Document:

Exhibit 10.5

 

PLEDGE AGREEMENT

 

PLEDGE AGREEMENT
(this “Agreement”), dated as of
February 26, 2003, made by SuperGen, Inc., a Delaware corporation (the “Pledgor”), in favor of the investors set
forth on the Collateral Schedule attached hereto, each with respect to the
collateral pledged to it hereunder (each, a “Pledgee”, and collectively, the “Pledgees”).

 

WHEREAS:

 

A.            The Pledgor and the Pledgees are
parties to a Securities Purchase Agreement, dated as of the date hereof (as
amended or otherwise modified from time to time, the “Securities Purchase Agreement”);

 

B.            Pursuant to the Securities Purchase
Agreement, the Pledgees, severally but not jointly, have agreed to purchase
certain senior exchangeable convertible notes (the “Notes”) from the Pledgor,
which, among other things, are exchangeable by each Pledgee for up to an
aggregate number of shares (collectively, the “AVII Shares”) of the common stock, par value $.0001 per share,
of AVI BioPharma, Inc. (“AVII”),
set forth opposite such Pledgee’s name on the Collateral Schedule attached
hereto; and

 

C.            It is a condition precedent to the
purchase of the Notes by the Pledgees pursuant to the Securities Purchase
Agreement that the Pledgor shall have executed and delivered to the Pledgees a
pledge agreement providing for the pledge to the Pledgees of, and the grant to
the Pledgees of a security interest in, the AVII Shares pledged to each Pledgee
as specified in the Collateral Schedule attached hereto (collectively, the “Pledged Shares”);

 

NOW,  THEREFORE, in consideration of the premises
and the agreements herein contained and in order to induce the Pledgees to
enter into the Securities Purchase Agreement, the Pledgor hereby agrees with
the Pledgees as follows:

 

SECTION 1. 
Definitions. 
All terms used in this Agreement which are defined in the Securities
Purchase Agreement or in Article 8 or Article 9 of the Uniform Commercial Code
(the “UCC”) currently in effect in the State of New York and which are not
otherwise defined herein shall have the same meanings herein as set forth
therein; provided, that terms used herein which are defined in the UCC as in
effect in the State of New York on the date hereof shall continue to have the
same meaning notwithstanding any replacement or amendment of such statute
except as the Pledgees may otherwise determine.

 

SECTION 2. 
Pledge and Grant of Security Interest.  As collateral security for all of the
Obligations (as defined in Section 3 hereof), the Pledgor hereby pledges and
assigns to each Pledgee, and grants to each Pledgee a continuing security
interest in, the Pledgor’s right, title and interest in and to such Pledgee’s
Pledged Shares, the certificates representing such Pledged Shares, all options
and other rights, contractual or otherwise, in respect thereof and all dividends,
distributions, cash, instruments, investment property and other property
(including but not limited to, any stock dividend and any distribution in
connection with a stock split) from time

 

 

to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the
Pledged Shares, all right, title and interest in the Accounts (the “Accounts”) referred to in the Securities
Account Control Agreement (the “Securities
Account Control Agreement”), dated as of the date hereof, among the
Pledgor, Pledgees and Mellon Investors Services LLC, as Custodian (the “Custodian”), all financial assets held
therein or credited thereto and all security entitlements in respect thereof
and all proceeds of any of the foregoing, whether now owned or existing or
hereafter acquired or arising and wherever located (collectively, the “Pledged Collateral”).

 

SECTION 3. 
Security for Obligations.  The security interest created hereby in the
Pledged Collateral constitutes continuing collateral security for all of the
following obligations, whether now existing or hereafter incurred (the “Obligations”):

 

(a)           the prompt payment by the Pledgor to
each Pledgee, as and when due and payable (by scheduled maturity, required
prepayment, acceleration, demand or otherwise), of all amounts from time to
time owing by it in respect of interest, principal and other charges of the
Notes and the other Transaction Documents (including, without limitation, all
interest that accrues after the commencement of any case, proceeding or other
action relating to bankruptcy, insolvency or reorganization of the Pledgor
whether or not the payment of such interest is unenforceable or is not
allowable due to the existence of such case, proceeding or other action), all
fees, commissions, expense reimbursements, indemnifications and all other
amounts due or to become due to the Pledgees under the Transaction Documents;
and

 

(b)           the delivery to each Pledgee of its
Pledged Shares upon exchange, in connection with any Company Exchange or otherwise
pursuant to the terms of such Pledgee’s Note.

 

SECTION 4. 
Delivery of the Pledged Collateral.

 

(a)           A certificate or certificates,
bearing applicable securities law legends, currently representing each
Pledgee’s Pledged Shares shall be delivered to the custodian under that certain
Securities Account Control Agreement, dated as of the date hereof, among the
Pledgor, the Pledgees and Mellon Investors Services LLC, as custodian (the “Custodian”) (the “Securities Account Control Agreement”), for
deposit into the Accounts (as defined therein) concurrently with or prior to
the execution and delivery of this Agreement. 
In connection with the foregoing, the Pledgor shall take all actions
necessary, including causing the issuance of any necessary legal opinions, to
cause AVII to issue the Pledged Shares in the name of the Custodian, on behalf
of the Pledgees, or payable to or to the order of, the Custodian or (ii)
endorsed to the order of the Custodian or in blank.  All other promissory notes, certificates and instruments
constituting Pledged Collateral from time to time shall be delivered to the
Custodian in accordance with the Securities Account Control Agreement for
deposit into the Accounts promptly upon the receipt thereof by or on behalf of
the Pledgor.  All such promissory notes,
certificates and instruments shall be held on behalf of the Pledgees pursuant
to the Securities Account Control Agreement, and shall be delivered in suitable
form for transfer by delivery or shall be accompanied by duly executed instruments
of transfer or assignment or undated stock powers executed in blank, all in
form and substance reasonably satisfactory to the Pledgees.  If any Pledged Collateral consists of
uncertificated securities, the Pledgor shall cause the

 

 

Custodian, on behalf of the
Pledgees, to become the registered holder thereof, or, to the extent
practicable, cause AVII to agree that it will comply with instructions
originated by the Custodian, on behalf of the Pledgees, with respect to such
securities without further consent by the Pledgor.  If any Pledged Collateral consists of security entitlements, the
Pledgor shall transfer such security entitlements to the Custodian, on behalf
of the Pledgees.  The Pledgor further
agrees to execute such other documents and to take such other actions as the
Custodian or any Pledgee deems reasonably necessary or desirable to create and
perfect the security interests intended to be created hereunder, to effect the
foregoing and to permit the Custodian and each Pledgee to exercise any of its
rights and remedies hereunder.

 

(b)           If the Pledgor shall receive, by
virtue of its being or having been an owner of any Pledged Collateral, any (i)
stock certificate (including, without limitation, any certificate representing
a stock dividend or distribution in connection with any increase or reduction
of capital, reclassification, merger, consolidation, sale of assets,
combination of shares, stock split, spin-off or split-off), promissory note or
other instrument, (ii) option or right, whether as an addition to, substitution
for, or in exchange for, any Pledged Collateral, or otherwise, (iii) dividends
or interest payable in cash or in securities or other property, (iv) dividends,
interest and other distributions paid or payable other than in cash in respect
of, and instruments and other property received, receivable or otherwise
distributed in respect of or in exchange for, any Pledged Collateral, (v)
dividends or other distributions in connection with a partial or total
liquidation or dissolution or in connection with a reduction of capital,
capital surplus or paid-in surplus, or (vi) cash paid, payable or otherwise
distributed in redemption of, or in exchange for, any Pledged Collateral, such
stock certificate, promissory note, instrument, option, right, property,
payment or distribution constituting Pledged Collateral shall be, and shall
forthwith be delivered to the Custodian in accordance with the Securities
Account Control Agreement for deposit pro rata into the Accounts to hold as
Pledged Collateral and shall, if received by the Pledgor, be received in trust
for the benefit of the Pledgees, shall be segregated from the Pledgor’s other
property and shall be delivered forthwith to the Custodian in the exact form
received, with any necessary endorsement and/or appropriate stock powers duly
executed in blank, to be deposited in the Accounts and held by the Custodian
for the benefit of the Pledgees as Pledged Collateral and as further collateral
security for the Obligations.

