Worldwide Sales, Distribution, And Development Agreement

CONFIDENTIAL TREATMENT REQUESTED


WORLDWIDE SALES, DISTRIBUTION, AND DEVELOPMENT AGREEMENT


This Sales, Distribution, and Development Agreement (the "Agreement") is made as of December 21, 1999 by and between SuperGen, Inc., ("SuperGen"), a California corporation with its principal offices at Two Annabel Lane, Suite 220, San Ramon, California 94583, and Abbott Laboratories, an Illinois corporation ("Abbott"), with its principal offices at 100 Abbott Park Road, Abbott Park, Illinois 60064.


RECITALS:


WHEREAS, SuperGen is developing a pharmaceutical compound known as Rubitecan (as defined below) for the treatment of pancreatic cancer and other indications;


WHEREAS, SuperGen desires to collaborate with Abbott with respect to the clinical development, obtaining of regulatory approvals, distribution and marketing of Rubitecan product(s) throughout the world;


WHEREAS, Abbott desires to collaborate with SuperGen with respect to such product(s); and


WHEREAS, Abbott and SuperGen shall enter into three other agreements in support of their collaboration: (i) a U.S. Distribution Agreement pursuant to which SuperGen will grant to Abbott the right to distribute SuperGen's product Nipent in the United States (the "U.S. Distribution Agreement"); and (ii) a Common Stock and Option Purchase Agreement pursuant to which Abbott shall purchase an equity interest in SuperGen's common stock (the "Stock Purchase Agreement") (both of which other agreements, along with this Agreement, collectively referred to as the "SuperGen-Abbott Agreements");


NOW, THEREFORE, in consideration of the foregoing and the mutual covenant undertakings contained herein, the parties hereto hereby agree as follows:


ARTICLE I: DEFINITIONS


In addition to the other terms defined elsewhere herein, the following terms shall have the following meanings when used in this Agreement (and any term defined in the singular shall have the same meaning when used in the plural, and vice versa, unless stated otherwise):


1.1 "Abbott Cost of Goods" means (i) with respect to the Net Units of Product Sold in the U.S. Territory, the [________________________] for the Net Units of Product Sold in the U.S. Territory during the given calendar quarter or year; (ii) with respect to the Net Units of Product Sold in the International Territory, the [________________________] for the Net Units of Product Sold in the International Territory during the given calendar quarter or year, and in the event that Sections 8.5(b) or (c) apply, (A) to the extent that the Compound or


1


Product for the International Territory is sourced from the same Abbott-owned manufacturing facilities as the facilities used for the Product for the U.S. Territory, the [________________________] in the U.S. Territory during the given calendar quarter or year, (B) to the extent that the Compound or Product is sourced from a different Abbott-owned manufacturing facility, the [________________________] during the given calendar quarter or year and (C) to the extent that the Compound or Product is sourced from a Third Party manufacturer, the [________________________] during the given calendar quarter or year; and (iii) with respect to the Territories, [________________________] Abbott's Cost of Goods shall be calculated separately for the U.S. Territory and the International Territory.


1.2 "Abbott Distribution Expenses" means, for the U.S. Territory only, a percentage of Abbott Net Sales in the U.S. Territory during the given calendar quarter or year, which percentage shall be agreed by the parties no later than sixty (60) days prior to Launch in the U.S. Territory.


1.3 "Abbott Distribution Margin" means the [________________________] for the given calendar quarter or year.


1.4 "Abbott Net Sales" means the total gross sales of the Product (as set forth on the invoice for such Product) by Abbott and permitted Sublicensees (as defined in Section 2.5(d) below) to Third Parties in the given calendar quarter or year, plus, if applicable, the fair market value of all properties and services received in consideration of a sale of Product by Abbott and permitted Sublicensees to Third Parties during such calendar quarter or year, less the following deductions directly paid or incurred by Abbott or its permitted Sublicensees with respect to the sale of the Product in such calendar quarter or year:


(i) with respect to the U.S. Territory, [________________________]


2


[__________________________] ;


(ii) with respect to the International Territory,[_____________________];
and


(iii) with respect to the Territories (A) [________________________]
and (B) [________________________].


Abbott's Net Sales shall be calculated separately for the U.S. Territory and the International Territory.


1.5 "Abbott Operating Margin" means the [________________________] for the given calendar quarter or year. The Abbott Operating Margin shall be calculated separately for the U.S. Territory and the International Territory.


