SECURITIES PURCHASE AGREEMENT
Exhibit
10.14
This
Securities Purchase Agreement, dated on and as of the date set forth on the
signature page hereto (this “Agreement”),
is
made between Hana Biosciences, Inc., a Delaware corporation (the “Company”),
the
undersigned purchaser(s) (each a “Purchaser”
and
collectively, the “Purchasers”)
and
each assignee of a Purchaser who becomes a party hereto.
WHEREAS,
subject
to the terms and conditions set forth in this Agreement and pursuant to Section
4(2) of the Securities Act of 1933, as amended (the “Securities
Act”)
and
Rule 506 of Regulation D promulgated thereunder, the Company desires to offer,
issue and sell to the Purchasers (the “Offering”),
and
the Purchasers, severally and not jointly, desire to purchase from the Company,
shares (the “Shares”)
of the
Company’s common stock, par value $0.001 per share (the “Common
Stock”),
and
five-year warrants to purchase shares of Common Stock (the “Warrants”),
with
an exercise price per share equal to $5.80. The Shares and the Warrants are
collectively referred to herein as the “Securities”.
NOW,
THEREFORE,
in
consideration of the mutual covenants and agreements contained in this
Agreement, and for other good and valuable consideration the receipt and
adequacy of which is hereby acknowledged, the Company and each of the Purchasers
agree as follows:
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A.
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(1) Subject
to the conditions to closing set forth herein, each Purchaser hereby irrevocably
subscribes for and agrees to purchase Securities for the aggregate purchase
price set forth on the signature page of such Purchaser hereto (the
“Subscription
Amount”).
The
Securities to be issued to a Purchaser hereunder shall consist of (i)
Shares
in
an amount equal to the quotient of (x) the Subscription Amount, divided by
(y)
the Offering Price, rounded down to the nearest whole number, and (ii) a Warrant
to purchase such number of shares of Common Stock to be determined based on
a
ratio of one (1) share of Common Stock for every five (5) Shares purchased
hereunder, rounded down to the nearest whole number. This Agreement shall not
become binding on any Purchaser unless the aggregate Subscription Amount of
the
Purchasers is at least $10,000,000 (the “Minimum
Subscription Amount”).
The
aggregate amount of Securities to be issued pursuant to the Offering shall
not
exceed 3,686,729 Shares, which number represents approximately 19.99% of the
total shares of Common Stock outstanding on the date hereof, and Warrants to
purchase 737,345 shares of Common Stock. The
Company shall allocate the Subscription Amount between the Shares and the
Warrants prior to the Closing (as defined below) and provide notice to the
Purchasers of such allocation.
(2) For
purposes of this Agreement, the “Offering
Price”
shall
be $4.00, which shall be
the
price per Share to be paid by the Purchasers.
(3) As
soon
as possible, but no later than three (3) business days after the date of this
Agreement, the Company shall hold the closing of the Offering (the “Closing”
and the
date of the Closing, the “Closing
Date”).
Prior
to the Closing, each Purchaser shall deliver the applicable Subscription Amount,
by wire transfer to such escrow account in accordance with the wire transfer
instructions set forth on Schedule
A,
and
such amount shall be held in the manner described in Paragraph (4) below. The
receipt of funds for the Minimum Subscription Amount into the escrow account
referenced in Paragraph (4) below shall be a condition to each Purchaser’s
obligation to complete the purchase of the Securities as contemplated by this
Agreement.
(4) All
payments for Securities made by the Purchasers will be deposited as soon as
practicable for the undersigned’s benefit in a non-interest bearing escrow
account. Payments for Securities made by the Purchasers will be returned
promptly, prior to an applicable Closing, without interest or deduction, if,
or
to the extent, the undersigned’s subscription is rejected or the Offering is
terminated for any reason.
(5) Upon
receipt by the Company of the requisite payment for all Securities to be
purchased by the Purchasers, the Company shall, at the Closing: (i) issue to
each Purchaser stock certificates representing the shares of Common Stock
purchased at such Closing under this Agreement; (ii) issue to each Purchaser
a
Warrant to purchase such number of shares of Common Stock calculated based
on
the number of shares of Common Stock issued at such Closing and in accordance
with Paragraph (1) above; (iii) deliver to the Purchasers and to Xxxxxxxxxxx
& Co. Inc. and Xxxxxxx Securities, Inc., the co-placement agents for the
Offering (together, the “Placement
Agents”),
a
certificate stating that the representations and warranties made by the Company
in Section C of this Agreement were true and correct in all material respects
when made and are true and correct in all material respects on the date of
each
such Closing relating to the Securities subscribed for pursuant to this
Agreement as though made on and as of such Closing date (provided, however,
that
representations and warranties that speak as of a specific date shall continue
to be true and correct as of the Closing with respect to such date); (iv) have
obtained from AMEX written approval of the Company’s additional listing
application relating to the Securities to be issued hereunder; and (v) cause
to
be delivered to the Placement Agents and the Purchasers an opinion of Xxxxxx
Xxxxxxx Xxxxxx & Brand, LLP substantially in the form of Exhibit
A
hereto
and reasonably acceptable to counsel for the Placement Agents. The obligations
of the Company described in the foregoing clauses (i) through (v) shall be
conditions precedent to each Purchaser’s obligation to complete the purchase of
the Securities as contemplated by this Agreement.
(6) Each
Purchaser acknowledges and agrees that the purchase of Shares and Warrants
by
such Purchaser pursuant to the Offering is subject to all the terms and
conditions set forth in this Agreement.
Each
Purchaser, severally and not jointly, hereby represents and warrants to the
Company and the Placement Agents, and agrees with the Company as
follows:
(1) The
Purchaser has carefully read this Agreement and the form of Warrant attached
hereto as Exhibit
B
(collectively the “Offering
Documents”),
and
is familiar with and understands the terms of the Offering. Specifically, and
without limiting in any way the foregoing representation, the
Purchaser has carefully read and considered the Company’s (a) Annual Report on
Form 10-KSB for the fiscal year ended December 31, 2004 (the “2004
Form 10-KSB”),
including, without limitation, the financial statements included therein and
the
sections therein entitled “Item 1. Business,”“Risk Factors” (which immediately
follows “Item 1. Business”), and “Management’s Discussion and Analysis of
Financial Condition and Results of Operations,” and (b) Quarterly Reports on
Form 10-QSB for the quarters ended March 31, 2005 and June 30, 2005,
respectively, including, without limitation, the subsections of each such Form
10-QSB entitled “Item 1. Financial Statements,” and “Item 2. Management’s
Discussion and Analysis of Financial Condition and Results of Operations.” The
Purchaser fully understands all of the risks related to the purchase of the
Securities. The
Purchaser has carefully considered and has discussed with the Purchaser’s
professional legal, tax, accounting and financial advisors, to the extent the
Purchaser has deemed necessary, the suitability of an investment in the
Securities for the Purchaser’s particular tax and financial situation and has
determined that the Securities being subscribed for by the Purchaser are a
suitable investment for the Purchaser. The
Purchaser recognizes that an investment in the Securities involves substantial
risks, including the possible loss of the entire amount of such investment.
The
Purchaser further recognizes that the Company has broad discretion concerning
the use and application of the proceeds from the Offering.
(2) The
Purchaser acknowledges that (i) the Purchaser has had the opportunity to request
copies of any documents, records, and books pertaining to this investment and
(ii) any such documents, records and books that the Purchaser requested have
been made available for inspection by the Purchaser, the Purchaser’s attorney,
accountant or advisor(s).
(3) The
Purchaser and the Purchaser’s advisor(s) have had a reasonable opportunity to
ask questions of and receive answers from representatives of the Company or
persons acting on behalf of the Company concerning the Offering and all such
questions have been answered to the full satisfaction of the
Purchaser.
(4) The
Purchaser is not subscribing for Securities as a result of or subsequent to
any
advertisement, article, notice or other communication published in any
newspaper, magazine or similar media or broadcast over television or radio
or
presented at any seminar, meeting or conference whose attendees have been
invited by any general solicitation or general advertising.
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(5) If
the
Purchaser is a natural person, the Purchaser has reached the age of majority
in
the state in which the Purchaser resides. Each Purchaser has adequate means
of
providing for the Purchaser’s current financial needs and contingencies, is able
to bear the substantial economic risks of an investment in the Securities for
an
indefinite period of time, has no need for liquidity in such investment and
can
afford a complete loss of such investment.
(6) The
Purchaser has sufficient knowledge and experience in financial, tax and business
matters to enable the Purchaser to utilize the information made available to
the
Purchaser in connection with the Offering, to evaluate the merits and risks
of
an investment in the Securities and to make an informed investment decision
with
respect to an investment in the Securities on the terms described in the
Offering Documents.
(7) The
Purchaser will not sell or otherwise transfer the Securities without
registration under the Securities Act and applicable state securities laws
or an
applicable exemption therefrom. The Purchaser acknowledges that neither the
offer nor sale of the Securities has been registered under the Securities Act
or
under the securities laws of any state. The Purchaser represents and warrants
that the Purchaser is acquiring the Securities for the Purchaser’s own account,
for investment and not with a view toward resale or distribution within the
meaning of the Securities Act. The Purchaser has not offered or sold the
Securities being acquired nor does the Purchaser have any present intention
of
selling, distributing or otherwise disposing of such Securities either currently
or after the passage of a fixed or determinable period of time or upon the
occurrence or non-occurrence of any predetermined event or circumstances in
violation of the Securities Act. The Purchaser is aware that (i) the Securities
are not currently eligible for sale in reliance upon Rule 144 promulgated under
the Securities Act and (ii) the Company has no obligation to register the
Securities subscribed for hereunder, except as provided in Section E
hereof.
By
making these representations herein, Purchaser is not making any representation
or agreement to hold the Securities for any minimum or other specific term
and
reserves the right to dispose of the Securities at any time in accordance with
or pursuant to a registration statement or an available exemption to the
registration requirements of the Securities Act.
(8) The
Purchaser acknowledges that the certificates representing the Shares, the
Warrants and, upon the exercise of the Warrants, the shares of Common Stock
issuable upon exercise of the Warrants (the “Warrant
Shares”),
be
stamped or otherwise imprinted with a legend substantially in the following
form:
The
securities represented hereby have not been registered under the Securities
Act
of 1933, as amended, or any state securities laws and neither the securities
nor
any interest therein may be offered, sold, transferred, pledged or otherwise
disposed of except pursuant to an effective registration under such act or
an
exemption from registration, which, in the opinion of counsel reasonably
satisfactory to this corporation, is available.
