Exhibit 10.4


 


FORM OF
WARRANT


 


THE ISSUANCE AND SALE OF THE SECURITIES
REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR
SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITY UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND APPLICABLE STATE SECURITIES LAWS, OR (B) AN OPINION OF COUNSEL, IN
A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR (II) UNLESS SOLD
PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.  NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED
IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY THE SECURITIES.


 


SUPERGEN, INC.


 


Warrant
To Purchase Common Stock of AVI BioPharma, Inc.


 


Number of Shares:


Date of Issuance: June 24, 2003 (“Issuance Date”)


 


SuperGen, Inc., a Delaware corporation (the “Company”), hereby certifies that, for Ten United States
Dollars ($10.00) and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged,
                    ,
the registered holder hereof or its permitted assigns, is entitled, subject to
the terms set forth below, to purchase from the Company, at the Exercise Price
(as defined below) then in effect, upon surrender of this Warrant to Purchase
Common Stock of AVI BioPharma, Inc. (including all Warrants to Purchase Common
Stock of AVI BioPharma, Inc. issued in exchange, transfer or replacement
hereof, the “Warrant”), at any
time or times on or after August 26, 2003, but not after 11:59 P.M., New
York City Time, on the Expiration Date (as defined below),               
(             )
fully paid nonassessable shares of AVII Common Stock (as defined below)  (the “Warrant
Shares”).  Except as
otherwise defined herein, capitalized terms in this Warrant shall have the
meanings set forth in Section 15.  This
Warrant is one of the Warrants to Purchase Common Stock of AVI BioPharma, Inc.
(the “SPA Warrants”) issued
pursuant to Section 1 of that certain Securities Purchase Agreement, dated as
of June 24, 2003 (the “Initial Issuance
Date”), among the Company and the purchasers (the “Purchasers”) referred to therein (the “Securities Purchase Agreement”).


 


1.             EXERCISE
OF WARRANT.


 


(a)           Mechanics of
Exercise.  Subject to the terms and
conditions hereof (including, without limitation, the limitations set forth in
Section 1(e)), this Warrant may be


 

















 


exercised by the holder hereof on any day on or after August 26,
2003, in whole or in part, by (i) delivery of a written notice, in the
form attached hereto as Exhibit A (the “Exercise Notice”), of such holder’s election to exercise this
Warrant, (ii) (A) payment to the Company of an amount equal to the
applicable Exercise Price multiplied by the number of Warrant Shares as to
which this Warrant is being exercised (the “Aggregate
Exercise Price”) in cash by wire transfer of immediately available
funds or (B) cashier’s check drawn on a United States bank and (iii) the
surrender to a common carrier for overnight delivery to the Company, or as soon
as practicable following the date the holder of this Warrant delivers the Exercise
Notice to the Company, of this Warrant (or an indemnification undertaking with
respect to this Warrant in the case of its loss, theft or destruction).  On or before the third Business Day
following the date on which the Company has received each of the Exercise
Notice, the Aggregate Exercise Price and this Warrant (or an indemnification
undertaking with respect to this Warrant in the case of its loss, theft or
destruction) (the “Exercise Delivery
Documents”), the Company shall use its reasonable best efforts to
cause AVII or the Transfer Agent (X) to transfer and deliver to the address as
specified in the Exercise Notice, a certificate, registered in the name of the
holder of this Warrant or its designee, for the number of shares of AVII Common
Stock to which the holder of this Warrant is entitled pursuant to such
exercise, or (Y) provided that AVII’s transfer agent (the “Transfer Agent”) is participating in The
Depository Trust Company (“DTC”)
Fast Automated Securities Transfer Program, upon the request of the holder,
credit such aggregate number of shares of AVII Common Stock to which the holder
of this Warrant is entitled pursuant to such exercise to the holder’s or its
designee’s balance account with DTC through its Deposit Withdrawal Agent
Commission system.  Upon any such transfer of any AVII Common
Stock to the holder, the holder shall have good and marketable title to such
shares, free and clear of any liens, encumbrances, restrictions, rights of
first refusal or rights of any other Person and such shares of AVII Common
Stock shall be unrestricted and freely tradable on the Principal Market without
any delivery or other requirements whatsoever and without the need for registration under the
Securities Act or any state securities laws. 
The Company shall use its reasonable best efforts to cause AVII and the
Transfer Agent to treat for all purposes the Person or Persons entitled to
receive the shares of AVII Common Stock issuable upon exercise of this Warrant
as the transferee or transferees of such shares of AVII Common Stock on the
date of delivery of the Exercise Notice. 
Notwithstanding the provisions of this Section 1(a), the Company shall
not be required to deliver shares of AVII Common Stock if (i) the transfer of
AVII Common Stock cannot be made pursuant to Rule 144 (as defined in the
Securities Purchase Agreement) and the registration statement covering the
resale by the Company to the Holder of the AVII Common Stock subject to such
Exercise Notice (each such registration statement, an “AVII Registration Statement”) is not
effective and available for resales by the Company, (ii) the Company has
previously delivered notice to the Holder that the use of such Registration
Statement has been suspended in accordance with the terms of the registration
rights agreement between the Company and AVII governing such AVII Registration
Statement (each such registration rights agreement, an “AVII Registration Rights Agreement”) and
(iii) the Company is using its reasonable best efforts to have the
effectiveness of such AVII Registration Statement reinstated and otherwise is
promptly pursuing its rights and remedies under such AVII Registration Rights
Agreement.  If the Company does not
deliver AVII Common Stock pursuant to the terms of the immediately preceding
sentence, then the Company promptly shall deliver such shares of AVII Common
Stock, unrestricted and freely tradable on the Principal Market without any
delivery or other requirements whatsoever and without the need for registration under the Securities Act or


