
A Delaware corporation
By: /s/ Joseph Rubinfeld
--------------------
Name: Joseph Rubinfeld, Ph.D.
-----------------------
Title: President & Chief Executive Officer
-----------------------------------
8
<PAGE>
By signing below, the undersigned agrees to the terms of the
SUPRGEN, INC. Registration Rights Agreement.
INVESTOR:
By: /s/ Alan P. Timmins
-------------------
Name: Alan P. Timmins
Title: Chief Operating Officer & Chief Financial Officer
Address: One SW Columbia, Suite 1105 Portland, OR 97258
Facsimile: (503) 227-0751
9
<PAGE>
Exhibit 4.2
SUBSCRIPTION AGREEMENT
This Subscription Agreement is made this 1st day of December, 1999,
by and between SUPERGEN, INC., a Delaware corporation ("SuperGen"), and AVI
BIOPHARMA, INC., an Oregon corporation ("AVI"), in connection with the
subscription by SuperGen for 1,000,000 shares of the common stock of AVI (the
"AVI Securities"), par value .0001, for a price of Five Dollars ($5.00) per
share.
1. SUBSCRIPTION. SuperGen subscribes for the AVI Securities.
1.1 CASH CONSIDERATION. At closing, SuperGen shall pay to
AVI the amount of Two Million Five Hundred Dollars ($2,500,000) in
immediately available funds.
1.2 STOCK CONSIDERATION. At closing, SuperGen shall deliver
to AVI 100,000 shares of the common stock of SuperGen, .001 par value,
registered in the name of AVI (the "SuperGen Securities"), which shares shall
be deemed to have a value of Two Million Five Hundred Thousand Dollars
($2,500,000).
2. REPRESENTATIONS OF SUPERGEN.
2.1 INVESTMENT INTENT. SuperGen represents and warrants to AVI
that SuperGen is purchasing the AVI Securities for SuperGen's own account and
investment and not with a view to, or for sale in connection with, any
distribution, and that SuperGen can withstand the loss of SuperGen's entire
investment and has no need for liquidity in the investment the Securities
represent.
2.2 QUALIFIED INVESTOR. SuperGen warrants and represents to
AVI that SuperGen is an accredited investor within the meaning of Regulation
501, as promulgated under the Securities Act of 1933, as amended, and warrants
that all information there presented is materially accurate.
2.3 INVESTMENT EXPERIENCE. SuperGen is experienced in
evaluating and investing in companies in the development stage, and has such
knowledge and experience in financial or business matters that it is capable of
evaluating the merits and risks of the investment in the AVI Securities.
2.4 AUTHORIZATION. The execution, delivery and performance of
this Agreement by SuperGen does not (i) require the consent, approval or
authorization of any governmental or regulatory authority having jurisdiction
and (ii) will not violate any applicable law, judgment, order, injunction,
decree, rule, regulation or ruling of any governmental authority applicable to
SuperGen.
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PAGE 1 - SUBSCRIPTION AGREEMENT
<PAGE>
2.5 AUTHORITY TO EXECUTE AGREEMENT. SuperGen has full power
and authority and legal right to make this Agreement and to incur and perform
its obligations hereunder and the performance by SuperGen of this Agreement has
been duly authorized by all necessary action of SuperGen.
2.6 ACCESS TO INFORMATION. SuperGen represents and warrants
that SuperGen and its Board of Directors has received copies of AVI's filings
under the Securities and Exchange Act of 1934, as amended, including, without
limitation, the risk factors they contain; SuperGen further understands that
forward-looking statements in such filings are not warranted and must be
regarded as highly speculative and uncertain. SuperGen has had such opportunity
to ask questions and to examine the operations of AVI as SuperGen wishes, and
has availed themselves of such opportunity as SuperGen deems appropriate.
2.7 RESTRICTED SECURITIES, LEGEND. SuperGen understands that
the AVI Securities have not been registered under the Securities Act of 1933, as
amended, in reliance upon an exemption from registration. Such exemption depends
upon, among other things, the bona fide nature of SuperGen's investment intent
stated in this Subscription Agreement. SuperGen understands that the AVI
Securities must be held indefinitely, unless the Securities subsequently are
registered under the Securities Act of 1933 or unless an exemption from
registration is otherwise available. SuperGen understands that AVI is not
obligated to register the Securities, except as hereafter provided. SuperGen
agrees that the AVI Securities may not be offered, sold, transferred, pledged,
or otherwise disposed of in the absence of an effective registration statement
under the Securities Act of 1933 and applicable state securities laws or an
opinion of counsel acceptable to AVI that such registration is not required.
SuperGen understands that the documentation representing the Securities will be
imprinted with substantially the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE
STATE SECURITIES LAWS. THE SHARES HAVE BEEN ACQUIRED WITHOUT A VIEW TO
DISTRIBUTION AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SHARES UNDER THE ACT AND UNDER ANY APPLICABLE SECURITIES LAWS, OR
AN OPINION OF COUNSEL FOR THE HOLDER (CONCURRED IN BY LEGAL COUNSEL FOR
THE CORPORATION) THAT SUCH REGISTRATION IS NOT REQUIRED AS TO SUCH
OFFER OR SALE. THE STOCK TRANSFER AGENT HAS BEEN ORDERED TO EFFECTUATE
TRANSFERS OF THIS CERTIFICATE ONLY IN ACCORDANCE WITH THE ABOVE
INSTRUCTION.
3. REPRESENTATIONS OF AVI.
3.1 INVESTMENT INTENT. AVI represents and warrants to SuperGen
that AVI is purchasing the SuperGen Securities for AVI's own account and
investment and not with a view
- --------------------------------------------------------------------------------
PAGE 2 - SUBSCRIPTION AGREEMENT
<PAGE>
to, or for sale in connection with, any distribution, and that AVI can withstand
the loss of AVI's entire investment and has no need for liquidity in the
investment the Securities represent.
3.2 QUALIFIED INVESTOR. AVI warrants and represents to
SuperGen that AVI is an accredited investor within the meaning of Regulation
501, as promulgated under the Securities Act of 1933, as amended, and warrants
that all information there presented is materially accurate.
3.3 INVESTMENT EXPERIENCE. AVI is experienced in evaluating
and investing in companies in the development stage, and has such knowledge and
experience in financial or business matters that it is capable of evaluating the
merits and risks of the investment in the SuperGen Securities.
3.4 AUTHORIZATION. The execution, delivery and performance of
this Agreement by AVI does not (i) require the consent, approval or
authorization of any governmental or regulatory authority having jurisdiction
and (ii) will not violate any applicable law, judgment, order, injunction,
decree, rule, regulation or ruling of any governmental authority applicable to
AVI.