Certificates
evidencing the Shares and the Warrant Shares shall not be required to contain
such legend or any other legend (i) following any sale of such Shares or Warrant
Shares pursuant to Rule 144, or (ii) if such Shares or Warrant Shares are
eligible for sale under Rule 144(k) or have been sold pursuant to the
Registration Statement (as hereafter defined) and in compliance with the
obligations set forth in Section E(6), below, or (iii) such legend is not
required under applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the Staff of the Securities and
Exchange Commission), in each such case (i) through (iii) to the extent
reasonably determined by the Company’s legal counsel. Notwithstanding the
foregoing, following the effective date of the Registration Statement, the
legend set forth above may, at the request of the Purchaser, be removed from
the
certificates evidencing such Shares and Warrant Shares prior to the resale
thereof and the Company will rescind any stop transfer orders with respect
to
such shares given to the Company’s transfer agent, provided that such Purchaser
represents and covenants to the Company in writing (in a form reasonably
acceptable to the Company and its counsel) that (1) the Purchaser will sell
such
shares only pursuant to and in the manner contemplated by the Registration
Statement, including the Plan of Distribution section contained therein (in
substantially the form attached hereto as Exhibit E), and otherwise in
compliance with the Securities Act, including the prospectus delivery
requirements of such act, (2) the Purchaser will indemnify the Company for
any
damages or losses resulting to the Company for the Purchaser’s breach of its
representation and covenant described in the foregoing clause (1), and (3)
such
other agreements or covenants as the Company or its counsel may reasonably
request. Subject to the foregoing, at such time and to the extent a legend
is no
longer required for the Shares or Warrant Shares, the Company will use its
best
efforts to no later than three (3) trading days following the delivery by a
Purchaser to the Company or the Company’s transfer agent of a legended
certificate representing such Shares or Warrant Shares (together with such
accompanying documentation or representations as reasonably required by counsel
to the Company), deliver or cause to be delivered a certificate representing
such Shares or Warrant Shares that is free from the foregoing legend.
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(9) If
this
Agreement is executed and delivered on behalf of a partnership, corporation,
trust, estate or other entity: (i) such partnership, corporation, trust, estate
or other entity has the full legal right and power and all authority and
approval required (a) to execute and deliver this Agreement and all other
instruments executed and delivered by or on behalf of such partnership,
corporation, trust, estate or other entity in connection with the purchase
of
its Securities, and (b) to purchase and hold such Securities; (ii) the signature
of the party signing on behalf of such partnership, corporation, trust, estate
or other entity is binding upon such partnership, corporation, trust, estate
or
other entity; and (iii) such partnership, corporation, trust or other entity
has
not been formed for the specific purpose of acquiring such Securities, unless
each beneficial owner of such entity is qualified as an accredited investor
within the meaning of Rule 501(a) of Regulation D promulgated under the
Securities Act and has submitted information to the Company substantiating
such
individual qualification.
(10) If
the
Purchaser is a retirement plan or is investing on behalf of a retirement plan,
the Purchaser acknowledges that an investment in the Securities poses additional
risks, including the inability to use losses generated by an investment in
the
Securities to offset taxable income.
(11) The
information contained in the purchaser questionnaire in the form of Exhibit
C
attached
hereto (the “Purchaser
Questionnaire”)
delivered by the Purchaser in connection with this Agreement is complete and
accurate in all respects, and the Purchaser is an “accredited investor” as
defined in Rule 501 of Regulation D under the Securities Act on the basis
indicated therein. The Purchaser shall indemnify and hold harmless the Company
and each officer, director or control person, who is or may be a party or is
or
may be threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of or arising from any actual or alleged
misrepresentation or misstatement of facts or omission to represent or state
facts made or alleged to have been made by the Purchaser to the Company or
omitted or alleged to have been omitted by the Purchaser, concerning the
Purchaser or the Purchaser’s authority to invest or financial position in
connection with the Offering, including, without limitation, any such
misrepresentation, misstatement or omission contained in the Agreement or any
other document submitted by the Purchaser, against losses, liabilities and
expenses for which the Company or any officer, director or control person has
not otherwise been reimbursed (including attorney’s fees, judgments, fines and
amounts paid in settlement) actually and reasonably incurred by the Company
or
such officer, director or control person in connection with such action, suit
or
proceeding. For the avoidance of doubt, such indemnification shall be the
several, and not joint, obligation of each Purchaser with respect to its own
action or inaction as provided above.
(12) The
information contained in the selling stockholder questionnaire in the form
of
Exhibit
D
attached
hereto (the “Selling
Stockholder Questionnaire”)
delivered
by the Purchaser in connection with this Agreement is complete and accurate
in
all respects.
(13) The
Purchaser acknowledges that the Company will have the authority to issue shares
of Common Stock, in excess of those being issued in connection with the
Offering, and that the Company may issue additional shares of Common Stock
from
time to time. The issuance of additional shares of Common Stock may cause
dilution of the existing shares of Common Stock and a decrease in the market
price of such existing shares.
(14) The
Purchaser acknowledges that the Company has engaged the Placement Agents in
connection with the Offering and, as consideration for their services, has
agreed to pay the Placement Agents an aggregate cash commission equal to seven
percent (7%) of the gross proceeds resulting from the Offering and issue a
warrant (the “Placement
Agent Warrant”)
to
purchase a number of shares of Common Stock equal to six percent (6%) of the
aggregate Shares sold in the Offering. The Placement Agent Warrant will have
a
term of five years and be exercisable at a price equal to the exercise price
of
the Warrant issued to Purchaser hereunder.
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The
Company hereby makes the following representations and warranties to the
Purchaser and the Placement Agents, which shall survive the Closing and the
purchase and sale of the Securities.
(1) Organization,
Good Standing and Qualification.
The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has full corporate power and
authority to conduct its business as currently conducted. The Company is duly
qualified to do business as a foreign corporation and is in good standing in
all
jurisdictions in which the character of the property owned or leased or the
nature of the business transacted by it makes qualification necessary, except
where the failure to be so qualified would not have a material adverse effect
on
the business, properties, prospects, financial condition or results of
operations of the Company (a “Material
Adverse Effect”).
(2) Capitalization.
The
authorized capital stock of the Company consists of 100,000,000 shares of Common
Stock and 10,000,000 shares of preferred stock, par value $0.001 per share.
As
of
October 14, 2005, there
were 18,433,650 shares
of
Common Stock and no shares of preferred stock issued and outstanding. As of
October 14, 2005, the Company had reserved (i) 1,410,068 shares of Common Stock
for issuance to employees, directors and consultants pursuant to the Company’s
2003 Stock Option Plan, of which 704,296 shares of Common Stock are subject
to
outstanding, unexercised options as of such date, (ii) 2,500,000 shares of
Common Stock for issuance to employees, directors and consults pursuant to
the
Company’s 2004 Stock Incentive Plan, of which 1,034,504 shares of Common Stock
are subject to outstanding, unexercised options as of such date, and (iii)
2,483,263 shares of Common Stock reserved for issuance pursuant to other
outstanding options and warrants to purchase Common Stock. Other than as set
forth above or as contemplated in this Agreement, there are no other options,
warrants, calls, rights, commitments or agreements of any character to which
the
Company is a party or by which either the Company is bound or obligating the
Company to issue, deliver, sell, repurchase or redeem, or cause to be issued,
delivered, sold, repurchased or redeemed, any shares of the capital stock of
the
Company or obligating the Company to grant, extend or enter into any such
option, warrant, call, right, commitment or agreement. The
issuance and sale of the Securities contemplated hereby will not give rise
to
any preemptive rights, rights of first refusal or other similar rights on behalf
of any person, other than the Company’s obligation to issue an option to Xxxx X.
Xxx following completion of the transactions contemplated hereby, as described
on that certain Employment Agreement dated November 1, 2003, as amended on
October 21, 2004, by and between the Company and Xx. Xxx (which agreement is
incorporated by reference as Exhibits 10.1 and 10.11 to the 2004 Form
10-KSB).
(3) Issuance;
Reservation of Shares.
The
issuance of the Shares has been duly and validly authorized by all necessary
corporate and stockholder action, and the Shares, when issued and paid for
pursuant to this Agreement, will be validly issued, fully paid and
non-assessable shares of Common Stock of the Company. The issuance of the
Warrants has been duly and validly authorized by all necessary corporate and
stockholder action, and the Warrant Shares, when issued upon the due exercise
of
the Warrants, will be validly issued, fully paid and non-assessable shares
of
Common Stock of the Company. The Company has reserved, and will reserve, at
all
times that the Warrants or Placement Agent Warrants remain outstanding, such
number of shares of Common Stock sufficient to enable the full exercise of
the
Warrants and the Placement Agent Warrants.
(4) Authorization;
Enforceability.
The
Company has all corporate right, power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby. All corporate
action on the part of the Company, its directors and stockholders necessary
for
the authorization, execution, delivery and performance of this Agreement by
the
Company, the authorization, sale, issuance and delivery of the Securities
contemplated herein and the performance of the Company’s obligations hereunder
has been taken. This Agreement has been duly executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms and subject to
laws
of general application relating to bankruptcy, insolvency and the relief of
debtors and rules of law governing specific performance, injunctive relief
or
other equitable remedies, and to limitations of public policy.
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(a) The
execution and delivery by the Company of this Agreement and the consummation
of
the transactions contemplated hereby will not result in the violation of any
law, statute, rule, regulation, order, writ, injunction, judgment or decree
of
any court or governmental authority to or by which the Company is bound, or
of
any provision of the Certificate of Incorporation or Bylaws of the Company,
and
will not conflict with, or result in a breach or violation of, any of the terms
or provisions of, or constitute (with due notice or lapse of time or both)
a
default under, any lease, loan agreement, mortgage, security agreement, trust
indenture or other agreement or instrument to which the Company is a party
or by
which it is bound or to which any of its properties or assets is subject, nor
result in the creation or imposition of any lien upon any of the properties
or
assets of the Company except to the extent that any such violation, conflict
or
breach would not be reasonably likely to have a Material Adverse Effect.
No
holder
of any of the securities of the Company or any of its Subsidiaries has any
rights (“demand,”“piggyback” or otherwise) to have such securities registered by
reason of the intention to file, filing or effectiveness of a Registration
Statement (as defined in Section E hereof), other than those persons identified
as “selling stockholders” in the registration statements filed by the Company
under the Securities Act on Form SB-2 (SEC File Nos. 333-118426 and
333-125083).
(b) Except
for the approval of the American Stock Exchange (the “AMEX”),
no
consent, approval, authorization or other order of any governmental authority
or
other third-party is required to be obtained by the Company in connection with
the authorization, execution and delivery of this Agreement or with the
authorization, issue and sale of the Securities, except such post-Closing
filings as may be required to be made with the Securities and Exchange
Commission (the “SEC”),
AMEX
and
with
any state or foreign blue sky or securities regulatory authority.
(6) Litigation.
There
are no pending or, to the Company’s knowledge, threatened legal or governmental
proceedings against the Company, which, if adversely determined, would be
reasonably likely to have a Material Adverse Effect on the Company. There
is
no action, suit, proceeding, inquiry or investigation before or by any court,
public board or body (including, without limitation, the SEC) pending or, to
the
knowledge of the Company, threatened against or affecting the Company or any
of
its Subsidiaries wherein an unfavorable decision, ruling or finding could
adversely affect the validity or enforceability of, or the authority or ability
of the Company to perform its obligations under the Agreements. The Company
has
not received any notice from its counsel that the Company is exposed to any
liability that would reasonably be expected to have a Material Adverse Effect
on
the Company.
(7) Accuracy
of Reports.