 


2

















 


any
state securities laws, either immediately after such AVII Registration
Statement once again becomes effective and available for use by the Company or
as soon as possible pursuant to Rule 144. 
If the number of Warrant Shares represented by this Warrant
submitted for exercise pursuant to this Section 1(a) is greater than the number
of Warrant Shares being acquired upon an exercise, then the Company shall as
soon as practicable and in no event later than five Business Days after any
exercise and at its own expense, issue a new Warrant (in accordance with
Section 7(d)) representing the right to purchase the number of Warrant Shares
purchasable immediately prior to such exercise under this Warrant, less the
number of Warrant Shares with respect to which this Warrant is exercised.  No fractional shares of AVII Common Stock
are to be transferred upon the exercise of this Warrant, but rather the number
of shares of AVII Common Stock to be transferred shall be rounded up to the
nearest whole number.  The Company shall
pay any and all taxes, including without limitation, all documentary stamp,
transfer or similar taxes, or other incidental expense that may be payable with
respect to the issuance and delivery of Warrant Shares upon exercise of this
Warrant.


 


(b)           Exercise Price.  For purposes of this Warrant, “Exercise Price” means $5.00, subject to
adjustment as provided herein.


 


(c)           Company’s Failure
to Timely Deliver Securities. 
Subject to Section 1(e), if the Company shall fail for any reason or for
no reason to deliver to the holder within three Business Days of receipt of the
Exercise Delivery Documents, a certificate for the number of shares of AVII
Common Stock to which the holder is entitled or to have credited to the
holder’s balance account with DTC such number of shares of AVII Common Stock to
which the holder is entitled upon the holder’s exercise of this Warrant, the
Company shall pay as additional damages in cash to such holder on each day
after such third  Business Day that
the delivery of such AVII Common Stock is not timely effected an amount equal
to 1.0% of the product of (A) the sum of the number of shares of AVII Common
Stock not delivered to the holder on a timely basis and to which the holder is
entitled and (B) the Closing Sale Price of the AVII Common Stock on the trading
day immediately preceding the last possible date which the Company could have
delivered such AVII Common Stock to the holder without violating Section 1(a).


 


(d)           Disputes.  In the case of a dispute as to the
determination of the Exercise Price or the arithmetic calculation of the
Warrant Shares, the Company shall promptly transfer to the holder the number of
Warrant Shares that are not disputed and resolve such dispute in accordance
with Section 12.


 


(e)           Limitations on
Exercises.  The Company shall not
effect the exercise of this Warrant, and no Person (as defined below) who is a
holder of this Warrant shall have the right to exercise this Warrant, to the
extent that after giving effect to such exercise, such Person (together with
such Person’s affiliates) would beneficially own in excess of 4.99% of the
shares of the AVII Common Stock outstanding immediately after giving effect to
such exercise.  For purposes of the
foregoing sentence, the aggregate number of shares of AVII Common Stock
beneficially owned by such Person and its affiliates shall include the number
of shares of AVII Common Stock issuable upon exercise of this Warrant with
respect to which the determination of such sentence is being made, but shall
exclude shares of AVII Common Stock which would be issuable upon (i) exercise
of the remaining, unexercised portion of this Warrant beneficially owned by
such Person and its affiliates and (ii) exercise or conversion of the
unexercised or