1.6 "Abbott SG&A" means the [________________________] which are incurred by Abbott and/or its permitted Sublicensees in the advertising, Detailing, sales, marketing and promotion of the Product and, to the extent permitted under Section 4.4, the [________________________] for the Product during any given calendar quarter or year, in the categories set forth in Exhibit 1.8. provided that in no event shall Abbott SG&A include any [________________________].


1.7 "Abbott Trademark" means the trademark(s) to be selected and registered by Abbott for the Product in the International Territory.


1.8 "Affiliate" means any corporation or non-corporate business entity which controls, is controlled by, or is under common control with a Party. A corporation or non-corporate business entity shall be regarded as in control of another corporation or non-corporate business entity if it owns, or directly or indirectly controls, in excess of fifty percent (50%) of the voting stock of the other corporation, or (a) in the absence of the ownership of in excess of fifty percent (50%) of the voting stock of a corporation or (b) in the case of a non-corporate business entity, if it possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such corporation or non-corporate business entity, as applicable.


1.9 "Co-Promote" or "Co-Promotion" means the joint activities of the Parties to


3


Promote the Product under the SuperGen Trademark in the U.S. Territory.


1.10 "Competing Product" means any pharmaceutical product [________________________].


1.11 "Compound" means rubetican, known as 9-nitro-20 (S)-camptothecin, also known as 4-ethyl-4-hydroxy-9-nitro-1H-pyrano-[3',4':6,7] indolizino [1,2-b] quinolone-3, 14(4H, 12H)-dione; CAS. Reg. No. 7689-03-4.


1.12 [________________________]


1.13 "Current Good Clinical Practice" means clinical practice as set out in: (i) current Guidelines for Good Clinical Practice for Trials on Medicinal Products in the European Union; (ii) US Code of Federal Regulations Title 21, Chapter 50 (Protection of Human Subjects), Chapter 56 (Institutional Review Boards), and relevant final FDA Guidance and Points to Consider for drugs and/or biotechnology-derived products, as may be amended from time to time; or (iii) the equivalent current law or regulation in any market.


1.14 "Current Good Laboratory Practice" means laboratory practice as set out in: (i) Rules Governing Medicinal Products in the European Union Vol. III, ISBN 92.825 9619-2 (ex. OECD principles of GLP), as may be amended from time to time; (ii) US Code of Federal Regulations, Title 21, Chapter 58 (Good Laboratory Practice for Nonclinical Laboratory Studies), and relevant final FDA Guidance and Points to Consider for drugs and/or biotechnology-derived products, as may be amended from time to time; or (iii) the equivalent current law or regulation in any market.


1.15 "Current Good Manufacturing Practice" means manufacture in accordance with: (i) EC Directive 91/456/EEC, as may be amended from time to time; (ii) the current principles and guidelines of Good Manufacturing Practice for medicinal products for human use as required by, but not limited to, the applicable sections of the US Federal Food, Drug and Cosmetic Act, the US Public Health Service Act, the US Code of Federal Regulations, Title 21, Parts 210 (CURRENT GOOD MANUFACTURING PRACTICE IN MANUFACTURING, PROCESSING, PACKING, OR HOLDING OF DRUGS; GENERAL) and 211 (CURRENT GOOD MANUFACTURING PRACTICES FOR FINISHED PHARMACEUTICALS), and relevant final FDA Guidance and Points to Consider for drugs and/or biotechnology-derived products, as amended from time to time; or (iii) the equivalent current law or regulation in any market.


1.16 "Detail" means a face-to-face sales presentation by a Sales Representative during which the Product is marketed and promoted to an appropriate health care professional. This shall include, but not be limited to, discussions with health care professionals, meetings with or presentations to managed care entities, purchasing decision-makers or


4


formulary committees of health care providers, and participation in conventions and continuing education programs.


1.17 "Detailing" means the act of marketing and promoting the Product through Details.


1.18 "Discretionary Funds" means the miscellaneous costs and expenses which represent that portion of the U.S. Co-Promotion Budget that are used by the Sales Representatives in support of their Detailing and marketing activity for the Product.


1.19 "EMEA" means the European Medicines Evaluation Agency or any successor entity thereto in the European Union, provided that if submission for regulatory approval for the Product is made in the EU via the decentralized procedure, then reference to the "EMEA" in this Agreement shall be deemed a reference to the appropriate reference member state in the EU.


1.20 "FDA" means the U.S. Food and Drug Administration or any successor entity thereto.


1.21 "Finished Product" means the Product packaged and labeled for sale in accordance with applicable laws and regulations in the Territories.


1.22 "International Promotional Materials" means all electronic and computer managed information (including the Internet), all written, printed or graphic materials, brochures, sales aids and other promotional items relating to a Product approved for use in the International Territory, including but not limited to advertising, Continuing Medical Education programs, seminar presentations, symposia and speaker programs.


