Common Stock and Warrant Purchase Agreement - SuperGen Inc. and AVI BioPharma Inc.
SUPERGEN, INC.
TWO ANNABEL LANE, SUITE 220
SAN RAMON, CA 94583
AVI BIOPHARMA, INC.
ONE SW COLUMBIA, SUITE 1105
PORTLAND, OR 97258
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
APRIL 4, 2000
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
TABLE OF CONTENTS.................................................................................i
SECTION 1 AUTHORIZATION AND SALE OF SECURITIES....................................................1
1.1 AUTHORIZATION...........................................................................1
1.2 SALE OF SHARES BY AVI...................................................................1
1.3 SUBSEQUENT ISSUANCE OF SHARES BY SUPERGEN...............................................2
1.4 WARRANT.................................................................................2
SECTION 2 CLOSING DATE; DELIVERY
2.1 CLOSING.................................................................................3
2.2 SUBSEQUENT CLOSINGS.....................................................................3
2.3 WARRANT EXERCISE CLOSING................................................................3
2.4 DELIVERY................................................................................3
SECTION 3 REPRESENTATIONS AND WARRANTIES OF AVI...................................................4
3.1 ORGANIZATION; STANDING AND POWER; QUALIFICATION.........................................4
3.2 CAPITALIZATION..........................................................................4
3.3 AUTHORIZATION; NO CONFLICTS; APPROVALS..................................................5
3.4 FINANCIAL STATEMENTS....................................................................6
3.5 ABSENCE OF UNDISCLOSED LIABILITIES......................................................6
3.6 ABSENCE OF CERTAIN CHANGES OR EVENTS....................................................6
3.7 TAXES...................................................................................7
3.8 INTELLECTUAL PROPERTY...................................................................7
3.9 ENVIRONMENTAL MATTERS...................................................................8
3.10 SEC FILINGS.............................................................................8
3.11 LISTING.................................................................................8
3.12 EMPLOYEE BENEFIT PLANS..................................................................8
3.13 EMPLOYEES...............................................................................9
3.14 BROKERS OR FINDERS......................................................................9
3.15 COMPLIANCE WITH LAWS....................................................................9
3.16 LITIGATION..............................................................................9
3.17 NO MISREPRESENTATION....................................................................9
3.18 INVESTMENT AVI.........................................................................10
3.19 VALID PRIVATE PLACEMENT................................................................10
3.20 OREGON BUSINESS CORPORATION ACT........................................................10
3.21 EXEMPT OFFERING; ACQUISITION FOR INVESTMENT............................................11
3.22 ACCESS TO INFORMATION; INVESTMENT EXPERIENCE; NO RELIANCE .............................11
SECTION 4 REPRESENTATIONS AND WARRANTIES OF SUPERGEN.............................................12
4.1 ORGANIZATION; STANDING AND POWER; QUALIFICATION........................................12
</TABLE>
-i-
<PAGE>
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
4.2 CAPITALIZATION.........................................................................12
4.3 AUTHORIZATION; NO CONFLICTS; APPROVALS.................................................13
4.4 FINANCIAL STATEMENTS...................................................................14
4.5 ABSENCE OF UNDISCLOSED LIABILITIES.....................................................14
4.6 ABSENCE OF CERTAIN CHANGES OR EVENTS...................................................14
4.7 TAXES..................................................................................15
4.8 INTELLECTUAL PROPERTY..................................................................16
4.9 ENVIRONMENTAL MATTERS..................................................................16
4.10 SEC FILINGS............................................................................16
4.11 LISTING................................................................................16
4.12 EMPLOYEE BENEFIT PLANS.................................................................17
4.13 EMPLOYEES..............................................................................17
4.14 BROKERS OR FINDERS.....................................................................17
4.15 COMPLIANCE WITH LAWS...................................................................17
4.16 LITIGATION.............................................................................17
4.17 NO MISREPRESENTATION...................................................................18
4.18 VALID PRIVATE PLACEMENT................................................................18
4.19 SECTION 203............................................................................18
4.20 EXEMPT OFFERING; ACQUISITION FOR INVESTMENT............................................18
4.21 ACCESS TO INFORMATION; INVESTMENT EXPERIENCE; NO RELIANCE..............................19
4.22 BROKERS OR FINDERS.....................................................................20
SECTION 5 ADDITIONAL AGREEMENTS..................................................................21
5.1 FINANCIAL STATEMENTS AND OTHER REPORTS.................................................21
5.2 CONFIDENTIALITY........................................................................21
5.3 PUBLIC ANNOUNCEMENTS...................................................................21
5.4 HSR ACT................................................................................22
5.5 RESTRICTIONS ON TRANSFER...............................................................22
5.6 LEGENDS................................................................................23
5.7 FURTHER ASSURANCES.....................................................................25
5.8 USE OF FUNDS...........................................................................25
5.9 REGISTRATION RIGHTS AGREEMENT..........................................................25
SECTION 6 CONDITIONS TO CLOSINGS.................................................................25
6.1 CONDITIONS TO SUPERGEN'S OBLIGATION TO ACQUIRE THE AVI SHARES..........................25
6.2 CONDITIONS TO AVI'S OBLIGATION TO ISSUE THE SHARES.....................................26
6.3 CONDITIONS TO THE INITIAL WARRANT CLOSING..............................................27
SECTION 7 MISCELLANEOUS..........................................................................27
7.1 ACCESS TO INFORMATION..................................................................27
</TABLE>
-ii-
<PAGE>
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
7.2 WAIVERS AND AMENDMENTS.................................................................27
7.3 GOVERNING LAW..........................................................................27
7.4 SURVIVAL...............................................................................27
7.5 SUCCESSORS AND ASSIGNS.................................................................27
7.6 ENTIRE AGREEMENT.......................................................................28
7.7 NOTICES................................................................................28
7.8 SEVERABILITY...........................................................................28
7.9 EXPENSES...............................................................................28
7.10 TITLES AND SUBTITLES...................................................................28
7.11 CALIFORNIA CORPORATE SECURITIES LAW....................................................28
7.12 COUNTERPARTS...........................................................................29
7.13 DELAYS OR OMISSIONS....................................................................29
</TABLE>
-iii-
<PAGE>
TABLE OF CONTENTS
(CONTINUED)
EXHIBITS
A Form Warrant
B Form Registration Rights Agreement
-iv-
<PAGE>
AVI BIOPHARMA, INC.
SUPERGEN, INC.
COMMON STOCK AND WARRANT PURCHASE AGREEMENT
THIS COMMON STOCK AND WARRANT PURCHASE AGREEMENT (the "AGREEMENT") is
made as of April 4, 2000 by and between AVI BioPharma, Inc., an Oregon
corporation ("AVI"), and SuperGen, Inc., a Delaware corporation ("SUPERGEN").
RECITALS
WHEREAS, AVI is developing a pharmaceutical compound known as Avicine for
the treatment of colorectal cancer and other indications;
WHEREAS, AVI desires to collaborate with SuperGen with respect to the
clinical development, obtaining of regulatory approvals, distribution and
marketing of Avicine product(s) in the United States;
WHEREAS, SuperGen desires to collaborate with AVI with respect to such
product(s); and
WHEREAS, in support of their collaboration, SuperGen and AVI shall enter
into that certain United States of America Sales, Distribution, and Development
Agreement (the "U.S. AGREEMENT"), which provides, among other things, that
SuperGen will make equity investments in AVI in consideration of cash or its own
common stock;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenant
undertakings contained herein, the parties hereto hereby agree as follows:
SECTION 1
AUTHORIZATION AND SALE OF SECURITIES
1.1 AUTHORIZATION. AVI will, prior to the Closing Date or the Warrant
Closing Date (as defined below), authorize the sale and issuance of the number
of shares (the "AVI Shares") and Warrant Shares (as defined below) of its Common
Stock (the "AVI Common Stock") pursuant to the terms of this Agreement. SuperGen
will, prior to the Closing Date and the applicable Subsequent Closing Date (as
defined below), authorize the sale and issuance of the number of shares (the
"SuperGen Shares") of its Common Stock (the "SuperGen Common Stock") pursuant to
the terms of this Agreement.
1.2 SALE OF SHARES BY AVI. Subject to the terms and conditions of this
Agreement and the terms and conditions of the U.S. Agreement, SuperGen agrees to
purchase and AVI agrees to sell
<PAGE>
and issue to SuperGen 1,684,211 shares of AVI's common stock ("AVI COMMON
STOCK") for consideration consisting of $5,000,000 in cash and 347,826 in
SuperGen's common stock ("SUPERGEN COMMON STOCK").
1.3 SUBSEQUENT ISSUANCE OF SHARES BY SUPERGEN. Subject to the terms
and conditions of this Agreement and the terms and conditions of the U.S.
Agreement, SuperGen may make milestone payments to AVI in SuperGen Common Stock
pursuant to Sections 5(b), (c) and (d) of the U.S. Agreement in an aggregate
amount of up to $10,000,000, to be completed in up to three (3) subsequent
closings (each a "SUBSEQUENT CLOSING," the closing date for each Subsequent
Closing referred to as a "SUBSEQUENT CLOSING DATE"). The valuation of SuperGen
Common Stock for purposes of such milestone payments shall be the average of the
closing prices of SuperGen Common Stock over the twenty (20) trading days
commencing ten (10) trading days immediately preceding the Relevant Date (as
defined below). For purposes of this Agreement, Relevant Date means, (i) in the
case of a Subsequent Closing pursuant to Section 5.1(b) of the U.S. Agreement,
the business day upon which the condition set forth in Section 5.1(b) of the
U.S. Agreement is satisfied, (ii) in the case of a Subsequent Closing pursuant
to Section 5.1(c) of the U.S. Agreement, the business day upon which the
condition set forth in Section 5.1(c) of the U.S. Agreement is satisfied; and
(iii) in the case of a Subsequent Closing pursuant to Section 5.1(d) of the U.S.
Agreement, the business day upon which the condition set forth in Section 5.1(d)
of the U.S. Agreement is satisfied. The number of SuperGen Shares to be issued
to AVI in each Subsequent Closing shall be that number of SuperGen Shares which,
at the valuation specified above, are valued as near as possible to the dollar
value set forth in the corresponding section of the U.S. Agreement. No fractions
of any shares shall be allotted pursuant to this Agreement and the shares issued
hereunder shall be rounded up to the nearest whole number of shares.