 

SECTION 5. 
Representations and Warranties.  The Pledgor represents and warrants as
follows:

 

(a)           The execution, delivery and
performance by the Pledgor of this Agreement and the exercise by the Custodian
or the Pledgees of any of their rights and remedies in accordance with the
terms of this Agreement and applicable securities laws will not contravene any
law or any contractual restriction binding on or affecting the Pledgor or any
of its properties and do not and will not result in or require the creation of
any Lien upon or with respect to any of its properties other than pursuant to
this Agreement.

 

(b)           The Pledgor is and will be at all
times the legal and beneficial owner of the Pledged Collateral free and clear
of any Lien or option except for the security interest created by this
Agreement.

 

 

(c)           No authorization or approval or other
action by, and no notice to or filing with, any governmental authority or other
regulatory body is required for the grant by the Pledgor, or the perfection, of
the security interest purported to be created hereby in the Pledged Collateral
or the exercise by the Custodian or the Pledgees of any of their rights and
remedies hereunder, except as may be required in connection with any sale of
any Pledged Collateral by laws affecting the offering and sale of securities
generally, including any foreclosure procedures pursuant to the securities
laws.

 

(d)           This Agreement creates a valid
security interest in favor of the Pledgees in the Pledged Collateral, as
security for the Obligations.  Each Pledgee
having control of the Accounts containing one or more certificates representing
Pledgee’s Pledged Shares and all other certificated securities, instruments and
cash constituting Pledged Collateral from time to time results in the
perfection of such security interest in any instruments and certificated
securities constituting Pledged Collateral. 
If any Pledged Collateral consists of uncertificated securities, each
Pledgee’s security interest therein will be perfected upon the transfer of such
securities to the Custodian, on behalf of the Pledgees, or upon the agreement
of AVII that it will comply with written instructions originated by the
Custodian or the Pledgees with respect to such securities without further
consent by the Pledgor.  Such security
interest is, or in the case of Pledged Collateral in which the Pledgor obtains
rights after the date hereof, will be, a perfected, first priority security
interest.  All action necessary to
perfect and protect such security interest has been duly taken, except for the
Custodian or each Pledgee’s having possession of certificated securities,
instruments and cash constituting Pledged Collateral after the date hereof and
obtaining control of uncertificated securities and security entitlements
constituting Pledged Collateral after the date hereof.

 

SECTION 6. 
Covenants as to the Pledged Collateral.  So long as any of the Obligations shall
remain outstanding, the Pledgor will, unless each Pledgee shall otherwise
consent in writing:

 

(a)           keep adequate records concerning the
Pledged Collateral and permit each Pledgee or any agents or representatives
thereof at any reasonable time and from time to time to examine and make copies
of and abstracts from such records;

 

(b)           at its expense, promptly deliver to
the Pledgees a copy of each notice or other communication received by it in
respect of the Pledged Collateral;

 

(c)           at its expense, defend each Pledgee’s
right, title and security interest in and to the Pledged Collateral against the
claims of any Person;

 

(d)           at its expense, at any time and from
time to time, promptly execute and deliver all further instruments and
documents and take all further action that may be necessary or desirable or
that any Pledgee may request in order to (i) perfect and protect the security interest
purported to be created hereby, (ii) enable the Custodian or the Pledgees to
exercise and enforce their rights and remedies hereunder in respect of the
Pledged Collateral or (iii) otherwise effect the purposes of this Agreement;

 

 

(e)           not sell, assign (by operation of law
or otherwise), transfer, exchange or otherwise dispose of any Pledged
Collateral or any interest therein;

 

(f)            not create or suffer to exist any
Lien upon or with respect to any Pledged Collateral except for the security
interest created hereby;

 

(g)           not make or consent to any amendment
or other modification or waiver with respect to any Pledged Collateral or enter
into any agreement or permit to exist any restriction with respect to any
Pledged Collateral other than pursuant hereto;

 

(h)           not take or fail to take any action
which would in any manner impair the value or enforceability of each Pledgee’s
security interest in and Lien on any Pledged Collateral;

 

(i)            in the event that, and as soon as,
the Pledged Shares become eligible for resale by the Pledgor pursuant to Rule
144(k), the Pledgor shall cause, at its expense, its legal counsel to issue an
opinion (provided that the legal and factual criteria that are reasonably
required for issuing such an opinion are present in the transaction) addressed
to AVII and AVII’s transfer agent providing that such Pledged Shares can be
reissued without legends or any other restriction on the transfer thereof and
shall take all other necessary action to cause the Pledged Shares held by the
Custodian to so be reissued to the Custodian, on behalf of the Pledgees,
without any such legend or restriction; and

 

(j)            in the event that the provisions of
Section 6(i) are not applicable and the Custodian or any Pledgee exercises its
rights under any of the Transaction Documents as to any of such Pledgee’s
Pledged Shares in compliance with applicable securities laws, the Pledgor shall
cause, at its expense, its legal counsel to issue an opinion (provided that the
legal and factual criteria that are reasonably required for issuing such an
opinion are present in the transaction) addressed to AVII and AVII’s transfer
agent providing that such Pledged Shares can be reissued without legends or any
other restriction on the transfer thereof.

 

SECTION 7. 
Voting Rights, Etc. in Respect of the Pledged Collateral.

 

(a)           So long as no Event of Default or
event which, with the giving of notice or lapse of time or both, would
constitute an Event of Default, shall have occurred and be continuing:

 

(i)            the Pledgor may
exercise any and all voting and other consensual rights pertaining to any
Pledged Collateral for any purpose not inconsistent with the terms of the
Transaction Documents; and

 

(ii)           the Custodian and
each Pledgee, as necessary, will execute and deliver (or cause to be executed
and delivered) to the Pledgor all such proxies and other instruments as the
Pledgor may reasonably request for the purpose of enabling the Pledgor to
exercise the voting and other rights which it is entitled to exercise pursuant
to Section 7(a)(i) hereof.

 

 

(b)           Upon the occurrence and during the
continuance of an Event of Default or an event which, with the giving of notice
or the lapse of time or both, would constitute an Event of Default:

 

(i)            all rights of the
Pledgor to exercise the voting and other consensual rights which it would
otherwise be entitled to exercise pursuant to Section 7(a)(i) hereof shall
cease, and all such rights shall thereupon become vested pro rata in the
Pledgees which shall thereupon have the sole right to exercise such voting and
other consensual rights; and

 

(ii)           without limiting
the generality of the foregoing, each Pledgee may at its option exercise any
and all rights of conversion, exchange, subscription or any other rights,
privileges or options pertaining to any of such Pledgee’s Pledged Collateral as
if it were the absolute owner thereof, including, without limitation, the right
to exchange, in its discretion, any and all of such Pledgee’s Pledged
Collateral upon the merger, consolidation, reorganization, recapitalization or
other adjustment of AVII, or upon the exercise by AVII of any right, privilege
or option pertaining to any Pledged Collateral, and, in connection therewith,
to deposit and deliver any and all of the Pledged Collateral with any
committee, depository, transfer agent, registrar or other designated agent upon
such terms and conditions as it may determine.

 

SECTION 8. 
Additional Provisions Concerning the Pledged Collateral.

 

(a)           The Pledgor hereby authorizes each
Pledgee to file, without the signature of the Pledgor where permitted by law,
one or more financing or continuation statements, and amendments thereto,
relating to the Pledged Collateral.

 

(b)           The Pledgor hereby irrevocably
appoints each Pledgee the Pledgor’s attorney-in-fact and proxy, with full
authority, exercisable only during the existence of an Event of Default or
otherwise in accordance with this Agreement, in the place and stead of the
Pledgor and in the name of the Pledgor or otherwise, from time to time in such
Pledgee’s discretion, to take any action and to execute any instrument which
such Pledgee may deem necessary or advisable to accomplish the purposes of this
Agreement (subject to the rights of the Pledgor under Section 7(a) hereof),
including, without limitation, to receive, endorse and collect all instruments
made payable to the Pledgor representing any dividend or other distribution in
respect of any of such Pledgee’s Pledged Collateral and to give full discharge
for the same.  This power is coupled
with an interest and is irrevocable until all of the Obligations are satisfied
in full.