 


3

















 


unconverted portion of any other securities of AVII beneficially owned
by such Person and its affiliates (including, without limitation, any
debentures, convertible notes or convertible preferred stock or warrants)
subject to a limitation on conversion or exercise analogous to the limitation
contained herein.  Except as set forth
in the preceding sentence, for purposes of this paragraph, beneficial ownership
shall be calculated in accordance with Section 13(d) of the Securities Exchange
Act of 1934, as amended.  For purposes
of this Warrant, in determining the number of outstanding shares of AVII Common
Stock, a holder may rely on the number of outstanding shares of AVII Common
Stock as reflected in (1) AVII’s most recent Form 10-Q, Form 10-K or other
public filing with the Securities and Exchange Commission, as the case may be,
(2) a more recent public announcement by AVII or (3) any other notice by AVII
or its Transfer Agent setting forth the number of shares of AVII Common Stock
outstanding.  For any reason at any
time, upon the written or oral request of the holder of this Warrant, the
Company shall within two Business Days confirm orally and in writing to the
holder of this Warrant to its knowledge the number of shares of AVII Common
Stock then outstanding.  In any case,
the number of outstanding shares of AVII Common Stock shall be determined after
giving effect to the conversion or exercise of securities of AVII, including
the SPA Warrants, by the holder of this Warrant and its affiliates since the
date as of which such number of outstanding shares of AVII Common Stock was
reported and to
the extent that such securities of AVII include securities other than this
Warrant, the holder shall inform the Company of any such conversions, exchanges
or exercises.


 


(f)            Forced Exercise.  Notwithstanding
the foregoing, in the event that at any time following December 31, 2004,
the Conditions to Forced Exercise (as defined below) are satisfied, then the
Company shall have the right to send a written notice to the holder hereof on
the Business Day immediately after the Measuring Period indicating that the
holder shall be required to exercise this Warrant on the twentieth (20th)
trading day (the “Warrant Cancellation Date”)
following receipt of such written notice as to the Warrants for which the
holder has not delivered an Exercise Notice as of such forced exercise
date.  “Conditions to Forced Exercise “ means the following
conditions:  (i) on each day during the
period beginning on the first day of the Measuring Period (as defined below)
and ending on the Warrant Cancellation Date, the transfer of AVII Common Stock can be made pursuant to Rule 144 or
each AVII Registration Statement is effective and available for resales by the
Company, (ii) on each day during the period beginning on the Issuance
Date and ending on the Warrant Cancellation Date, the AVII Common Stock is
designated for quotation on the Principal Market and shall not have been
suspended from trading on such exchange or market; (iii) during the period
beginning on the Issuance Date and ending on and including the Warrant
Cancellation Date, the Company shall have delivered unrestricted shares of (A)
Common Stock upon conversion of, and as interest shares under (as applicable),
the Notes (as defined in the Securities Purchase Agreement) and (B) Warrant
Shares upon exercise of the Warrants to the holders on a timely basis; (iv) the
Company shall not have failed to timely make any payments (after giving effect
to any applicable cure periods) to the holder of any SPA Securities; (v) the
Company otherwise shall have been in material compliance with and shall not
have breached, in any material respect, any provision, covenant, representation
or warranty of the Securities Purchase Agreement, the Registration Rights
Agreement and any of the Warrants; and (vii) the Weighted Average Price of the
AVII Common Stock on each day during any twenty consecutive trading days (the “Measuring Period”) after December 31,
2004 is equal to or greater than $10.00 (subject to adjustment for


 


4

















 


stock splits, stock dividends, recapitalizations, combinations, reverse
stock splits or other similar events after the Issuance Date).


 


2.             ADJUSTMENT
OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES.  The Exercise Price and the number of Warrant Shares shall be
adjusted from time to time as follows:


 


(a)           Adjustment upon
Subdivision or Combination of AVII Common Stock.  If AVII at any time after the date of issuance of this Warrant
subdivides (by any stock split, stock dividend, recapitalization or otherwise)
one or more classes of its outstanding shares of AVII Common Stock into a
greater number of shares, the Exercise Price in effect immediately prior to
such subdivision will be proportionately reduced and the number of Warrant
Shares will be proportionately increased. 
If AVII at any time after the date of issuance of this Warrant combines
(by combination, reverse stock split or otherwise) one or more classes of its
outstanding shares of AVII Common Stock into a smaller number of shares, the
Exercise Price in effect immediately prior to such combination will be
proportionately increased and the number of Warrant Shares will be proportionately
decreased.  Any adjustment under this
Section 2(a) shall become effective at the close of business on the date the
subdivision or combination becomes effective.