1.4 WARRANT. Subject to the terms and conditions of this agreement and
the U.S. Agreement, AVI shall issue a Warrant to SuperGen upon SuperGen's
request, in substantially the form attached hereto as EXHIBIT A to this
Agreement, to purchase up to 1,665,478 shares of AVI Common Stock, subject to
anti-dilution provisions. The exercise price for the Warrant shall be $35.625,
300% of the purchase price per AVI Share specified under Section 1.2 of this
Agreement (the "WARRANT PRICE") (such price to be adjusted pursuant to the terms
of the Warrant), and the Warrant shall be exercisable at any time, or from time
to time, in whole or in part, for a three year period commencing on the earlier
of (i) the date the U.S. Food and Drug Administration (the "FDA") accepts the
new drug application submitted for the product (as defined in the U.S.
Agreement) or (ii) the date on which the closing price of AVI Common Stock
exceeds the Warrant Price (shares to be purchased upon exercise of the Warrant
are hereinafter referred to as the "WARRANT SHARES").
For purposes of this Agreement, the number of Warrant Shares of AVI
Common Stock, including the anti-dilution provisions, shall be calculated at the
time SuperGen first exercises the Warrant based on the following formula:
OP = (0.10 X (OS + (10/90 X OS)))
-2-
<PAGE>
- OP means the number of Warrant Shares.
- OS means the total number of shares of AVI Common Stock then
outstanding.
SECTION 2
CLOSING DATE; DELIVERY
2.1 CLOSING. Purchase and sale of the AVI Shares and the issuance of
the SuperGen Shares as set forth in Section 1.2 hereunder shall take place in
accordance with Section 5.1(a) of the U.S. Agreement at a closing ("CLOSING") to
occur upon the satisfaction of all of the conditions set forth in Sections 6.1
and 6.2 hereof and Section 16.11 of the U.S. Agreement (the "CLOSING DATE"). The
Closing shall be held at the offices of Wilson Sonsini Goodrich & Rosati, 650
Page Mill Road, Palo Alto, California, at 10:00 a.m. local time, on the Closing
Date, or at such other time and place upon which AVI and SuperGen shall agree.
2.2 SUBSEQUENT CLOSINGS. The Subsequent Closings for issuance of
SuperGen Shares to AVI under Section 1.3 hereunder shall take place at closings
to occur on the applicable Subsequent Closing Date, which shall be the fifth
business day following any Relevant Date. The Subsequent Closings shall be held
at the offices of Wilson Sonsini Goodrich & Rosati, 650 Page Mill Road, Palo
Alto, California, at 10:00 a.m. local time, on any Subsequent Closing Date, or
at such other time and place upon which AVI and SuperGen shall agree.
2.3 WARRANT EXERCISE CLOSING. The closing for SuperGen's initial
exercise of the Warrant ("INITIAL WARRANT CLOSING") shall be held at the offices
of Wilson Sonsini Goodrich & Rosati, 650 Page Mill Road, Palo Alto, California,
at 10:00 a.m. local time, three business days following the receipt by AVI of
SuperGen's Notice of Exercise ("WARRANT CLOSING DATE"), or at such other time
and place upon which AVI and SuperGen shall agree.
2.4 DELIVERY.
2.4.1 CLOSING. At the Closing, AVI shall cause the delivery to
SuperGen of certificates registered in SuperGen's name or as designated by
SuperGen evidencing the AVI Shares, upon the receipt of the portion of cash
payment for the AVI Shares as set forth in Section 1.2 above, by check payable
to AVI or wire transfer per AVI's instructions; and SuperGen shall cause the
delivery to AVI of certificates registered in AVI's name or as designated by AVI
evidencing the number of the SuperGen Shares specified in Section 1.2 hereunder.
2.4.2 SUBSEQUENT CLOSINGS. At each Subsequent Closing, AVI shall
cause the delivery to SuperGen of certificates registered in SuperGen's name or
as designated by SuperGen evidencing such number of AVI Shares calculated
according to Section 1.3.
-3-
<PAGE>
2.4.3 WARRANT CLOSINGS. At the Initial Warrant Closing and
thereafter upon the receipt of Notice of Exercise, AVI shall cause the delivery
to SuperGen of certificates registered in SuperGen's name or as designated by
SuperGen in the Notice of Exercise representing the number of Warrant Shares as
specified in the Notice of Exercise.
SECTION 3
REPRESENTATIONS AND WARRANTIES OF AVI
Except as disclosed in AVI's SEC Filings (as defined in Section 3.10) or
as set forth in the disclosure schedule previously delivered to SuperGen (the
"AVI DISCLOSURE SCHEDULE"), AVI represents and warrants to SuperGen as follows:
3.1 ORGANIZATION; STANDING AND POWER; QUALIFICATION. AVI and each of
its subsidiaries is a corporation duly organized and existing under, and by
virtue of, the laws of the State of Oregon and is in good standing under such
laws. AVI and each of its subsidiaries have all requisite corporate power to
own, lease and operate its property and to carry on its businesses, and is duly
qualified to do business and is in good standing as a foreign corporation in any
jurisdiction except where the failure to be so qualified and in good standing
would not have a material adverse effect on the business, assets (including
intangible assets), properties, liabilities (contingent or otherwise), financial
condition, operations, or results of operation of AVI or its subsidiaries, taken
as a whole (a "MATERIAL ADVERSE EFFECT").
3.2 CAPITALIZATION. The authorized capital stock of AVI consists of
50,000,000 shares of AVI Common Stock, $0.0001 par value, and 2,000,000 shares
of preferred stock, $0.0001 par value. As of March 31, 2000, there were
16,658,784 shares of Common Stock issued and outstanding, 2,364,302 shares of
AVI Common Stock issuable under AVI's stock option plans and 5,438,963 shares
issuable pursuant to warrants and there were no issued and outstanding shares of
preferred stock. All such issued and outstanding shares have been duly
authorized and validly issued, are fully paid and nonassessable. Except as set
forth in the AVI Disclosure Schedule, no shares of AVI Common Stock are entitled
to preemptive rights or registration rights and there are no outstanding
options, warrants, scrip, rights to subscribe to, call or commitments of any
character whatsoever relating to, or securities or rights convertible into, any
shares of capital stock of AVI. Furthermore, except as set forth in this
Agreement and the AVI Disclosure Schedule, there are no contracts or commitments
by which AVI is or may become bound to issue additional shares of the capital
stock of AVI or options, securities or rights convertible into shares of capital
stock of AVI. AVI is not a party to, and it has no knowledge of, any agreement
restricting the voting or transfer of any shares of the capital stock of AVI
other than transfer restrictions imposed to satisfy state and federal securities
laws. Except as set forth in the AVI Disclosure Schedule, the offer and sale of
all capital stock, convertible securities, rights, warrants, or options of AVI
issued prior to the Closing complied with all applicable federal and state
securities laws. Each of AVI's subsidiaries is wholly-owned by AVI.
-4-
<PAGE>
3.3 AUTHORIZATION; NO CONFLICTS; APPROVALS.
3.3.1 All corporate action on the part of AVI, its shareholders
and its directors necessary for the authorization, execution, delivery and
performance of the Agreement by AVI, the authorization, sale, issuance and
delivery of the AVI Shares, the authorization and issuance of the Warrant, and
the authorization, sale, issuance and delivery of the Warrant Shares (including
any required shareholder authorization of the Warrant Shares), and the
performance of all of AVI's obligations under the Agreement has been taken or
will be taken prior to the Closing Date, the issuance of the Warrant or the
Warrant Closing Date. The Agreement, the Registration Rights Agreement and any
other documents (including the Warrant) required to be executed and delivered by
AVI hereunder (collectively, the "TRANSACTION DOCUMENTS"), when executed and
delivered by AVI, shall constitute valid and binding obligations of AVI,
enforceable in accordance with their terms, subject to laws of general
application relating to bankruptcy, insolvency and the relief of debtors and
rules of law governing specific performance, injunctive relief or other
equitable remedies. The AVI Shares and Warrant Shares, when issued in compliance
with the provisions of this Agreement, will be validly issued, fully paid and
nonassessable, and free of any liens or encumbrances, other than any permissible
liens or encumbrances created by or imposed upon the AVI Shares and Warrant
Shares by SuperGen; provided, however, that the AVI Shares and Warrant Shares
are subject to restrictions on transfer under state and/or federal securities
laws and as set forth in this Agreement.
3.3.2 The execution and delivery by AVI of this Agreement and the
other Transaction Documents do not, and the consummation of the transactions
contemplated hereby and thereby will not, (i) conflict with, or result in any
violation of or breach of any provision of the Articles of Incorporation or
Bylaws of AVI, (ii) result in any violation or breach of, or constitute (with or
without notice or lapse of time, or both) a default under, or give rise to a
right of termination, cancellation or acceleration of any obligation or loss of
any benefit under any license, assignment, note, mortgage, indenture, lease,
contract or other agreement or obligation to which AVI is a party or by which
AVI or any of its properties or assets may be bound, (iii) conflict with or
violate any judgment, order, decree, statute, law, ordinance, rule or regulation
or any material permit, concession, franchise or license applicable to AVI or
any of its properties or assets, except in the case of (ii) for such violations,
breaches, defaults, rights of termination, cancellation or acceleration, or
losses of benefits which would not be reasonably likely to have a Material
Adverse Effect.
3.3.3 No consent, approval, order or authorization of, or
registration, declaration or filing with, any governmental entity is required by
or with respect to AVI in connection with the execution and delivery of this
Agreement and the other Transaction Documents or the consummation of the
transactions contemplated hereby or thereby, except that the filing of one or
more notification and report forms under the Hart Scott Rodino Antitrust
Improvement Act of 1976 (the "HSR ACT") may be required with respect to the
acquisition by SuperGen of the AVI Shares and Warrant Shares, and except (i)
such other consents, approvals, orders, authorizations, registrations,
declarations and filings as may be required under applicable federal and state
securities laws and the laws of any
-5-
<PAGE>
foreign country, and (ii) such other consents, authorizations, filings,
approvals and registrations which, if not obtained or made, would not be
reasonably likely to have a Material Adverse Effect.
3.4 FINANCIAL STATEMENTS. AVI has delivered to SuperGen copies of
AVI's audited consolidated financial statements (balance sheet, statement of
operations, statement of shareholders' equity, and statement of cash flows) for
the year ended December 31, 1999 (the "AVI FINANCIAL STATEMENTS"). AVI Financial
Statements were prepared in accordance with generally accepted accounting
principles ("GAAP") applied on a consistent basis throughout the periods
involved (except as may be otherwise indicated in such financial statements or
the notes thereto). AVI Financial Statements present fairly in all material
respects the financial position of AVI and its subsidiaries as of the respective
dates and the consolidated results of its operations and cash flows for the
periods indicated.