3.5 AUTHORITY TO EXECUTE AGREEMENT. AVI has full power and
authority and legal right to make this Agreement and to incur and perform its
obligations hereunder and the performance by AVI of this Agreement has been duly
authorized by all necessary action of AVI.
3.6 ACCESS TO INFORMATION. AVI represents and warrants that
AVI and its Board of Directors has received copies of SuperGen's filings under
the Securities and Exchange Act of 1934, as amended, including, without
limitation, the risk factors they contain; AVI further understands that
forward-looking statements in such filings are not warranted and must be
regarded as highly speculative and uncertain. AVI has had such opportunity to
ask questions and to examine the operations of SuperGen as AVI wishes, and has
availed themselves of such opportunity as AVI deems appropriate.
3.7 RESTRICTED SECURITIES, LEGEND. AVI understands that the
SuperGen Securities have not been registered under the Securities Act of 1933,
as amended, in reliance upon an exemption from registration. Such exemption
depends upon, among other things, the bona fide nature of AVI's investment
intent stated in this Subscription Agreement. AVI understands that the SuperGen
Securities must be held indefinitely, unless the Securities subsequently are
registered under the Securities Act of 1933 or unless an exemption from
registration is otherwise available. AVI understands that SuperGen is not
obligated to register the Securities, except as hereafter provided. AVI agrees
that the SuperGen Securities may not be offered, sold, transferred, pledged, or
otherwise disposed of in the absence of an effective registration statement
under the Securities Act of 1933 and applicable state securities laws or an
opinion of counsel acceptable to SuperGen that such registration is not
required. SuperGen understands that the documentation representing the
Securities will be imprinted with substantially the following legend:
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PAGE 3 - SUBSCRIPTION AGREEMENT
<PAGE>
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE
STATE SECURITIES LAWS. THE SHARES HAVE BEEN ACQUIRED WITHOUT A VIEW TO
DISTRIBUTION AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SHARES UNDER THE ACT AND UNDER ANY APPLICABLE SECURITIES LAWS, OR
AN OPINION OF COUNSEL FOR THE HOLDER (CONCURRED IN BY LEGAL COUNSEL FOR
THE CORPORATION) THAT SUCH REGISTRATION IS NOT REQUIRED AS TO SUCH
OFFER OR SALE. THE STOCK TRANSFER AGENT HAS BEEN ORDERED TO EFFECTUATE
TRANSFERS OF THIS CERTIFICATE ONLY IN ACCORDANCE WITH THE ABOVE
INSTRUCTION.
4. CLOSING. The closing of the transaction contemplated hereunder shall
take place at a place and time mutually agreed by SuperGen and AVI not more than
fifteen (15) days after the date hereof.
5. EXCLUSIVE RIGHT TO NEGOTIATE. SuperGen and AVI presently are
negotiating the terms and conditions of a definitive agreement wherein SuperGen
shall enjoy the rights to market and sell AVICINE, AVI's anti-cancer therapeutic
vaccine. For and in consideration of this Subscription, SuperGen and AVI agree
that between the date of this Subscription Agreement and the earlier of (a)
termination of negotiations with respect to the Definitive Agreement by mutual
agreement of SuperGen and AVI, or (b) February 28, 2000, AVI shall not, and
shall use its best efforts to insure that its directors, officers and advisors
do not, directly or indirectly, institute, pursue or enter into any discussions,
negotiations, or agreements (whether preliminary or definitive) with any person
or entity other than SuperGen contemplating or providing for the marketing and
sale of AVICINE by any party other than SuperGen. In addition, AVI shall suspend
and not resume during such time period any discussions or negotiations described
above which were initiated prior to the execution of this Subscription
Agreement. AVI further agrees that any definitive agreement entered into between
SuperGen and AVI to market and sell AVICINE, contemplated by this section, shall
include provisions, mutually agreed by the parties, whereby SuperGen shall enjoy
a first option on AVI's portfolio of anti-cancer therapeutic products.
6. REGISTRATION RIGHTS.
6.1 REGISTRATION OF AVI SECURITIES. At the closing, AVI shall
enter into a Registration Rights Agreement with SuperGen providing Super Gen
"piggyback" registration rights with respect to the AVI Securities but providing
further for the registration of the AVI Securities not later than ninety (90)
days after the closing date hereof.
6.2 REGISTRATION OF SUPERGEN. At the closing, SuperGen shall
enter into a Registration Rights agreement with AVI providing AVI "piggyback"
registration rights with
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PAGE 4 - SUBSCRIPTION AGREEMENT
<PAGE>
respect to the SuperGen Securities but providing further for the registration of
the SuperGen Securities not later than ninety (90) days after the closing date
hereof.
7. OTHER MATTERS.
7.1 SEVERABILITY. Each clause of this agreement is severable.
If any clause is ruled void or unenforceable, the balance of the agreement shall
nonetheless remain in effect.
7.2 NON-WAIVER. A waiver of one or more breaches of any clause
of this agreement shall not act to waive any other breach, whether of the same
or different clauses.
7.3 GOVERNING LAW, JURISDICTION. This agreement is governed by
the laws of the state of Oregon, and is enforceable only in the state or federal
courts located in Oregon, in which both parties consent to jurisdiction.
7.4 ATTORNEYS' FEES. The prevailing party in any suit, action,
arbitration, or appeal filed or held concerning this agreement shall be entitled
to reasonable attorneys' fees.
7.5 AMENDMENTS. This agreement may be modified only in writing
signed by the original parties hereto, their successors, or by their authorized
representatives.
IN WITNESS WHEREOF, the parties have heretofore signed this
Subscription Agreement.
SUPERGEN, INC., a Delaware corporation AVI BIOPHARMA, INC. an Oregon
corporation
By: /s/ Joseph Rubinfeld By: /s/ Alan Timmins
-------------------- ----------------
Title: Chief Executive Officer & President Title: Chief Operating Officer
& Chief Financial Officer
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PAGE 5 - SUBSCRIPTION AGREEMENT
<PAGE>
AMENDMENT 1 TO SUBSCRIPTION AGREEMENT
This amendment to Section 1 of the Subscription agreement is an addition to the
terms previously agreed to.
1.3 RE-EXCHANGE OF CASH CONSIDERATION. SuperGen and AVI each have the
right, but not the obligation, to demand a re-exchange of AVI's 500,000
shares and SuperGen's $2.5 million in cash if an arrangement, under the
general terms of the Letter of Intent between the two companies, is not
agreed to by the date contemplated therein. This right shall last for
30 days from the termination date of the Letter of Intent and will be
completed within 180 days of such date.
IN WITNESS WHEREOF, the parties have heretofore signed this Amendment.