 


(b)           Other Considerations.  All
calculations under this Section 2 shall be made by the Company in good
faith.


 


3.             RIGHTS
UPON DISTRIBUTION OF ASSETS.  If (1)
AVII shall declare or make any dividend or other distribution of its assets (or
rights to acquire its assets) to holders of AVII Common Stock, by way of return
of capital or otherwise (including, without limitation, any distribution of
cash, stock or other securities, property or options by way of a dividend, spin
off, reclassification, corporate rearrangement or other similar transaction) (a
“Distribution”), at any time after
the issuance of this Warrant, and (2) the holder hereof does not receive such
Distribution in accordance with the penultimate sentence of Section 6 hereof,
then, in each such case:


 


(a)           any Exercise Price
in effect immediately prior to the close of business on the record date fixed
for the determination of holders of AVII Common Stock entitled to receive the
Distribution shall be reduced, effective as of the close of business on such
record date, to a price determined by multiplying such Exercise Price by a
fraction of which (i) the numerator shall be the Closing Bid Price of the AVII
Common Stock on the trading day immediately preceding such record date minus
the value of the Distribution (as determined in good faith by the Company’s
Board of Directors) applicable to one share of AVII Common Stock, and (ii) the
denominator shall be the Closing Bid Price of the AVII Common Stock on the
trading day immediately preceding such record date; and


 


(b)           the number of
Warrant Shares shall be increased to a number of shares equal to the number of
shares of AVII Common Stock obtainable immediately prior to the close of
business on the record date fixed for the determination of holders of AVII
Common Stock entitled to receive the Distribution multiplied by the reciprocal
of the fraction set forth in the immediately preceding paragraph (a); provided
that in the event that the Distribution is of


 


5

















 


common stock (“Other Common Stock”)
of a company whose common stock is traded on a national securities exchange or
a national automated quotation system, then the holder of this Warrant may
elect to receive a warrant to purchase Other Common Stock in lieu of an
increase in the number of Warrant Shares, the terms of which shall be identical
to those of this Warrant, except that such warrant shall be exercisable into
the number of shares of Other Common Stock that would have been payable to the
holder of this Warrant pursuant to the Distribution had the holder exercised
this Warrant immediately prior to such record date and with an aggregate
exercise price equal to the product of the amount by which the exercise price
of this Warrant was decreased with respect to the Distribution pursuant to the
terms of the immediately preceding paragraph (a) and the number of Warrant
Shares calculated in accordance with the first part of this paragraph (b).


 


4.             PURCHASE
RIGHTS.


 


(a)           AVII Purchase
Rights.  If at any time AVII grants,
issues or sells any Options, Convertible Securities or rights to purchase stock,
warrants, securities or other property pro rata to the record holders of any
class of AVII Common Stock (including, without limitation, in connection with
any Organic Change (as defined below) of AVII) (the “AVII Purchase Rights”), then the Company shall use its
reasonable best efforts to cause the holder to acquire, upon the terms
applicable to such AVII Purchase Rights, the aggregate AVII Purchase Rights
which the holder could have acquired if the holder had held the number of
shares of AVII Common Stock acquirable upon complete exercise of this Warrant
(without taking into account any limitations or restrictions on the
exercisability of this Warrant immediately before the date on which a record is
taken for the grant, issuance or sale of such AVII Purchase Rights, or, if no
such record is taken, the date as of which the record holders of AVII Common
Stock are to be determined for the grant, issue or sale of such AVII Purchase
Rights.


 


(b)           Organic Change.  Any recapitalization, reorganization,
reclassification, consolidation, merger, sale of all or substantially all of
the Company’s assets to another Person or other transaction, in each case which
is effected in such a way that holders of Common Stock are entitled to receive
securities or assets with respect to or in exchange for Common Stock is
referred to herein as an “Organic Change.”  Prior to the consummation of any (i) sale of
all or substantially all of the Company’s assets to an acquiring Person or (ii)
other Organic Change following which the Company is not a surviving entity, the
Company will secure from the Person purchasing such assets or the Person
issuing the securities or providing the assets in such Organic Change (in each
case, the “Acquiring Entity”) a
reasonably satisfactory written agreement to deliver to the holder of this
Warrant in exchange for this Warrant a security of the Acquiring Entity
evidenced by a written instrument substantially similar in form and substance
to this Warrant (including an adjusted exercise price equal to the value for
the Common Stock reflected by the terms of such consolidation, merger or sale,
and exercisable for a corresponding number of shares of Common Stock acquirable
and receivable upon exercise of this Warrant (without regard to any limitations
on the exercise of this Warrant), if the value so reflected is less than the
Exercise Price in effect immediately prior to such consolidation, merger or
sale).