All
reports required to be filed by the Company within the two years prior to the
date of this Agreement (the “SEC
Reports”)
under
the Securities Exchange Act of 1934, as amended (the “Exchange
Act”),
have
been filed with the SEC, complied at the time of filing in all material respects
with the requirements of their respective forms and, except to the extent
updated or superseded by any subsequently filed report, were complete and
correct in all material respects as of the dates at which the information was
furnished, and contained (as of such dates) no untrue statements of a material
fact nor omitted to state any material fact necessary in order to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading.
(8) Financial
Information.
The
Company’s financial statements that appear in the SEC Reports have been prepared
in accordance with United States generally accepted accounting principles
(“GAAP”),
except in the case of unaudited statements, as permitted by Form 10-QSB of
the
SEC or as may be indicated therein or in the notes thereto, applied
on a consistent basis throughout the periods indicated and such financial
statements fairly present in all material respects the financial condition
and
results of operations of the Company as of the dates and for the periods
indicated therein.
(9) Accounting
Controls.
The
Company maintains a system of internal accounting controls sufficient to provide
reasonable assurances that (i) transactions are executed in accordance with
management’s general or specific authorization; (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
GAAP and to maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets is compared
with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
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(10) Xxxxxxxx-Xxxxx
Act of 2002.
The
Company is, and will be, at all times during the period the Company must
maintain effectiveness of the Registration Statement as provided herein, in
compliance, in all material respects, with all applicable provisions of the
Xxxxxxxx-Xxxxx Act of 2002 and all rules and regulations promulgated thereunder
or implementing the provisions thereof that are in effect and is taking
reasonable steps to ensure that it will be in compliance with other applicable
provisions of the Xxxxxxxx-Xxxxx Act of 2002 not currently in effect upon the
effectiveness of such provisions.
(11) Absence
of Certain Changes.
Since
the date of the Company’s financial statements in the latest of the SEC Reports,
there has not occurred any undisclosed event that has caused a Material Adverse
Effect or any occurrence, circumstance or combination thereof that reasonably
would be likely to result in such Material Adverse Effect.
(12) Investment
Company.
The
Company is not an “investment company” within the meaning of such term under the
Investment Company Act of 1940, as amended, and the rules and regulations of
the
SEC thereunder.
(13) Subsidiaries.
The
Company has no subsidiaries. For the purposes of this Agreement, “subsidiary”
shall mean any company or other entity of which at least 50% of the securities
or other ownership interest having ordinary voting power for the election of
directors or other persons performing similar functions are at the time owned
directly or indirectly by the Company or any of its other
subsidiaries.
(14) Indebtedness.
The
financial statements in the SEC Reports reflect, to the extent required, as
of
the date thereof all outstanding secured and unsecured Indebtedness (as defined
below) of the Company or any subsidiary, or for which the Company or any
subsidiary has commitments. For purposes of this Agreement, “Indebtedness”
shall
mean (a) any liabilities for borrowed money or amounts owed (other than trade
accounts payable incurred in the ordinary course of business), (b) all
guaranties, endorsements and other contingent obligations in respect of
Indebtedness of others, whether or not the same are or should be reflected
in
the Company’s balance sheet (or the notes thereto), except guaranties by
endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business; and (c) the present value
of
any lease payments due under leases required to be capitalized in accordance
with GAAP. The Company is not in default with respect to any
Indebtedness.
(15) Certain
Fees.
Other
than fees payable to the Placement Agents,
no
brokers’, finders’ or financial advisory fees or commissions will be payable by
the Company with respect to the transactions contemplated by this
Agreement.
(16) Material
Agreements.
Except
as set forth in the SEC Reports, the Company is not a party to any written
or
oral contract, instrument, agreement, commitment, obligation, plan or
arrangement, a copy of which would be required to be filed with the SEC as
an
exhibit to Form 10-KSB (each, a “Material
Agreement”).
The
Company and each of its subsidiaries has in all material respects performed
all
the obligations required to be performed by them to date under the foregoing
agreements, have received no notice of default by the Company or the subsidiary
that is a party thereto, as the case may be, and, to the Company’s knowledge,
are not in default under any Material Agreement now in effect, the result of
which would be reasonably likely to have a Material Adverse Effect.
(17) Transactions
with Affiliates.
Except
as set forth in the SEC Reports, there are no loans, leases, agreements,
contracts, royalty agreements, management contracts or arrangements or other
continuing transactions between (a) the Company or any of its customers or
suppliers on the one hand, and (b) on the other hand, any person who would
be
covered by Item 404(a) of Regulation S-B or any company or other entity
controlled by such person.
(18) Taxes.
The
Company has prepared and filed all federal, state, local, foreign and other
tax
returns for income, gross receipts, sales, use and other taxes and custom duties
(“Taxes”)
required by law to be filed by it, except for tax returns, the failure to file
which, individually or in the aggregate, do not and would not have a Material
Adverse Effect on the Company. Such filed tax returns are complete and accurate,
except for such omissions and inaccuracies which, individually or in the
aggregate, do not and would not have a Material Adverse Effect on the Company.
The Company has paid or made provisions for the payment of all Taxes shown
to be
due on such tax returns and all additional assessments, and adequate provisions
have been and are reflected in the financial statements of the Company and
the
subsidiaries for all current Taxes to which the Company or any subsidiary is
subject and which are not currently due and payable, except for such Taxes
which, if unpaid, individually or in the aggregate, do not and would not have
a
Material Adverse Effect on the Company. None of the federal income tax returns
of the Company for the past five years has been audited by the Internal Revenue
Service. The Company has not received written notice of any assessments,
adjustments or contingent liability (whether federal, state, local or foreign)
in respect of any Taxes pending or threatened against the Company or any
subsidiary for any period which, if unpaid, would have a Material Adverse Effect
on the Company.
7
(19) Insurance.
The
Company is insured by insurers of recognized financial responsibility against
such losses and risks and in such amounts as the Company believes are prudent
and customary in the businesses in which the Company is engaged. The Company
has
no reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business without an
increase in cost significantly greater than general increases in cost
experienced for similar companies in similar industries with respect to similar
coverage.
(20) Environmental
Matters.
Except
as disclosed in the SEC Reports, all real property owned, leased or otherwise
operated by the Company is free of contamination from any substance, waste
or
material currently identified to be toxic or hazardous pursuant to, within
the
definition of a substance which is toxic or hazardous under, or which may result
in liability under, any Environmental Law (as defined below), including, without
limitation, any asbestos, polychlorinated biphenyls, radioactive substance,
methane, volatile hydrocarbons, industrial solvents, oil or petroleum or
chemical liquids or solids, liquid or gaseous products, or any other material
or
substance (“Hazardous
Substance”)
which
has caused or would reasonably be expected to cause or constitute a threat
to
human health or safety, or an environmental hazard in violation of Environmental
Law or to result in any environmental liabilities that would be reasonably
likely to have a Material Adverse Effect. The Company has not caused or suffered
to occur any release, spill, migration, leakage, discharge, disposal,
uncontrolled loss, seepage, or filtration of Hazardous Substances that would
reasonably be expected to result in environmental liabilities that would be
reasonably likely to have a Material Adverse Effect. The Company has generated,
treated, stored and disposed of any Hazardous Substances in compliance with
applicable Environmental Laws, except for such non-compliances that would not
be
reasonably likely to have a Material Adverse Effect. The Company has obtained,
or has applied for, and is in compliance with and in good standing under all
permits required under Environmental Laws (except for such failures that would
not be reasonably likely to have a Material Adverse Effect) and the Company
has
no knowledge of any proceedings to substantially modify or to revoke any such
permit. There are no investigations, proceedings or litigation pending or,
to
the Company's knowledge, threatened against the Company or any of the Company’s
facilities relating to Environmental Laws or Hazardous Substances. “Environmental
Laws”
shall
mean all federal, national, state, regional and local laws, statutes, ordinances
and regulations, in each case as amended or supplemented from time to time,
and
any judicial or administrative interpretation thereof, including orders, consent
decrees or judgments relating to the regulation and protection of human health,
safety, the environment and natural resources.
(21) Intellectual
Property Rights and Licenses.
The
Company owns or has the right to use any and all information, know-how, trade
secrets, patents, copyrights, trademarks, service marks, trade names, domain
names, software, formulae, methods, processes and other intangible properties
that are of a such nature and significance to the business that the failure
to
own or have the right to use such items would have a Material Adverse Effect
(“Intangible
Rights”).
The
Company has not received any notice that it is in conflict with or infringing
upon the asserted intellectual property rights of others in connection with
the
Intangible Rights, and, to the Company’s knowledge, neither the use of the
Intangible Rights nor the operation of the Company’s businesses is infringing or
has infringed upon any intellectual property rights of others. All payments
have
been duly made that are necessary to maintain the Intangible Rights in force.
No
claims have been made, and to the Company’s knowledge, no claims are threatened,
that challenge the validity or scope of any material Intangible Right of the
Company. The Company has taken reasonable steps to obtain and maintain in force
all licenses and other permissions under Intangible Rights of third parties
necessary to conduct their businesses as heretofore conducted by them, and
now
being conducted by them, and as expected to be conducted, and the Company is
not
or has not been in material breach of any such license or other permission.
8
(a) There
are
no existing, or to the best of the Company’s knowledge, threatened strikes or
other labor disputes against the Company that would be reasonably likely to
have
a Material Adverse Effect. Except as set forth in the SEC Reports, there is
no
organizing activity involving employees of the Company pending or, to the
Company’s or its subsidiaries’ knowledge, threatened by any labor union or group
of employees. There are no representation proceedings pending or, to the
Company’s knowledge, threatened with the National Labor Relations Board, and no
labor organization or group of employees of the Company or its subsidiaries
has
made a pending demand for recognition.
(b) Except
as
set forth in the SEC Reports, the Company is not, or during the five years
preceding the date of this Agreement was not, a party to any labor or collective
bargaining agreement and there are no labor or collective bargaining agreements
which pertain to employees of the Company.
(c) Each
employee benefit plan is in compliance with all applicable law, except for
such
noncompliance that would not be reasonably likely to have a Material Adverse
Effect.
(d) The
Company does not have any liabilities, contingent or otherwise, including
without limitation, liabilities for retiree health, retiree life, severance
or
retirement benefits, which are not fully reflected, to the extent required
by
GAAP, on the Balance Sheet or fully funded. The term “liabilities” used in the
preceding sentence shall be calculated in accordance with reasonable actuarial
assumptions.
(e) The
Company has not (i) terminated any “employee pension benefit plan” as defined in
Section 3(2) of ERISA (as defined below) under circumstances that present a
material risk of the Company or any of its subsidiaries incurring any liability
or obligation that would be reasonably likely to have a Material Adverse Effect,
or (ii) incurred or expects to incur any outstanding liability under Title
IV of
the Employee Retirement Income Security Act of 1974, as amended and all rules
and regulations promulgated thereunder (“ERISA”).
(23) Compliance
with Law.
The
Company is in compliance in all material respects with all applicable laws,
except for such noncompliance that would not reasonably be likely to have a
Material Adverse Effect. The Company has not received any notice of, nor does
the Company have any knowledge of, any violation (or of any investigation,
inspection, audit or other proceeding by any governmental entity involving
allegations of any violation) of any applicable law involving or related to
the
Company which has not been dismissed or otherwise disposed of that would be
reasonably likely to have a Material Adverse Effect. The Company has not
received notice or otherwise has any knowledge that the Company is charged
with,
threatened with or under investigation with respect to, any violation of any
applicable law that would reasonably be likely to have a Material Adverse
Effect.