 

(c)           If the Pledgor fails to perform any
agreement or obligation contained herein, each Pledgee itself may perform, or
cause performance of, such agreement or obligation with respect to such
Pledgee’s Pledged Collateral, and the expenses of such Pledgee incurred in
connection therewith shall be payable by the Pledgor pursuant to Section 10
hereof and shall be secured by the Pledged Collateral.

 

(d)           Other than the exercise of reasonable
care to assure the safe custody of the Pledged Collateral while held hereunder
and as otherwise provided under Section 9-207 of the

 

 

UCC, the Custodian and each
Pledgee shall have no duty or liability to preserve rights pertaining thereto
and shall be relieved of all responsibility for such Pledgee’s Pledged
Collateral upon surrendering it or tendering surrender of it to the
Pledgor.  The Custodian and each Pledgee
shall be deemed to have exercised reasonable care in the custody and
preservation of the Pledged Collateral in its possession if the Pledged
Collateral is accorded treatment substantially equal to that which the
Custodian or such Pledgee accords its own property, it being understood that
the Custodian and such Pledgee shall not have responsibility for (i)
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relating to any Pledged Collateral,
whether or not the Custodian or the Pledgee has or is deemed to have knowledge
of such matters, or (ii) taking any necessary steps to preserve rights against
any parties with respect to any Pledged Collateral.

 

(e)           Each Pledgee may at any time in its
discretion (i) without notice to the Pledgor, transfer or register in the name
of the Pledgee or any of its nominees, any or all of such Pledgee’s Pledged
Collateral, subject only to the revocable rights of the Pledgor under Section
7(a) hereof, and (ii) exchange certificates or instruments constituting Pledged
Collateral for certificates or instruments of smaller or larger denominations.

 

SECTION 9. 
Remedies Upon Default.  If
any Event of Default shall have occurred and be continuing:

 

(a)           Each Pledgee may exercise in respect
of such Pledgee’s Pledged Collateral, in addition to other rights and remedies
provided for herein or otherwise available to it, all of the rights and
remedies of a secured party on default under the UCC then in effect in the
State of New York; and without limiting the generality of the foregoing and
without notice except as specified below, sell such Pledgee’s Pledged
Collateral or any part thereof in one or more parcels at public or private
sale, at any exchange or broker’s board or elsewhere, at such price or prices
and on such other terms as are commercially reasonable.  The Pledgor agrees that, to the extent
notice of sale shall be required by law, at least 10 days’ notice to the
Pledgor of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification.  No Pledgee shall be obligated to make any
sale of Pledged Collateral regardless of whether or not notice of sale has been
given.  Such Pledgee may adjourn any
public or private sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned.

 

(b)           In the event that any Pledgee
determines to exercise its right to sell all or any part of such Pledgee’s
Pledged Collateral pursuant to Section 9(a) hereof, the Pledgor will, at the
Pledgor’s expense and upon request by such Pledgee: (i) execute and deliver,
and use its best efforts to cause each issuer of such Pledged Collateral and
the directors and officers thereof to execute and deliver, all such instruments
and documents, and do or cause to be done all such other acts and things, as
may be necessary or, in the opinion of such Pledgee, advisable to allow such
Pledgee to receive the Pledgee’s Pledged Collateral in a form that will allow
such Pledgee to dispose of such Pledged Collateral without any restriction,
including, if necessary, to avail itself of the Registration Statements,
including, if necessary, by causing any such Registration Statement or any
prospectus contained in any such Registration Statement to be amended or
supplemented to substitute such Pledgee in place of the Pledgor or otherwise
and by causing the

 

 

issuance of any necessary legal
opinions to allow the transfer of such Pledgee’s Pledged Collateral to such
Pledgee, all of the foregoing which, in the opinion of such Pledgee, are
necessary or advisable, and all in conformity with the requirements of the 1933
Act and the rules and regulations of the SEC applicable thereto, (ii) if
necessary, cause each issuer of any Pledged Collateral to qualify such Pledged
Collateral under the state securities or “Blue Sky” laws of each necessary
jurisdiction, and to obtain all necessary governmental approvals for the sale
of the Pledged Collateral, as requested by such Pledgee, (iii) use its best
efforts to cause AVII to make available to its security holders, as soon as
practicable, an earnings statement which will satisfy the provisions of Section
11(a) of the 1933 Act, and (iv) do or cause to be done all such other acts and
things as may be necessary to make such sale of such Pledged Collateral valid
and binding and in compliance with applicable law.  The Pledgor acknowledges the impossibility of ascertaining the
amount of damages which would be suffered by the Pledgees by reason of the
failure by the Pledgor to perform any of the covenants contained in this
Section 9(b) and, consequently, agrees that, if the Pledgor fails to perform
any of such covenants, it shall pay, as liquidated damages and not as a
penalty, an amount equal to the value of each Pledgee’s Pledged Collateral on
the date such Pledgee demands compliance with this Section 9(b); provided,
however, that the payment of such amount shall not release the Pledgor from any
of its obligations under any provision of the Transaction Documents.

 

(c)           Notwithstanding the provisions of
Section 9(b) hereof, the Pledgor recognizes that any Pledgee may deem it
impracticable to effect a public sale of all or any part of such Pledgee’s
Pledged Collateral and that such Pledgee may, therefore, determine to make one
or more private sales of any such Pledged Collateral to a restricted group of
purchasers who will be obligated to agree, in the case of securities, among
other things, to acquire such securities for their own account, for investment
and not with a view to the distribution or resale thereof.  The Pledgor acknowledges that any such
private sale may be at prices and on terms less favorable to the seller than
the prices and other terms which might have been obtained at a public sale and,
notwithstanding the foregoing, agrees that such private sales shall be deemed
to have been made in a commercially reasonable manner and that the applicable
Pledgee shall have no obligation to delay sale of any such securities for the
period of time necessary to permit the issuer of such securities to register
such securities for public sale under the 1933 Act.  The Pledgor further acknowledges and agrees that any offer to
sell any such Pledged Collateral which has been (i) publicly advertised on a
bona fide basis in a newspaper or other publication of general circulation in
the financial community of The City of New York (to the extent that such an
offer may be so advertised without prior registration under the 1933 Act) or
(ii) made privately in the manner described above to not less than fifteen bona
fide offerees shall be deemed to involve a “public disposition” for the
purposes of Section 9-610(c) of the UCC (or any successor or similar,
applicable statutory provision) as then in effect in the State of New York,
notwithstanding that such sale may not constitute a “public offering” under the
1933 Act, and that a Pledgee may, in such event, bid for the purchase of such
Pledged Collateral.

 

(d)           Any cash held by any Pledgee (or in
the Accounts) as Pledged Collateral and all cash proceeds received by any
Pledgee (or the Custodian for the deposit in the Accounts) in respect of any
sale of, collection from, or other realization upon, all or any part of such
Pledgee’s Pledged Collateral may, in the discretion of such Pledgee, be held by
the Pledgee as collateral for, and/or then or at any time thereafter applied
(after payment of any amounts payable to the Pledgee pursuant to Section 10
hereof) in whole or in part by the Pledgee against,

 

 

all or any part of the
Obligations in such order as the Pledgee shall elect.  Any surplus of such cash or cash proceeds held by a Pledgee and
remaining after payment in full of all of the Obligations owed to such Pledgee
shall be paid over to the Pledgor or to such Person as may be lawfully entitled
to receive such surplus.

 

(e)           In the event that the proceeds of any
such sale, collection or realization are insufficient to pay all amounts to
which the applicable Pledgee is legally entitled, the Pledgor shall be liable
for the deficiency, together with interest thereon at the highest rate
specified in such Pledgee’s Note for interest on overdue principal thereof or
such other rate as shall be fixed by applicable law, together with the costs of
collection and the reasonable fees of any attorneys employed by such Pledgee to
collect such deficiency.

 

SECTION 10. 
Indemnity and Expenses.