1.23 "International Territory" means all areas of the world outside the U.S. Territory.


1.24 "International Transfer Price" means the price for the sale of Product by SuperGen to Abbott in the International Territory as determined pursuant to Section 8.2(c).


1.25 "Know-How" means any proprietary technology (other than the Licensed Patents) owned by or licensed (with a right of sublicense) to SuperGen during the term of this Agreement relating to the Compound or the Product; including but not limited to, all pharmacological and toxicological data, including animal test results and human clinical data and evaluation reports, and all performance specifications.


1.26 "Launch" means the date upon which the first commercial sale of a Product by Abbott or its Affiliates to Third Parties (as evidenced by the invoice date for such sale) occurs in the Territories.


1.27 "Licensed Patents" means all patents and patent applications set forth in Exhibit 1.23 throughout the Territory, including without limitation substitutions,


5


extensions, additions, reissues, reexaminations, renewals, divisions, continuations, continuations-in-part or supplementary patent certificates thereof or therefor, owned by or licensed (with the right to sublicense) to SuperGen during the term of this Agreement relating to the Compound and/ or the Product.


1.28 "Losses" means any liabilities, costs, damages, judgments, settlements and other reasonable out-of-pocket expenses (including legal and other professional fees and expenses).


1.29 "Major European Countries" means France, Italy, Germany, Spain and the United Kingdom.


1.30 "Marketing Studies" means those clinical trials and studies (including, for the purposes of this Agreement, physician-held IND studies) which are performed essentially for marketing purposes and expressly excludes all clinical studies and trials which are required to pursue, obtain, and maintain Regulatory Approval in the Territories.


1.31 "Medicare/ Medicaid Rebates" means those rebates that are due to either U.S. federal or state administered programs on purchases of the Product by such programs as established by applicable U.S. federal or state law or regulation.


1.32 "NDA" means, with respect to each commercially launched Product, an approvable New Drug Application filed by SuperGen with the FDA for the U.S. Territory, and the equivalent regulatory submission with the applicable governmental authorities in the European Union and/ or in a given country in the International Territory, and all subsequent submissions to that NDA.


1.33 "Net Units of Product Sold" means the total number of units of Product which are sold by Abbott or its Affiliates to Third Parties during the given calendar quarter or year less any returned, recalled, damaged or any other such units of Product for which the customer has been credited the original sales price. For any given period, the Net Units of Product Sold shall equal that number of units of Product included in the calculation of Abbott Net Sales for the same period. The Net Units of Product Sold shall be calculated separately for the U.S. Territory and the International Territory.


1.34 "Party" means Abbott or SuperGen, and "Parties" means Abbott and SuperGen, except as provided in Section 20.2.


1.35 "Patent Protected" means, with respect to the Product in a specific country of the Territories, that the manufacture, use or sale of such Product in such country infringes a Valid Claim in such country.


1.36 "Person" means a natural person, a corporation, a partnership, a trust venture, any governmental authority, and any other entity or organization.


1.37 "Product" means any pharmaceutical product containing the Compound or a


6


derivative thereof as an active ingredient.


1.38 "Product Sales" means the total gross sales of the Product.


1.39 "Promote" or "Promotion" means the act of Detailing or otherwise advertising, marketing and promoting sales of the Product and conducting as necessary Marketing Studies.


1.40 "Regulatory Approval" means (i) with respect to the U.S. Territory, approval from the FDA to market a Product in the United States and (ii) with respect to the International Territory, all governmental approvals and authorizations necessary for the commercial sale of the Product in a country in the Territory, including but not limited to marketing authorization, pricing approval and pricing reimbursement, as applicable.


1.41 "Sales Representative" means, with respect to each Party, an individual: (i) who is regularly employed by such Party on a full-time or part-time basis as a member of one of its sales forces or as a field-based medical liaison representative or, with the written consent of the other Party, is retained on a contractual basis to act as a part of its sales force; and (ii) who is appropriately qualified and experienced in pharmaceutical product promotion to make effective sales presentations for the Product.


1.42 "Sales Year" means, for both the U.S. Territory and the International Territory, for the first Sales Year, a twelve (12) month period commencing on the date of Abbott's Launch of the Product in such Territory, or any succeeding twelve (12) month period.


1.43 "Sample Pack" means Product for distribution to Third Parties as professional samples not to be sold.


1.44 "Specifications" means written manufacturing release specifications, which shall be agreed between the Parties for, respectively, the Compound, the Product and the Finished Product, and attached to this Agreement as Exhibit 1.44.