AVI BIOPHARMA, INC., an Oregon corporation
By: /s/ Alan Timmins
----------------
Title: Chief Operating Officer & Chief Financial Officer
SUPERGEN, INC., a Delaware corporation
By: /s/ Joseph Rubinfeld
--------------------
Title: Chief Executive Officer & President
<PAGE>
AMENDMENT TO SUBSCRIPTION AGREEMENT
This Amendment (the "AMENDMENT") is made as of December 15, 1999 by and
between SuperGen, Inc., a Delaware corporation ("SUPERGEN") and AVI BioPharma,
Inc., an Oregon corporation ("AVI").
BACKGROUND
A. SuperGen and AVI entered into a Subscription Agreement dated as of
December 1, 1999 (the "SUBSCRIPTION AGREEMENT") providing for SuperGen to pay
AVI $2.5 million in cash (the "CASH CONSIDERATION") and issue to AVI 100,000
shares of SuperGen common stock in exchange for 1,000,000 shares of AVI common
stock and the exclusive right from the date of the Subscription Agreement until
February 28, 2000 to negotiate an agreement for SuperGen to market and sell
Avicine and have a right of first option with respect to AVI's portfolio of
anti-cancer therapeutic compounds.
B. Pursuant to Section 7.5 of the Subscription Agreement, SuperGen and
AVI previously amended the Subscription Agreement and desire to further amend
the Subscription Agreement to clarify the conditions under which there may be a
redemption of 500,000 shares of AVI common stock. Unless defined in this
Amendment, all capitalized terms shall have the meanings set forth in the
Subscription Agreement.
NOW, THEREFORE, SuperGen and AVI agree as follows:
Section 1.3 of the Agreement shall be deleted and replaced in its
entirety by the following:
1.3 REDEMPTION. In the event that by February 28, 2000 (the "EXPIRATION
DATE") SuperGen and AVI have not entered into a definitive agreement for
SuperGen to market and sell Avicine and for SuperGen to have a right of first
option with respect to AVI's portfolio of anti-cancer therapeutic compounds, all
on substantially the terms as set forth in the letter of intent attached to this
Amendment, SuperGen and AVI shall each have the right, but not the obligation,
to request in writing a redemption of 500,000 shares of AVI common stock in
exchange for return to SuperGen of the Cash Consideration (the "REDEMPTION").
(a) NOTICE PERIOD. For a period of 30 calendar days following
the Expiration Date (the "NOTICE PERIOD"), SuperGen and AVI may each deliver
written notice to the other of their desire to cause the Redemption.
(b) EXCHANGE DATE. The Redemption shall occur on a date (the
"REDEMPTION DATE") no later than 180 calendar days after the Expiration Date.
(c) DELIVERY. AVI shall deliver to SuperGen the full amount of
the Cash Consideration, along with any interest earned thereon, and SuperGen
shall deliver 500,000 shares of AVI common stock on the Redemption Date.
(d) SECURITY. To ensure AVI's obligations under this Section
1.3, AVI shall establish an account for the receipt of the Cash Consideration.
The account will be owned by AVI and will require the signature of an officer of
AVI and an officer of SuperGen before any funds can be disbursed from this
account. Once established, there will be no changes of any nature whatsoever to
the account without the written consent of an officer from both SuperGen and
AVI. SuperGen agrees to terminate this security arrangement promptly after the
earlier of (i) the expiration of the Notice Period (if a Redemption was not
requested) or (ii) AVI's full performance of its obligations under the
Redemption provisions of Section 1.3.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the day and year first above written.
SUPERGEN, INC.
By: /s/ Joseph Rubinfeld
--------------------
Joseph Rubinfeld
Chief Executive Officer and President
AVI BIOPHARMA, INC.
By: /s/ Alan P. Timmins
-------------------
Alan P. Timmins
Chief Operating Officer and
Chief Financial Officer
<PAGE>
CONFIDENTIAL TREATMENT REQUEST
EXHIBIT 4.3
* Portions denoted with an asterisk have been omitted and filed separately with
the Securities and Exchange Commission pursuant to a request for confidential
treatment.
RESEARCH AGREEMENT (CAMPTOTHECIN)
This Research Agreement (the "Agreement"), effective as of the 15th day
of November, 1999 (the "Effective Date"), is between CLAYTON FOUNDATION FOR
RESEARCH, a Texas nonprofit corporation having its office at One Riverway, Suite
1560, Houston, Texas 77056 ("Clayton"); RESEARCH DEVELOPMENT FOUNDATION, a
Nevada nonprofit corporation having its office at 402 North Division Street,
Carson City, Nevada 89703 ("RDF"); and SUPERGEN, INC., a Delaware corporation
having an office at Two Annabel Lane, Suite 220, San Ramon, California 94583
("Company").
WITNESSETH:
WHEREAS, Clayton is a nonprofit organization exempt from taxation under
Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the "Code");
WHEREAS, RDF is a nonprofit organization exempt from taxation under
Section 501(c)(3) of the Code that is assigned title to inventions, discoveries
and know-how arising out of Clayton's research for patenting and licensing;
WHEREAS, Company is interested in research in the field described in
Exhibit A hereto (the "Field of Interest");
WHEREAS, Clayton has ongoing research involving cancer therapy wherein
camptothecin and analogues thereof, including, but not limited to,
9-nitro-camptothecin and analogues thereof, are delivered in liposomes to the
respiratory tract via aqueous aerosol droplets, at Baylor College of Medicine
("Institution") under the direction of Vernon Knight, M.D. ("Scientist"), at
least some of which is directed to the Field of Interest;
WHEREAS, Company will provide funding to Clayton for its use in the
conduct of further research at Institution under the direction of Scientist, all
as described herein;
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<PAGE>
CONFIDENTIAL TREATMENT REQUEST
WHEREAS, Clayton will assign to RDF any inventions, discoveries and
know-how arising out of such research; and
WHEREAS, RDF will, subject to the terms and conditions hereof, grant to
Company an exclusive license to any inventions or discoveries arising out of the
research funded hereunder;
NOW THEREFORE, in consideration of the above premises and the mutual
covenants and agreements herein, the parties agree as follows:
1. SUPPLY OF RESEARCH MATERIAL. Company will provide to Scientist at no
cost such quantities of 9-nitro-camptothecin (GMP grade) (hereafter "9-NC") as
Clayton and Scientist will need to conduct the research contemplated hereunder.
Clayton, through Scientist, will notify Company reasonably in advance of its
needs for and quantities of 9-NC required. In the event that Company cannot or
does not provide Clayton with the required quantities of 9-NC, Clayton may
purchase such quantities, and Company will promptly reimburse Clayton for the
cost thereof by cash payment. Such cost shall not reduce the amounts that
Company agrees to pay Clayton otherwise pursuant to this Agreement.
2. RESEARCH. Clayton will conduct research at Institution under the
direction of Scientist in accordance with the work plan set forth in Exhibit B
hereto. Such work plan may be modified or changed from time to time by written
agreement of Clayton and Company.