 


5.             NONCIRCUMVENTION.  The Company hereby covenants and agrees that
the Company will not, by amendment of its Certificate of Incorporation or
through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities, or


 


6

















 


any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms of this Warrant, and will at all times in good
faith carry out all the provisions of this Warrant and take all action as may
be required to protect the rights of the holder of this Warrant.  Without limiting the generality of the
foregoing, the Company (i)  will take all such actions as may be necessary
or appropriate in order that the Company may validly and legally transfer
shares of AVII Common Stock upon the exercise of this Warrant, free and clear
of all Liens (as defined in the Securities Purchase Agreement), and (ii) will,
so long as any of the SPA Warrants are outstanding, take all action necessary
to keep available its shares of AVII Common Stock, solely for the purpose of
effecting the exercise of the SPA Warrants, 100% of the number of shares of
AVII Common Stock as shall from time to time be necessary to effect the
exercise of the SPA Warrants then outstanding (without regard to any
limitations on exercise).


 


6.             WARRANT
HOLDER NOT DEEMED A STOCKHOLDER. 
Except as otherwise specifically provided herein, no holder, solely in
such Person’s capacity as a holder of this Warrant, shall be entitled to vote
or receive dividends or be deemed the holder of shares of the Company for any
purpose, nor shall anything contained in this Warrant be construed to confer
upon the holder hereof, solely in such Person’s capacity as a holder of this
Warrant, any of the rights of a shareholder of the Company or any right to
vote, give or withhold consent to any corporate action (whether any
reorganization, issue of stock, reclassification of stock, consolidation,
merger, conveyance or otherwise), receive notice of meetings, receive dividends
or subscription rights, or otherwise, prior to the issuance to the holder of
this Warrant of the Warrant Shares which such Person is then entitled to
receive upon the due exercise of this Warrant. 
In addition, nothing contained in this Warrant shall be construed as
imposing any liabilities on such holder to purchase any securities (upon
exercise of this Warrant or otherwise) or as a stockholder of the Company,
whether such liabilities are asserted by the Company or by creditors of the
Company.  Notwithstanding this Section
6, (i) the Company will provide the holder of this Warrant with copies of the
same notices and other information given to the Company as a stockholder of
AVII generally, immediately upon receipt thereof and (ii) the holder, as the holder of this Warrant,
shall be entitled to receive such dividends paid and distributions made to the
holders of AVII Common Stock to the same extent as if the holder had exercised
this Warrant to purchase shares of AVII Common Stock (without regard to any
limitations on exchange herein or elsewhere) and had held such shares of AVII
Common Stock on the record date for such dividends and distributions.  Payments under the preceding sentence shall
be made upon receipt by the Company of the dividend or distribution from AVII.


 


7.             REISSUANCE
OF WARRANTS.


 


(a)           Transfer of
Warrant.  If this Warrant is to be
transferred, the holder shall surrender this Warrant to the Company, whereupon
the Company will forthwith issue and deliver upon the order of the holder of
this Warrant a new Warrant (in accordance with Section 7(d)), registered as the
holder of this Warrant may request, representing the right to purchase the
number of Warrant Shares being transferred by the holder and, if less then the
total number of Warrant Shares then underlying this Warrant is being
transferred, a new Warrant (in accordance with Section 7(d)) to the holder of
this Warrant representing the right to purchase the number of Warrant Shares
not being transferred.


 


7

















 


(b)           Lost, Stolen or
Mutilated Warrant.  Upon receipt by
the Company of evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of this Warrant, and, in the case of loss,
theft or destruction, of any indemnification undertaking by the holder of this
Warrant to the Company in customary form and, in the case of mutilation, upon
surrender and cancellation of this Warrant, the Company shall execute and
deliver to the holder a new Warrant (in accordance with Section 7(d))
representing the right to purchase the Warrant Shares then underlying this
Warrant.