3.5 ABSENCE OF UNDISCLOSED LIABILITIES. Neither AVI nor any of its
subsidiaries has any liabilities, either accrued or contingent (whether or not
required to be reflected in financial statements in accordance with GAAP), and
whether due or to become due, other than (i) liabilities reflected or provided
for on the balance sheet as of December 31, 1999 (the "AVI BALANCE SHEET")
contained in AVI Financial Statements, (ii) liabilities specifically described
in this Agreement or the AVI Disclosure Schedule, and (iii) normal or recurring
liabilities incurred since December 31, 1999 in the ordinary course of business
consistent with past practices that would not reasonably be expected to result
in a Material Adverse Effect.
3.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in the
AVI Disclosure Schedule, and except as reflected in AVI Financial Statements,
since December 31, 1999, AVI and its subsidiaries have conducted their
businesses in the ordinary course and in a manner consistent with past
practices, and have not:
3.6.1 suffered any event or occurrence that has had or would
reasonably be expected to have a Material Adverse Effect;
3.6.2 declared, set aside or paid any dividend or made any other
distribution on or in respect of the shares of its capital stock or declared any
direct or indirect redemption, retirement, purchase or other acquisition of such
shares, except for purchases of stock from terminated non-officer employees in
the ordinary course of business and in a manner consistent with past practices;
3.6.3 issued any shares of their capital stock or any warrants,
rights, or options for, or entered into any commitment relating to such capital
stock, except for issuances made in the ordinary course of business in arm's
length transactions for value and in a manner consistent with past practices
(including issuances made upon exercises and conversions of employee and
director stock options);
-6-
<PAGE>
3.6.4 made any material change in the accounting methods or
practices they follow, whether for general financial or tax purposes, or any
change in depreciation or amortization policies or rates;
3.6.5 bought, rented, sold, leased, abandoned or otherwise
disposed of any real property or machinery, equipment or other operating
property except in the ordinary course of business and in a manner consistent
with past practices and in an amount that is not material to AVI and its
subsidiaries taken as a whole;
3.6.6 sold, assigned, transferred, licensed, pledged, or
otherwise disposed of or encumbered any patent, trademark, trade name, brand
name, FDA license or approval application, copyright (or pending application for
any patent, trademark or copyright), invention, work of authorship, process,
know-how, formula or trade secret or interest thereunder or other material
intangible asset, except for non-exclusive licenses which were granted in the
ordinary course of business and in a manner consistent with past practices and
in an amount that is not material to AVI and its subsidiaries taken as a whole;
3.6.7 entered into any material commitment or transaction
(including without limitation any borrowing or capital expenditure) other than
the transactions contemplated by this Agreement and the other Transaction
Documents; or
3.6.8 paid, loaned or advanced any amount to, or sold,
transferred or leased any properties or assets or rights under license to, or
entered into any agreement or arrangement with any of its officers, directors or
shareholders or any affiliate of any of the foregoing, other than employee
compensation and benefits and reimbursement of employment related business
expenses incurred in the ordinary course of business.
3.7 TAXES. AVI (including its subsidiaries) has timely made or filed
all federal and state income and all other tax returns, reports and declarations
required by any jurisdiction to which it is subject and has paid all taxes and
other governmental assessments and charges, shown or determined to be due on
such returns, reports and declarations, except those being contested in good
faith and has set aside on its books provision reasonably adequate for the
payment of all taxes for periods subsequent to the periods to which such
returns, reports or declarations apply. There are no material unpaid taxes
claimed to be due by the taxing authority of any jurisdiction, and the officers
of AVI know of no basis for any such claim. To the best knowledge of AVI, there
are no pending or proposed audits or claims from any tax authority for
deficiencies, penalties or interest against AVI or its subsidiaries and the
officers of AVI know of no basis for any such audit or claim
3.8 INTELLECTUAL PROPERTY. To AVI's knowledge after reasonable
inquiry, (i) each of AVI and its subsidiaries has the right to use, free and
clear of all liens, charges, claims and restrictions, all intellectual property,
patents, trademarks, service marks, trade names, copyrights, licenses and rights
which are material to its business as presently conducted and (ii) neither AVI
nor any of its
-7-
<PAGE>
subsidiaries is infringing upon or otherwise acting adversely to the right or
claimed right of any other person under or with respect to the foregoing.
3.9 ENVIRONMENTAL MATTERS. To AVI's knowledge after reasonable
inquiry, neither AVI nor any of its subsidiaries is in violation of any statute,
rule, regulation, decision or order of any governmental agency or body or any
court, domestic or foreign, relating to the use, disposal or release of
hazardous or toxic substances or relating to the protection or restoration of
the environment or human exposure to hazardous or toxic substances
(collectively, "ENVIRONMENTAL LAWS") which, individually or in aggregate, would
have a Material Adverse Effect. Except as set forth in the AVI Disclosure
Schedule, to AVI's knowledge after reasonable inquiry, neither AVI nor any of
its subsidiaries owns or operates any real property contaminated with any
substance that is subject to any Environmental Laws, is liable for any off-site
disposal or contamination pursuant to any Environmental Laws, or is subject to
any claim relating to any Environmental Laws, which violation, contamination,
liability or claim would individually or in aggregate have a Material Adverse
Effect; and AVI is not aware of any pending investigation that might lead to
such a claim.
3.10 SEC FILINGS. AVI has timely filed all reports, registration
statements, proxy statements and other materials, together with any amendments
thereto (the "SEC FILING"), required to be filed by AVI with the Securities and
Exchange Commission (the "SEC") under the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT"). AVI has furnished to SuperGen copies of its Annual
Report on Form 10-K for the year ended December 31, 1999, and all Current
Reports on Form 8-K and proxy statements, as filed with the SEC. As of the date
filed, the SEC Filings do not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in light
of the circumstances in which they were made, not misleading. The financial
statements contained in the SEC Filings fairly present the financial position of
AVI and its subsidiaries as at the dates thereof and for the periods covered
thereby and have been prepared in accordance with GAAP and with the published
rules and regulations of the SEC with respect thereto.
3.11 LISTING. AVI Common Stock is duly listed on the Nasdaq National
Market ("NMS"). AVI is not in violation of the listing requirements of the NMS
and does not reasonably anticipate that the AVI Common Stock will be delisted by
the NMS for the foreseeable future.
3.12 EMPLOYEE BENEFIT PLANS. Except as set forth in the AVI Disclosure
Schedule, all AVI's employee benefit plans comply with and are and have been
operated in accordance with applicable laws and regulations. There are no funded
benefit obligations for which contributions have not been made or properly
accrued and there are no unfunded benefit obligations which have not been
accounted for by reserves on AVI's Financial Statements, and no event has
occurred, and there exists no condition or set of circumstances, with respect to
the employee benefit plans of AVI, which would reasonably be expected to subject
AVI to any liability, other than liabilities which would not be reasonably
likely, either individually or in the aggregate, to have a Material Adverse
Effect.
-8-
<PAGE>
3.13 EMPLOYEES. To AVI's knowledge, no employee or consultant of AVI is
in material violation of any material term of any such employment or consulting
agreement, confidentiality agreement, or any other contract or agreement
relating to the relationship of such employee or consultant with AVI or any
other party because of the nature of the business conducted or to be conducted
by AVI.
3.14 BROKERS OR FINDERS. No agent, broker, investment banker, financial
advisor or other firm or person is or will be entitled to any broker's or
finder's fee or any other commission or similar fee in connection with any of
the transactions contemplated by this Agreement or any of the other Transaction
Documents except for a fee of $150,000 and 40,909 shares of AVI Common Stock
paid by AVI to Boston Healthcare for assistance rendered to AVI in partnering
the Avicine vaccine product, and AVI agrees to indemnify and hold SuperGen
harmless from and against any and all claims, liabilities or obligations with
respect to any other fees, commissions or expenses asserted by any person on the
basis of any act or statement alleged to have been made by AVI.
3.15 COMPLIANCE WITH LAWS. Each of AVI and its subsidiaries has
complied in all material respects with all applicable federal, state, local and
foreign statutes, laws and regulations, and is not in violation of, and has not
received any notices of violation with respect to, any such statute, law or
regulation, with respect to the conduct, ownership or operation of its
businesses which, individually or in aggregate, would have a Material Adverse
Effect. Each of AVI and its subsidiaries has obtained each governmental consent,
license, permit, grant or other authorization of a governmental entity that is
required for the operation of its business as currently conducted (collectively,
the "AVI AUTHORIZATIONS"), and all such AVI Authorizations are in full force and
effect, except for such AVI Authorizations which, if not obtained by AVI or any
of its subsidiaries, would not be reasonably likely, either individually or in
the aggregate, to have a Material Adverse Effect.
3.16 LITIGATION. Except as set forth in the AVI Disclosure Schedule,
there is no action, suit, proceeding, claim, arbitration or investigation,
pending before any agency, court or tribunal, or to the knowledge of AVI,
threatened against AVI, its subsidiaries or any of their respective properties
or officers or directors (in their capacities as such), and, to the knowledge of
AVI, there is no valid basis for any action, suit, proceeding, claim,
arbitration or investigation against AVI or any of its subsidiaries which, if
determined adversely to AVI or any such subsidiary, would reasonably be expected
to have a Material Adverse Effect. There is no judgment, decree or order against
AVI or any of its subsidiaries or, to the knowledge of AVI after reasonable
inquiry, any of its respective directors or officers (in their capacities as
such) that would prevent, enjoin, or materially alter or delay any of the
transactions contemplated by this Agreement or that would reasonably be expected
to have a Material Adverse Effect.
3.17 NO MISREPRESENTATION. No representation or warranty by AVI in this
Agreement or any of the other Transaction Documents, and no statement,
certificate or schedule furnished or to be furnished by or on behalf of AVI
pursuant to this Agreement or any of the other Transaction
-9-
<PAGE>
Documents, when taken together, contains any untrue statement of a material fact
or omits to state a material fact required to be stated therein or necessary in
order to make such statements, in light of the circumstances under which they
were made, not misleading.
3.18 INVESTMENT AVI. AVI is not, and after giving effect to the
issuance of the AVI Shares and the Warrant Shares will not be, an investment
company under the Investment Company Act of 1940.
3.19 VALID PRIVATE PLACEMENT. Subject to the accuracy of SuperGen's
representations in Section 4.21, AVI is entitled to rely on an AVI exemption
from the provisions of Section 5 of the Securities Act in its sale and issuance
of AVI Shares and Warrant Shares to SuperGen pursuant to the terms of this
Agreement.