3. FUNDING. Company will provide funding to be used for the performance
of this research as set forth in Exhibit C hereto.
4. REPORTING. Clayton will keep Company informed of the progress of the
research conducted hereunder. Clayton agrees to make periodic informal verbal
reports to a designated representative or representatives of Company, to respond
to reasonable inquiries of Company regarding the status of the research, to
promptly disclose to Company the existence of any discoveries or inventions
which are made in the conduct of the research hereunder, and to provide to
Company a detailed written report to be prepared annually or at the conclusion
of the research.
5. INVENTIONS/PATENTS. Any discoveries or inventions which are
conceived or reduced to practice during the term of this Agreement and which
directly result from the performance of the research hereunder, as well as any
patent applications and patents therefor, shall be owned by RDF but shall be
subject to Company's license as set forth below. RDF shall have the right in the
first instance to elect to prepare, file, prosecute and maintain patent
applications for such inventions and, if it declines to do so, Company shall
have the right to do so. Neither Company nor RDF
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<PAGE>
CONFIDENTIAL TREATMENT REQUEST
will forego or abandon such patenting efforts without first notifying the other
party of its intent and allowing such other party the opportunity to pursue
patenting at the latter's sole expense and responsibility.
6. a. LICENSE. Any discoveries or inventions hereunder shall be
deemed to be "Proprietary Property" as defined in the License Agreement
(Camptothecin) of November 15, 1999, between RDF and Company (the "License
Agreement"), which License Agreement is incorporated herein by reference for all
purposes. Thus such discoveries and inventions automatically shall be licensed
exclusively to Company in the Field of Use as defined in the License Agreement
under the terms and conditions set forth therein. At the appropriate time, the
parties agree to amend Exhibit 1 of the License Agreement to include discoveries
and inventions hereunder as Proprietary Property for purposes of the License
Agreement.
b. ANALOGUE RESEARCH; ELECTION. While all analogues of
camptothecin are included in the Field of Use granted to Company pursuant to the
License Agreement, the Work Plan (Exhibit B) contemplates that the research
pursuant to this Agreement will be limited to the 9-NC analogue of camptothecin.
Clayton, at its sole expense, may conduct research on camptothecin analogues
other than 9-NC (hereafter "Other Analogue(s)") either during or after the term
of this Agreement. If comparative xenograft model studies of any Other
Analogue(s) demonstrate equivalency to 9-NC, Clayton or RDF may so notify
Company in writing. Within thirty (30) days from the date of such notice,
Company shall inform Clayton or RDF in writing whether it elects to enter into a
research agreement with Clayton and fund research with respect to the Other
Analogue(s) that are the subject of Clayton's or RDF's notice to Company. Absent
such a timely election by Company, the Other Analogue(s) subject of Clayton's or
RDF's notice to Company shall thereafter be deemed excluded from the Field of
Use of Exhibit 1A of the License Agreement. In the event that Company elects to
fund research with respect to the Other Analogue(s) that are subject of
Clayton's or RDF's notice to Company, the parties shall in good faith negotiate
a research agreement with mutually agreeable terms, and Company will pay to
Clayton (i) the amount that Company and Clayton agree upon for conduct of the
research, and (ii) a sum to reimburse Clayton for its research costs with
respect to each of the Other Analogue(s) up to the date of Company's written
election, said sum to be calculated as follows:
i. [ * ]; and
ii. [ * ].
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<PAGE>
CONFIDENTIAL TREATMENT REQUEST
7. TERM; TERMINATION OF AGREEMENT. Anything herein to the contrary
notwithstanding, this Agreement and the transactions contemplated by this
Agreement shall terminate on November 15, 2001; provided that the term hereof
may be extended by mutual consent in writing of Clayton and Company; and
provided further that this Agreement may otherwise be terminated at any time as
follows:
a. MUTUAL CONSENT. By mutual consent in writing of Clayton
and Company.
b. COMPANY'S FAILURE TO MEET ITS OBLIGATIONS HEREUNDER. By
Clayton by written notice to Company if Company fails to carry out its
obligations under the terms of this Agreement or under the terms of other legal
agreements between Company and either RDF or Clayton, and does not cure any such
failure within thirty (30) days after notice thereof from Clayton.
c. RDF OR CLAYTON'S FAILURE TO MEET OBLIGATIONS HEREUNDER. By
Company by written notice to RDF if RDF or Clayton fail to carry out their
obligations under the terms of this Agreement and do not cure any such failure
within thirty (30) days after notice thereof from Company.
8. EFFECT OF TERMINATION. In the event that this Agreement shall be
terminated, all further obligations of the parties under this Agreement shall
terminate without further liability of any party to another; provided, however,
that the confidentiality obligations of the parties contained in Section 17
hereof, Company's license under discoveries and inventions prior to termination
pursuant to Section 6 a., and the analogue research and election pursuant to
Section 6 b., shall survive any such termination. Notwithstanding the foregoing,
a termination shall not relieve any party of any liability for a breach of, or
for any misrepresentation under, this Agreement or be deemed to constitute a
waiver of any available remedy (including specific performance if available) for
any such breach or misrepresentation.
9. AMENDMENTS; WAIVERS. This Agreement and any schedule or exhibit
attached hereto may be amended only by agreement in writing of all parties. No
waiver of any provision nor consent to any exception to the terms of this
Agreement or any agreement contemplated hereby shall be effective unless in
writing and signed by the party to be bound and then only to the specific
purpose, extent and instance so provided.
10. SCHEDULES; EXHIBITS; INTEGRATION. Each schedule and exhibit
delivered pursuant to the terms of this Agreement shall be in writing and shall
constitute a part of this Agreement, although schedules need not be attached to
each copy of this Agreement. This Agreement, together with such schedules and
exhibits, and the
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<PAGE>
CONFIDENTIAL TREATMENT REQUEST
License Agreement constitute the entire agreement among the parties pertaining
to the subject matter hereof and supersede all prior agreements and
understandings of the parties in connection therewith.
11. BEST EFFORTS; FURTHER ASSURANCES. Each party shall use its best
efforts to cause all conditions to its and the other parties' obligations
hereunder to be timely satisfied and to perform and fulfill all obligations on
its part to be performed and fulfilled under this Agreement, to the end that the
transactions contemplated by this Agreement shall be effected substantially in
accordance with its terms as soon as reasonably practicable. The parties shall
cooperate with each other in such actions.
12. GOVERNING LAW. Except as otherwise expressly provided, this
Agreement and the legal relations between the parties shall be governed by and
construed in accordance with the laws of the State of Nevada applicable to
contracts made and performed in such State and without regard to conflicts of
law doctrines, and jurisdiction and venue for any dispute regarding this
Agreement will be in such State.