 


(c)           Warrant
Exchangeable for Multiple Warrants. 
This Warrant is exchangeable, upon the surrender hereof by the holder of
this Warrant at the principal office of the Company, for a new Warrant or
Warrants (in accordance with Section 7(d)) representing in the aggregate the
right to purchase the number of Warrant Shares then underlying this Warrant,
and each such new Warrant will represent the right to purchase such portion of
such Warrant Shares as is designated by the holder of this Warrant at the time
of such surrender; provided, however, that no Warrants for fractional shares of
AVII Common Stock shall be given.


 


(d)           Issuance of New
Warrants.  Whenever the Company is
required to issue a new Warrant pursuant to the terms of this Warrant, such new
Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as
indicated on the face of such new Warrant, the right to purchase the Warrant
Shares then underlying this Warrant (or in the case of a new Warrant being
issued pursuant to Section 7(a) or Section 7(c), the Warrant Shares designated
by the holder of this Warrant which, when added to the number of shares of AVII
Common Stock underlying the other new Warrants issued in connection with such
issuance, does not exceed the number of Warrant Shares then underlying this
Warrant), (iii) shall have an issuance date, as indicated on the face of such
new Warrant, which is the same as the Issuance Date, and (iv) shall have the
same rights and conditions as this Warrant.


 


8.             NOTICES.  Whenever notice is required to be given
under this Warrant, unless otherwise provided herein, such notice shall be
given in accordance with Section 9(f) of the Securities Purchase
Agreement.  The Company shall provide
the holder of this Warrant with prompt written notice of all actions taken
pursuant to this Warrant, including in reasonable detail a description of such
action and the reason therefore. 
Without limiting the generality of the foregoing, the Company will give
written notice to the holder of this Warrant (i) immediately upon any
adjustment of the Exercise Price or number of Warrant Shares or number or kind
of securities purchasable upon exercise of this Warrant, setting forth in
reasonable detail, and certifying, the facts requiring such adjustment and the
calculation of such adjustment and (ii) at least ten days prior to the date on
which the Company closes its books or takes a record, or in the event that the
Company does not so close its books or take a record, at least ten days prior
to the date of any such event, (A) with respect to any dividend or distribution
upon the AVII Common Stock, (B) with respect to any grants, issues or sales of
any Options, Convertible Securities or rights to purchase stock, warrants,
securities or other property to holders of AVII Common Stock or (C) for
determining rights to vote with respect to any Change of Control (as defined in
the SPA Securities), dissolution or liquidation, provided in each case that
such information shall be made known to the public prior to or in conjunction
with such notice being provided to such holder, and (iii) immediately upon obtaining
knowledge (A) with respect to any dividend or distribution upon the AVII Common
Stock or (B) with respect to any pro rata subscription offer


 


8

















 


to
holders of AVII Common Stock, provided in each case that such information has
been made known to the public prior to or in conjunction with such notice being
provided to the holder. 
Notwithstanding the foregoing, Section 4(i) of the Securities Purchase
Agreement shall apply to all notices given pursuant to this Warrant.


 


9.             AMENDMENT
AND WAIVER.  Except as otherwise
provided herein, the provisions of this Warrant may be amended and the Company
may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if the Company has obtained the written
consent of the holders of SPA Warrants representing at least a majority of the
shares of AVII Common Stock obtainable upon exercise of the SPA Warrants then
outstanding; provided that no such action may increase the exercise price of
any SPA Warrant or decrease the number of shares or class of stock obtainable
upon exercise of any SPA Warrant without the written consent of the holder of
this Warrant.  No such amendment shall
be effective to the extent that it applies to less than all of the holders of
the SPA Warrants then outstanding, and any amendment made in conformity with
the provisions of this Section 9 shall be biding on all holders of the SPA
Warrants then outstanding.


 


10.           GOVERNING
LAW.  This Warrant shall be
construed and enforced in accordance with, and all questions concerning the
construction, validity, interpretation and performance of this Warrant shall be
governed by, the internal laws of the State of New York, without giving effect
to any choice of law or conflict of law provision or rule (whether of the State
of New York or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of New York.


 


11.           CONSTRUCTION;
HEADINGS.  This Warrant shall be
deemed to be jointly drafted by the Company and all the holders of SPA Warrants
and shall not be construed against any person as the drafter hereof.  The headings of this Warrant are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Warrant.