3.20 OREGON BUSINESS CORPORATION ACT. The purchase of the AVI Shares
and Warrant Shares pursuant to this Agreement has been approved by the Board of
Directors of AVI prior to the date of this Agreement for the purposes of the
Oregon Business Corporation Act such that after the date of this Agreement,
neither SuperGen nor any of its affiliates will be subject to the restrictions
on business combination transactions set forth therein with respect to SuperGen
on account of such purchase.
3.21 EXEMPT OFFERING; ACQUISITION FOR INVESTMENT.
3.21.1 AVI is acquiring the SuperGen Shares under this Agreement
solely for AVI's or its designated affiliate's own account for passive
investment purposes and not with a view to, or for resale in connection with,
any distribution thereof within the meaning of the Securities Act of 1933, as
amended (the "SECURITIES ACT"). AVI further represents that AVI does not have
any present intention of selling, offering to sell or otherwise disposing of or
distributing the SuperGen Shares or any portion thereof. AVI acknowledges and
understands that the entire legal and beneficial interest of the SuperGen Shares
AVI is acquiring is being purchased for, and will be held for the account of,
AVI or its designated affiliate only and neither in whole nor in part for any
other person. AVI understands that the SuperGen Shares have not been registered
under the Securities Act or other securities laws in reliance on specific
exemptions therefrom, which exemptions depend upon, among other things, the bona
fide nature of AVI investment intent as expressed herein.
3.21.2 The SuperGen Shares were not offered to AVI through, and
AVI is not aware of, any form of general solicitation or general advertising,
including, without limitation, (i) any advertisement, article, notice or other
communication published in any newspaper, magazine or similar media or broadcast
over television or radio, and (ii) any seminar or meeting whose attendees have
been invited by any general solicitation or general advertising.
3.21.3 AVI is an "accredited" investor as defined in Regulation D
under the Securities Act, and a "qualified institutional buyer" within the
meaning of Rule 144A under the Securities Act.
-10-
<PAGE>
3.21.4 AVI further acknowledges and understands that the SuperGen
Shares must be held indefinitely unless they are subsequently registered under
the Securities Act or an exemption from such registration is available, and the
transfer complies with the restrictions set forth in Section 5.5 of this
Agreement. AVI understands that the certificate(s) evidencing the SuperGen
Shares will be imprinted with a legend that sets forth the restrictions on
transfer.
3.21.5 AVI understands that Rule 144 promulgated under the
Securities Act permits limited resale of shares purchased in a private placement
subject to the satisfaction of certain conditions, including, among other
things, the existence of a public market for the SuperGen Shares, the
availability of certain current public information about SuperGen, more than one
year having elapsed between the resale and the date the security to be sold was
last held by SuperGen or an affiliate of SuperGen, the sale being made through a
"broker's transaction" or in transactions directly with a "market maker," and
the number of shares being sold during any three-month period not exceeding
specified limitations. AVI is further aware that Rule 144(k) permits persons who
have not been affiliates of SuperGen for at least three months and whose shares
have been beneficially owned by a person other than SuperGen or its affiliates
for at least two years after full payment for such shares to sell such shares
without regard to the current public information, manner of sale and volume
limitations described above.
3.21.6 AVI has reviewed with its own tax advisers the federal,
state, and local tax consequences of this investment and the transactions
contemplated by this Agreement and has relied solely on such advisers and not on
any statements or representations of SuperGen or any of its agents other than
the representations and warranties set forth herein. AVI understands that it
(and not SuperGen) shall be responsible for its own tax liability that may arise
as a result of its investment or the transactions contemplated by this
Agreement.
3.22 ACCESS TO INFORMATION; INVESTMENT EXPERIENCE; NO RELIANCE.
3.22.1 ACCESS TO INFORMATION. AVI has, prior to the date of this
Agreement, been furnished with SuperGen's most recent SEC Filings and given an
opportunity to review material contracts and documents of SuperGen which have
been filed as exhibits to such SEC Filings. AVI has had opportunity to discuss
SuperGen's business, management and financial affairs with its management. AVI
has also had an opportunity to ask questions of officers of SuperGen, which
questions were answered to its satisfaction. AVI, in making the investment
decision, has read, reviewed, and relied solely on SuperGen's SEC Filings and
other documents furnished by SuperGen, including SuperGen's Financial
Statements, pursuant to this Agreement and SuperGen's representations and
warranties contained herein, and has made an independent investigation, or
obtained any additional information which AVI deems necessary to verify the
accuracy and completeness of the information received. AVI is not relying on any
oral representation of SuperGen or any other person, nor any written
representation or assurance from SuperGen other than those contained in the SEC
Filings or incorporated herein or therein. The foregoing, however, does not
limit or modify AVI's right to rely upon covenants, representations and
warranties of SuperGen in
-11-
<PAGE>
Section 4 of this Agreement. AVI acknowledges and agrees that SuperGen has no
responsibility for, does not ratify, and is under no responsibility whatsoever
to comment upon or correct any reports, analyses or other comments made about
SuperGen by any third parties, including, but not limited to, analysts' research
reports or comments, and AVI has not relied upon any such third party reports in
making the decision to invest.
3.22.2 RISK OF INVESTMENT; INVESTMENT EXPERIENCE; CAPABILITY TO
EVALUATE. AVI recognizes that an investment in SuperGen involves substantial
risks, including the potential loss of AVI's entire investment herein. AVI has
substantial knowledge and experience in investing in securities and in financial
and business matters that it is capable of evaluating the merits and risks of
the investment. AVI acknowledges that it is able to fend for itself in the
transactions contemplated by this Agreement, and that AVI has the ability to
bear the economic risk of investment pursuant to this Agreement.
3.22.3 RELIANCE ON OWN JUDGEMENT OR ADVISORS. AVI has relied
completely on its own judgement or the advice of its own tax, investment, legal
or other advisors and has not relied on SuperGen or any of its affiliates,
officers, directors, attorneys, accountants or any affiliates of any thereof and
each other person, if any, who controls any of the foregoing, within the meaning
of Section 15 of the Securities Act for any tax, investment or legal advice
(other than reliance on information furnished by SuperGen, the representations,
warranties and covenants contained herein).
SECTION 4
REPRESENTATIONS AND WARRANTIES OF SUPERGEN
Except as disclosed in SuperGen's SEC Filings or as set forth in the
disclosure schedule previously provided to AVI (the "SUPERGEN DISCLOSURE
SCHEDULE"), SuperGen hereby represents and warrants to and agrees with AVI as
follows:
4.1 ORGANIZATION; STANDING AND POWER; QUALIFICATION. SuperGen and each
of its subsidiaries is a corporation duly organized and existing under, and by
virtue of, the laws of the State of Delaware and is in good standing under such
laws. SuperGen and each of its subsidiaries have all requisite corporate power
to own, lease and operate its property and to carry on its businesses, and is
duly qualified to do business and is in good standing as a foreign corporation
in any jurisdiction except where the failure to be so qualified and in good
standing would not have a material adverse effect on the business, assets
(including intangible assets), properties, liabilities (contingent or
otherwise), financial condition, operations, or results of operation of SuperGen
or its subsidiaries, taken as a WHOLE (a "MATERIAL ADVERSE EFFECT").
4.2 CAPITALIZATION. The authorized capital stock of SuperGen consists
of 40,000,000 shares of SuperGen Common Stock, $0.001 par value, and 2,000,000
shares of preferred stock, $0.001 par value. As of March 31, 2000, there were
30,555,785 shares of SuperGen Common Stock issued and outstanding, 3,192,316 of
SuperGen Common Stock issuable under SuperGen's stock
-12-
<PAGE>
option plans and 5,106,067 shares issuable pursuant to warrants and there were
no issued and outstanding shares of preferred stock. All such issued and
outstanding shares have been duly authorized and validly issued, are fully paid
and nonassessable. Except as set forth in the SuperGen Disclosure Schedule, no
shares of SuperGen Common Stock are entitled to preemptive rights or
registration rights and there are no outstanding options, warrants, scrip,
rights to subscribe to, call or commitments of any character whatsoever relating
to, or securities or rights convertible into, any shares of capital stock of
SuperGen. Furthermore, except as set forth in this Agreement and the SuperGen
Disclosure Schedule, there are no contracts or commitments by which SuperGen is
or may become bound to issue additional shares of the capital stock of SuperGen
or options, securities or rights convertible into shares of capital stock of
SuperGen. SuperGen is not a party to, and it has no knowledge of, any agreement
restricting the voting or transfer of any shares of the capital stock of
SuperGen other than transfer restrictions imposed to satisfy state and federal
securities laws. Except as set forth in the SuperGen Disclosure Schedule, the
offer and sale of all capital stock, convertible securities, rights, warrants,
or options of SuperGen issued prior to the Closing and any Subsequent Closing
complied with all applicable federal and state securities laws. Each of
SuperGen's subsidiaries is wholly-owned by SuperGen.
4.3 AUTHORIZATION; NO CONFLICTS; APPROVALS.
4.3.1 All corporate action on the part of SuperGen, its
stockholders and its directors necessary for the authorization, execution,
delivery and performance of the Agreement by SuperGen, the authorization, sale,
issuance and delivery of the SuperGen Shares, and the performance of all of
SuperGen's obligations under the Agreement has been taken or will be taken prior
to the Closing Date or Subsequent Closing Date. The Agreement, the Registration
Rights Agreement and any other documents required to be executed and delivered
by SuperGen hereunder (collectively, the "TRANSACTION DOCUMENTS"), when executed
and delivered by SuperGen, shall constitute valid and binding obligations of
SuperGen, enforceable in accordance with their terms, subject to laws of general
application relating to bankruptcy, insolvency and the relief of debtors and
rules of law governing specific performance, injunctive relief or other
equitable remedies. The SuperGen Shares, when issued in compliance with the
provisions of this Agreement, will be validly issued, fully paid and
nonassessable, and free of any liens or encumbrances, other than any permissible
liens or encumbrances created by or imposed upon the SuperGen Shares by AVI;
provided, however, that the SuperGen Shares are subject to restrictions on
transfer under state and/or federal securities laws and as set forth in this
Agreement.
4.3.2 The execution and delivery by SuperGen of this Agreement
and the other Transaction Documents do not, and the consummation of the
transactions contemplated hereby and thereby will not, (i) conflict with, or
result in any violation of or breach of any provision of the Certificate of
Incorporation or Bylaws of SuperGen, (ii) result in any violation or breach of,
or constitute (with or without notice or lapse of time, or both) a default
under, or give rise to a right of termination, cancellation or acceleration of
any obligation or loss of any benefit under any license, assignment, note,
mortgage, indenture, lease, contract or other agreement or obligation to which
-13-
<PAGE>
SuperGen is a party or by which SuperGen or any of its properties or assets may
be bound, (iii) conflict with or violate any judgment, order, decree, statute,
law, ordinance, rule or regulation or any material permit, concession, franchise
or license applicable to SuperGen or any of its properties or assets, except in
the case of (ii) for such violations, breaches, defaults, rights of termination,
cancellation or acceleration, or losses of benefits which would not be
reasonably likely to have a Material Adverse Effect.