13. NO ASSIGNMENT. Neither this Agreement nor any rights or obligations
under it are assignable without the prior written consent of the other parties
hereto.
14. HEADINGS. The descriptive headings of the sections and subsections
of this Agreement are for convenience only and do not constitute a part of this
Agreement.
15. COUNTERPARTS. This Agreement and any amendment hereto or any other
agreement (or document) delivered pursuant hereto may be executed in one or more
counterparts and by different parties in separate counterparts. All of such
counterparts shall constitute one and the same agreement (or other document) and
shall become effective (unless otherwise provided therein) when one or more
counterparts have been signed by each party and delivered to the other parties.
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<PAGE>
CONFIDENTIAL TREATMENT REQUEST
16. PUBLICITY / PUBLICATIONS.
a. Clayton and Company shall coordinate all publicity relating
to the transactions contemplated by this Agreement. No party hereto shall issue
any press release, publicity statement or other public notice relating to this
Agreement, or the transactions contemplated by this Agreement, without the prior
consent of both Clayton and Company, except to the extent otherwise required by
applicable law. Unless required by law, without prior written consent from the
other party, a party shall not use for purposes of sales, 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)
the other party or any corporation which is controlled by the same persons who
control such other party ("Other Corporation"); (ii) the names of trustees,
directors, officers, or employees of such other party or an Other Corporation;
or (iii) any trademarks (or adaptations thereof) of such other party or an Other
Corporation.
b. Each party is prepared to assist the other parties in
seeking patent or copyright protection for proprietary property owned by the
others. In this regard, no publication of the subject matter and/or results of
the research conducted hereunder shall be made by any party without giving the
other parties sixty (60) days notice in advance thereof so that patent
applications can be filed before such publication, if appropriate.
-6-
<PAGE>
CONFIDENTIAL TREATMENT REQUEST
17. CONFIDENTIALITY. All proprietary property and information disclosed
by any party (or its representatives) whether before or after the date hereof,
in connection with the transactions contemplated by, or the discussions and
negotiations preceding, this Agreement to any other party (or its
representatives) shall be kept confidential by such other party and its
representatives and, unless waived in writing by the other parties, shall not be
used by any such persons other than as contemplated by this Agreement, except
that such restrictions shall not apply to: (i) information which, at the time of
disclosure, is in the public domain or which, after disclosure, becomes part of
the public domain through no fault of the receiving party; (ii) information
which the receiving party can show was in its possession at the time of
disclosure and which was not acquired, directly or indirectly, from the
disclosing party; (iii) information which was lawfully obtained or received from
a third party, other than the disclosing party, having the legal right to
transmit same; or (iv) 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. If
this Agreement is terminated in accordance with its terms, each party shall use
all reasonable efforts to return upon written request from any other party all
documents (and reproductions thereof) received by it or its representatives from
such other party (and, in the case of reproductions, all such reproductions made
by the receiving party) that include information not within the exceptions
contained in the first sentence of this Section 17, unless the recipients
provide assurances reasonably satisfactory to the requesting party that such
documents have been destroyed; provided, however, that one copy of any such
documentation may be retained by the receiving party for the sole purpose of
monitoring compliance with this Agreement.
18. PARTIES IN INTEREST. This Agreement shall be binding upon and inure
to the benefit of each party, and nothing in this Agreement, express or implied,
is intended to confer upon any other person any rights or remedies of any nature
whatsoever under or by reason of this Agreement. Nothing in this Agreement is
intended to relieve or discharge the obligation of any third person to (or to
confer any right of subrogation or action over against) any party to this
Agreement.
19. NOTICES. Any notice or other communication hereunder must be given
in 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:
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CONFIDENTIAL TREATMENT REQUEST
If to Clayton, addressed to:
Clayton Foundation for Research
One Riverway, Suite 1440
Houston, Texas 77056
Attn: C. W. Wellen, President
cc: James F. Weiler, Esq., Vice President
If to RDF, 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 Company, addressed to:
SuperGen, Inc.
Two Annabel Lane, Suite 220
San Ramon, California 94583
Attn: Simeon Wrenn, Ph.D., Vice President
cc: Ms. Lucy Chang, 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.
20. EXPENSES. Each party shall pay its own expenses incident to the
negotiation, preparation and performance of this Agreement and the transactions
contemplated hereby, including but not limited to the fees, expenses and
disbursements of their respective accountants and counsel.
21. REMEDIES; WAIVER. All rights and remedies existing under this
Agreement and any related agreements or documents are cumulative to and not
exclusive of, any rights or remedies otherwise available under applicable law.
No failure on the part of any party to exercise or delay in exercising any right
hereunder shall be deemed a waiver thereof, nor shall any single or partial
exercise preclude any further or other exercise of such or any other right.
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CONFIDENTIAL TREATMENT REQUEST
22. ATTORNEY FEES. In the event of any action for the breach of this
Agreement or misrepresentation by any party, the prevailing party shall be
entitled to reasonable attorney's fees, costs and expenses incurred in such
action.
23. SEVERABILITY. If any provision of this Agreement is determined to
be invalid, illegal or unenforceable by any governmental entity, the remaining
provisions of this Agreement to the extent permitted by law shall remain in full
force and effect; provided that the essential terms and conditions of this
Agreement remain valid, binding and enforceable and provided that the economic
and legal substance of the transactions contemplated is not affected in any
manner materially adverse to any party. In the event of any such determination,
the parties agree to negotiate in good faith to modify this Agreement to fulfill
as closely as possible the original intents and purposes hereof. To the extent
permitted by law, the parties hereby to the same extent waive any provision of
law that renders any provision hereof prohibited or unenforceable in any
respect.
[Remainder of page intentionally left blank]
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CONFIDENTIAL TREATMENT REQUEST
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its duly authorized officers effective as of the
date and year first above written.
CLAYTON FOUNDATION FOR RESEARCH
By: /s/ C. W. Wellen
----------------------
Name: C. W. Wellen
----------------------
Title: President
----------------------
Date: December 3, 1999
----------------------
RESEARCH DEVELOPMENT FOUNDATION
By: /s/ Andrew MacKenzie
----------------------
Name: Andrew MacKenzie
----------------------
Title: Vice President
----------------------
Date: December 7, 1999
----------------------
SCIENTIST SUPERGEN, INC.
Agreed to and Accepted:
By: /s/ Dr. Joseph Rubinfeld
-------------------------
Name: Dr. Joseph Rubinfeld
-------------------------
/s/ Vernon Knight
- ---------------------------------
Vernon Knight, M.D. ("Scientist") Title: President & CEO
-------------------------
Date: December 1, 1999
-------------------------
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CONFIDENTIAL TREATMENT REQUEST
EXHIBIT A
FIELD OF INTEREST
Cancer therapy in humans wherein 9-nitro-camptothecin is delivered in
liposomes, lipid complexes, or other liposome particles, to the respiratory
tract via aqueous aerosol droplets.