 

(a)           The Pledgor agrees to indemnify and
hold harmless each Pledgee and all of their respective stockholders, partners,
members, officers, directors, employees and direct or indirect investors and
any of the foregoing Persons’ agents or other representatives (including,
without limitation, those retained in connection with the transactions
contemplated by this Agreement) from and against any and all claims, damages,
losses, liabilities, obligations, penalties, costs and expenses (including,
without limitation, reasonable attorney’s 
fees and disbursements) to the extent that they arise out of or
otherwise result from this Agreement (including, without limitation, enforcement
of this Agreement), except, as to any such indemnified Person, claims, losses
or liabilities resulting solely and directly from such Person’s gross
negligence or willful misconduct, and except to the extent that such claims,
losses or liabilities result from failure of such indemnified Persons to comply
with applicable securities laws, in each case as determined by a final judgment
of a court of competent jurisdiction.

 

(b)           The Pledgor will pay to the Custodian
and each Pledgee upon demand the amount of any and all costs and expenses,
including the fees and disbursements of the Custodian and such Pledgee’s
counsel and of any experts and agents, which the Custodian or such Pledgee may
incur in connection with (i) the preparation, negotiation, execution, delivery,
recordation, administration, amendment, waiver or other modification or
termination of this Agreement, (ii) the custody, preservation, use or operation
of, or the sale of, collection from, or other realization upon, any of the
Pledged Collateral, (iii) the exercise or enforcement of any of the rights of
the Custodian or such Pledgee hereunder or (iv) the failure by the Pledgor to
perform or observe any of the provisions hereof.

 

SECTION 11. 
Notices. 
Whenever notice is required to be given under this Agreement, unless
otherwise provided herein, such notice shall be given in accordance with
Section 9(f) of the Securities Purchase Agreement.

 

SECTION 12. 
Security Interest Absolute.  To the extent permitted by law, all rights
of the Custodian, the Pledgees and the Pledgor hereunder shall be absolute and
unconditional irrespective of: (i) any lack of validity or enforceability of
any Transaction Document or any other agreement or instrument relating thereto,
(ii) any change in the time, manner or place of payment of, or in any other
term in respect of, all or any of the Obligations, or any other amendment or
waiver of or consent to any departure from any guaranty, for all or

 

 

any of the Obligations, or
(iii) any other circumstance which might otherwise constitute a defense
available to, or a discharge of, the Pledgor in respect of the
Obligations.  All authorizations and
agencies contained herein with respect to any of the Pledged Collateral are
irrevocable and powers coupled with an interest.

 

SECTION 13. 
Miscellaneous.

 

(a)           No amendment of any provision of this
Agreement shall be effective unless it is in writing and signed by the Pledgor
and Pledgees with rights to a majority of the Pledged Shares then held by or on
behalf of all Pledgees, and no waiver of any provision of this Agreement, and
no consent to any departure by the Pledgor therefrom, shall be effective unless
it is in writing and signed by Pledgees with rights to a majority of the
Pledged Shares then held by or on behalf of all Pledgees, and then such waiver
or consent shall be effective only in the specific instance and for the
specific purpose for which given.

 

(b)           No failure on the part of the
Custodian or any Pledgee to exercise, and no delay in exercising, any right
hereunder or under any Transaction Document shall operate as a waiver thereof;
nor shall any single or partial exercise of any such right preclude any other
or further exercise thereof or the exercise of any other right.  The rights and remedies of the Custodian and
the Pledgees provided herein and in the Transaction Documents are cumulative
and are in addition to, and not exclusive of, any rights or remedies provided
by law.  The rights of the Custodian and
the Pledgees under any Transaction Document against any party thereto are not
conditional or contingent on any attempt by the Custodian or a Pledgee to
exercise any of its rights under any other document against such party or
against any other Person.

 

(c)           Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining portions hereof or thereof
or affecting the validity or enforceability of such provision in any other
jurisdiction.

 

(d)           This Agreement shall create a
continuing security interest in the Pledged Collateral and shall (i) remain in
full force and effect until the satisfaction in full or release of the
Obligations and (ii) be binding on the Pledgor and its successors and assigns
and shall inure, together with all rights and remedies of the Pledgees
hereunder, to the benefit of the Pledgees and their respective successors,
transferees and assigns; provided that no such transfer or assignment shall be
valid if it is in violation of applicable securities laws.  Without limiting the generality of clause
(ii) of the immediately preceding sentence, subject to compliance with
applicable securities laws, any Pledgee may assign or otherwise transfer all or
any portion of the Notes, and its rights under the Transaction Documents, to
any other Person, and such other Person shall thereupon become vested with all
of the benefits in respect thereof granted to such Pledgee herein or otherwise
unless such benefit is unavailable under applicable law.  Upon any such permitted assignment or
transfer, all references in this Agreement to a Pledgee shall mean the assignee
of such Pledgee.  None of the rights or
obligations of the Pledgor hereunder may be assigned or otherwise transferred
without the prior written consent of Pledgees holding a majority of the Pledged
Shares then held by all Pledgees.

 

 

(e)           Upon the satisfaction in full of the
Obligations, (i) this Agreement and the security interest created hereby shall
terminate and all rights to the Pledged Collateral, if any shall be remaining,
shall revert to the Pledgor, and (ii) the Custodian and the Pledgees will, upon
the Pledgor’s request and at the Pledgor’s expense, (A) return to the Pledgor
such of the Pledged Collateral as shall not have been sold or otherwise
disposed of, dealt with or applied pursuant to the terms hereof and of the
Transaction Documents and (B) execute and deliver to the Pledgor, without
recourse, representation or warranty, such documents as the Pledgor shall
reasonably request to evidence such termination.

 

(f)            All questions concerning the
construction, validity, enforcement and interpretation of this Agreement 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,
except to the extent that the validity and perfection or the perfection and the
effect of perfection or non-perfection of the security interest created hereby,
or remedies hereunder, in respect of any particular Pledged Collateral are
governed by the law of a jurisdiction other than the State of New York.  Each party hereby irrevocably submits to the
non-exclusive jurisdiction of the state and federal courts sitting in The City
of New York, Borough of Manhattan, for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or
discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is
brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper.  Each party
hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing a copy thereof
to such party at the address for such notices to it under this Agreement and
agrees that such service shall constitute good and sufficient service of
process and notice thereof.  Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law.  EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY
HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY
DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY.

 

 

IN WITNESS WHEREOF,
the Pledgor has caused this Pledge Agreement to be duly executed as of the date
first written above.

 

	
   

  	
  SUPERGEN, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOSEPH RUBINFELD

  
	
   

  	
   

  	
  Name:  Joseph Rubinfeld

  
	
   

  	
   

  	
  Title:  President/Chief Executive Officer

  
				

 

 

COLLATERAL SCHEDULE

 

TO

 

PLEDGE AGREEMENT

 

Pledged Shares

 

	
  Name of
  Pledgee

  	
   

  	
  Number of Pledged Shares

  	
   

  	
  Class

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Smithfield
  Fiduciary LLC.

  	
   

  	
  1,332,601

  	
   

  	
  Common Stock

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Omicron
  Master Trust

  	
   

  	
  526,841

  	
   

  	
  Common Stock

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mainfield
  Enterprises Inc.

  	
   

  	
  495,851

  	
   

  	
  Common Stock

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cranshire
  Capital L.P.

  	
   

  	
  154,954

  	
   

  	
  Common Stock

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  OTAPE LLC

  	
   

  	
  123,964

  	
   

  	
  Common StockExhibit
10.6

 

SECURITIES ACCOUNT CONTROL AGREEMENT

 

SECURITIES ACCOUNT CONTROL AGREEMENT (the “Agreement”),
dated as of February 26, 2003, among SuperGen, Inc., a Delaware company (the “Company”),
the secured parties set forth on the signature pages hereof (each, a “Secured
Party”, and collectively, the “Secured Parties”), and Mellon Investor
Services LLC, a New Jersey limited liability company, as Custodian.