Neither
the Company nor any of its subsidiaries nor any employee or agent of the Company
or any subsidiary has made any contribution or other payment to any official
of,
or candidate for, any federal, state or foreign office in violation of any
law.
The Company and its directors, officers, employees and agents have complied
in
all material respects with the Foreign Corrupt Practices Act of 1977, as
amended, and any related rules and regulations.
(24) Ownership
of Property.
Except
as set forth in the Company’s financial statements included in the SEC Reports,
the Company and has (i) good and marketable fee simple title to its owned real
property, if any, free and clear of all liens, except for liens which do not
individually or in the aggregate have a Material Adverse Effect; (ii) a valid
leasehold interest in all leased real property, and each of such leases is
valid
and enforceable in accordance with its terms (subject to laws of general
application relating to bankruptcy, insolvency and the relief of debtors and
rules of law governing specific performance, injunctive relief or other
equitable remedies, and to limitations of public policy) and is in full force
and effect, and (iii) good title to, or valid leasehold interests in, all of
its
other properties and assets free and clear of all liens, except for liens
disclosed in the SEC Reports or which otherwise do not individually or in the
aggregate have a Material Adverse Effect.
(25) Compliance
with AMEX Listing Requirements.
The
Company is in compliance in all material respects with all currently effective
AMEX continued listing requirements and corporate governance requirements.
The
Company’s Common Stock is registered pursuant to Section 12(b) of the Exchange
Act and is listed on AMEX, trading in the Common Stock has not been suspended,
and the Company has taken no action designed to, or likely to have the effect
of, terminating the registration of the Common Stock under the Exchange Act
or
de-listing the Common Stock from AMEX, nor to the Company’s knowledge is AMEX
currently contemplating terminating such listing. The Company and the Common
Stock meet the criteria for continued listing and trading on AMEX.
9
(26) No
Integrated Offering.
Assuming the accuracy of each Purchaser’s representations and warranties set
forth in Section B hereof, neither the Company, nor any of its affiliates or
other person acting on the Company’s behalf has, directly or indirectly, made
any offers or sales of any security or solicited any offers to buy any security
under circumstances that would cause the Offering of the Securities to be
integrated with prior offerings by the Company for purposes of the Securities
Act, when integration would cause the Offering not to be exempt from the
requirements of Section 5 of the Securities Act.
(27) General
Solicitation.
Neither
the Company nor, its knowledge, any person acting on behalf of the Company,
has
offered or sold any of the Securities by any form of “general solicitation”
within the meaning of Rule 502 under the Securities Act. To the knowledge of
the
Company, no person acting on its behalf has offered the Securities for sale
other than to the Purchasers and certain other “accredited investors” within the
meaning of Rule 501 under the Securities Act.
(28) No
Manipulation of Stock.
The
Company has not taken and will not, in violation of applicable law, take, any
action designed to or that might reasonably be expected to cause or result
in
stabilization or manipulation of the price of the Common Stock to facilitate
the
sale or resale of the Securities.
(29) No
Registration.
Assuming the accuracy of the representations and warranties made by, and
compliance with the covenants of, the Purchasers in Section B hereof, no
registration of the Securities under the Securities Act is required in
connection with the offer and sale of the Securities by the Company to the
Purchasers as contemplated by this Agreement.
(30) Form
D.
The
Company agrees to file one or more Forms D with respect to the Securities on
a
timely basis as required under Regulation D under the Securities Act to claim
the exemption provided by Rule 506 of Regulation D and to provide a copy thereof
to the Purchasers and their counsel promptly after such filing.
(31) Certain
Future Financings and Related Actions.
The
Company will not sell, offer to sell, solicit offers to buy or otherwise
negotiate in respect of any “security” (as defined in the Securities Act) that
is or could be integrated with the sale of the Securities in a manner that
would
require the registration of the Securities under the Securities
Act.
(32) Use
of
Proceeds.
The
Company intends that the net proceeds from the Offering will be used to fund
the
continued development of its product candidates (including, without
limitation, expenses relating to conducting clinical trials and milestones
payments that may be triggered under the license agreements relating to such
product candidates), for working capital and for other general corporate
purposes; provided,
however,
that
the Company has broad discretion with regard to the use of such proceeds and
nothing herein shall restrict the Company’s ability to apply such proceeds in a
manner different than set forth above.
(33) Disclosure.
The
Company understands and confirms that each of the Purchasers will rely on the
foregoing representations in effecting transactions in securities of the
Company. All disclosure provided by the Company to the Purchasers regarding
the
Company, its business and the transactions contemplated hereby furnished by
or
on the behalf of the Company are true and correct in all material respects
and
do not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading. To the
Company’s knowledge, no material event or circumstance has occurred or
information exists with respect to the Company or its business, properties,
operations or financial conditions, which, under applicable law, rule or
regulation, requires public disclosure or announcement by the Company but which
has not been so publicly announced or disclosed.
10
Each
of
the Purchasers understands, acknowledges and agrees with the Company as
follows:
(1) The
execution of this Agreement by the Purchaser or solicitation of the investment
contemplated hereby shall create no obligation on the part of the Company or
the
Placement Agents to accept any subscription or complete the Offering. If the
Company accepts a subscription for Securities made by a Purchaser, it shall
countersign this Agreement within one business day of its submission by
Purchaser.
(2) No
federal or state agency or authority has made any finding or determination
as to
the accuracy or adequacy of the Offering Documents or as to the fairness of
the
terms of the Offering nor any recommendation or endorsement of the
Securities.
Any
representation to the contrary is a criminal offense. In making an investment
decision, Purchasers must rely on their own examination of the Company and
the
terms of the Offering, including the merits and risks involved.
(3) The
Offering is intended to be exempt from registration under the Securities Act
by
virtue of Section 4(2) of the Securities Act and the provisions of Rule 506
of
Regulation D thereunder, which is in part dependent upon the truth, completeness
and accuracy of the statements made by the Purchaser herein and in the Purchaser
Questionnaire.
(4) Notwithstanding
the registration obligations provided herein, there can be no assurance that
the
Purchaser will be able to sell or dispose of the Securities. It is understood
that in order not to jeopardize the Offering’s exempt status under Section 4(2)
of the Securities Act and Regulation D, any transferee may, at a minimum, be
required to fulfill the investor suitability requirements
thereunder.
(5) The
Purchaser acknowledges that the Offering is confidential and non-public and
agrees that all information about the Offering shall be kept in confidence
by
the Purchaser until the public announcement of the Offering by the Company.
The
Purchaser acknowledges that the foregoing restrictions on the Purchaser’s use
and disclosure of any such confidential, non-public information contained in
the
above-described documents restricts the Purchaser from trading in the Company’s
securities to the extent such trading is on the basis of material, non-public
information of which the Purchaser is aware. Except for the terms of the
transaction documents and the fact that the Company is considering consummating
the transactions contemplated therein, the Company confirms that neither the
Company nor, to its knowledge, any other person acting on its behalf, has
provided any of the Purchasers or their agents or counsel with any information
that constitutes material, non-public information.
(6) The
Purchaser agrees that beginning on the date hereof until the Offering is
publicly announced by the Company (which the Company has agreed to undertake
in
accordance with the provisions of Section F.3. hereof), the Purchaser will
not
enter into any Short Sales. For purposes of the foregoing sentence, a “Short
Sale” by a Purchaser means a sale of Common Stock that is marked as a short sale
and that is executed at a time when such Purchaser has no equivalent offsetting
long position in the Common Stock, exclusive of the Shares. For purposes of
determining whether a Purchaser has an equivalent offsetting long position
in
the Common Stock, all Common Stock that would be issuable upon exercise in
full
of all options then held by such Purchaser (assuming that such options were
then
fully exercisable, notwithstanding any provisions to the contrary, and giving
effect to any exercise price adjustments scheduled to take effect in the future)
shall be deemed to be held long by such Purchaser.
(1) Certain
Definitions.
For
purposes of this Section E, the following terms shall have the meanings ascribed
to them below.
(a) “Prospectus”
means
the prospectus included in the Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from
a
prospectus filed as part of an effective registration statement in reliance
upon
Rule 430A promulgated under the Securities Act), as amended or supplemented
by
any prospectus supplement, with respect to the terms of the Offering of any
portion of the Registrable Securities covered by the Registration Statement,
and
all other amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.
11
(b) “Registrable
Securities”
shall
mean any Shares and Warrant Shares issued or issuable pursuant to the Offering
Documents together with any securities issued or issuable upon any stock split,
dividend or other distribution, adjustment, recapitalization or similar event
with respect to the foregoing.
(c) “Registration
Statement”
means
the registration statement required to be filed under this Section E, including
the Prospectus, amendments and supplements to such registration statement or
Prospectus, including pre- and post-effective amendments, all exhibits thereto,
and all material incorporated by reference or deemed to be incorporated by
reference in such registration statement.
(2) Shelf
Registration.
(a) The
Company shall use its best efforts to cause to prepare and file with the SEC
a
“Shelf” Registration Statement covering the resale of all Registrable Securities
for an offering to be made on a continuous basis pursuant to Rule 415 under
the
Securities Act on or prior to the 30th day following the Closing (such date
of
actual filing, the “Filing
Date”).
The
Registration Statement shall be on Form S-3 and shall contain (except if
otherwise directed by the Purchasers) a “Plan of Distribution” substantially in
the form attached hereto as Exhibit
E.
Each
Purchaser will furnish to the Company, within five days of the Closing, a
completed questionnaire in the form set forth as Exhibit
D
hereto.
Each Purchaser agrees to promptly update such questionnaire in order to make
the
information previously furnished to the Company by such Purchaser not materially
misleading. The Registration Statement shall register the Registrable Securities
for resale by the holders thereof.
(b) The
Company shall use its best efforts to cause the Registration Statement to be
declared effective by the SEC on or prior to the 90th day following the Closing,
and shall use its best efforts to keep the Registration Statement continuously
effective under the Securities Act until the earliest of (i) the second
anniversary of the Closing or (ii) the date when all Registrable Securities
covered by such Registration Statement have been sold (the “Effectiveness
Period”).
(c) The
Company shall request effectiveness of the Registration Statement (and any
post-effective amendments thereto) within five (5) business days following
the
Company’s receipt of notice from the SEC that the Registration Statement will
not be reviewed by the SEC or that the SEC has completed its review of such
Registration Statement and has no further comments. The Company shall request
effectiveness of the Registration Statement (and any post-effective amendments
thereto) at 5:00 p.m., Eastern time, on the effective date and deliver the
Prospectus (or any supplements thereto), which delivery may be made
electronically, by 8:00 a.m. Eastern time on the business day after such
effective date.