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CONFIDENTIAL TREATMENT REQUEST
EXHIBIT B
WORK PLAN
[ * ]
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CONFIDENTIAL TREATMENT REQUEST
EXHIBIT C
FUNDING REQUIREMENTS
[ * ]
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CONFIDENTIAL TREATMENT REQUEST
EXHIBIT 4.4
* Portions denoted with an asterisk have been omitted and filed separately with
the Securities and Exchange Commission pursuant to a request for confidential
treatment.
RESEARCH AGREEMENT (PACLITAXEL)
This Research Agreement (the "Agreement"), effective as of the 15th day
of November, 1999 (the "Effective Date"), is between CLAYTON FOUNDATION FOR
RESEARCH, a Texas nonprofit corporation having its office at One Riverway, Suite
1560, Houston, Texas 77056 ("Clayton"); RESEARCH DEVELOPMENT FOUNDATION, a
Nevada nonprofit corporation having its office at 402 North Division Street,
Carson City, Nevada 89703 ("RDF"); and SUPERGEN, INC., a Delaware corporation
having an office at Two Annabel Lane, Suite 220, San Ramon, California 94583
("Company").
WITNESSETH:
WHEREAS, Clayton is a nonprofit organization exempt from taxation under
Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the "Code");
WHEREAS, RDF is a nonprofit organization exempt from taxation under
Section 501(c)(3) of the Code that is assigned title to inventions, discoveries
and know-how arising out of Clayton's research for patenting and licensing;
WHEREAS, Company is interested in research in the field described in
Exhibit A hereto (the "Field of Interest");
WHEREAS, Clayton has ongoing research involving cancer therapy wherein
paclitaxel and analogues thereof are delivered in liposomes to the respiratory
tract via aqueous aerosol droplets, at Baylor College of Medicine
("Institution") under the direction of Vernon Knight, M.D. ("Scientist"), at
least some of which is directed to the Field of Interest;
WHEREAS, Company will provide funding to Clayton for its use in the
conduct of further research at Institution under the direction of Scientist, all
as described herein;
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CONFIDENTIAL TREATMENT REQUEST
WHEREAS, Clayton will assign to RDF any inventions, discoveries and
know-how arising out of such research; and
WHEREAS, RDF will, subject to the terms and conditions hereof, grant to
Company an exclusive license to any inventions or discoveries arising out of the
research funded hereunder;
NOW THEREFORE, in consideration of the above premises and the mutual
covenants and agreements herein, the parties agree as follows:
1. SUPPLY OF RESEARCH MATERIAL. Company will provide to Scientist at no
cost such quantities of paclitaxel (GMP grade) as Clayton and Scientist will
need to conduct the research contemplated hereunder. Clayton, through Scientist,
will notify Company reasonably in advance of its needs for and quantities of
paclitaxel required. In the event that Company cannot or does not provide
Clayton with the required quantities of paclitaxel, Clayton may purchase such
quantities, and Company will promptly reimburse Clayton for the cost thereof by
cash payment. Such cost shall not reduce the amounts that Company agrees to pay
Clayton otherwise pursuant to this Agreement.
2. RESEARCH. Clayton will conduct research at Institution under the
direction of Scientist in accordance with the work plan set forth in Exhibit B
hereto. Such work plan may be modified or changed from time to time by written
agreement of Clayton and Company.
3. FUNDING. Company will provide funding to be used for the performance
of this research as set forth in Exhibit C hereto.
4. REPORTING. Clayton will keep Company informed of the progress of the
research conducted hereunder. Clayton agrees to make periodic informal verbal
reports to a designated representative or representatives of Company, to respond
to reasonable inquiries of Company regarding the status of the research, to
promptly disclose to Company the existence of any discoveries or inventions
which are made in the conduct of the research hereunder, and to provide to
Company a detailed written report to be prepared annually or at the conclusion
of the research.
5. INVENTIONS/PATENTS. Any discoveries or inventions which are
conceived or reduced to practice during the term of this Agreement and which
directly result from the performance of the research hereunder, as well as any
patent applications and patents therefor, shall be owned by RDF but shall be
subject to Company's license as set forth below. RDF shall have the right in the
first instance to elect to prepare, file, prosecute and maintain patent
applications for such inventions and, if it declines to do so, Company shall
have the right to do so. Neither Company nor RDF
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CONFIDENTIAL TREATMENT REQUEST
will forego or abandon such patenting efforts without first notifying the other
party of its intent and allowing such other party the opportunity to pursue
patenting at the latter's sole expense and responsibility.
6. a. LICENSE. Any discoveries or inventions hereunder shall be
deemed to be "Proprietary Property" as defined in the License Agreement
(Paclitaxel) of November 15, 1999, between RDF and Company (the "License
Agreement"), which License Agreement is incorporated herein by reference for all
purposes. Thus such discoveries and inventions automatically shall be licensed
exclusively to Company in the Field of Use as defined in the License Agreement
under the terms and conditions set forth therein. At the appropriate time, the
parties agree to amend Exhibit 1 of the License Agreement to include discoveries
and inventions hereunder as Proprietary Property for purposes of the License
Agreement.
b. ANALOGUE RESEARCH; ELECTION. While paclitaxel and all
analogues thereof are included in the Field of Use granted to Company pursuant
to the License Agreement, the Work Plan (Exhibit B) contemplates that the
research pursuant to this Agreement will be limited to paclitaxel itself.
Clayton, at its sole expense, may conduct research on paclitaxel analogues
(hereafter "Analogue(s)") either during or after the term of this Agreement. If
comparative xenograft model studies of any Analogue(s) demonstrate equivalency
to paclitaxel, Clayton or RDF may so notify Company in writing. Within thirty
(30) days from the date of such notice, Company shall inform Clayton or RDF in
writing whether it elects to enter into a research agreement with Clayton and
fund research with respect to the Analogue(s) that are the subject of Clayton's
or RDF's notice to Company. Absent such a timely election by Company, the
Analogue(s) subject of Clayton's or RDF's notice to Company shall thereafter be
deemed excluded from the Field of Use of Exhibit 1A of the License Agreement. In
the event that Company elects to fund research with respect to the Analogue(s)
that are subject of Clayton's or RDF's notice to Company, the parties shall in
good faith negotiate a research agreement with mutually agreeable terms, and
Company will pay to Clayton (i) the amount that Company and Clayton agree upon
for conduct of the research, and (ii) a sum to reimburse Clayton for its
research costs with respect to each of the Analogue(s) up to the date of
Company's written election, said sum to be calculated as follows:
i. [ * ]; and
ii. [ * ].