1.45 "SuperGen Cost of Goods" means the [________________________] during the given calendar quarter or year, [________________________] during the given calendar quarter or year for (i) the [________________________]; (ii) any [________________________]; and (iii) [________________________]; and (iv) any [________________________]. The SuperGen


7


Cost of Goods shall be calculated separately for the U.S. Territory and the International Territory.


1.46 "SuperGen Distribution Margin" means the [________________________] for a given calendar quarter or year. The SuperGen Distribution Margin shall be calculated only for the U.S. Territory.


1.47 "SuperGen Operating Margin" means the [________________________] for a given calendar quarter or year. The SuperGen Operating Margin shall be calculated only for the U.S. Territory.


1.48 "SuperGen Product Sales" means the total aggregate [________________________] in the U.S. Territory during a given calendar quarter or year. The SuperGen Product Sales shall be calculated only for the U.S. Territory.


1.49 "SuperGen SG&A" means, with respect to the U.S. Territory during the given calendar quarter or year, the [________________________] in the advertising, Detailing, sales, marketing and promotion of the Product in the U.S. Territory and, to the extent permitted under Section 4.4, the [________________________] for the U.S. Territory for the Product during the given calendar quarter or year, in the categories set forth in Exhibit 1.8, provided that in no event shall SuperGen SG&A include any [________________________]. The SuperGen SG&A shall be calculated only for the U.S. Territory.


1.50 "SuperGen Technology" means the Licensed Patents and the Know-How.


1.51 "SuperGen Third Party Royalties" means the royalty payments made, for a given period during the term of this Agreement, by SuperGen to [________________________].


1.52 "SuperGen Trademark" means the trademark to be selected by the U.S. Marketing Board and registered by SuperGen for the Product in the U.S. Territory.


1.53 "Territories" means the U.S. Territory and the International Territory.


1.54 "Third Party" means any Person that is not a Party or an Affiliate of a Party.


8


1.55 "U.S. Product Profit" means the following: (i) with respect to the first calendar quarter of each year, the total of the [________________________] for such calendar quarter and (ii) for the second, third and fourth calendar quarters of each year, the total, for the subject calendar quarter and each previous calendar quarter during such calendar year, of the [________________________].


1.56 "U.S. Promotional Materials" means all electronic and computer managed information (including the Internet), all written, printed or graphic materials, brochures, sales aids and other promotional items relating to a Product approved by the U.S. Marketing Board for use in the U.S. Territory, including but not limited to advertising, Continuing Medical Education programs, audio programs, seminar presentations, symposia and speaker programs.


1.57 "U.S. Territory" means the continental United States of America, Hawaii and Alaska.


1.58 "U.S. Transfer Price" means the price for the sale of the Product by SuperGen to Abbott in the U.S. Territory pursuant to Section 8.2(b) below.


1.59 "Valid Claim" means (a) an issued claim of any unexpired patent included among the Licensed Patents, or (b) a pending claim of any pending patent application included among the Licensed Patents, which has not been held unenforceable, unpatentable or invalid by a decision of a court or governmental body of competent jurisdiction, unappealable or unappealed within the time allowed for appeal, which has not been rendered unenforceable through disclaimer or otherwise or which has not been lost through an interference proceeding.


ARTICLE 2: DISTRIBUTION AND PROMOTION


2.1 EXCLUSIVE DISTRIBUTOR. SuperGen hereby appoints Abbott, and Abbott hereby accepts appointment, as the exclusive distributor of the Product in the U.S. Territory and the International Territory, with the sole and exclusive right, exclusive even as to SuperGen, to sell commercially and to distribute the Product to Third Parties in the Territories, with the right to appoint Affiliate sub-distributors, and with the right to appoint Third Party sub-distributors with SuperGen's prior written consent, which consent shall not be unreasonably withheld or delayed.


2.2 RESERVATION OF RIGHTS. Except as expressly provided in this Article 2
and elsewhere in this Agreement, no right, title or interest is granted,
whether express or implied, by SuperGen to Abbott relating to other
SuperGen products. Nothing in this Agreement shall be deemed to restrict
SuperGen's right to exploit technology, know-how, patents or any other
intellectual property rights relating to other SuperGen products.