4.3.3 No consent, approval, order or authorization of, or
registration, declaration or filing with, any governmental entity is required by
or with respect to SuperGen in connection with the execution and delivery of
this Agreement and the other Transaction Documents or the consummation of the
transactions contemplated hereby or thereby, except that the filing of one or
more notification and report forms under the HSR Act may be required with
respect to the acquisition by AVI of the SuperGen Shares, and except (i) such
other consents, approvals, orders, authorizations, registrations, declarations
and filings as may be required under applicable federal and state securities
laws and the laws of any foreign country, and (ii) such other consents,
authorizations, filings, approvals and registrations which, if not obtained or
made, would not be reasonably likely to have a Material Adverse Effect.
4.4 FINANCIAL STATEMENTS. SuperGen has delivered to AVI copies of
SuperGen's audited consolidated financial statements (balance sheet, statement
of operations, statement of stockholders' equity, and statement of cash flows)
for the year ended December 31, 1999 (the "SUPERGEN FINANCIAL STATEMENTS").
SuperGen Financial Statements were prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved (except as may be otherwise
indicated in such financial statements or the notes thereto). SuperGen Financial
Statements present fairly in all material respects the financial position of
SuperGen and its subsidiaries as of the respective dates and the consolidated
results of its operations and cash flows for the periods indicated.
4.5 ABSENCE OF UNDISCLOSED LIABILITIES. Neither SuperGen nor any of
its subsidiaries has any liabilities, either accrued or contingent (whether or
not required to be reflected in financial statements in accordance with GAAP),
and whether due or to become due, other than (i) liabilities reflected or
provided for on the balance sheet as of December 31, 1999 (the "SUPERGEN BALANCE
SHEET") contained in SuperGen Financial Statements, (ii) liabilities
specifically described in this Agreement or the SuperGen Disclosure Schedule,
and (iii) normal or recurring liabilities incurred since December 31, 1999 in
the ordinary course of business consistent with past practices that would not
reasonably be expected to result in a Material Adverse Effect.
4.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in the
SuperGen Disclosure Schedule, and except as reflected in SuperGen Financial
Statements, since December 31, 1999, SuperGen and its subsidiaries have
conducted their businesses in the ordinary course and in a manner consistent
with past practices, and have not:
-14-
<PAGE>
4.6.1 suffered any event or occurrence that has had or would
reasonably be expected to have a Material Adverse Effect;
4.6.2 declared, set aside or paid any dividend or made any other
distribution on or in respect of the shares of its capital stock or declared any
direct or indirect redemption, retirement, purchase or other acquisition of such
shares, except for purchases of stock from terminated non-officer employees in
the ordinary course of business and in a manner consistent with past practices;
4.6.3 issued any shares of their capital stock or any warrants,
rights, or options for, or entered into any commitment relating to such capital
stock, except for issuances made in the ordinary course of business in arm's
length transactions for value and in a manner consistent with past practices
(including issuances made upon exercises and conversions of employee and
director stock options);
4.6.4 made any material change in the accounting methods or
practices they follow, whether for general financial or tax purposes, or any
change in depreciation or amortization policies or rates;
4.6.5 bought, rented, sold, leased, abandoned or otherwise
disposed of any real property or machinery, equipment or other operating
property except in the ordinary course of business and in a manner consistent
with past practices and in an amount that is not material to SuperGen and its
subsidiaries taken as a whole;
4.6.6 sold, assigned, transferred, licensed, pledged, or
otherwise disposed of or encumbered any patent, trademark, trade name, brand
name, the FDA license or approval application, copyright (or pending application
for any patent, trademark or copyright), invention, work of authorship, process,
know-how, formula or trade secret or interest thereunder or other material
intangible asset, except for non-exclusive licenses which were granted in the
ordinary course of business and in a manner consistent with past practices and
in an amount that is not material to SuperGen and its subsidiaries taken as a
whole;
4.6.7 entered into any material commitment or transaction
(including without limitation any borrowing or capital expenditure) other than
the transactions contemplated by this Agreement and the other Transaction
Documents; or
4.6.8 paid, loaned or advanced any amount to, or sold,
transferred or leased any properties or assets or rights under license to, or
entered into any agreement or arrangement with any of its officers, directors or
stockholders or any affiliate of any of the foregoing, other than employee
compensation and benefits and reimbursement of employment related business
expenses incurred in the ordinary course of business.
4.7 TAXES. SuperGen (including its subsidiaries) has timely made or
filed all federal and state income and all other tax returns, reports and
declarations required by any jurisdiction to which
-15-
<PAGE>
it is subject and has paid all taxes and other governmental assessments and
charges, shown or determined to be due on such returns, reports and
declarations, except those being contested in good faith and has set aside on
its books provision reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations apply.
There are no material unpaid taxes claimed to be due by the taxing authority of
any jurisdiction, and the officers of SuperGen know of no basis for any such
claim. To the best knowledge of SuperGen, there are no pending or proposed
audits or claims from any tax authority for deficiencies, penalties or interest
against SuperGen or its subsidiaries and the officers of SuperGen know of no
basis for any such audit or claim.
4.8 INTELLECTUAL PROPERTY. To SuperGen's knowledge after reasonable
inquiry, (i) each of SuperGen and its subsidiaries has the right to use, free
and clear of all liens, charges, claims and restrictions, all intellectual
property, patents, trademarks, service marks, trade names, copyrights, licenses
and rights which are material to its business as presently conducted and (ii)
neither SuperGen nor any of its subsidiaries is infringing upon or otherwise
acting adversely to the right or claimed right of any other person under or with
respect to the foregoing.
4.9 ENVIRONMENTAL MATTERS. To SuperGen's knowledge after reasonable
inquiry, neither SuperGen nor any of its subsidiaries is in violation of any
Environmental Laws which, individually or in aggregate, would have a Material
Adverse Effect. Except as set forth in the SuperGen Disclosure Schedule, to
SuperGen's knowledge after reasonable inquiry, neither SuperGen nor any of its
subsidiaries owns or operates any real property contaminated with any substance
that is subject to any Environmental Laws, is liable for any off-site disposal
or contamination pursuant to any Environmental Laws, or is subject to any claim
relating to any Environmental Laws, which violation, contamination, liability or
claim would individually or in aggregate have a Material Adverse Effect; and
SuperGen is not aware of any pending investigation that might lead to such a
claim.
4.10 SEC FILINGS. SuperGen has timely filed all SEC Filings required to
be filed by SuperGen with the SEC under the Exchange Act. SuperGen has furnished
to AVI copies of its Annual Report on Form 10-K for the year ended December 31,
1999 and all Current Reports on Form 8-K and proxy statements, as filed with the
SEC. As of the date filed, the SEC Filings do not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading. The financial statements contained in the SEC Filings fairly present
the financial position of SuperGen and its subsidiaries as at the dates thereof
and for the periods covered thereby and have been prepared in accordance with
GAAP and with the published rules and regulations of the SEC with respect
thereto.
4.11 LISTING. SuperGen's Common Stock is duly listed on the NMS.
SuperGen is not in violation of the listing requirements of the NMS and does not
reasonably anticipate that the SuperGen Common Stock will be delisted by the NMS
for the foreseeable future.
-16-
<PAGE>
4.12 EMPLOYEE BENEFIT PLANS. Except as set forth in the SuperGen
Disclosure Schedule, all SuperGen's employee benefit plans comply with and are
and have been operated in accordance with applicable laws and regulations. There
are no funded benefit obligations for which contributions have not been made or
properly accrued and there are no unfunded benefit obligations which have not
been accounted for by reserves on SuperGen's Financial Statements, and no event
has occurred, and there exists no condition or set of circumstances, with
respect to the employee benefit plans of SuperGen, which would reasonably be
expected to subject SuperGen to any liability, other than liabilities which
would not be reasonably likely, either individually or in the aggregate, to have
a Material Adverse Effect.
4.13 EMPLOYEES. To SuperGen's knowledge, no employee or consultant of
SuperGen is in material violation of any material term of any such employment or
consulting agreement, confidentiality agreement, or any other contract or
agreement relating to the relationship of such employee or consultant with
SuperGen or any other party because of the nature of the business conducted or
to be conducted by SuperGen.
4.14. BROKERS OR FINDERS. No agent, broker, investment banker, financial
advisor or other firm or person is or will be entitled to any broker's or
finder's fee or any other commission or similar fee in connection with any of
the transactions contemplated by this Agreement or any of the other Transaction
Documents, and SuperGen agrees to indemnify and hold AVI harmless from and
against any and all claims, liabilities or obligations with respect to any other
fees, commissions or expenses asserted by any person on the basis of any act or
statement alleged to have been made by SuperGen.
4.15 COMPLIANCE WITH LAWS. Each of SuperGen and its subsidiaries has
complied in all material respects with all applicable federal, state, local and
foreign statutes, laws and regulations, and is not in violation of, and has not
received any notices of violation with respect to, any such statute, law or
regulation, with respect to the conduct, ownership or operation of its
businesses which, individually or in aggregate, would have a Material Adverse
Effect. Each of SuperGen and its subsidiaries has obtained each governmental
consent, license, permit, grant or other authorization of a governmental entity
that is required for the operation of its business as currently conducted
(collectively, the "SUPERGEN AUTHORIZATIONS"), and all SuperGen Authorizations
are in full force and effect, except for such Company Authorizations which, if
not obtained by SuperGen or any of its subsidiaries, would not be reasonably
likely, either individually or in the aggregate, to have a Material Adverse
Effect.
4.16 LITIGATION. Except as set forth in the SuperGen Disclosure
Schedule, there is no action, suit, proceeding, claim, arbitration or
investigation, pending before any agency, court or tribunal, or to the knowledge
of SuperGen, threatened against SuperGen, its subsidiaries or any of their
respective properties or officers or directors (in their capacities as such),
and, to the knowledge of SuperGen, there is no valid basis for any action, suit,
proceeding, claim, arbitration or investigation against SuperGen or any of its
subsidiaries which, if determined adversely to SuperGen or any such subsidiary,
would reasonably be expected to have a Material Adverse Effect. There is no
-17-
<PAGE>
judgment, decree or order against SuperGen or any of its subsidiaries or, to the
knowledge of SuperGen after reasonable inquiry, any of its respective directors
or officers (in their capacities as such) that would prevent, enjoin, or
materially alter or delay any of the transactions contemplated by this Agreement
or that would reasonably be expected to have a Material Adverse Effect.
