Document:

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

 

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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

 

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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

 

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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

 

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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:

  

 

15Exhibit 10.5

 

AMENDED AND RESTATED PLEDGE AGREEMENT

 

AMENDED AND RESTATED PLEDGE AGREEMENT (this “Agreement”),
dated as of June 24, 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 were parties to a Securities
Purchase Agreement, dated as of February 26, 2003 (the “February Securities Purchase Agreement”)
pursuant to which the Pledgees, severally but not jointly, purchased certain
senior exchangeable convertible notes (the “February
Notes”) from the Pledgor, which, among other things, were
exchangeable (the “AVII Exchange Right”)
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 thereto;

 

B.            As a condition precedent to the purchase of the February
Notes by the Pledgees, the Pledgor executed and delivered to the Pledgees a
pledge agreement (the “February Pledge
Agreement”) providing for the pledge to the Pledgees of, and the
grant to the Pledgees of a security interest in, the AVII Shares (collectively,
the “Pledged Shares”);

 

C.            Each Pledgee has entered into a Conversion and Amendment
Agreement with the Pledgor, each dated as of the date hereof, pursuant to
which, among other things, the AVII Exchange Right is being eliminated;

 

D.            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”) pursuant to which the Pledgees, severally but
not jointly, have agreed to purchase (i) certain senior convertible notes from
the Pledgor and (ii) warrants to acquire that number of Pledged Shares
specified in the Collateral Schedule attached hereto (the “Warrants”);

 

E.             Pursuant to the Securities Purchase Agreement, each of
the Pledgees is depositing a portion of the Purchase Price (as defined in the
Securities Purchase Agreement) in a securities account where it will be
invested as provided in Section 8(f) (the “Cash
Collateral Account”; such deposit, together with all financial
assets, investment property, securities, cash and other property now or
hereafter held in the Cash Collateral Account, and the proceeds thereof,
including, without limitation, dividends payable in cash or stock and shares or
other proceeds of conversions or splits of any securities in the Cash
Collateral Account, collectively, the “Cash
Collateral”) governed by the Collateral Account Notification and
Acknowledgement (Bank of America, N.A.), dated as of the date hereof (the “Cash Collateral Account Control

 

 

Agreement”), between the Pledgor, the Pledgees and
Banc of America Securities LLC (the “Cash
Collateral Custodian”);

 

F.             It is a condition precedent to the purchase of the Notes
and the Warrants by the Pledgees pursuant to the Securities Purchase Agreement
that the Pledgor shall have executed and delivered to the Pledgees an amended
and restated pledge agreement providing for the pledge to the Pledgees of, and
the grant to the Pledgees of a security interest in all right, title and
interest in: (i) the Pledged Shares to each Pledgee as specified in the
Collateral Schedule attached hereto, (ii) the Cash Collateral and the Cash
Collateral Account to each Pledgee as specified in the Collateral Schedule
attached hereto, and (iii) the Securities Accounts under the Amended and
Restated Securities Account Control Agreement (as such terms are defined
below); and

 

G.            The parties desire to amend and restate the February
Pledge Agreement to reflect the aforementioned pledge and security interest.

 

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 and such Pledgee’s Cash Collateral, the certificates representing
such Pledged Shares, all options and other rights, contractual or otherwise, in
respect of the Pledged Shares and the Cash Collateral and all dividends,
interest, 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 Cash Collateral, all right, title and interest in the
Accounts (the “Securities Accounts”,
and together with the Cash Collateral Account, the “Accounts”) referred to in the Amended and Restated Securities
Account Control Agreement (the “Amended and
Restated Securities Account Control Agreement”), dated as of the
date hereof, among the Pledgor, the Pledgees and Mellon Investors Services LLC,
as Custodian (the “Custodian”),
and the Cash Collateral Account pursuant to the Cash Collateral Account Control
Agreement, 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”).

 

2

 

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
exercise of the Warrants.

 

SECTION 4.         Delivery of the Pledged Collateral.

 

(a)           Pursuant to the Amended and Restated Securities Account
Control Agreement, a certificate or certificates, bearing applicable securities
law legends, currently representing each Pledgee’s Pledged Shares, has
previously been delivered to the Custodian, for deposit into the Accounts (as
defined therein) prior to the execution and delivery of this Agreement.  Pursuant to the Securities Purchase
Agreement and the Cash Collateral Account Control Agreement, the Cash
Collateral, currently representing each Pledgee’s Cash Collateral, shall be
delivered to the Cash Collateral Custodian, for deposit into the Cash
Collateral Account, 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  and the Cash Collateral Custodian, as applicable, in accordance
with the Amended and Restated Securities Account Control Agreement and the Cash
Collateral Account Control Agreement, as applicable, 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 Amended and
Restated Securities Account Control Agreement and the Cash Collateral Account
Control Agreement, as applicable, 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 or the Cash
Collateral Custodian, as applicable, 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 or the Cash Collateral Custodian, as applicable,
on behalf of the Pledgees.  The

 

3

 

Pledgor further agrees to execute such other
documents and to take such other actions as the Custodian or the Cash
Collateral Custodian, as applicable, 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 or the
Cash Collateral Custodian, as applicable, 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, dividend, interest, right, property, payment or
distribution constituting Pledged Collateral shall be, and shall forthwith be
delivered to the Custodian or the Cash Collateral Custodian, as applicable, in
accordance with the Amended and Restated Securities Account Control Agreement
and the Cash Collateral Account Control Agreement, as applicable, 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 or the Cash Collateral Custodian, as applicable, 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 or the Cash Collateral Custodian, as applicable, 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 Cash Collateral
Custodian, as applicable, 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.