2.3 PROMOTION.


9


(a) SuperGen hereby grants to Abbott, and Abbott hereby accepts, the
exclusive right to Co-Promote the Product in the U.S. Territory jointly
with SuperGen. Neither Abbott nor SuperGen shall appoint any Third Party
to act on its behalf with respect to the Detailing of the Product in the
U.S. Territory. At any time during the term of this Agreement, if
SuperGen (or its successors or permitted assigns), at its sole
discretion, decides not to Co-Promote or to cease Co-Promoting the
Product in the U.S. Territory, SuperGen shall provide Abbott with at
least one hundred eighty (180) days prior written notice of such
decision. In such event, Abbott's right to Co-Promote the Product in the
U.S. Territory pursuant to this Article 2.3 shall automatically become
an exclusive right to Promote the Product in the U.S. Territory,
exclusive even as to SuperGen, without requiring any amendment of this
Agreement, effective one hundred eighty (180) days after receipt of such
notice from SuperGen.


(b) SuperGen hereby grants to Abbott, and Abbott hereby accepts, the
exclusive right, exclusive even as to SuperGen, to Promote the Product
in the International Territory, with the right to appoint Third Parties
to Co-Promote the Product in the International Territory.


2.4 NON-COMPETE. During the term of this Agreement, the Parties shall not
market, offer for sale or sell a Competing Product within the
Territories.


2.5 LICENSE.


(a) SuperGen hereby grants Abbott an exclusive license under the
SuperGen Technology to offer to sell and sell the Product in the U.S.
Territory, with the right to sub-license to Affiliates, and with the
right to sub-license to Third Parties with SuperGen's prior written
consent, such consent not to be unreasonably withheld or delayed. Such
license shall be exclusive even as to SuperGen, except to the extent
necessary to enable SuperGen to perform any obligations or activities
that SuperGen is required or permitted to perform under this Agreement.


(b) SuperGen hereby grants Abbott an exclusive license under the
SuperGen Technology to import, use, offer to sell and sell the Product
in the International Territory, with the right to sublicense. Such
license shall be exclusive even as to SuperGen, except to the extent
necessary to enable SuperGen to perform any obligations or activities
that SuperGen is required or permitted to perform under this Agreement.


(c) Solely for the purpose of enabling Abbott to exercise its rights
pursuant to Article 8.5 of this Agreement, SuperGen hereby grants Abbott
a non-exclusive license to make and have made the Product in the
Territories.


(d) If at any time during the term of this Agreement, the financial
resources of SuperGen are not reasonably sufficient to enable it to
continue to meet its


10


obligations hereunder for at least the next six months, SuperGen will so
notify Abbott and the parties will meet to review and consider steps
that might be taken to preserve Abbott's rights to the SuperGen
Technology under the terms of the Agreement.


2.6 RIGHTS TO ADDITIONAL PRODUCTS.


(a) SuperGen hereby grants to Abbott, and Abbott hereby accepts, a
right of first discussion with respect to all pharmaceutical compounds,
other than the Compound, which are licensed to, owned by and/ or
developed by SuperGen (regardless of their stage of development) as
provided herein. If SuperGen desires to sell, or grant any rights
relating to, any such compound, SuperGen shall first
[________________________].


(b) [________________________].


(c) [________________________].


(d) [________________________].


2.7 RIGHT OF FIRST REFUSAL FOR SUPERGEN ACQUISITION.


(a) In the event that SuperGen wishes to initiate an inquiry or
solicit an offer, or receives an offer or inquiry, from any Third Party
relating to the potential


11


merger with or acquisition of SuperGen or of a controlling portion of
the voting securities or substantially all of assets of SuperGen,
SuperGen shall first so notify Abbott ("Acquisition Offer Notice") and
Abbott shall have the right of first refusal to merge with or acquire
SuperGen or a controlling portion of the voting securities or
substantially all of assets of SuperGen.


(b) The Acquisition Offer Notice shall set forth the principal
financial and other terms under consideration by SuperGen. Abbott shall
have ninety (90) days from receipt of the Acquisition Offer Notice to
respond with either an offer to merger with or acquire SuperGen, or a
notice that Abbott is not interested in making any offer to merge with
or acquire SuperGen. If Abbott makes an offer to merge with or acquire
SuperGen, the Parties shall enter into good faith negotiations for such
merger or acquisition, and shall enter into a definitive agreement or
agreements in order to effect such merger or acquisition subject to the
terms and conditions of such definitive agreement or agreements. If the
Parties are unable to reach agreement and to enter into such definitive
agreement or agreements within ninety (90) days of the start of
negotiations, then SuperGen shall be free to initiate an inquiry or
solicit an offer, or to entertain an offer or inquiry, from any Third
Party relating to the potential merger with or acquisition of SuperGen
or of a controlling portion of the voting securities or substantially
all of assets of SuperGen; provided that SuperGen shall not enter into
...