4.17 NO MISREPRESENTATION. No representation or warranty by SuperGen in
this Agreement or any of the other Transaction Documents, and no statement,
certificate or schedule furnished or to be furnished by or on behalf of SuperGen
pursuant to this Agreement or any of the other Transaction Documents, when taken
together, contains any untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary in order to make such
statements, in light of the circumstances under which they were made, not
misleading.
4.18 INVESTMENT COMPANY. SuperGen is not, and after giving effect to
the issuance of the SuperGen Shares will not be, an investment company under the
Investment Company Act of 1940.
4.19 VALID PRIVATE PLACEMENT. Subject to the accuracy of AVI's
representations in Section 3.21, SuperGen is entitled to rely on an exemption
from the provisions of Section 5 of the Securities Act in its sale and issuance
of the SuperGen Shares to AVI pursuant to the terms of this Agreement.
4.20 SECTION 203. The purchase of the SuperGen Shares pursuant to this
Agreement has been approved by the Board of Directors of SuperGen prior to the
date of this Agreement for the purposes of Section 203 of the Delaware General
Corporation Law such that after the date of this Agreement, neither AVI nor any
of its affiliates will be subject to the restrictions on business combination
transactions set forth in said Section 203 with respect to SuperGen on account
of such purchase.
4.21 EXEMPT OFFERING; ACQUISITION FOR INVESTMENT.
4.21.1 SuperGen is acquiring the AVI Shares and Warrant Shares
solely for SuperGen's or its designated affiliate's own account for passive
investment purposes and not with a view to, or for resale in connection with,
any distribution thereof within the meaning of the Securities Act. SuperGen
further represents that SuperGen does not have any present intention of selling,
offering to sell or otherwise disposing of or distributing the AVI Shares or
Warrant Shares or any portion thereof. SuperGen acknowledges and understands
that the entire legal and beneficial interest of the AVI Shares and Warrant
Shares SuperGen is acquiring is being purchased for, and will be held for the
account of, SuperGen or its designated affiliate only and neither in whole nor
in part for any other person. SuperGen understands that the AVI Shares and
Warrant Shares have not been registered under the Securities Act or other
securities laws in reliance on specific exemptions therefrom, which exemptions
depend upon, among other things, the bona fide nature of SuperGen's investment
intent as expressed herein.
-18-
<PAGE>
4.21.2 The AVI Shares and Warrant Shares were not offered to
SuperGen through, and SuperGen is not aware of, any form of general solicitation
or general advertising, including, without limitation, (i) any advertisement,
article, notice or other communication published in any newspaper, magazine or
similar media or broadcast over television or radio, and (ii) any seminar or
meeting whose attendees have been invited by any general solicitation or general
advertising.
4.21.3 SuperGen is an "accredited" investor as defined in
Regulation D under the Securities Act, and a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act.
4.21.4 SuperGen further acknowledges and understands that the AVI
Shares and Warrant Shares must be held indefinitely unless they are subsequently
registered under the Securities Act or an exemption from such registration is
available, and the transfer complies with the restrictions set forth in Section
5.5 of this Agreement. SuperGen understands that the certificate(s) evidencing
the AVI Shares and Warrant Shares will be imprinted with a legend that sets
forth the restrictions on transfer.
4.21.5 SuperGen understands that Rule 144 promulgated under the
Securities Act permits limited resale of shares purchased in a private placement
subject to the satisfaction of certain conditions, including, among other
things, the existence of a public market for the AVI Shares and Warrant Shares,
the availability of certain current public information about AVI, more than one
year having elapsed between the resale and the date the security to be sold was
last held by AVI or an affiliate of AVI, the sale being made through a "broker's
transaction" or in transactions directly with a "market maker," and the number
of shares being sold during any three-month period not exceeding specified
limitations. SuperGen is further aware that Rule 144(k) permits persons who have
not been affiliates of AVI for at least three months and whose shares have been
beneficially owned by a person other than AVI or its affiliates for at least two
years after full payment for such shares to sell such shares without regard to
the current public information, manner of sale and volume limitations described
above.
4.21.6 SuperGen has reviewed with its own tax advisers the
federal, state, and local tax consequences of this investment and the
transactions contemplated by this Agreement and has relied solely on such
advisers and not on any statements or representations of AVI or any of its
agents other than the representations and warranties set forth herein. SuperGen
understands that it (and not AVI) shall be responsible for its own tax liability
that may arise as a result of this investment or the transactions contemplated
by this Agreement.
4.22 ACCESS TO INFORMATION; INVESTMENT EXPERIENCE; NO RELIANCE.
4.22.1 ACCESS TO INFORMATION. SuperGen has, prior to the date of
this Agreement, been furnished with AVI's most recent SEC Filings and given an
opportunity to review material contracts and documents of AVI which have been
filed as exhibits to such SEC Filings. SuperGen has had opportunity to discuss
AVI's business, management and financial affairs with its
-19-
<PAGE>
management. SuperGen has also had an opportunity to ask questions of officers of
AVI, which questions were answered to its satisfaction. SuperGen, in making the
investment decision, has read, reviewed, and relied solely on AVI's SEC Filings
and other documents furnished by AVI, including AVI's Financial Statements,
pursuant to this Agreement and AVI's representations and warranties contained
herein, and has made an independent investigation, or obtained any additional
information which SuperGen deems necessary to verify the accuracy and
completeness of the information received. SuperGen is not relying on any oral
representation of AVI or any other person, nor any written representation or
assurance from AVI other than those contained in the SEC Filings or incorporated
herein or therein. The foregoing, however, does not limit or modify SuperGen's
right to rely upon covenants, representations and warranties of AVI in Section 3
of this Agreement. SuperGen acknowledges and agrees that AVI has no
responsibility for, does not ratify, and is under no responsibility whatsoever
to comment upon or correct any reports, analyses or other comments made about
AVI by any third parties, including, but not limited to, analysts' research
reports or comments, and SuperGen has not relied upon any such third party
reports in making the decision to invest.
4.22.2 RISK OF INVESTMENT; INVESTMENT EXPERIENCE; CAPABILITY TO
EVALUATE. SuperGen recognizes that an investment in AVI involves substantial
risks, including the potential loss of SuperGen's entire investment herein.
SuperGen has substantial knowledge and experience in investing in securities and
in financial and business matters that it is capable of evaluating the merits
and risks of the investment. SuperGen acknowledges that it is able to fend for
itself in the transactions contemplated by this Agreement, and that SuperGen has
the ability to bear the economic risk of investment pursuant to this Agreement.
4.22.3 RELIANCE ON OWN JUDGEMENT OR ADVISORS. SuperGen has relied
completely on its own judgement or the advice of its own tax, investment, legal
or other advisors and has not relied on AVI or any of its affiliates, officers,
directors, attorneys, accountants or any affiliates of any thereof and each
other person, if any, who controls any of the foregoing, within the meaning of
Section 15 of the Securities Act for any tax, investment or legal advice (other
than reliance on information furnished by AVI, the representations, warranties
and covenants contained herein).
4.23 BROKERS OR FINDERS. No agent, broker, investment banker, financial
adviser or other firm or person is or will be entitled to any broker's or
finder's fee, or any other commission or similar fee, in connection with any of
the transactions contemplated by this Agreement or any of the other Transaction
Documents, and SuperGen agrees to indemnify and hold AVI and its subsidiaries
harmless from and against any and all claims, liabilities or obligations with
respect to any such fees or commissions asserted by any person on the basis of
any act or statement determined to have been made to such person by SuperGen.
-20-
<PAGE>
SECTION 5
ADDITIONAL AGREEMENTS
AVI and SuperGen further agree with each other as follows:
5.1 FINANCIAL STATEMENTS AND OTHER REPORTS.
5.1.1 As long as SuperGen beneficially owns, either outright or
pursuant to rights to acquire, at least five percent (5%) of AVI Common Stock on
either a primary or fully diluted basis, AVI shall deliver to SuperGen, promptly
after transmission thereof, copies of all such financial statements, proxy
statements, notices and reports as AVI shall send to its public shareholders and
copies of all registration statements (without exhibits), other than
registration statements on Form S-8 or any similar successor form, and all
reports which it files with the SEC (or any governmental body or agency
succeeding to the functions of the SEC). SuperGen shall have the right to
discuss such financial statements, proxy statements, notices, reports,
registration statements and filings with such officers of AVI as SuperGen may
reasonably designate upon reasonable notice and at reasonable times, and to
share such information with SuperGen's professional advisers, subject to the
confidentiality provisions set forth in Section 5.2.
5.1.2 As long as AVI beneficially owns, either outright or
pursuant to rights to acquire, at least five percent (5%) of SuperGen Common
Stock on either a primary or fully diluted basis, SuperGen shall deliver to AVI,
promptly after transmission thereof, copies of all such financial statements,
proxy statements, notices and reports as SuperGen shall send to its public
stockholders and copies of all registration statements (without exhibits), other
than registration statements on Form S-8 or any similar successor form, and all
reports which it files with the SEC (or any governmental body or agency
succeeding to the functions of the SEC). SuperGen shall have the right to
discuss such financial statements, proxy statements, notices, reports,
registration statements and filings with such officers of SuperGen as AVI may
reasonably designate upon reasonable notice and at reasonable times, and to
share such information with AVI's professional advisers, subject to the
confidentiality provisions set forth in Section 5.2.
5.2 CONFIDENTIALITY. Except as permitted by Section 5.3, each party
agrees (and shall cause its professional advisers to agree) not to disclose to
any person any information or data obtained by them pursuant to Section 5.1
until such information or data otherwise becomes publicly available or except
pursuant to a valid subpoena, judicial process or its equivalent or as otherwise
required by law. At the disclosing party's request, the receiving party shall,
and shall cause its professional advisers to, sign a confidentiality agreement,
in form and substance reasonably satisfactory to the disclosing party, as a
condition to the receipt of confidential nonpublic information of the disclosing
party by such advisers pursuant to Section 5.1.