(d) Upon
the
occurrence of any Event (as defined below), as partial relief for the damages
suffered therefrom by the Purchasers (which remedy shall not be exclusive of
any
other remedies which are available at law or in equity; and provided further
that the Purchasers shall be entitled to pursue an action for specific
performance of the Company’s obligations under Paragraph (2)(b) above and
any such actions at law, in equity, for specific performance or
otherwise shall not require the Purchaser to post a bond), the Company
shall pay to each Purchaser, as liquidated damages and not as a penalty (it
being agreed that it would not be feasible to ascertain the extent of such
damages with precision), such amounts and at such times as shall be determined
pursuant to this Paragraph (2)(d). For such purposes, each of the
following shall constitute an “Event”:
(i) the
Filing Date does not occur on or prior to the later of the 30th day following
the Closing Date (such later date is defined herein as the “Filing
Default Date”),
in
which case the Company shall pay to each Purchaser an amount in cash equal
to:
(A) one and one-half percent (1.5%) of the aggregate purchase price paid by
such
Purchaser, on a pro-rata basis over a 30-day period; and (B) for each successive
30-day period thereafter or any portion thereof until the Filing Date, one
and
one-half percent (1.5%) of the aggregate purchase price paid by such Purchaser,
on a pro-rata basis over a 30-day period, to be paid at the end of each 30-day
period; or
(ii) the
Registration Statement is not declared effective on or prior to the date that
is
90 days after the Closing Date (the “Required
Effectiveness Date”),
in
which case the Company shall pay to each Purchaser an amount in cash equal
to:
(A) for the first 30 days after such 90th day, one and one-half percent (1.5%)
of the aggregate purchase price paid by such Purchaser, on a pro-rata basis
over
a 30-day period; and (B) for each successive 30-day period thereafter until
the
Registration Statement is deemed effective, one and one-half percent (1.5%)
of
the aggregate purchase price paid by such Purchaser, on a pro rata basis over
a
30-day period, at the end of each 30-day period.
12
The
payment obligations of the Company under this Section E(2)(d) shall be
cumulative.
(3) Registration
Procedures.
In
connection with the Company’s registration obligations hereunder, the Company
shall:
(a) Use
its
best efforts to (i) prepare and file with the SEC such amendments, including
post-effective amendments, to the Registration Statement as may be necessary
to
keep the Registration Statement continuously effective as to the Registrable
Securities for the Effectiveness Period; (ii) cause the related Prospectus
to be
amended or supplemented by any required Prospectus supplement, and as so
supplemented or amended to be filed pursuant to Rule 424; and (iii) respond
as
promptly as reasonably possible, and in any event within ten (10) trading days,
to any comments received from the SEC with respect to the Registration Statement
or any amendment thereto and as promptly as reasonably possible provide the
Placement Agents true
and
complete copies of all correspondence from and to the SEC relating to the
Registration Statement.
(b) Notify
the Placement Agents and the Purchasers as promptly as reasonably possible,
and
(if requested by the Placement Agents) confirm such notice in writing no later
than one (1) trading day thereafter, of any of the following events: (i) the
SEC
notifies the Company whether there will be a “review” of the Registration
Statement; (ii) the SEC comments in writing on the Registration Statement (in
which case the Company shall deliver to the Placement Agents a copy of such
comments and of all written responses thereto); (iii) the SEC or any other
Federal or state governmental authority in writing requests any amendment or
supplement to the Registration Statement or Prospectus or requests additional
information related thereto; (iv) if the SEC issues any stop order suspending
the effectiveness of the Registration Statement or initiates any action, claim,
suit, investigation or proceeding (a “Proceeding”)
for
that purpose; (v) the Company receives notice in writing of any suspension
of
the qualification or exemption from qualification of any Registrable Securities
for sale in any jurisdiction, or the initiation or threat of any Proceeding
for
such purpose; or (vi) the financial statements included in the Registration
Statement become ineligible for inclusion therein or any statement made in
the
Registration Statement or Prospectus or any document incorporated or deemed
to
be incorporated therein by reference is untrue in any material respect or any
revision to the Registration Statement, Prospectus or other document is required
so that it will not contain any untrue statement of a material fact or omit
to
state any material fact required to be stated therein or necessary to make
the
statements therein, in light of the circumstances under which they were made,
not misleading. Notwithstanding the foregoing, the Company shall not include
any
material non-public information in any notice provided to any Purchaser under
this Section E(3)(b).
(c) Use
its
best efforts to avoid the issuance of or, if issued, obtain the withdrawal
of
(i) any order suspending the effectiveness of the Registration Statement or
(ii)
any suspension of the qualification (or exemption from qualification) of any
of
the Registrable Securities for sale in any jurisdiction, at the earliest
practicable moment.
(d) Deliver
to each Purchaser, which delivery may be made electronically, by 8:00 a.m.
Eastern time on the business day after the date first available, without charge,
such reasonable number of copies of the Prospectus or Prospectuses (including
each form of prospectus) and each amendment or supplement thereto as such
Purchasers may reasonably request. The Company hereby consents to the use of
such Prospectus and each amendment or supplement thereto by each of the selling
Purchasers in connection with the offering and sale of the Registrable
Securities covered by such Prospectus and any amendment or supplement
thereto.
(e) (i)
In
the time and manner required by AMEX, prepare and file with AMEX an additional
shares listing application covering all of the Registrable Securities and a
notification form regarding the change in the number of the Company’s
outstanding Shares; (ii) use its best efforts, regardless of listing or similar
costs, to take all steps necessary to cause such Registrable Securities to
be
approved for listing on AMEX as soon as possible thereafter; (iii) provide
to
the Purchasers notice of such listing; and (iv) use its best efforts, regardless
of listing or similar costs, to maintain the listing of such Registrable
Securities on AMEX.
13
(f) To
the
extent required by law, prior to any public offering of Registrable Securities,
use its best efforts to register or qualify or cooperate with the selling
Purchasers in connection with the registration or qualification (or exemption
from such registration or qualification) of such Registrable Securities for
offer and sale under the securities or “blue sky” laws of such jurisdictions
within the United States as any Purchaser requests in writing, to keep each
such
registration or qualification (or exemption therefrom) effective during the
Effectiveness Period and to do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the Registrable
Securities covered by a Registration Statement; provided,
however,
that
the Company shall not be required for any such purpose to (i) qualify generally
to do business as a foreign corporation in any jurisdiction wherein it would
not
be otherwise required to qualify but for the requirements of this Paragraph
(3)(f), or (ii) subject itself to taxation.
(g) Upon
the
occurrence of any event described in Paragraph (3)(b)(vi) above, as promptly
as
reasonably possible, prepare a supplement or amendment, including a
post-effective amendment, to the Registration Statement or a supplement to
the
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference, and file any other required document so that, as
thereafter delivered, neither the Registration Statement nor such Prospectus
will contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading;
provided,
however,
that
the Company may suspend sales pursuant to the Registration Statement for a
period of up to thirty (30) days (unless the holders of at least 80 percent
of
the then-eligible Registrable Securities consisting of outstanding shares of
Common Stock consent in writing to a longer delay of up to an additional thirty
(30) days) no more than once in any twelve-month period if the Company furnishes
to the holders of the Registrable Securities a certificate signed by the
Company’s Chief Executive Officer stating that in the good faith judgment of the
Company’s Board of Directors, (i) the offering could reasonably be expected to
interfere in any material respect with any acquisition, corporate reorganization
or other material transaction under consideration by the Company or (ii) there
is some other material development relating to the operations or condition
(financial or other) of the Company that has not been disclosed to the general
public and as to which it is in the Company’s best interests not to disclose
such development; provided further, however, that the Company may not so suspend
sales more than once in any calendar year without the written consent of the
holders of at least a majority of the then-eligible Registrable Securities
consisting of outstanding shares of Common Stock. Each violation of the
Company’s obligation not to suspend sales pursuant to the Registration Statement
longer than permitted pursuant to the proviso
of this
Paragraph 3(g) shall be deemed an “Event” and for each such default, Purchaser
shall be entitled to the payment provisions set forth in Paragraph
2(d)(i).
(h) Comply
with all applicable rules and regulations of the SEC and AMEX in all material
respects.
(4) Registration
Expenses.
The
Company shall pay (or reimburse the Purchasers for) all fees and expenses
incident to the performance of or compliance with this Agreement by the Company,
including without limitation (a) all registration and filing fees and expenses,
including without limitation those related to filings with the SEC, Nasdaq
and
in connection with applicable state securities or “Blue Sky” laws, (b) printing
expenses (including, without limitation, expenses of printing certificates
for
Registrable Securities and of printing copies of Prospectuses reasonably
requested by the Purchasers), (c) messenger, telephone and delivery expenses,
(d) fees and disbursements of counsel for the Company and fees and
disbursements, up to an aggregate of $15,000, of a single counsel for all the
Purchasers, and (e) fees and expenses of all other Persons retained by the
Company in connection with the consummation of the transactions contemplated
by
this Agreement. Notwithstanding the foregoing, each Purchaser shall pay any
and
all costs, fees, discounts or commissions attributable to the sale of its
respective Registrable Securities.
(5) Indemnification.
(a) Indemnification
by the Company.
The
Company shall, notwithstanding any termination of this Agreement, indemnify
and
hold harmless each Purchaser, its officers and directors, partners, members,
agents, brokers and employees of each of them, each Person who controls any
such
Purchaser (within the meaning of Section 15 of the Securities Act or Section
20
of the Exchange Act) and the officers, directors, partners, members, agents
and
employees of each such controlling Person, and each underwriter of Registrable
Securities, to the fullest extent permitted by applicable law, from and against
any and all losses, claims, damages, liabilities, settlement costs and expenses,
including without limitation costs of preparation and reasonable attorneys’ fees
(collectively, “Losses”),
as
incurred, arising out of or relating to any untrue or alleged untrue statement
of a material fact contained in the Registration Statement, any Prospectus
or
form of prospectus or in any amendment or supplement thereto, or arising out
of
or relating to any omission or alleged omission of a material fact required
to
be stated therein or necessary to make the statements therein (in the case
of
any Prospectus or form of prospectus or supplement thereto, in light of the
circumstances under which they were made) not misleading, except to the extent,
but only to the extent, that (i) such untrue statements or omissions related
to
such Purchaser or such Purchaser’s proposed method of distribution of
Registrable Securities and was reviewed and expressly approved in writing by
such Purchaser expressly for use in the Registration Statement, such Prospectus
or such form of Prospectus or in any amendment or supplement thereto (which
shall, however, be deemed to include disclosure substantially in accordance
with
the “Plan of Distribution” attached hereto), or (ii) in the case of an
occurrence of an event of the type specified in Paragraph (3)(b) above, the
use
by such Purchaser of an outdated or defective Prospectus after the Company
has
duly notified such Purchaser in writing that the Prospectus is outdated or
defective and prior to the receipt by such Purchaser of the Advice contemplated
in Paragraph (6) below. The Company shall notify the Purchasers promptly of
the
institution, threat or assertion of any Proceeding of which the Company is
aware
in connection with the transactions contemplated by this Agreement.
14
(b) Indemnification
by Purchasers.