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CONFIDENTIAL TREATMENT REQUEST
7. TERM; TERMINATION OF AGREEMENT. Anything herein to the contrary
notwithstanding, this Agreement and the transactions contemplated by this
Agreement shall terminate on November 15, 2001; provided that the term hereof
may be extended by mutual consent in writing of Clayton and Company; and
provided further that this Agreement may otherwise be terminated at any time as
follows:
a. MUTUAL CONSENT. By mutual consent in writing of Clayton
and Company.
b. COMPANY'S FAILURE TO MEET ITS OBLIGATIONS HEREUNDER. By
Clayton by written notice to Company if Company fails to carry out its
obligations under the terms of this Agreement or under the terms of other legal
agreements between Company and either RDF or Clayton, and does not cure any such
failure within thirty (30) days after notice thereof from Clayton.
c. RDF OR CLAYTON'S FAILURE TO MEET OBLIGATIONS HEREUNDER. By
Company by written notice to RDF if RDF or Clayton fail to carry out their
obligations under the terms of this Agreement and do not cure any such failure
within thirty (30) days after notice thereof from Company.
8. EFFECT OF TERMINATION. In the event that this Agreement shall be
terminated, all further obligations of the parties under this Agreement shall
terminate without further liability of any party to another; provided, however,
that the confidentiality obligations of the parties contained in Section 17
hereof, Company's license under discoveries and inventions prior to termination
pursuant to Section 6 a., and the analogue research and election pursuant to
Section 6 b., shall survive any such termination. Notwithstanding the foregoing,
a termination shall not relieve any party of any liability for a breach of, or
for any misrepresentation under, this Agreement or be deemed to constitute a
waiver of any available remedy (including specific performance if available) for
any such breach or misrepresentation.
9. AMENDMENTS; WAIVERS. This Agreement and any schedule or exhibit
attached hereto may be amended only by agreement in writing of all parties. No
waiver of any provision nor consent to any exception to the terms of this
Agreement or any agreement contemplated hereby shall be effective unless in
writing and signed by the party to be bound and then only to the specific
purpose, extent and instance so provided.
10. SCHEDULES; EXHIBITS; INTEGRATION. Each schedule and exhibit
delivered pursuant to the terms of this Agreement shall be in writing and shall
constitute a part of this Agreement, although schedules need not be attached to
each copy of this Agreement. This Agreement, together with such schedules and
exhibits, and the
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CONFIDENTIAL TREATMENT REQUEST
License Agreement constitute the entire agreement among the parties pertaining
to the subject matter hereof and supersede all prior agreements and
understandings of the parties in connection therewith.
11. BEST EFFORTS; FURTHER ASSURANCES. Each party shall use its best
efforts to cause all conditions to its and the other parties' obligations
hereunder to be timely satisfied and to perform and fulfill all obligations on
its part to be performed and fulfilled under this Agreement, to the end that the
transactions contemplated by this Agreement shall be effected substantially in
accordance with its terms as soon as reasonably practicable. The parties shall
cooperate with each other in such actions.
12. GOVERNING LAW. Except as otherwise expressly provided, this
Agreement and the legal relations between the parties shall be governed by and
construed in accordance with the laws of the State of Nevada applicable to
contracts made and performed in such State and without regard to conflicts of
law doctrines, and jurisdiction and venue for any dispute regarding this
Agreement will be in such State.
13. NO ASSIGNMENT. Neither this Agreement nor any rights or obligations
under it are assignable without the prior written consent of the other parties
hereto.
14. HEADINGS. The descriptive headings of the sections and subsections
of this Agreement are for convenience only and do not constitute a part of this
Agreement.
15. COUNTERPARTS. This Agreement and any amendment hereto or any other
agreement (or document) delivered pursuant hereto may be executed in one or more
counterparts and by different parties in separate counterparts. All of such
counterparts shall constitute one and the same agreement (or other document) and
shall become effective (unless otherwise provided therein) when one or more
counterparts have been signed by each party and delivered to the other parties.
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CONFIDENTIAL TREATMENT REQUEST
16. PUBLICITY / PUBLICATIONS.
a. Clayton and Company shall coordinate all publicity relating
to the transactions contemplated by this Agreement. No party hereto shall issue
any press release, publicity statement or other public notice relating to this
Agreement, or the transactions contemplated by this Agreement, without the prior
consent of both Clayton and Company, except to the extent otherwise required by
applicable law. Unless required by law, without prior written consent from the
other party, a party shall not use for purposes of sales, 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)
the other party or any corporation which is controlled by the same persons who
control such other party ("Other Corporation"); (ii) the names of trustees,
directors, officers, or employees of such other party or an Other Corporation;
or (iii) any trademarks (or adaptations thereof) of such other party or an Other
Corporation.
b. Each party is prepared to assist the other parties in
seeking patent or copyright protection for proprietary property owned by the
others. In this regard, no publication of the subject matter and/or results of
the research conducted hereunder shall be made by any party without giving the
other parties sixty (60) days notice in advance thereof so that patent
applications can be filed before such publication, if appropriate.
17. CONFIDENTIALITY. All proprietary property and information disclosed
by any party (or its representatives) whether before or after the date hereof,
in connection with the transactions contemplated by, or the discussions and
negotiations preceding, this Agreement to any other party (or its
representatives) shall be kept confidential by such other party and its
representatives and, unless waived in writing by the other parties, shall not be
used by any such persons other than as contemplated by this Agreement, except
that such restrictions shall not apply to: (i) information which, at the time of
disclosure, is in the public domain or which, after disclosure, becomes part of
the public domain through no fault of the receiving party; (ii) information
which the receiving party can show was in its possession at the time of
disclosure and which was not acquired, directly or indirectly, from the
disclosing party; (iii) information which was lawfully obtained or received from
a third party, other than the disclosing party, having the legal right to
transmit same; or (iv) 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. If
this Agreement is terminated in accordance with its terms, each party shall use
all reasonable efforts to return upon written request from any other party all
documents (and reproductions thereof) received by it or its representatives from
such other party (and, in the case of reproductions, all such reproductions made
by the receiving party) that include
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CONFIDENTIAL TREATMENT REQUEST
information not within the exceptions contained in the first sentence of this
Section 17, unless the recipients provide assurances reasonably satisfactory to
the requesting party that such documents have been destroyed; provided, however,
that one copy of any such documentation may be retained by the receiving party
for the sole purpose of monitoring compliance with this Agreement.
18. PARTIES IN INTEREST. This Agreement shall be binding upon and inure
to the benefit of each party, and nothing in this Agreement, express or implied,
is intended to confer upon any other person any rights or remedies of any nature
whatsoever under or by reason of this Agreement. Nothing in this Agreement is
intended to relieve or discharge the obligation of any third person to (or to
confer any right of subrogation or action over against) any party to this
Agreement.