5.3 PUBLIC ANNOUNCEMENTS. Each of the parties hereto will cooperate
with each other in the development and distribution of all news releases and
other public information disclosures with
-21-
<PAGE>
respect to this Agreement and the other Transaction Documents and any of the
transactions contemplated hereby and thereby, and neither party hereto directly
or indirectly through its officers and/or directors shall make any further
announcement, news release or disclosure without first consulting with the other
party hereto except (a) with the prior written consent of the other party or (b)
to the extent such party believes in good faith, after consultation with legal
counsel, that such announcement, release or disclosure is required by law. Each
party shall not, and shall cause its officers and directors not to, make or
contribute to any public statement, news release or other public communication
or filing disclosing personal information concerning the other party or any
member of the other party without the prior written consent of the other party
and such member unless such party believes in good faith, after consultation
with legal counsel, that such statement, release, communication or filing is
required by law.
5.4 HSR ACT. AVI shall be responsible for all applicable filing fees
under the HSR Act relating to the acquisition of AVI Shares and Warrant
Shares, and SuperGen shall be responsible for all applicable filing fees under
the HSR Act relating to the acquisition of SuperGen Shares. Each party shall use
its best efforts to cooperate with the other party in making the applicable
filings under the HSR Act, and with respect to the exercise of the Warrant,
SuperGen agrees not to exercise the Warrant on any date prior to the expiration
or early termination of the applicable waiting periods under the HSR Act.
5.5 RESTRICTIONS ON TRANSFER.
5.5.1 SuperGen shall not, directly or indirectly, sell, transfer,
assign, pledge, distribute or otherwise dispose of, or grant any option with
respect to, establish any "short" or put-equivalent position with respect to, or
otherwise enter into any agreement, arrangement, transaction or series of
transactions (through derivatives or otherwise) which has or is intended to have
the effect, directly or indirectly, of reducing SuperGen's risk of ownership in
the AVI Shares or Warrant Shares it purchases pursuant to this Agreement (each
of the foregoing, a "Transfer") unless the Transfer is effected pursuant to (a)
a registration statement under the Securities Act and any applicable state
securities laws or (b) an exemption from the registration requirements under
federal and state securities laws, and AVI receives an opinion of counsel,
reasonably satisfactory to AVI stating that such Transfer will not require
registration of the AVI Shares or the Warrant Shares, as the case may be, under
the Securities Act or state securities laws, except that such an opinion will
not be required for transactions made pursuant to Rule 144 provided that
SuperGen and SuperGen's broker, if necessary, provide AVI with the necessary
representations for counsel to AVI to issue an opinion with respect to such
transaction.
5.5.2 AVI shall not, directly or indirectly, make a Transfer of
the SuperGen Shares it purchases pursuant to this Agreement unless the Transfer
is effected pursuant to (a) a registration statement under the Securities Act
and any applicable state securities laws or (b) an exemption from the
registration requirements under federal and state securities laws, and SuperGen
receives an opinion of counsel, reasonably satisfactory to SuperGen stating that
such Transfer will not require
-22-
<PAGE>
registration of the SuperGen Shares, under the Securities Act or state
securities laws, except that such an opinion will not be required for
transactions made pursuant to Rule 144 provided that AVI and AVI's broker, if
necessary, provide SuperGen with the necessary representations for counsel to
SuperGen to issue an opinion with respect to such transaction.
5.6 LEGENDS.
5.6.1 Each certificate representing the AVI Shares and Warrant
Shares shall be endorsed with the following legends, and any other legends
required by law:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE
IS MADE IN ACCORDANCE WITH RULE 144 UNDER THE ACT, OR AVI RECEIVES AN
OPINION OF COUNSEL FOR THE HOLDER OF THESE SECURITIES REASONABLY
SATISFACTORY TO AVI, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR
HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF SUCH ACT.
THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS
ON TRANSFER SET FORTH IN AN AGREEMENT DATED AS OF APRIL 4, 2000, BY AND
BETWEEN SUPERGEN, INC. AND AVI BIOPHARMA, INC., A COPY OF WHICH AGREEMENT
MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF
RECORD OF THIS CERTIFICATE TO THE SECRETARY OF AVI BIOPHARMA, INC. AT AVI
BIOPHARMA, INC.'S PRINCIPAL EXECUTIVE OFFICES.
AVI need not register a transfer of the legended AVI Shares or Warrant
Shares, and may also instruct its transfer agent not to register the transfer of
such AVI Shares or Warrant Shares, as the case may be, unless the conditions
specified in each of the foregoing legends are satisfied. The first of the
foregoing legends shall be removed from any security legended pursuant to this
Section 5.6.1, and AVI shall issue a certificate without such legend to the
holder of such AVI Shares or Warrant Shares, as the case may be, if such AVI
Shares or Warrant Shares are registered under the Securities Act and a
prospectus meeting the requirements of Section 10 of the Securities Act is
available or if such holder satisfies the requirements of Rule 144(k), or the
holder provides AVI with an opinion of counsel, reasonably satisfactory to AVI,
to the effect that a public sale, transfer or assignment of such AVI Shares or
Warrant Shares may be made without registration. The second of the foregoing
legends shall be removed from any AVI Shares or Warrant Shares legended in
-23-
<PAGE>
accordance with this Section 5.6.1, and AVI shall issue a certificate without
such legend to the holder of such AVI Share or Warrant Share at such time as
such share is transferred in accordance with Section 5.5. The stop transfer
instructions with respect to any legended share shall be removed if both of the
foregoing legends are removed in accordance with this Section 5.6.1.
5.6.2 Each certificate representing the SuperGen Shares shall be
endorsed with the following legends, and any other legends required by law:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE
IS MADE IN ACCORDANCE WITH RULE 144 UNDER THE ACT, OR SUPERGEN RECEIVES
AN OPINION OF COUNSEL FOR THE HOLDER OF THESE SECURITIES REASONABLY
SATISFACTORY TO SUPERGEN, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR
HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF SUCH ACT.
THE SECURITIES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS
ON TRANSFER SET FORTH IN AN AGREEMENT DATED AS OF APRIL 4, 2000, BY AND
BETWEEN SUPERGEN, INC. AND AVI BIOPHARMA, INC., A COPY OF WHICH AGREEMENT
MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF
RECORD OF THIS CERTIFICATE TO THE SECRETARY OF SUPERGEN, INC. AT
SUPERGEN, INC.'S PRINCIPAL EXECUTIVE OFFICES.
SuperGen need not register a transfer of the legended SuperGen Shares,
and may also instruct its transfer agent not to register the transfer of such
SuperGen Shares, unless the conditions specified in each of the foregoing
legends are satisfied. The first of the foregoing legends shall be removed from
any security legended pursuant to this Section 5.6.2, and SuperGen shall issue a
certificate without such legend to the holder of such SuperGen Shares, if such
SuperGen Shares are registered under the Securities Act and a prospectus meeting
the requirements of Section 10 of the Securities Act is available or if such
holder satisfies the requirements of Rule 144(k), or the holder provides
SuperGen with an opinion of counsel, reasonably satisfactory to SuperGen, to the
effect that a public sale, transfer or assignment of such SuperGen Shares may be
made without registration. The second of the foregoing legends shall be removed
from any SuperGen Shares legended in accordance with this Section 5.6.2, and
SuperGen shall issue a certificate without such legend to the holder of such
SuperGen Share at such time as such share is transferred in accordance with
Section 5.5. The stop
-24-
<PAGE>
transfer instructions with respect to any legended share shall be removed if
both of the foregoing legends are removed in accordance with this Section 5.6.2.
5.7 FURTHER ASSURANCES. At any time or from time to time after the
Closing, each Subsequent Closing and the Initial Warrant Closing, each party
shall execute and deliver to the other party or parties such other documents and
instruments, provide such materials and information and take such other actions
as either party may reasonably request more effectively to carry out the
provisions of this Agreement and the other Transaction Documents.
5.8 USE OF FUNDS. AVI shall use the proceeds from the sale of the AVI
Shares to SuperGen and the milestone payments contemplated by Section 5.1 of the
U.S. Agreement for proper corporate purposes, including allocating in a
responsible manner a sufficient portion of such proceeds and milestone payments
calculated to cause AVI to use its reasonable efforts to fulfill its obligations
under the U.S. Agreement.
5.9 REGISTRATION RIGHTS AGREEMENT. The parties shall enter into a
registration rights agreement dated the date hereof in substantially the form
attached hereto as EXHIBIT B with respect to the AVI Shares, Warrant Shares and
SuperGen Shares.
SECTION 6
CONDITIONS TO CLOSINGS
6.1 CONDITIONS TO SUPERGEN'S OBLIGATION TO ACQUIRE THE AVI SHARES AND
ISSUE SUPERGEN SHARES. The obligation of SuperGen to purchase the AVI Shares
from AVI and issue SuperGen Shares to AVI hereunder is subject to the
satisfaction, on or prior to the Closing Date or the Subsequent Closing Date, as
the case may be, of the following conditions, any of which may be waived by
SuperGen, in SuperGen's sole discretion, to the extent permitted by law:
6.1.1 REPRESENTATIONS AND WARRANTIES CORRECT. The representations
and warranties made by AVI in this Agreement and the other Transaction Documents
shall be true and correct when made and as of the Closing Date.
6.1.2 PERFORMANCE OF OBLIGATIONS. AVI shall have performed in all
material respects all covenants, agreements and other obligations required to be
performed or observed by AVI pursuant to this Agreement on or prior to the
Closing Date, and AVI shall have delivered to SuperGen a certificate to such
effect, executed by the chief executive officer and chief financial officer of
AVI and dated the Closing Date.
6.1.3 COMPLIANCE WITH LAW. At the time of the Closing and each
Subsequent Closing, the issuance by AVI and the acquisition by SuperGen of the
AVI Shares, and the issuance by SuperGen and the acquisition by AVI of the
SuperGen Shares, hereunder shall be legally permitted by all laws and
regulations to which SuperGen and AVI are subject; all waiting periods, if
-25-
<PAGE>
any, under the HSR Act applicable to the issuance and sale of the AVI Shares and
SuperGen Shares hereunder shall have expired or been terminated and no
preliminary or permanent injunction or other order by any court of competent
jurisdiction prohibiting or otherwise restraining such acquisition shall be in
effect.
6.1.4 U.S. AGREEMENT. The U.S. Agreement shall be in full force
and effect and shall not have been terminated by either party thereto nor shall
either party have given notice of such termination.
6.1.5 PURPOSELY LEFT BLANK.
6.1.6 REGISTRATION RIGHTS AGREEMENT. The parties shall have
executed the Registration Rights Agreement as set forth in Section 5.9.