Each
Purchaser shall, severally and not jointly, indemnify and hold harmless the
Company, its directors, officers, agents and employees, and each Person who
controls the Company (within the meaning of Section 15 of the Securities Act
and
Section 20 of the Exchange Act), and the directors, officers, agents or
employees of such controlling Persons, to the fullest extent permitted by
applicable law, from and against all Losses (as determined by a court of
competent jurisdiction in a final judgment not subject to appeal or review)
arising out of or based upon any untrue statement or alleged untrue statement
of
a material fact contained in any Registration Statement, any Prospectus, or
any
form of prospectus or in any amendment or supplement thereto, or arising out
of
or based upon any omission of a material fact required to be stated therein
or
necessary to make the statements therein not misleading to the extent, but
only
to the extent, that such untrue statement or omission is contained in any
information furnished in writing by such Purchaser to the Company specifically
for inclusion in such Registration Statement or Prospectus or to the extent
that
(i) such untrue statements or omissions related to such Purchaser or such
Purchaser’s proposed method of distribution of Registrable Securities and was
reviewed and expressly approved in writing by such Purchaser expressly for
use
in the Registration Statement, such Prospectus or such form of Prospectus or
in
any amendment or supplement thereto (which shall, however, be deemed to include
disclosure substantially in accordance with the “Plan of Distribution” attached
hereto), or (ii) in the case of an occurrence of an event of the type specified
in Paragraph (3)(b) above, the use by such Purchaser of an outdated or defective
Prospectus after the Company has notified such Purchaser in writing that the
Prospectus is outdated or defective and prior to the receipt by such Purchaser
of the Advice contemplated in Paragraph (6) below. In no event shall the
liability of any selling Purchaser hereunder be greater in amount than the
dollar amount of the net proceeds received by such Purchaser upon the sale
of
the Registrable Securities giving rise to such indemnification
obligation.
(c) Conduct
of Indemnification Proceedings.
If any
Proceeding shall be brought or asserted against any Person entitled to indemnity
hereunder (an “Indemnified
Party”),
such
Indemnified Party shall promptly notify the Person from whom indemnity is sought
(the “Indemnifying
Party”)
in
writing, and the Indemnifying Party shall assume the defense thereof, including
the employment of counsel reasonably satisfactory to the Indemnified Party
and
the payment of all fees and expenses incurred in connection with defense
thereof, provided, that the failure of any Indemnified Party to give such notice
shall not relieve the Indemnifying Party of its obligations or liabilities
pursuant to this Agreement, except (and only) to the extent that such failure
shall have prejudiced the Indemnifying Party. An Indemnified Party shall have
the right to employ separate counsel in any such Proceeding and to participate
in the defense thereof, but the fees and expenses of such counsel shall be
at
the expense of such Indemnified Party or Parties unless: (i) the Indemnifying
Party has agreed in writing to pay such fees and expenses; or (ii) the
Indemnifying Party shall have failed promptly to assume the defense of such
Proceeding and to employ counsel reasonably satisfactory to such Indemnified
Party in any such Proceeding; or (iii) the named parties to any such Proceeding
(including any impleaded parties) include both such Indemnified Party and the
Indemnifying Party, and such Indemnified Party shall have been advised by
counsel that a conflict of interest is likely to exist if the same counsel
were
to represent such Indemnified Party and the Indemnifying Party (in which case,
if such Indemnified Party notifies the Indemnifying Party in writing that it
elects to employ one separate counsel in each applicable jurisdiction at the
expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and such counsel shall be at the expense
of
the Indemnifying Party); provided,
however, that in the event that the Indemnifying Party shall be required to
pay
the fees and expenses of separate counsel, the Indemnifying Party shall only
be
required to pay the fees and expenses of one separate counsel for such
Indemnified Party or Parties. The Indemnifying Party shall not be liable for
any
settlement of any such Proceeding affected without its written consent, which
consent shall not be unreasonably withheld. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of
any
pending Proceeding in respect of which any Indemnified Party is a party, unless
such settlement includes an unconditional release of such Indemnified Party
from
all liability on claims that are the subject matter of such Proceeding. All
fees
and expenses of the Indemnified Party (including reasonable fees and expenses
to
the extent incurred in connection with investigating or preparing to defend
such
Proceeding in a manner not inconsistent with this Section) shall be paid to
the
Indemnified Party, as incurred, within ten trading days of written notice
thereof to the Indemnifying Party (regardless of whether it is ultimately
determined that an Indemnified Party is not entitled to indemnification
hereunder; provided, that the Indemnifying Party may require such Indemnified
Party to undertake to reimburse all such fees and expenses to the extent it
is
finally judicially determined that such Indemnified Party is not entitled to
indemnification hereunder).
15
(d) Contribution.
If a
claim for indemnification under Paragraph (5)(a) or (b) is unavailable to an
Indemnified Party (by reason of public policy or otherwise), then each
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such Losses, in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party and Indemnified Party in connection with the
actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such Indemnifying
Party and Indemnified Party shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission of a material
fact,
has been taken or made by, or related to information supplied by, such
Indemnifying Party or Indemnified Party, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission. The amount paid or payable by a party as a result
of any Losses shall be deemed to include, subject to the limitations set forth
in Paragraph (5)(c), any reasonable attorneys’ or other reasonable fees or
expenses incurred by such party in connection with any Proceeding to the extent
such party would have been indemnified for such fees or expenses if the
indemnification provided for in this Paragraph 5(d) was available to such party
in accordance with its terms.
The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Paragraph (5)(d) were determined by pro rata allocation or
by
any other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding the provision of this Paragraph (5)(d), no Purchaser shall
be
required to contribute, in the aggregate, any amount in excess of the amount
by
which the proceeds actually received by such Purchaser from the sale of the
Registrable Securities subject to the Proceeding exceeds the amount of any
damages that such Purchaser has otherwise been required to pay by reason of
such
untrue or alleged untrue statement or omission or alleged omission. No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
The
indemnity and contribution agreements contained in this Section are in addition
to any liability that the Indemnifying Parties may have to the Indemnified
Parties.
(6) Dispositions.
Each
Purchaser agrees that it will comply with the prospectus delivery requirements
of the Securities Act as applicable to it in connection with sales of
Registrable Securities pursuant to the Registration Statement. Each Purchaser
further agrees that, upon receipt of a notice from the Company of the occurrence
of any event of the kind described in Paragraphs (3)(b), such Purchaser will
discontinue disposition of such Registrable Securities under the Registration
Statement until such Purchaser’s receipt of the copies of the supplemented
Prospectus and/or amended Registration Statement contemplated by Paragraph
(3)(g), or until it is advised in writing (the “Advice”)
by the
Company that the use of the applicable Prospectus may be resumed, and, in either
case, has received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such Prospectus or
Registration Statement. The Company may provide appropriate stop orders to
enforce the provisions of this paragraph.
16
(7) No
Piggy-Back on Registrations.
Neither
the Company nor any of its security holders (other than the Purchasers and
the
Placement Agents, with respect to the shares of Common Stock issuable upon
the
exercise of the Placement Agent Warrant, in such capacities pursuant hereto)
may
include securities of the Company in the Registration Statement other than
the
Registrable Securities, and the Company shall not after the date hereof enter
into any agreement providing any such right with respect to the Registration
Statement to any of its security holders.
(8) Piggy-Back
Registrations.
If at
any time during the Effectiveness Period, other than any suspension period
referred to in Paragraph (3)(g), there is not an effective Registration
Statement covering all of the Registrable Securities and the Company shall
determine to prepare and file with the SEC a registration statement relating
to
an offering for its own account or the account of others under the Securities
Act of any of its equity securities, other than on Form S-4 or Form S-8 (each
as
promulgated under the Securities Act) or their then equivalents relating to
equity securities to be issued solely in connection with any acquisition of
any
entity or business or equity securities issuable in connection with stock option
or other employee benefit plans, then the Company shall send to each Purchaser
written notice of such determination and if, within fifteen (15) days after
receipt of such notice, any such Purchaser shall so request in writing, the
Company shall include in such registration statement all or any part of such
Registrable Securities not already covered by an effective Registration
Statement such Purchaser requests to be registered.
(9) Rule
144.
For a
period of two years following the date hereof, the Company agrees with each
holder of Registrable Securities to:
(a) use
its
best efforts to
comply
with the requirements of Rule 144(c) under the Securities Act with respect
to
current public information about the Company;
(b) use
its
best efforts to file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange
Act
(at any time it is subject to such reporting requirements); and
(c) furnish
to any holder of Registrable Securities upon request (i) a written statement
by
the Company as to its compliance with the requirements of said Rule 144(c)
and
the reporting requirements of the Securities Act and the Exchange Act (at any
time it is subject to such reporting requirements), (ii) a copy of the most
recent annual or quarterly report of the Company, and (iii) such other reports
and documents of the Company as such holder may reasonably request to avail
itself of any similar rule or regulation of the SEC allowing it to sell any
such
securities without registration.
(1) The
Company hereby agrees that, for a period of ninety (90) days after effectiveness
of the Registration Statement, it shall not issue or sell any Common Stock
of
the Company, any warrants or other rights to acquire Common Stock or any other
securities that are convertible into Common Stock, with the exception of
issuances or sales related to a strategic transaction, pursuant to the exercise
of an option, warrant or other right to acquire Common Stock outstanding as
of
the date of this Agreement, or to an employee, director, consultant, supplier,
lender or lessor, or any option grant or issuance.
(2) Until
the
later of (i) one hundred eighty (180) days following the Closing or
(ii)
forty-five (45) days following effectiveness of the Registration Statement,
the
Company shall not cause any registration statement to become effective, other
than the Registration Statement contemplated hereby, any registration statement
related to securities issued or to be issued pursuant to any option or other
plan for the benefit of the Company’s employees, officers, directors or
consultants, or any registration statement filed on Form S-4 relating to
securities issued in connection with a merger or other acquisition; provided,
however,
that
nothing herein shall prohibit the Company from maintaining the effectiveness
of
any currently outstanding registration statement filed by the Company under
the
Securities Act, including, without limitation, the filing of post-effective
amendments to such registration statements.
17
(3) Not
later
than 8:30 a.m. Eastern time on the business day following the date this
Agreement is entered into, the Company shall make a public announcement of
the
execution of this Agreement by filing with the SEC a Current Report on Form
8-K
and issuing a press release.
(4)
Not
later than 8:30 a.m. Eastern time on the business day following the Closing,
the
Company shall make a public announcement of the Closing of the Offering by
filing with the SEC a Current Report on Form 8-K and issuing a press
release.
(1) All
pronouns and any variations thereof used herein shall be deemed to refer to
the
masculine, feminine, singular or plural, as identity of the person or persons
may require.
(2) Any
notice or other document required or permitted to be given or delivered to
the
Purchasers shall be in writing and sent (a) by fax if the sender on the same
day
sends a confirming copy of such notice by an internationally recognized
overnight delivery service (charges prepaid) or (b) by an internationally
recognized overnight delivery service (with charges prepaid):
(i) if
to the
Company, at
Hana
Biosciences, Inc.