 

WHEREAS:

 

A.            The
Company and the Secured Parties are parties to a Securities Purchase Agreement,
dated as of the date hereof (as amended or otherwise modified from time to
time, the “Securities Purchase Agreement”);

 

B.            Pursuant
to the Securities Purchase Agreement, the Secured Parties, severally but not
jointly, have agreed to purchase certain senior exchangeable convertible notes
(the “Notes”)
from the Company, which, among other things, are exchangeable by each Secured
Party for up to an aggregate number of shares (collectively, the “AVII Shares”)
of the common stock, par value $.0001 per share, of AVI BioPharma, Inc. (“AVII”),
set forth opposite such Secured Party’s name on Exhibit A attached hereto;

 

C.            Pursuant
to the terms of that certain Pledge Agreement, dated as of the date hereof,
made by the Company in favor of the Secured Parties (as the same may hereafter
be amended, supplemented or otherwise modified from time to time, the “Pledge
Agreement”), the Company has granted each Secured Party a security
interest (the “Security Interest”) in such Secured Party’s AVII Shares
(collectively, the “Pledged Shares”) and the certificates
representing such Pledged Shares, all options and other rights, contractual or
otherwise, in respect of the Pledged Shares and all dividends, distributions,
cash, instruments, investment property and other property (including but not
limited to, any stock dividend and any distribution in connection with a stock
split) from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Shares and all security
entitlements in respect of the Pledged Shares and all proceeds of any of the
foregoing, whether now owned or existing or hereafter acquired or arising and
wherever located (collectively, the “Pledged Collateral”).  In order to perfect the Secured Parties’
interest in the Pledged Collateral, the Company has established a securities
account with the Custodian into which the Pledged Collateral shall be
deposited.  The Company acknowledges
having received value for such pledge of the Pledged Collateral.

 

D.            Terms
defined in Article 8 or 9 of the Uniform Commercial Code as in effect in the
State of New York (the “UCC”) are used in this Agreement
(including, without limitation, paragraph (A) above) as such terms are defined
in such Article 8 or 9.

 

E.             The
Company and the Secured Parties hereto are entering into this Agreement
pursuant to the terms of the Pledge Agreement.

 

 

NOW,
THEREFORE, in consideration of the premises and mutual
agreements contained herein, the parties hereto hereby agree as follows:

 

Section 1.              Appointment
of Custodian.  The Custodian,
Mellon Investor Services LLC, with an address at 235 Montgomery Street, 23rd
Floor, San Francisco, CA  94104 (in such
capacity, together with its successors in such capacity, the “Custodian”)
agrees that it is a “securities intermediary” (as such term is defined in
Section 8-102(a)(14) of the UCC).

 

Section 2.              Notation
of Security Interest. 
The Company and the Secured Parties are entering into this Agreement to
perfect, and confirm the first priority lien of, the Secured Parties’ security
interest in the Pledged Collateral.

 

Section 3.              The
Accounts.

 

(a)           Establishment
of Accounts.  The Custodian
acknowledges and agrees that it has established and is maintaining on its books
and records the following account: account number 002346SUPERINC designated the
SuperGen, Inc., Securities Account (such account, together with any
replacements thereof or substitutions therefor, and together with any
additional Accounts, if any, established in the future pursuant hereto,
collectively the “Accounts”) into which shall be deposited
the Pledged Shares and all other property constituting Pledged Collateral under
the Pledge Agreement.  The Custodian
represents that as of the date hereof this Agreement is the only agreement
between the Custodian and the Company governing the Accounts.

 

(b)           Status of
Accounts; Treatment of Property as Financial Assets; Relationship of Parties.  Each of the parties hereto agrees that:  (i) each of the Accounts is a
“securities account” (within the meaning of Section 8-501(a) of the UCC) in
respect of which the Custodian is a “securities intermediary” (within the
meaning of Section 8-102(a)(14) of the UCC); (ii) each item of property
(whether cash, a security, an instrument or any other property) credited to any
of the Accounts shall be treated as a “financial asset” (within the meaning of
Section 8-102(a)(9) of the UCC); (iii) the Custodian will treat each
Secured Party as the person entitled to exercise the rights that comprise such
Secured Party’s pro rata interest in each such item of property credited to any
of the Accounts; (iv) each Secured Party is an “entitlement holder”
(within the meaning of Section 8-102(a)(7) of the UCC); and (v) the Pledged
Collateral and any rights or proceeds derived therefrom are subject to the
liens and other security interests in favor of the Secured Parties and the
rights of the Company in respect of the Pledged Collateral are also subject to
such liens and such other security interests.

(c)           The
Custodian will, by book-entry notation, promptly credit to the appropriate
account all property delivered to it constituting Pledged Collateral and such
property shall be held by the Custodian and treated as “financial assets”.

 

(d)           Form of
Securities, Instruments, etc. 
All securities and other financial assets credited to any of the
Accounts that are in registered form or that are payable to or to the order of
shall be (i) registered in the name of, or payable to or to the order of, the
Custodian or (ii) endorsed to the order of the Custodian or in blank, in each
case with signatures guaranteed by a member of a medallion signature guarantee
program approved by the Securities

 

 

Transfer Association and in no case will any financial asset credited
to any of the Accounts be registered in the name of, or payable to or to the
order of, the Company or indorsed to or to the order of the Company, except to
the extent the foregoing have been specially indorsed to or to the order of the
Custodian or in blank.

 

(e)           Securities
Intermediary’s Jurisdiction. 
The Custodian agrees that, for the purposes of the UCC, its “securities
intermediary’s jurisdiction” (within the meaning of Section 8–110(e)
of the UCC) shall be the State of New York.

 

(f)            Conflicts
with other Agreements.  The
Custodian agrees that, if there is any conflict between this Agreement (or any
portion thereof) and any other agreement relating to any of the Accounts, the
provisions of this Agreement shall prevail.

 

(g)           No Other
Agreements.  The Custodian
hereby confirms and agrees that:

 

(i)            there are no other agreements
entered into between the Custodian and the Company with respect to the
Accounts;

 

(ii)           it has not entered into, and until
the termination of this Agreement will not enter into, any agreement with any
other person relating to the Accounts and/or any financial assets credited
thereto pursuant to which it has agreed or will agree to comply with
entitlement orders (as defined in Section 8-102(a)(8) of the UCC) of such other
person; and

 

(iii)          it has not entered into, and until the
termination of this Agreement will not enter into, any agreement with the
Company or any Secured Party purporting to limit or condition the obligation of
the Custodian to comply with entitlement orders as set forth in Section 4
hereof.

 

(h)           Entitlement
Orders, Standing Instructions. 
The Company, each Secured Party and the Custodian each agree that if at
any time the Custodian shall receive any “entitlement order” (within the
meaning of Section 8–102(a)(8) of the New York UCC), or any other
order, originated by a Secured Party (so long as such order shall not relate to
Pledged Shares exceeding such Secured Party’s AVII Exchange Cap Allocation) and
relating to the Accounts, the Custodian shall comply with such entitlement
order or other order without further consent by the Company or any other
Person.  Subject to the following
paragraph, the Custodian shall accept instructions or entitlement orders only
from a Secured Party with respect to any Pledged Collateral pledged to it
pursuant to the Pledge Agreement and held by the Custodian or otherwise
credited to or held in the Accounts. 
The Secured Parties hereby instruct and order the Custodian to deposit,
and to direct and otherwise cause each issuer, obligor, guarantor, clearing
corporation or other applicable Person to pay and deposit into the Accounts
under and in accordance with the Pledge Agreement all cash distributions and
all other Cash payments and proceeds in respect of the Pledged Collateral
(including any stock or securities issued with respect to the Pledged
Collateral and (i) if issued in certificated form, the relevant certificate(s) 

 

 

shall be delivered to the Custodian upon receipt, duly endorsed in
blank or accompanied by blank stock powers, in each case with signatures
guaranteed by a member of a medallion signature guaranteed program approved by
the Securities Transfer Association and (ii) if issued in book entry form,
shall be registered in the name of the Custodian or its nominee), until such
time as the Secured Parties may otherwise direct the Custodian in accordance
with this Agreement.