 

4

 

(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 Cash Collateral Custodian, as applicable, 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 such Pledgee’s Cash Collateral 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, or the Cash
Collateral Custodian, as applicable, 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 the Cash Collateral Custodian, as applicable, 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 Cash Collateral Custodian,
as applicable, 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;

 

5

 

(e)           not sell, assign (by operation of law or otherwise),
transfer, exchange or otherwise dispose of any Pledged Collateral or any
interest therein; provided, however, that 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,
the Pledgor shall be entitled to instruct the Pledgees to direct the Cash
Collateral Custodian to transfer to the Pledgor, in accordance with the
Pledgor’s written instructions, (i) up to fifty percent (50%) of the Cash
Collateral then on deposit in the Cash Collateral Account on a date that is not
earlier than the date that is nine months after the date hereof, and (ii) all
remaining Cash Collateral from the Cash Collateral Account on a date that is
not earlier than the date that is twelve months after the date hereof; provided,
further, that (A) the Pledgees shall have received at least five
business days prior written notice (but not more than seven business days prior
written notice) of such request, (B) such request shall include a certificate
by a duly authorized officer of the Pledgor, certifying to the Pledgees that 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, and (C) such transfer and release shall not affect in any respect
the lien and security interest of the Pledgees in any of the other Pledged
Collateral.

 

(f)            not create or suffer to exist any Lien upon or with
respect to any Pledged Collateral except for the security interest created
hereby, except as otherwise expressly provided in Section 6(e) hereof;

 

(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, except as otherwise expressly provided in Section 6(e)
hereof;

 

(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.

 

6

 

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, the Cash Collateral
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

 

7

 

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, the Cash Collateral
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, the Cash
Collateral 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, the Cash Collateral Custodian or such
Pledgee accords its own property, it being understood that the Custodian, the
Cash Collateral 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, the Cash Collateral 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, (ii) solely
with respect to such Pledgee’s pro  rata share of the Cash
Collateral, instruct the Cash Collateral Custodian with respect to the sale,
transfer or redemption of all or part of such Cash Collateral and the
remittance of proceeds thereof, if any, to such Pledgee, and (iii) exchange
certificates or instruments constituting Pledged Collateral for certificates or
instruments of smaller or larger denominations.

 

(f)            The Pledgor shall be entitled to invest or direct the
investment of the Cash Collateral only in (i) identified United States Treasury
securities or (ii) selected shares of a money market fund registered under the
Investment Company Act of 1940, as amended, the portfolio of which consists of
United States Treasury securities credited to the Cash Collateral Account or
(iii) a money market account with the Cash Collateral Custodian credited to the
Cash Collateral Account.

 

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

 

8

 

(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

 

9

 

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 or the Cash Collateral Custodian, as applicable, 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

 

10

 

(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, the Cash Collateral
Custodian and each Pledgee upon demand the amount of any and all costs and
expenses, including the fees and disbursements of the Custodian, the Cash
Collateral Custodian and such Pledgee’s counsel and of any experts and agents,
which the Custodian, the Cash Collateral 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, the Cash Collateral 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 Cash Collateral
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)           The parties hereto intend to maintain the validity,
effectiveness, enforceability, perfection and priority of the Plede Agreement,
dated as of February 26, 2003, by and among the parties hereto (the “Original Pledge Agreement”) and this
Agreement is intended, inter  alia, to continue, increase and
modify the obligations and indebtedness secured by the security interests and
pledges created under the Original Pledge Agreement.   Except as specifically provided herein, this Agreement shall not
have the effect of terminating, limiting, modifying or otherwise affecting the
validity, effectiveness, enforceability, perfection and priority of the
security interests or the pledges created under the Original Pledge
Agreement.  Nothing herein contained
shall be construed as a substitution or novation of the obligations outstanding
under, and as defined in, the Original Pledge Agreement, which shall remain in
full force and effect, except as modified hereby or by instruments executed
concurrently herewith.  All references
in the Securities Purchase Agreement, the Transaction Documents, and all documents
related thereto, except as otherwise expressly provided in such documents, to
“the

 

11

 

Pledge Agreement,” “thereto,” “thereof,”
“thereunder” or words of like import referring to the Original Pledge Agreement
shall mean the Original Pledge Agreement as amended and restated by this
Agreement.

 

(b)           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.

 

(c)           No failure on the part of the Custodian, the Cash Collateral
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,
the Cash Collateral 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, the Cash Collateral Custodian and the
Pledgees under any Transaction Document against any party thereto are not
conditional or contingent on any attempt by the Custodian, the Cash Collateral
Custodian or a Pledgee to exercise any of its rights under any other document
against such party or against any other Person.

 

(d)           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.

 

(e)           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.

 

(f)            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

 

12

 

shall be remaining, shall revert to the Pledgor, and
(ii) the Custodian, the Cash Collateral 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.

 

(g)           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.

 

13

 

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

 

	
   

  	
  SUPERGEN,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   Joseph Rubinfeld

  
	
   

  	
  Title:

  	
  President/Chief Executive
  Officer

  
					

 

14

 

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
  Stock

  

 

Cash
Collateral

 

	
  Name of Pledgee

  	
   

  	
  Cash
  Collateral

  	
   

  
	
  Smithfield Fiduciary LLC

  	
   

  	
  $

  	
   5,375,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Omicron Master Trust

  	
   

  	
  $

  	
   2,125,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Mainfield Enterprises Inc.

  	
   

  	
  $

  	
   2,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Cranshire Capital L.P.

  	
   

  	
  $

  	
   625,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  OTAPE LLC

  	
   

  	
  $

  	
   500,000

  	
   

  

 

15

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