000
Xxxxxx Xxxxx Xxxxxxxxx, Xxxxx 000
Xxxxx
Xxx
Xxxxxxxxx, XX 00000
Fax
No.:
000-000-0000
Attention:
Xxxxxxx X. Xxxxxxxx, Vice President, Chief Financial Officer
or
such
other address as it shall have specified to the Purchaser in writing, with
a
copy (which shall not constitute notice) to:
Xxxxxx
Xxxxxxx Xxxxxx & Brand, LLP
3300
Xxxxx Fargo Center
00
Xxxxx
Xxxxxxx Xxxxxx
Xxxxxxxxxxx,
XX 00000-0000
Fax
No.:
000-000-0000
Attention:
Xxxxxxxxxxx X. Xxxxxx, Esq.
(ii) if
to the
Purchaser, at its address set forth on the signature page to this Agreement,
or
such other address as it shall have specified to the Company in
writing.
(3) Failure
of the Company to exercise any right or remedy under this Agreement or any
other
agreement between the Company and the Purchaser, or otherwise, or delay by
the
Company in exercising such right or remedy, will not operate as a waiver
thereof. No waiver by the Company will be effective unless and until it is
in
writing and signed by the Company.
(4) This
Agreement shall be enforced, governed and construed in all respects in
accordance with the laws of the State of New York, as such laws are applied
by
the New York courts to agreements entered into and to be performed in New York
by and between residents of New York, and shall be binding upon the Purchaser,
the Purchaser’s heirs, estate, legal representatives, successors and assigns and
shall inure to the benefit of the Company, its successors and
assigns.
The
Company and each Purchaser hereby agree to submit to the jurisdiction of the
courts of the State of New York with respect to any proceeding arising out
of or
relating to this Agreement.
(5) If
any
provision of this Agreement is held to be invalid or unenforceable under any
applicable statute or rule of law, then such provision shall be deemed modified
to conform with such statute or rule of law. Any provision hereof that may
prove
invalid or unenforceable under any law shall not affect the validity or
enforceability of any other provisions hereof.
18
(6) The
parties understand and agree that, unless provided otherwise herein, money
damages would not be a sufficient remedy for any breach of the Agreement by
the
Company or the Purchaser and that the party against which such breach is
committed shall be entitled to equitable relief, including injunction and
specific performance, as a remedy for any such breach. Such remedies shall
not,
unless provided otherwise herein, be deemed to be the exclusive remedies for
a
breach by either party of the Agreement but shall be in addition to all other
remedies available at law or equity to the party against which such breach
is
committed.
(7) The
obligations of each Purchaser under this Agreement are several and not joint
with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser hereunder, except as may result from the actions of any such Purchaser
other than through the execution hereof. Nothing contained herein solely by
virtue of being contained herein shall be deemed to constitute the Purchasers
as
a partnership, an association, a joint venture or any similar entity, or create
a presumption that the Purchasers are in any way acting in concert or as a
group
with respect to such obligations or the transactions contemplated
hereby.
(8) This
Agreement, together with the agreements and documents executed and delivered
in
connection with this Agreement, constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof.
|
H.
|
The
signature page of this Agreement is contained as part of the applicable
subscription package, entitled “Signature Page”.
*
* * * *
* *
19
The
Purchaser hereby subscribes for such number of Shares as shall equal the
Subscription Amount as set forth below, divided by the Offering Price, and
shall
also receive a Warrant to purchase such number of shares of Common Stock
calculated as set forth in this Agreement, and agrees to be bound by the terms
and conditions of this Agreement.
PURCHASER
| 1. |
Dated:
,
2005
|
| 2. |
Total
Subscription Amount: $__________
|
|
|
|
||
|
Signature
of Subscriber
|
Signature
of Joint Purchaser
|
||
|
(and
title, if applicable)
|
(if
any)
|
||
|
|
|
||
|
Taxpayer
Identification or Social
|
Taxpayer
Identification or Social
|
||
|
Security
Number
|
Security
Number of Joint Purchaser (if any)
|
||
|
|
|||
|
Name
(please print as name will appear
|
|||
|
on
stock certificate)
|
|||
|
|
|||
|
Number
and Street
|
|||
|
|
|||
|
City,
State
|
Zip
Code
|
|
|
|
ACCEPTED
BY:
|
||
|
HANA
BIOSCIENCES, INC.
|
||
|
By:
|
||
|
Name:
|
|
|
|
Title:
|
|
|
Dated:
October 19, 2005
Exhibit
A
Xxxxxx
Xxxxxxx Xxxxxx & Brand, LLP
shall
deliver an opinion covering the following matters. The opinion shall be subject
to and include customary assumptions, limitations and
qualifications.
1. The
Company is a corporation, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority
under the laws of the State of Delaware to conduct its business as it is
described in the Company’s Form 10-QSB for the quarter ended June 30, 2005 and
Form 10-KSB for the fiscal year ended December 31, 2004, and
to
enter into and perform its obligations under the Agreement.
2. The
authorized capital stock of the Company consists of 100,000,000 shares of common
stock,
par value $0.001 per share (the “Common
Stock”),
and
10,000,000 shares of preferred stock, $0.001 par value per share (the
“Preferred
Stock”).
3. The
Shares have been duly authorized or reserved for issuance by all necessary
corporate action on the part of the Company; and the Shares, when issued and
delivered against payment therefor in accordance with the provisions of the
Agreement, will be validly issued, fully paid and non-assessable. The
Warrants have been duly authorized by
all
necessary corporate action on the part of the Company,
and the
Warrant Shares have been duly reserved
for issuance and,
when
issued and delivered against payment therefor upon the due exercise of the
Warrants in accordance with the provisions thereof, will be validly issued,
fully paid and non-assessable shares of Common Stock.
4. The
execution and delivery by the Company of the Agreement, and the consummation
by
the Company of the transactions contemplated thereby, have been duly authorized
by all necessary corporate and stockholder action on the part of the Company.
The Agreement constitutes the valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as rights
to indemnification and contribution thereunder may be limited by applicable
law
and except as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors’ rights generally or by general equitable principles.
5. The
execution and delivery by the Company of the Agreement, and the consummation
by
the Company of the transactions contemplated thereby, do not (a) violate the
provisions of any federal law of the United States of America or the General
Corporation Law of the State of Delaware applicable to the Company; (b) violate
the provisions of the Company’s Certificate of Incorporation or By-laws; or (c)
violate any existing obligation of the Company under any judgment, decree,
order
or award of any court, governmental body or arbitrator specifically naming
the
Company and of which we are aware, without any inquiry; or (d) with or without
notice and/or the passage of time, conflict with or result in the material
breach or termination of any material term or provision of, or constitute a
material default under, or cause any acceleration of any material obligation
under, or cause the creation of any material lien, charge or encumbrance upon
the material properties or assets of the Company pursuant to any contract or
instrument in the form included as an exhibit to the Company’s 2004 10-KSB and
subsequent SEC Reports.
6. Assuming
(a) the accuracy of the representations made by each Purchaser in the Agreement;
(b) that neither the Company, the Placement Agents nor any person acting on
behalf of either the Company or the Placement Agents has offered or sold the
Securities by any form of general solicitation or general advertising within
the
meaning of Rule 502(c) of Regulation D promulgated (the “Regulation
D”)
under
the Securities Act; (c) that no offerings or sales of securities of the Company
after the date hereof in a transaction can be “integrated” with any sales of the
Securities; and (d) that each person or entity that purchased securities of
the
Company directly from the Company or its agents and without registration between
the date six months prior to the Closing of the Offering and the date of the
Agreement was, as of the date of such purchase, an “accredited investor” as
defined in Rule 501 of Regulation D, the sale of the Securities to the
Purchasers at the Closing under the circumstances contemplated by this Agreement
are exempt from the registration and prospectus delivery requirements of Section
5 of the Securities Act.
7. To
our
knowledge, without any inquiry (including, without limitation, without any
docket search or other inquiry), there is no action, proceeding or litigation
pending or threatened against the Company before any court, governmental or
administrative agency or body required to be described in the Company’s Form
10-QSB for each of the quarters ended June 30, 2005 and March 31, 2005, and
the
Company’s Form 10-KSB for the fiscal year ended December 31, 2004, which is not
otherwise disclosed therein.
Exhibit
B
Form
of Warrant
[Omitted
from this Exhibit 10.14 and filed separately as Exhibit 4.6]
Exhibit
C
Hana
Biosciences, Inc.
Confidential
Purchaser Questionnaire
Before
any sale of Shares or Warrants by Hana Biosciences, Inc. can be made to you,
this Questionnaire must be completed and returned to Xxxxxxxxxxx & Co. Inc.
Attn: Investment Banking Department, 000 Xxxxx Xx., Xxx Xxxx, XX
00000
|
1.
|
IF
YOU ARE AN INDIVIDUAL PLEASE FILL IN THE IDENTIFICATION QUESTIONS
IN (A)
IF YOU ARE AN ENTITY PLEASE FILL IN THE IDENTIFICATION QUESTIONS
IN
(B)
|
A.
INDIVIDUAL IDENTIFICATION QUESTIONS
|
Name
|
|
|
(Exact
name as it should appear on stock certificate)
|
|
|
Residence
Address
|
|
|
Home
Telephone Number
|
|
|
Fax
Number
|
|
|
Date of Birth
|
|
|
Social Security Number
|
|
B.
IDENTIFICATION QUESTIONS FOR ENTITIES
|
Name
|
|
|
(Exact
name as it will appear on stock certificate)
|
|
|
Address
of Principal
|
|
|
Place
of Business
|
|
|
State
(or Country) of Formation
|
|
|
or
Incorporation
|
|
|
Contact
Person
|
|
|
Telephone
Number (
)
|
|
|
Type
of Entity
|
|
|
(corporation,
partnership,
|
|
|
trust,
etc.)
|
|
|
Was
entity formed for the purpose of this investment?
|
|
|
Yes __
No
__
|
|
2. DESCRIPTION
OF INVESTOR
The
following information is required to ascertain whether you would be deemed
an
“accredited investor” as defined in Rule 501 of Regulation D under the
Securities Act. Please check whether you are any of the following:
| o |
a
corporation or partnership with total assets in excess of $5,000,000,
not
organized for the purpose of this particular
investment
|
| o |
private
business development company as defined in Sec-tion 202(a)(22) of
the
Investment Advisers Act of 1940, a U.S. venture capital fund which
invests
primarily through private placements in non-publicly traded secu-rities
and makes available (either directly or through co-investors) to
the
portfolio companies significant guidance concerning management, operations
or business objectives
|
| o |
a
Small Business Investment Company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958
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2
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an
investment company registered under the Investment Company Act of
1940 or
a business development company as defined in Section 2(a)(48) of
that
Act
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a
trust not organized to make this particular investment, with total
assets
in excess of $5,000,000 whose purchase is directed by a sophisticated
person as des-cribed in Rule 506(b)(2)(ii) of the Securities
Act of
1933 and who completed item 4 below of this
questionnaire
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a
bank as defined in Section 3(a)(2) or a savings and loan association
or other institution defined in Sec-tion 3(a)(5)(A) of the
Securities
Act of 1933 acting in either an individual or fiduciary
capacity
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an
insurance company as defined in Section 2(13) of the Securities
Act
of 1933
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an
employee benefit plan within the meaning of Title I of the
Employee
Retirement Income Security Act of 1974 (i) whose investment
decision
is made by a fiduciary which is either a bank, savings and loan
association, insurance company, or registered investment advisor,
or
(ii) whose total assets exceed $5,000,000, or (iii) if
a
self-directed plan, whose investment decisions are made solely by
a person
who is an accredited investor and who completed Part I of
this
questionnaire;
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a
charitable, religious, educational or other organiza-tion described
in
Section 501(c)(3) of the Internal Revenue Code, not formed
for the
purpose of this invest-ment, with total assets in excess of
$5,000,000
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an
entity not located in the U.S. none of whose equity owners are U.S.