 


12.           DISPUTE
RESOLUTION.  In the case of a
dispute as to the determination of the Exercise Price or the arithmetic
calculation of the Warrant Shares, the Company shall submit the disputed
determinations or arithmetic calculations via facsimile within two Business
Days of receipt of the Exercise Notice giving rise to such dispute, as the case
may be, to the holder of this Warrant. 
If the holder of this Warrant and the Company are unable to agree upon
such determination or calculation of the Exercise Price or the Warrant Shares
within three Business Days of such disputed determination or arithmetic
calculation being submitted to the holder of this Warrant, then the Company
shall, within two Business Days submit via facsimile (a) the disputed
determination of the Exercise Price to an independent, reputable investment
bank selected by the Company and approved by the holder of this Warrant or (b)
the disputed arithmetic calculation of the Warrant Shares to the Company’s
independent, outside accountant.  The
Company shall cause the investment bank or the accountant, as the case may be,
to perform the determinations or calculations and notify the Company and the
holder of this Warrant of the results no later than ten Business Days from the
time it receives the disputed determinations or calculations.  Such investment bank’s or accountant’s
determination or calculation, as the case may be, shall be binding upon all
parties absent demonstrable error.


 


9

















 


13.           REMEDIES,
OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF.  The remedies provided in this Warrant shall
be cumulative and in addition to all other remedies available under this
Warrant, the Securities Purchase Agreement, the Pledge Agreement (as defined in
the Securities Purchase Agreement), the SPA Securities and the Registration
Rights Agreement, at law or in equity (including a decree of specific performance
and/or other injunctive relief), and nothing herein shall limit the right of
the holder of this Warrant right to pursue actual damages for any failure by
the Company to comply with the terms of this Warrant. The Company acknowledges
that a breach by it of its obligations hereunder will cause irreparable harm to
the holder of this Warrant and that the remedy at law for any such breach may
be inadequate.  The Company therefore
agrees that, in the event of any such breach or threatened breach, the holder of
this Warrant shall be entitled, in addition to all other available remedies, to
an injunction restraining any breach, without the necessity of showing economic
loss and without any bond or other security being required.


 


14.           TRANSFER.          This Warrant may not be offered for
sale, sold, transferred or assigned without the consent of the Company, except
to “accredited investors” as that term is defined in Rule 501(a) of Regulation
D as promulgated under the Securities Act of 1933, as amended, and as may otherwise
be required by Section 2(i) of the Securities Purchase Agreement.


 


15.           CERTAIN
DEFINITIONS.  For purposes of this
Warrant, the following terms shall have the following meanings:


 


(a)           “AVII” means AVI BioPharma, Inc., an Oregon
corporation.


 


(b)           “AVII Common Stock” means (i) the
common stock, par value $.0001 per share, of AVII and (ii) any capital
stock into which such AVII Common Stock shall have been changed or any capital
stock resulting from a reclassification of such AVII Common Stock.


 


(c)           “Bloomberg” means Bloomberg Financial
Markets.


 


(d)           “Business Day” means any day other than
Saturday, Sunday or other day on which commercial banks in The City of New York
are authorized or required by law to remain closed.


 


(e)           “Closing Bid Price” and “Closing Sale Price” means, for any
security as of any date, the last closing bid price and last closing trade
price, respectively, for such security on the Principal Market, as reported by
Bloomberg, or, if the Principal Market begins to operate on an extended hours
basis and does not designate the closing bid price or the closing trade price,
as the case may be, then the last bid price or last trade price, respectively,
of such security prior to 4:00:00 p.m., New York City Time, as reported by
Bloomberg, or, if the Principal Market is not the principal securities exchange
or trading market for such security, the last closing bid price or last trade
price, respectively, of such security on the principal securities exchange or
trading market where such security is listed or traded as reported by
Bloomberg, or if the foregoing do not apply, the last closing bid price or last
trade price, respectively, of such security in the over-the-counter market on
the electronic bulletin board for such security as reported by Bloomberg, or,
if no closing bid price or last trade price, respectively, is reported for such
security by


 


10

















 


Bloomberg, the average of the bid prices, or the ask prices,
respectively, of any market makers for such security as reported in the “pink
sheets” by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.).  If the Closing Bid Price or the Closing Sale
Price cannot be calculated for a security on a particular date on any of the
foregoing bases, the Closing Bid Price or the Closing Sale Price, as the case
may be, of such security on such date shall be the fair market value as
mutually determined by the Company and the holder.  If the Company and the holder are unable to agree upon the fair
market value of such security, then such dispute shall be resolved pursuant to
Section 12.  All such determinations to
be appropriately adjusted for any stock dividend, stock split, stock
combination or other similar transaction during the applicable calculation period.