 

Without limiting the foregoing, the Custodian agrees
to comply with an exchange notice from a Secured Party or the Company which
exchange notice shall request delivery to such Secured Party of a number of
Pledged Shares that together with all previously delivered Pledged Shares to
such Secured Party shall not exceed in the aggregate such Secured Party’s AVII
Exchange Cap Allocation.  For purposes
hereof, “AVII
Exchange Cap Allocation” means for each Secured Party, initially the
amount set forth opposite such Secured Party’s name on Exhibit A
hereto.  In the event that any Secured
Party shall sell or otherwise transfer any of its rights to any of the Pledged
Shares in accordance with the Pledge Agreement, then such Secured Party shall
inform the Custodian in writing and the transferee shall be allocated a pro
rata portion of such Secured Party’s AVII Exchange Cap Allocation.  In the event that any Secured Party shall no
longer have any rights to any Pledged Collateral and such Secured Party shall
have received a number of Pledged Shares which, in the aggregate, is less than
such Secured Party’s AVII Exchange Cap Allocation, then the Company and the
remaining Secured Parties shall so inform the Custodian in writing and the
difference between such Secured Party’s AVII Exchange Cap Allocation and the
number of Pledged Shares actually delivered to such Secured Party shall be
allocated to the respective AVII Exchange Cap Allocations of the remaining
Secured Party’s on a pro rata basis in accordance with such notice.  In addition to the foregoing, upon receipt
of written instructions from a Secured Party, the Custodian shall take all
actions necessary to deliver to the Secured Parties unrestricted shares,
provided that the Custodian shall have received, if reasonably requested, a
legal opinion from the Company that such actions will be in compliance with all
applicable securities laws.

 

Section 4.              The
Custodian.

 

(a)           No Change to
Accounts.  Without prior
written consent of the Secured Parties, the Custodian will not change the
account number or designation of any Account.

 

(b)           Certain
Information.  The Custodian
shall promptly notify the Secured Parties if any Person asserts or seeks to
assert a lien, encumbrance or adverse claim against any portion or all of the
property credited to any of the Accounts. 
The Custodian will send copies of all statements, confirmations and
other correspondence relating to each of the Accounts (and/or any financial
assets credited thereto)  simultaneously
to the Company and the Secured Parties.

 

(c)           Subordination.  In the event that the Custodian has or
subsequently obtains by agreement, by operation of law or otherwise a security
interest in any securities account or any security entitlement credited
thereto, the Custodian hereby subordinates any such security interest therein
to the security interest of the Secured Parties in the Accounts, in all
property credited thereto and in all security entitlements with respect to such
property, any

 

 

and all statutory, regulatory, contractual or other rights now or
hereafter existing in favor of the Custodian over or with respect to the
Accounts, all property credited thereto and all security entitlements to such
property (including (i) any and all contractual rights of set-off, lien or
compensation, (ii) any and all statutory or regulatory rights of pledge, lien,
set-off or compensation (except that the Custodian may set-off the face amount
of any checks which have been credited to the Accounts but are subsequently
returned unpaid because of uncollected or insufficient funds), (iii) any and
all statutory, regulatory, contractual or other rights to put on hold, block
transfers from or fail to honor instructions of the Secured Parties with respect
to the Accounts or (iv) any and all statutory or other rights to prohibit or
otherwise limit the pledge, assignment, collateral assignment or granting of
any type of security interest of the Custodian in the Accounts).

 

(e)           Limitation
on Liability.  The Custodian
shall not have any duties or obligations except those expressly set forth
herein.  Without limiting the generality
of the foregoing, the Custodian shall not be subject to any fiduciary or other
implied duties, and the Custodian shall not have any duty to take any
discretionary action or exercise any discretionary powers.  None of the Custodian, any Affiliate of the
Custodian, or any officer, agent, stockholder, partner, member, director or
employee of the Custodian or any Affiliate of the Custodian shall have any
liability, whether direct or indirect and whether in contract, tort or
otherwise, other than for its gross negligence or willful misconduct.  The Custodian:

 

(i) shall act hereunder
as custodian only and shall not be responsible or liable in any matter whatever
for the sufficiency, collection, correctness, genuineness or validity of any
revenues, cash, payments, securities, property, funds, investments, dividends,
distributions, interest, income, earnings or other amounts deposited with or held
by it or for the identity, authority or rights of any person or entity
executing and delivering or purporting to execute or deliver any thereof to the
Custodian;

 

(ii) shall be fully
protected in acting upon any written notice, instruction, direction, request or
other communication, paper or document which the Custodian believes to be
genuine, and shall have no duty to inquire into or investigate the validity,
accuracy or content of any thereof;

 

(iii) shall not be liable
for any error of judgment or for any action taken, suffered or omitted to be
taken except in the case of its own gross negligence or bad faith, as
determined by a final non-appealable order, judgment, decree or ruling of a
court of competent jurisdiction.  In no
event shall the Custodian be (A) liable for acting in accordance with a notice,
instruction, direction, request or other communication, paper or document from
a Secured Party or (B) liable or responsible for special, punitive, indirect,
consequential or incidental loss or damages of any kind whatsoever to any
person or entity (including without limitation lost profits).  Any liability of the Custodian under this
Agreement will be limited to the amount of fees paid to the Custodian;

 

 

(iv) may consult with and
obtain advice from counsel (who may be an employee of the Custodian) and shall
be fully protected in taking, suffering or omitting to take any action in
reliance on said advice;

 

(v) shall have no duties,
responsibilities or obligations as the Custodian except those which are
expressly set forth herein, and in any modification or amendment hereof to
which the Custodian has consented in writing, and no duties, responsibilities
or obligations shall be implied or inferred. 
Without limiting the foregoing, the Custodian shall not be subject to,
nor be required to comply with, or determine if any person or entity has
complied with, the Pledge Agreement or any other agreement between or among the
parties hereto, even though reference thereto may be made in this Agreement, or
to comply with any notice, instruction, direction, request or other
communication, paper or document other than as expressly set forth in this
Agreement;

 

(vi) may execute or
perform any duty, responsibility or obligation hereunder either directly or
through agents, attorneys, accountants or other experts;

 

(vii) may engage or be
interested in any financial or other transaction with any party hereto or
affiliate thereof, and may act on, or as depositary, trustee or agent for, any
committee or body of holders of obligations of such party or affiliate, as
freely as if it were not the Custodian hereunder;

 

(viii) shall not be
obligated to expend or risk its own funds or to take any action which it
believes would expose it to expense or liability or to a risk of incurring
expense or liability, unless it has been furnished with assurances of repayment
or indemnity satisfactory to it;

 

(ix) shall not take
instructions or directions except those given in accordance with this
Agreement;

 

(x) shall not incur any
liability for not performing any act, duty, obligation or responsibility by
reason of any occurrence beyond the control of the Custodian (including without
limitation any act or provision of any present or future law or regulation or
governmental authority, any act of God, war, civil disorder or failure of any
means of communication); and

 

(xi) shall not be called
upon to advise any person or entity as to any investments with respect to any
security, property or funds held in escrow hereunder or the dividends, distributions,
income, interest or earnings thereon for any action taken or omitted to be
taken by any of them hereunder or in connection herewith unless there has been
a final judicial determination that such act or omission was performed or
omitted in bad faith or constituted gross negligence or willful misconduct.

 

 

Section 5.              Indemnity;
Limitation on Damages; Expenses; Fees.

 

(a)           Indemnity.  The Company agrees to indemnify, defend,
protect, save and keep harmless the Custodian and its affiliates and their respective
successors, assigns, directors, officers, managers, employees, agents,
attorneys, accountants and experts (collectively the “Indemnitees”), from and
against any and all losses, damages, claims, liabilities, penalties, judgments,
settlements, actions, suits, proceedings, litigation, investigations, costs or
expenses, including without limitation reasonable fees and disbursements of
counsel (collectively “Losses”), that may be imposed on, incurred
by, or asserted against any Indemnitee, at any time, and in any way relating to
or arising out of the execution, delivery or performance of this Agreement, the
enforcement of any rights or remedies under or in connection with this
Agreement, the establishment of the Accounts, the acceptance or administration
of the Accounts and any payment, transfer or other application of securities,
property or funds pursuant to this Agreement, or as may arise by reason of any
act, omission or error of the Indemnitee; provided, however, that
no Indemnitee shall be entitled to be so indemnified, defended, protected,
saved and kept harmless to the extent such Loss was proximately caused by its
own gross negligence or bad faith, as determined by a final, non-appealable
order, judgment, decree or ruling of a court of competent jurisdiction.  The obligations contained in this
Section 5(a) shall survive the termination of this Agreement and the
resignation or removal of the Custodian.