6.2 CONDITIONS TO AVI'S OBLIGATION TO ISSUE AVI SHARES AND ACQUIRE
SUPERGEN SHARES. AVI's obligation to purchase SuperGen Shares from SuperGen and
sell the AVI Shares to SuperGen hereunder is subject to the satisfaction, on or
prior to the Closing Date, of the following conditions, any of which may be
waived by AVI, in its sole discretion, to the extent permitted by law:
6.2.1 REPRESENTATIONS AND WARRANTIES CORRECT. The representations
and warranties made by SuperGen in this Agreement shall be true and correct when
made, and shall be true and correct on the Closing Date with the same force and
effect as if they had been made on and as of the Closing Date, and SuperGen
shall have delivered to AVI a certificate to such effect, executed by a duly
authorized officer of SuperGen and dated the Closing Date.
6.2.2 PERFORMANCE OF OBLIGATIONS. SuperGen shall have performed
in all material respects all covenants, agreements and other obligations
required to be performed or observed by SuperGen pursuant to this Agreement on
or prior to the Closing Date, and SuperGen shall have delivered to AVI a
certificate to such effect, executed by a duly authorized officer of SuperGen
and dated the Closing Date.
6.2.3 COMPLIANCE WITH LAW. At the time of Closing, the issuance
by AVI and the acquisition by SuperGen of the AVI Shares, and the issuance by
SuperGen and the acquisition by AVI of the SuperGen Shares, hereunder shall be
legally permitted by all laws and regulations to which either SuperGen or AVI is
subject; all waiting periods, if any, under the HSR Act applicable to the
issuance and acquisition of the AVI Shares and SuperGen Shares hereunder shall
have expired or been terminated and no preliminary or permanent injunction or
other order by any court of competent jurisdiction prohibiting or otherwise
restraining such acquisition shall be in effect.
6.2.4 REGISTRATION RIGHTS AGREEMENT. The parties shall have
executed the Registration Rights Agreement as set forth in Section 5.9.
-26-
<PAGE>
6.3 CONDITIONS TO THE INITIAL WARRANT CLOSING. The Initial Warrant
Closing shall be subject to the conditions that, on or prior to the Warrant
Closing Date, (i) the representations and warranties made by AVI and SuperGen in
this Agreement shall be true and correct on the Warrant Exercise Date, (ii) the
issuance by AVI and the acquisition by SuperGen of the Warrant Shares hereunder
shall be legally permitted by all laws and regulations to which either SuperGen
or AVI is subject, (iii) all waiting periods, if any, under the HSR Act if
applicable to the acquisition of such Warrant Shares hereunder shall have
expired or been terminated, (iv) no preliminary or permanent injunction or other
order by any court of competent jurisdiction prohibiting or otherwise
restraining such issuance or acquisition shall be in effect, and (v) this
Agreement shall have not been terminated as a result of the termination of the
U.S. Agreement.
SECTION 7
MISCELLANEOUS
7.1 ACCESS TO INFORMATION. No information or knowledge obtained in any
investigation by SuperGen or AVI shall affect or be deemed to modify any
representation or warranty contained in this Agreement or the Transaction
Documents.
7.2 WAIVERS AND AMENDMENTS. This Agreement or any provision hereof may
be amended, waived, discharged or terminated only by a statement in writing
signed by the party against which enforcement of the amendment, waiver,
discharge or termination is sought.
7.3 GOVERNING LAW. This Agreement shall be governed in all respects by
the internal laws of the State of Delaware, without respect to the conflicts or
the laws or rules thereof.
7.4 SURVIVAL. The representations, warranties, covenants and
agreements made in this Agreement shall survive the closings of the transactions
contemplated hereby, notwithstanding any investigation made by any party. All
statements as to factual matters contained in any certificate delivered by or on
behalf of each party pursuant hereto or in connection with the transactions
contemplated hereby shall be deemed to be representations and warranties by such
party hereunder as of the date of such certificate or instrument.
7.5 SUCCESSORS AND ASSIGNS. Except as expressly provided or
contemplated by this Agreement and the other Transaction Documents, neither this
Agreement nor any right, obligation or interest hereunder shall be assigned,
either in whole or in part, by any party hereto (other than by operation of law)
without the prior written consent of the other parties; provided, that nothing
herein shall prevent or limit the ability of SuperGen or AVI to assign any or
all of its rights under this Agreement or any of the other Transaction Documents
to an affiliate. Subject to the foregoing limitations, the provisions hereof
shall inure to the benefit of, and be binding upon and enforceable by, the
parties hereto and their respective successors and assigns.
-27-
<PAGE>
7.6 ENTIRE AGREEMENT. This Agreement, the U.S. Agreement and the
Transaction Documents, and the other certificates and documents delivered
pursuant hereto constitute the full and entire understanding and agreement
between the parties with regard to the subjects hereof and supersede any prior
and contemporaneous agreements, understandings, negotiations and discussions,
whether oral or written, of the parties with respect thereto.
7.7 NOTICES. All notices and other communications required or
permitted hereunder shall be in writing and shall be delivered personally or by
overnight courier or mailed by first class mail, or Express Mail, postage
prepaid, or via facsimile, addressed (a) if to AVI, at AVI BioPharma, Inc., One
SW Columbia, Portland, OR 97258, Attn: President, Alan P. Timmins, with a copy
to Alter Wynne LLC, 222 SW Columbia, #1700, Portland, Oregon 97201, Attn: Byron
Milstead, or to such other address (including electronic mail address) as AVI
shall have furnished to SuperGen in writing or by electronic mail, or (b) if to
SuperGen, at SuperGen, Inc., Two Annabel Lane, Suite 220, San Ramon, CA 94583,
Attn: President and CEO, Dr. Joseph Rubinfeld, with a copy of any said notice to
be sent to Wilson Sonsini Goodrich & Rosati, 650 Page Mill Road, Palo Alto, CA
94304-1050, Attn: Page Mailliard, Esq., or to such other address (including
electronic mail address) as SuperGen shall have furnished to AVI in writing or
by electronic mail. Notices that are mailed by (i) first class mail shall be
deemed received three (3) business days after deposit in the mail and (ii)
Express Mail or overnight courier shall be deemed received one (1) business day
after deposit in the mail or delivery to such courier. In the event that the
notice is sent by facsimile, notice shall be deemed to have been received when
sent and confirmed as to receipt.
7.8 SEVERABILITY. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions of this Agreement shall not in any way be affected or
impaired thereby.
7.9 EXPENSES. AVI and SuperGen shall each bear their own fees, costs
and expenses incurred on their behalf with respect to the Agreement and the
transactions contemplated hereby and any amendments or waiver thereto.
7.10 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not considered in construing or
interpreting this Agreement.
7.11 CALIFORNIA CORPORATE SECURITIES LAW. THE SALE OF THE SECURITIES
WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE
COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH
SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR
PRIOR TO SUCH QUALIFICATION IS UNLAWFUL UNLESS THE SALE OF SECURITIES IS EXEMPT
FROM THE QUALIFICATION BY SECTION 25100, 25102, OR 25105 OF THE CALIFORNIA
CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY
CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO
EXEMPT.
-28-
<PAGE>
7.12 COUNTERPARTS. This 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.
7.13 DELAYS OR OMISSIONS. No delay or omission to exercise any right,
power or remedy accruing to AVI or to SuperGen shall impair any such right,
power or remedy of AVI or SuperGen, nor shall it be construed to be a waiver of
any breach or default under this Agreement and the other Transaction Documents,
or an acquiescence therein or in any similar breach or default thereafter
occurring; nor shall any delay or omission to exercise any right, power or
remedy or any waiver of any single breach or default be deemed a waiver of any
other right, power or remedy or breach or default theretofore or thereafter
occurring. All remedies, either under this Agreement and the Transaction
Documents, or by law otherwise afforded to AVI or SuperGen, shall be cumulative
and not alternative.
7.14 DISPUTE RESOLUTION. The parties hereto agree that any disputes
which may arise during the term of this Agreement which relate to either party's
rights and/or obligations hereunder shall be resolved in accordance with the ADR
provisions contained in Exhibit 20.3 of the U.S. Agreement, except that either
party may seek judicial relief or enforcement to pursue equitable or other
remedies not addressed by the ADR provisions, including without limitation
specific performance or injunctive relief, to pursue a claim of fraudulent or
otherwise inequitable treatment under the ADR proceedings or to otherwise
enforce a judgment under the ADR proceedings.
[SIGNATURE PAGE FOLLOWS]
-29-
<PAGE>
IN WITNESS WHEREOF, SuperGen and AVI have caused this Agreement to be
duly executed as of the date and year first above written.
AVI BIOPHARMA, INC.
an Oregon corporation
By: /s/ Alan P. Timmins
------------------------------------
Name: Alan P. Timmins
Title: President
SUPERGEN, INC.
a Delaware corporation
By: /s/ Joseph Rubinfeld
------------------------------------
Name: Joseph Rubinfeld
Title: President & CEO
[Signature Page to Purchase Agreement]
-30-
<PAGE>
FORM OF
COMPLIANCE CERTIFICATE
Pursuant to Section 6.1 of that certain Common Stock and Warrant Purchase
Agreement dated as of April 4, 2000 between AVI BioPharma Inc., an Oregon
corporation ("AVI"), and SuperGen, Inc. ("SuperGen") set forth therein (the
"Agreement"), the undersigned, Alan P. Timmins, does hereby certify on behalf of
AVI as follows:
1. He is the duly elected President of AVI;
2. AVI has fulfilled all of the conditions specified in Sections 5
and 6 of the Agreement; and
3. Except as set forth in the Agreement and the disclosure schedules
provided to SuperGen, the representations and warranties of AVI
set forth in Section 3 of the Agreement are true and correct as of
the date hereof.
IN WITNESS WHEREOF, the undersigned has executed this certificate on
July 5, 2000.
/s/ Alan P. Timmins
-----------------------------------------
Name: Alan P. Timmins
Title: President
<PAGE>
FORM OF
COMPLIANCE CERTIFICATE
Pursuant to Section 6.1 of that certain Common Stock and Warrant Purchase
Agreement dated as of April 4, 2000 between AVI BioPharma Inc., an Oregon
corporation ("AVI"), and SuperGen, Inc. ("SuperGen") set forth therein (the
"Agreement"), the undersigned, Joseph Rubinfeld, does hereby certify on behalf
of SuperGen as follows:
1. He is the duly elected Chief Executive Officer of SuperGen;
2. SuperGen has fulfilled all of the conditions specified in Sections
5 and 6 of the Agreement; and
3. Except as set forth in the Agreement and the disclosure schedules
provided to AVI, the representations and warranties of SuperGen
set forth in Section 4 of the Agreement are true and correct as of
the date hereof.
IN WITNESS WHEREOF, the undersigned has executed this certificate on July
5, 2000.
/s/ Joseph Rubinfeld
-----------------------------------------
Name: Joseph Rubinfeld
Title: Chief Executive Officer
-2-