19. NOTICES. Any notice or other communication hereunder must be given
in 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 Clayton, addressed to:
Clayton Foundation for Research
One Riverway, Suite 1440
Houston, Texas 77056
Attn: C. W. Wellen, President
cc: James F. Weiler, Esq., Vice President
If to RDF, 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 Company, addressed to:
SuperGen, Inc.
Two Annabel Lane, Suite 220
San Ramon, California 94583
Attn: Simeon Wrenn, Ph.D., Vice President
cc: Ms. Lucy Chang, Director, Planning and Legal Affairs
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CONFIDENTIAL TREATMENT REQUEST
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.
20. EXPENSES. Each party shall pay its own expenses incident to the
negotiation, preparation and performance of this Agreement and the transactions
contemplated hereby, including but not limited to the fees, expenses and
disbursements of their respective accountants and counsel.
21. REMEDIES; WAIVER. All rights and remedies existing under this
Agreement and any related agreements or documents are cumulative to and not
exclusive of, any rights or remedies otherwise available under applicable law.
No failure on the part of any party to exercise or delay in exercising any right
hereunder shall be deemed a waiver thereof, nor shall any single or partial
exercise preclude any further or other exercise of such or any other right.
22. ATTORNEY FEES. In the event of any action for the breach of this
Agreement or misrepresentation by any party, the prevailing party shall be
entitled to reasonable attorney's fees, costs and expenses incurred in such
action.
23. SEVERABILITY. If any provision of this Agreement is determined to
be invalid, illegal or unenforceable by any governmental entity, the remaining
provisions of this Agreement to the extent permitted by law shall remain in full
force and effect; provided that the essential terms and conditions of this
Agreement remain valid, binding and enforceable and provided that the economic
and legal substance of the transactions contemplated is not affected in any
manner materially adverse to any party. In the event of any such determination,
the parties agree to negotiate in good faith to modify this Agreement to fulfill
as closely as possible the original intents and purposes hereof. To the extent
permitted by law, the parties hereby to the same extent waive any provision of
law that renders any provision hereof prohibited or unenforceable in any
respect.
[Remainder of page intentionally left blank]
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CONFIDENTIAL TREATMENT REQUEST
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its duly authorized officers effective as of the
date and year first above written.
CLAYTON FOUNDATION FOR RESEARCH
By: /s/ C. W. Wellen
--------------------------------
Name: C. W. Wellen
------------------------------
Title: President
-----------------------------
Date: December 3, 1999
------------------------------
RESEARCH DEVELOPMENT FOUNDATION
By: /s/ Andrew MacKenzie
--------------------------------
Name: Andrew MacKenzie
------------------------------
Title: Vice President
-----------------------------
Date: December 7, 1999
------------------------------
SCIENTIST SUPERGEN, INC.
Agreed to and Accepted:
By: /s/ Dr. Joseph Rubinfeld
--------------------------------
Name: Dr. Joseph Rubinfeld
------------------------------
/s/ Vernon Knight
- --------------------------------
Vernon Knight, M.D. ("Scientist") Title: President & CEO
-----------------------------
Date: December 1, 1999
------------------------------
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EXHIBIT A
FIELD OF INTEREST
Cancer therapy in humans wherein paclitaxel is delivered in liposomes,
lipid complexes, or other liposome particles, to the respiratory tract via
aqueous aerosol droplets.
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CONFIDENTIAL TREATMENT REQUEST
EXHIBIT B
WORK PLAN
[ * ]
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EXHIBIT C
FUNDING REQUIREMENTS
[ * ]
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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.
LICENSE AGREEMENT (CAMPTOTHECIN)
BETWEEN
RESEARCH DEVELOPMENT FOUNDATION
AND
SUPERGEN, INC.
<PAGE>
CONFIDENTIAL TREATMENT REQUEST
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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<S> <C>
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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<S> <C>
No Waiver...............................................................................................31
Choice of Law and Jurisdiction..........................................................................31
Severability............................................................................................31
Further Acts............................................................................................32
Entire Agreement........................................................................................32
Successors and Assigns..................................................................................32
</TABLE>
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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
[ * ] 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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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.
LICENSE AGREEMENT (PACLITAXEL)
BETWEEN
RESEARCH DEVELOPMENT FOUNDATION
AND
SUPERGEN, INC.
<PAGE>
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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
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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 [ * ]
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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CONFIDENTIAL TREATMENT REQUEST
(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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CONFIDENTIAL TREATMENT REQUEST
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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CONFIDENTIAL TREATMENT REQUEST
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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CONFIDENTIAL TREATMENT REQUEST
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 5.1
January 20, 2000
SuperGen, Inc.
2 Annabel Lane, Suite 220
San Ramon, California 94583
RE: REGISTRATION STATEMENT ON FORM S-3
Ladies and Gentlemen:
We have examined the registration statement on Form S-3 to be filed by you
with the Securities and Exchange Commission on or about January 21, 2000 (the
"Registration Statement"), in connection with the registration under the
Securities Act of 1933, of 136,130 shares of Common Stock, to be sold by certain
stockholders listed in the Registration Statement. As your counsel, we have
examined the transactions taken and proposed to be taken in connection with the
sale of such shares by such stockholders in the manner set forth in the
Registration Statement.
It is our opinion that such shares, if sold by such stockholders in the
manner set forth in the Registration Statement, will be legally and validly
issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement, and further consent to the use of our name wherever appearing in the
Registration Statement, including the Prospectus constituting a part thereof,
and any amendment thereto.
Very truly yours,
/s/ WILSON SONSINI GOODRICH & ROSATI
--------------------------------------
Wilson Sonsini Goodrich & Rosati
Professional Corporation
<PAGE>
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 March 25, 1999, with respect to the
consolidated financial statements of SuperGen, Inc. included in its Annual
Report (Form 10-K) for the year ended December 31, 1998, filed with the
Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Palo Alto, California
January 19, 2000
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Form S-3 Registration Statement of our report dated
February 11, 1999 included in SuperGen, Inc.'s 8-K dated August 26, 1999, and to
all references to our firm included in this Registration Statement.
/s/ ARTHUR ANDERSEN LLP
Philadelphia, PA
January 20, 2000
<PAGE>
EXHIBIT 23.3
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Form S-3 Registration
Statement and related Prospectus of SuperGen, Inc. for the registration of
136,130 shares of its common stock of our report dated January 31, 1996 with
respect to the financial statements of Sparta Pharmaceuticals, Inc. included in
SuperGen, Inc.'s Form 8-K dated August 26, 1999.
/s/ ERNST & YOUNG LLP
Raleigh, North Carolina
January 19, 2000