 

(b)           Expenses and
Fees.  The Company shall be
responsible for, and hereby agrees to pay, all reasonable costs and expenses
incurred by the Custodian and the Secured Parties in connection with the
establishment and maintenance of the Accounts, including the Custodian’s
customary fees and expenses, any costs or expenses incurred by the Custodian as
a result of conflicting claims or notices involving the parties hereto,
including the reasonable fees and expenses of its internal and external legal
counsel, and all other reasonable costs and expenses incurred in connection
with the execution, administration or enforcement of this Agreement including
reasonable attorneys’ fees and costs, whether or not such enforcement includes
the filing of a lawsuit.  The
authorization herein granted to the Custodian to pay such reasonable costs and
expenses shall be irrevocable and no further authorization or instruction shall
be required.

 

Section 6.              Representations
and Warranties.

 

Each of the parties, severally and not jointly,
represents and warrants that:

 

(a)           Status.  It is duly organized and validly existing
under the laws of the jurisdiction of its organization or incorporation and, if
relevant under such laws, in good standing.

 

(b)           Powers.  It has the power to execute this Agreement
and any other documentation relating to this Agreement to which it is a party,
to deliver this Agreement and any other documentation relating to this
Agreement that it is required by this Agreement to deliver and to perform its
obligations under this Agreement and has taken all necessary action to
authorize such execution, delivery and performance; and this Agreement has
been, and each other such document will be, duly executed and delivered by it.

 

 

(c)           No Violation
or Conflict.  Such execution,
delivery and performance do not violate or conflict with any law applicable to
it, any provision of its constitutional documents, any order or judgment of any
court or other agency of government applicable to it or any of its assets or
any contractual restriction binding on or affecting it or any of its assets.

 

(d)           Obligations
Binding.  Its obligations
under this Agreement constitute its legal, valid and binding obligations,
enforceable in accordance with their respective terms (subject to applicable
bankruptcy, reorganization, insolvency, moratorium or similar laws affecting
creditors’ rights generally and subject, as to enforceability, to equitable
principles of general application (regardless of whether enforcement is sought
in a proceeding in equity or at law)).

 

Section 7.              Adverse
Claims.  Except for the
claims and interests of the Secured Parties and of the Company in the Accounts,
the Custodian does not know of any claim to, or interest in, any Account or in
any “financial asset” (as defined in Section 8-102(a) of the UCC) credited
thereto.  If any person asserts any
lien, encumbrance or adverse claim (including any writ, garnishment, judgment,
warrant of attachment, execution or similar process) against any Account or in
any financial asset carried therein, the Custodian will promptly notify the
Secured Parties and the Company thereof.

 

Section 8.              Transfer.  Neither this Agreement nor
any interest or obligation in or under this Agreement may be transferred
(whether by way of security or otherwise) by any party without the prior
written consent of each other party, except that:

 

(a)           the
Custodian may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another Person (but without prejudice to
any other right or remedy under any other agreement); and

 

(b)           a
Secured Party may transfer all of its interests and obligations in and under
this Agreement to a successor under the Pledge Agreement; provided that
the Custodian shall have no obligation to comply with any notice, request,
certificate, consent, statement, instrument, document or other writing
delivered by successor until the Custodian receives evidence of such transfer
as the Custodian may reasonably require.

 

Except as provided above, the transfer of this
Agreement shall not terminate any Account or alter the obligations of the
parties hereto with respect to any Account. 
The Secured Parties shall notify the Company of any transfer under this
Section 8.

 

Any purported transfer that is not in compliance with
this Section 8 will be void.

 

Section 9.              Termination.  The rights and powers
granted herein to the Secured Parties have been granted in order to perfect its
security interest in the Accounts and the financial assets contained therein,
are powers coupled with an interest and will be affected neither by the
bankruptcy of the Company nor by the lapse of time.  The obligations of the Custodian shall continue in effect until
the security interests of each Secured Party in the Accounts have been
terminated pursuant to the terms of the Pledge Agreement and the Secured

 

 

Parties have notified the Custodian of such termination in
writing.  Upon the written instruction
of the Secured Parties, the Custodian shall close the Account or Accounts
specified in such instruction and disburse to the Company the balance of any
assets therein.  Any of the parties may
terminate this Agreement upon 30 days’ prior written notice to all of the other
parties hereto; provided, however, that any Pledged Collateral which has not
been released by the Secured Parties at or prior to such time of termination of
this Agreement shall be transferred to a substitute securities intermediary
designated by the Company and acceptable to Secured Parties with rights to a
majority of the Pledged Collateral (or, if the Company does not so designate an
acceptable substitute bank within 10 days of receiving a termination notice,
designated by Secured Parties with rights to a majority of the Pledged
Collateral).

 

Except as provided above, the termination of this
Agreement shall not terminate any Account or alter the obligations of the
Custodian to the Company or the Secured Parties pursuant to any other agreement
with respect to any Account.

 

Section 10.            Miscellaneous.

 

(a)           Governing
Law; Jurisdiction; Jury Trial. 
All questions concerning the construction, validity, enforcement and
interpretation of this Agreement 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.  Each party hereby irrevocably submits to the non-exclusive
jurisdiction of the state and federal courts sitting in The City of New York,
Borough of Manhattan, for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding
is improper.  Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees
that such service shall constitute good and sufficient service of process and
notice thereof.  Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law.  EACH PARTY
HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A
JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH
OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

(b)           Counterparts.  This Agreement may be executed in two or
more identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party; provided that a facsimile signature
shall be considered due execution and shall be binding upon the signatory
thereto with the same force and effect as if the signature were an original,
not a facsimile signature.

 

 

(c)           Headings.  The headings of this Agreement are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement.

 

(d)           Severability.  If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.

 

(e)           Entire
Agreement; Amendments.  This
Agreement supersedes all other prior oral or written agreements among the parties
hereto, their affiliates and Persons acting on their behalf with respect to the
matters discussed herein, and this Agreement contains the entire understanding
common to all of the parties hereto with respect to the matters covered herein
and, except as specifically set forth herein, no party makes any
representation, warranty, covenant or undertaking with respect to such common
matters.  No provision of this Agreement
may be amended other than by an instrument in writing signed by the Company,
the Custodian and the Secured Parties with rights to a majority of the Pledged
Collateral.

 

(f)            Notices.  Any notices, consents, waivers or other
communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered:  (i) upon receipt, when delivered personally;
(ii) upon receipt, when sent by facsimile (provided confirmation of
transmission is mechanically or electronically generated and kept on file by
the sending party); or (iii) one business day after deposit with an overnight
courier service, in each case properly addressed to the party to receive the
same.  The addresses and facsimile
numbers for such communications shall be:

If to the Company:

 

SuperGen, Inc.

4140 Dublin Boulevard

Suite 200

Dublin, California 94568

Telephone:            (925) 560-0100

Facsimile:               (925) 560-0101

Attention:              Chief Executive Officer

 

with a copy to:

 

Wilson Sonsini Goodrich & Rosati, PC

650 Page Mill Road

Palo Alto, California 93404

Telephone:            (650) 493-9300

Facsimile:               (650) 493-6811

Attention:              John V. Roos, Esq.

 

 

If to the Custodian:

 

Mellon Investor Services LLC

235 Montgomery Street

23rd Floor

San Francisco, California  94104

Telephone:            (415) 743-1422

Facsimile:               (415) 989-8251

Attention:              Sharon Magidson

 

with a copy to:

 

Mellon Investor Services LLC

85 Challenger Road

Ridgefield Park, New Jersey  07660

Attention:              Legal Department

 

If to a Secured Party, to its address and facsimile number set forth on
Schedule I, with copies to such Secured Party’s representatives as set forth on
Schedule I, or to such other address and/or facsimile number and/or to the
attention of such other Person as the recipient party has specified by written
notice given to each other party five (5) days prior to the effectiveness of
such change.  Written confirmation of
receipt (A) given by the recipient of such notice, consent, waiver or other
communication, (B) mechanically or electronically generated by the sender’s
facsimile machine containing the time, date, recipient facsimile number and an
image of the first page of such transmission or (C) provided by an overnight
courier service shall be rebuttable evidence of personal service, receipt by
facsimile or receipt from an overnight courier service in accordance with
clause (i), (ii) or (iii) above, respectively.