 


(f)            “Convertible Securities” means any stock or
securities (other than Options) directly or indirectly convertible into or
exercisable or exchangeable for AVII Common Stock.


 


(g)           “Expiration Date” means December 31,
2006, or, if such date falls on a day other than a Business Day or on which
trading does not take place on the Principal Market (a “Holiday”), the next date that is not a
Holiday.


 


(h)           “Options” means any rights, warrants or
options to subscribe for or purchase AVII Common Stock or Convertible
Securities.


 


(i)            “Person” means an individual, a limited
liability company, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization, any other entity and a government or any
department or agency thereof.


 


(j)            “Principal Market” means the Nasdaq National
Market.


 


(k)           “Registration Rights Agreement” means that
certain registration rights agreement between the Company and the Purchasers.


 


(l)            “SPA Securities” means the senior
exchangeable convertible notes issued pursuant to the Securities Purchase
Agreement.


 


(m)          “Weighted Average Price” means, for any security as of any date, the
dollar volume-weighted average price for such security on the Principal Market
during the period beginning at 9:30:01 a.m., New York City Time (or such other
time as the Principal Market publicly announces is the official open of
trading), and ending at 4:00:00 p.m., New York City Time (or such other time as
the Principal Market publicly announces is the official close of trading) as
reported by Bloomberg through its “Volume at Price” functions, or, if the
foregoing does not apply, the dollar volume-weighted average price of such
security in the over-the-counter market on the electronic bulletin board for
such security during the period beginning at 9:30:01 a.m., New York City Time
(or such other time as the Principal Market publicly announces is the official
open of trading), and ending at 4:00:00 p.m., New York City Time (or such other
time as the Principal Market publicly announces is the official close of
trading) as reported by Bloomberg, or, if no dollar volume-weighted average
price is reported for such security by Bloomberg for such hours, the average of
the highest closing bid price and the lowest closing ask


 


11

















 


price
of any of the market makers for such security as reported in the “pink sheets”
by Pink Sheets LLC (formerly the National Quotation Bureau, Inc.).  If
the Weighted Average Price cannot be calculated for a security on a particular
date on any of the foregoing bases, the Weighted Average Price of such security
on such date shall be the fair market value as mutually determined by the
Company and the holder.  If the Company
and the holder are unable to agree upon the fair market value of such security,
then such dispute shall be resolved pursuant to Section 12.  All such determinations to be appropriately
adjusted for any stock dividend, stock split, stock combination or other
similar transaction during the applicable calculation period.


 


[Signature Page Follows]


 


12

















 


IN
WITNESS WHEREOF, the Company has caused this Warrant
to Purchase Common Stock of AVI BioPharma, Inc. to be duly executed as of the
Issuance Date set out above.


 


	
   

  	
  SUPERGEN, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name: 
  Joseph Rubinfeld

  
	
   

  	
   

  	
  Title: 
  President/Chief Executive Officer

  
					



 


13

















 


EXHIBIT A


 


EXERCISE
NOTICE


 


TO BE EXECUTED
BY THE REGISTERED HOLDER TO EXERCISE THIS

WARRANT TO PURCHASE COMMON STOCK OF AVI BIOPHARMA, INC.


 


SUPERGEN, INC.


 


The
undersigned holder hereby exercises the right to purchase
                 
of the shares of Common Stock (“Warrant
Shares”) of AVI BioPharma, Inc., an Oregon corporation, held by
SuperGen, Inc., a Delaware corporation (the “Company”),
evidenced by the attached Warrant to Purchase Common Stock of AVI BioPharma,
Inc. (the “Warrant”), and tenders
herewith payment to the Company of the aggregate exercise price in full, equal
to
$                     ,
together with all applicable transfer taxes, if any.


 


Please deliver the Warrant Shares in the following name and to the
following address:


 


Deliver to:


 


 


Facsimile Number:


 


Authorization:


 


Account Number:


  (if electronic book entry transfer)


 


Transaction Code Number:


  (if electronic book entry transfer)


 


To the extent the foregoing exercise is for less than
the full number of Warrant Shares deliverable pursuant to the Warrant, a
replacement Warrant representing the remainder of the Warrant Shares
deliverable (and otherwise of like form, tenor and effect) shall be delivered
to holder.


 


	
  Date: 

  	
                             
    ,

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name of
  Registered holder

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  



 


14

















 


ACKNOWLEDGMENT


 


The Company
hereby acknowledges this Exercise Notice.


 


	
   

  	
  SUPERGEN, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


15