 

(g)           Successors
and Assigns.  This Agreement
shall be binding upon and inure to the benefit of the parties and their
respective successors and assigns.  The
Company shall not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Secured Parties with rights to a
majority of the Pledged Collateral.  A
Secured Party may assign some or all of its rights hereunder without the
consent of the Company, in which event such assignee shall be deemed to be a
Secured Party hereunder with respect to such assigned rights.

 

(h)           No Third
Party Beneficiaries.  This
Agreement is intended for the benefit of the parties hereto and their
respective permitted successors and assigns, and is not for the benefit of, nor
may any provision hereof be enforced by, any other Person.

 

(i)            Survival.  All representations and warranties made in
this Agreement or in any certificate or other document delivered pursuant to or
in connection with this Agreement shall survive the execution and delivery of
this Agreement or such certificate or other document (as the case may be) or
any deemed repetition of any such representation or warranty.  In addition, the rights of the Custodian
under Sections 4 and 5, and the obligations of the Company under
Section 5, shall survive the termination of this Agreement.

 

(j)            Further
Assurances.  Each party shall
do and perform, or cause to be done and performed, all such further acts and
things, and shall execute and deliver all such

 

 

other agreements, certificates, instruments and documents, as any other
party may reasonably request in order to carry out the intent and accomplish
the purposes of this Agreement and the consummation of the transactions
contemplated hereby.

 

(k)           No Strict
Construction.  The language
used in this Agreement will be deemed to be the language chosen by the parties
to express their mutual intent, and no rules of strict construction will be
applied against any party.

 

(l)            Cumulative
Remedies.  The rights and
remedies of the Parties set forth in this Agreement shall be cumulative, and
not exclusive, of any rights and remedies available to it at law or equity or
otherwise.

 

(m)          Benefit of
Agreement.  Subject to
Section 8, this Agreement shall be binding upon and inure to the benefit
of the Company, the Secured Parties and the Custodian and their respective
successors and permitted assigns.

 

(n)           No Waiver of
Rights.  A failure or delay
in exercising any right, power or privilege in respect of this Agreement will
not be presumed to operate as a waiver, and a single or partial exercise of any
right, power or privilege will not be presumed to preclude any subsequent or
further exercise, of that right, power or privilege or the exercise of any
other right, power or privilege.

Section 11.            Definitions.   As used in this Agreement:

 

“Affiliate” means, in relation to any
specified Person, any other Person controlled, directly or indirectly, by the
specified Person, any other Person that controls, directly or indirectly, the
specified Person or any other Person directly or indirectly under common
control with the specified Person.  For
this purpose, control of any Person means ownership of a majority of the voting
power of the Person.

 

“consent” includes a consent, approval,
action, authorization, exemption, notice, filing, registration or exchange
control consent.

 

“law” includes any treaty, law, rule or
regulation (as modified, in the case of tax matters, by the practice of any
relevant governmental revenue authority) and “lawful” and “unlawful”
will be construed accordingly.

 

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

 

 

IN WITNESS WHEREOF, the parties have caused
this Securities Account Control Agreement to be duly executed as of the date
first written above.

 

	
  COMPANY:

  	
   

  	
  SECURED
  PARTIES:

  
	
   

  	
   

  	
   

  
	
  SUPERGEN,
  INC.

  	
   

  	
  SMITHFIELD
  FIDUCIARY LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ JOSEPH RUBINFELD

  	
   

  	
  By:

  	
  /s/ ADAM J. CHILL

  
	
   

  	
  Name: Joseph Rubinfeld

  	
   

  	
   

  	
  Name: Adam J. Chill

  
	
   

  	
  Title: President/Chief Executive Officer

  	
   

  	
   

  	
  Title: Authorized Signatory

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  OMICRON
  MASTER TRUST

  
	
   

  	
   

  	
  By:  Omicron
  Capital L.P., as advisor

  
	
   

  	
   

  	
  By:  Omicron
  Capital Inc., its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ OLIVIER MORALI

  
	
   

  	
   

  	
   

  	
  Name: Olivier Morali

  
	
   

  	
   

  	
   

  	
  Title: President

  
	
   

  	
   

  	
   

  
	
  CUSTODIAN:

  	
   

  	
  MAINFIELD
  ENTERPRISES INC.

  
	
   

  	
   

  	
   

  
	
  MELLON
  INVESTOR SERVICES LLC

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ AVI VIGDER

  
	
   

  	
   

  	
   

  	
  Name: Avi Vigder

  
	
   

  	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ SHARON MAGIDSON

  	
   

  	
   

  
	
   

  	
  Name: Sharon Magidson

  	
   

  	
   

  
	
   

  	
  Title: Vice President

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CRANSHIRE
  CAPITAL L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ MITCHELL P. KOPIN

  
	
   

  	
   

  	
   

  	
  Name: Mitchell P. Kopin

  
	
   

  	
   

  	
   

  	
  Title: President-Downsview Capital, Inc.,

  
	
   

  	
   

  	
   

  	
   

  	
  The General Partner

  
								

 

 

	
   

  	
   

  	
  OTAPE
  LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ RICHARD CAYNE

  
	
   

  	
   

  	
   

  	
  Name: Richard Cayne

  
	
   

  	
   

  	
   

  	
  Title: General Counsel

  

 

 

Exhibit A

 

Pledged Shares

 

	
  Name of
  Secured Party

  	
   

  	
  AVII Exchange Cap Allocation

  
	
   

  	
   

  	
   

  
	
  Smithfield Fiduciary LLC

  	
   

  	
  1,332,601

  
	
   

  	
   

  	
   

  
	
  Omicron Master Trust

  	
   

  	
  526,841

  
	
   

  	
   

  	
   

  
	
  Mainfield Enterprises Inc.

  	
   

  	
  495,851

  
	
   

  	
   

  	
   

  
	
  Cranshire Capital L.P.

  	
   

  	
  154,954

  
	
   

  	
   

  	
   

  
	
  Otato L.P.

  	
   

  	
  123,964

  

 

 

SCHEDULE I

Secured
Parties:

 

Smithfield Fiduciary LLC

C/o Highbridge Capital Management, LLC

9 West 57th Street, 27th Floor

New York, New York 
10019

Facsimile:  (212) 751-0755

Telephone:  (212) 287-4720

Attention:   Ari J. Storch

Adam J. Chill

 

with copy to:

Schulte Roth & Zabel LLP

919 Third Avenue

New York, New York 
10022

Facsimile:  (212) 593-5955

Telephone:  (212) 756-2376

Attention:  Eleazer Klein, Esq.

 

Omicron Master Trust

c/o Omicron Capital L.P.

153 E. 53rd Street

48th Floor

New York, New York 
10022

Facsimile:  (212) 508-7028

Telephone:  (212) 508-7027

Attention:  Olivier Morali

 

with copy to:

The Law Offices of Brian Pusch

29 West 57th Street

New York, NY 10019 

Attention:  Brian Pusch, Esq.

Facsimile:  (212) 980-7055

Telephone:  (212) 980-0408

 

 

Mainfield Enterprises Inc.

c/o Cavallo Capital Corp.

660 Madison Avenue, 

18th Floor 

New York, New York  10021 

Facsimile:  (212) 651-9010

Telephone: 
(212) 651-9005

Attention:  Mor Sagi

 

with copy to:

 

Bryan Cave LLP

1290 Ave of the Americas

New York, NY 10104 

Attention:  Ken Henderson, Esq.

Facsimile:  (212) 541-1357

Telephone:  (212) 541-2275

 

Cranshire Capital L.P.

 

c/o Downsview Capital, Inc.

The General Partner

666 Dundee Road, Suite 1901

Northbrook, IL  60062

Facsimile:  (847) 562-9031

Telephone:  (847) 562-9030 

Attention:  Mitchell P. Kopin

 

 

Otape LLC

c/o OTA LLC

1 Manhattanville Rd.

Purchase, NY 
10577

Facsimile: 
(914) 694-6335

Telephone:  (914) 694-5857

Attention:  Paul
Masters

 

with copy to:

 

Piper Rudnick LLP

1251 Avenue of the Americas

New York, NY  10020

Attention:  Theodore Altman, Esq.

Facsimile:  (212) 835-6001

Telephone:  (212) 835-6000

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00047-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00047-of-00352.parquet"}]]