citizens or U.S. residents
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a
broker or dealer registered under Section 15 of the Securities
Exchange Act of 1934
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a
plan having assets exceeding $5,000,000 established and maintained
by a
government agency for its employees
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an
individual who had individual income from all sources during each
of the
last two years in excess of $200,000 or
the joint income of you and your spouse (if married) from all sources
during each of such years in excess of $300,000 and who reasonably
excepts
that either
your own income from all sources during the current year will exceed
$200,000 or
the joint income of you and your spouse (if married) from all sources
during the current year will exceed
$300,000
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an
individual whose net worth as of the date you purchase the securi-ties
offered, together with the net worth of your spouse, be in excess
of
$1,000,000
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an
entity in which all of the equity owners are accredited
investors
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Occupation______________________________________________
Number of Years__________________________________________
Present Employer_________________________________________
Position/Title____________________________________________
Educational
Background___________________________________
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2
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Frequency
of prior investment (check one in each column):
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Stocks
& Bonds
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Venture
Capital Investments
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Frequently
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Occasionally
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4. SIGNATURE
The
above
information is true and correct. The undersigned recognizes that the Company
and
its counsel are relying on the truth and accuracy of such information in
reliance on the exemption contained in Subsec-tion 4(2) of the Securities
Act of 1933, as amended, and Regula-tion D prom-ulgated thereunder.
The
undersigned agrees to notify the Company promptly of any changes in the
fore-going information which may occur prior to the investment.
Executed at ___________________, on
, 2005
(Signature)
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3
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Exhibit
D
Selling
Stockholder Questionnaire
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To:
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Hana
Biosciences, Inc.
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c/o
Xxxxxxxxxxx X. Xxxxxx, Esq.
Xxxxxx
Xxxxxxx Xxxxxx & Brand, LLP
3300
Xxxxx Fargo Center
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00
Xxxxx Xxxxxxx Xxxxxx
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Xxxxxxxxxxx,
Xxxxxxxxx 00000-0000
Reference
is made to the Securities Purchase Agreement (the “Agreement”), made between
Hana Biosciences, Inc., a Delaware corporation (the “Company”), and the
Purchasers noted therein.
Pursuant
to Section B(12) of the Agreement, the undersigned hereby furnishes to the
Company the following information for use by the Company in connection with
the
preparation of the Registration Statement contemplated by Section E of the
Agreement.
(1) Name
and Contact Information:
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Full
legal name of record holder:
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Address
of record holder:
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Social
Security Number or Taxpayer identification number of record
holder:
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Identity
of beneficial owner (if different
than record holder):
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Name
of contact person:
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Telephone
number of contact person:
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Fax
number of contact person:
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E-mail
address of contact person:
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(2)
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Beneficial
Ownership of Registrable Securities:
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(a)
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Number
of Registrable Securities owned by Selling Stockholder:
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(b)
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Number
of Registrable Securities requested to be registered:
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4
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(3)
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Beneficial
Ownership of Other Securities of the Company Owned by the Selling
Stockholder:
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Except
as set forth below in this Item (3), the undersigned is not the
beneficial
or registered owner of any securities of the Company other than
the
Registrable Securities listed above in Item (2)(a).
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Type
and amount of other securities beneficially owned by the Selling
Stockholder:
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(4)
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Relationships
with the Company:
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Except
as set forth below, neither the undersigned nor any of its affiliates,
officers, directors or principal equity holders (5% or more)
has held any
position or office or has had any other material relationship
with the
Company (or its predecessors or affiliates) during the past three
years.
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State
any exceptions here:
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(5)
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Plan
of Distribution:
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Except
as set forth below, the undersigned intends to distribute pursuant
to the
Registration Statement the Registrable Securities listed above
in Item (2)
in accordance with the “Plan of Distribution” section set forth
therein:
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State
any exceptions here:
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(6)
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Selling
Stockholder Affiliations:
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(a)
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Is
the Selling Stockholder a registered broker-dealer?
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(b)
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Is
the Selling Stockholder an affiliate of a registered broker-dealer(s)?
(For purposes of this response, an “affiliate” of, or person “affiliated”
with, a specified person, is a person that directly, or indirectly
through
one or more intermediaries, controls or is controlled by, or
is under
common control with, the person specified.)
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(c)
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If
the answer to Item (6)(b) is yes, identify the registered broker-dealer(s)
and describe the nature of the affiliation(s):
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(d)
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If
the answer to Item (6)(b) is yes, did the Selling Stockholder
acquire the
Registrable Securities in the ordinary course of business (if
not, please
explain)?
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5
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(e)
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If
the answer to Item (6)(b) is yes, did the Selling Stockholder,
at the time
of purchase of the Registrable Securities, have any agreements,
plans or
understandings, directly or indirectly, with any person to
distribute the
Registrable Securities (if yes, please explain)?
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(7)
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Voting
or Investment Control over the Registrable
Securities:
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If
the Selling Stockholder is not a natural person, please identify
the
natural person or persons who have voting or investment control
over the
Registrable Securities listed in Item (2) above:
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Pursuant
to Section E(3) of the Agreement, the undersigned acknowledges that the Company
may, by notice to the Placement Agents and to each Purchaser at its last known
address, suspend or withdraw the Registration Statement and require that the
undersigned immediately cease sales of Registrable Securities pursuant to the
Registration Statement under certain circumstances described in the Agreement.
At any time that such notice has been given, the undersigned may not sell
Registrable Securities pursuant to the Registration Statement.
The
undersigned hereby acknowledges receipt of a draft of the Registration Statement
dated [ ],
2005
and confirms that the undersigned has reviewed such draft including, without
limitation, the sections captioned “Selling Stockholders” and “Plan of
Distribution,” and confirms that, to the best of the undersigned’s knowledge,
the same is true, complete and accurate in every respect except as indicated
in
this Questionnaire. The undersigned hereby further acknowledges that pursuant
to
Section B(12) of the Agreement, the undersigned shall indemnify the Company
and
each of its directors and officers against, and hold the Company and each of
its
directors and officers harmless from, any losses, claims, damages, expenses
or
liabilities (including reasonable attorneys fees) to which the Company or its
directors and officers may become subject by reason of any statement or omission
in the Registration Statement made in reliance upon, or in conformity with,
a
written statement by the undersigned, including the information furnished in
this Questionnaire by the undersigned.
By
signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items (1) through (7) above and the inclusion
of such information in the Registration Statement, any amendments thereto and
the related prospectus. The undersigned understands that such information will
be relied upon by the Company in connection with the preparation or amendment
of
the Registration Statement and the related prospectus.
The
undersigned has reviewed the answers to the above questions and affirms that
the
same are true, complete and accurate. THE UNDERSIGNED AGREES TO NOTIFY THE
COMPANY IMMEDIATELY OF ANY CHANGES IN THE FOREGOING INFORMATION.
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Dated:
_____________, 2005
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Signature
of Record Holder
(Please
sign your name in exactly the same manner as the certificate(s) for
the
shares being registered)
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6
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We
are
registering the shares offered by this prospectus on behalf of the selling
stockholders. The selling stockholders, which as used herein includes donees,
pledgees, transferees or other successors-in-interest selling shares of common
stock or interests in shares of common stock received after the date of this
prospectus from a selling stockholder as a gift, pledge, partnership
distribution or other transfer, may, from time to time, sell, transfer or
otherwise dispose of any or all of their shares of common stock or interests
in
shares of common stock on any stock exchange, market or trading facility on
which the shares are traded or in private transactions. These dispositions
may
be at fixed prices, at prevailing market prices at the time of sale, at prices
related to the prevailing market price, at varying prices determined at the
time
of sale, or at negotiated prices. To the extent any of the selling stockholders
gift, pledge or otherwise transfer the shares offered hereby, such transferees
may offer and sell the shares from time to time under this prospectus, provided
that this prospectus has been amended under Rule 424(b)(3) or other applicable
provision of the Securities Act to include the name of such transferee in the
list of selling stockholders under this prospectus.
The
selling stockholders may use any one or more of the following methods when
disposing of shares or interests therein:
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·
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ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
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·
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block
trades in which the broker-dealer will attempt to sell the shares
as
agent, but may position and resell a portion of the block as principal
to
facilitate the transaction;
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·
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purchases
by a broker-dealer as principal and resale by the broker-dealer for
its
account;
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·
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an
exchange distribution in accordance with the rules of the applicable
exchange;
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·
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privately
negotiated transactions;
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·
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short
sales;
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·
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through
the writing or settlement of options or other hedging transactions,
whether through an options exchange or
otherwise;
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·
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broker-dealers
may agree with the selling stockholders to sell a specified number
of such
shares at a stipulated price per
share;
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·
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a
combination of any such methods of sale;
and
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·
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any
other method permitted pursuant to applicable
law.
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The
selling stockholders may, from time to time, pledge or grant a security interest
in some or all of the shares of common stock owned by them and, if they default
in the performance of their secured obligations, the pledgees or secured parties
may offer and sell the shares of common stock, from time to time, under this
prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or
other applicable provision of the Securities Act amending the list of selling
stockholders to include the pledgee, transferee or other successors in interest
as selling stockholders under this prospectus.
In
connection with the sale of our common stock or interests therein, the selling
stockholders may enter into hedging transactions with broker-dealers or other
financial institutions, which may in turn engage in short sales of the common
stock in the course of hedging the positions they assume. The selling
stockholders may also sell shares of our common stock short and deliver these
securities to close out their short positions, or loan or pledge the common
stock to broker-dealers that in turn may sell these securities. The selling
stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such
transaction).
The
aggregate proceeds to the selling stockholders from the sale of the common
stock
offered by them will be the purchase price of the common stock less discounts
or
commissions, if any. Each of the selling stockholders reserves the right to
accept and, together with their agents from time to time, to reject, in whole
or
in part, any proposed purchase of common stock to be made directly or through
agents. We will not receive any of the proceeds from this offering. Upon any
exercise of the warrants by payment of cash, however, we will receive the
exercise price of the warrants.
The
selling stockholders also may resell all or a portion of the shares in open
market transactions in reliance upon Rule 144 under the Securities Act of 1933,
provided that they meet the criteria and conform to the requirements of that
rule.
The selling
shareholders might be, and any broker-dealers that act in connection with the
sale of securities will be, deemed to be “underwriters” within the meaning of
Section 2(11) of the Securities Act, and any commissions received by such
broker-dealers and any profit on the resale of the securities sold by them
while
acting as principals will be deemed to be underwriting discounts or commissions
under the Securities Act.
To
the
extent required, the shares of our common stock to be sold, the names of the
selling stockholders, the respective purchase prices and public offering prices,
the names of any agents, dealer or underwriter, any applicable commissions
or
discounts with respect to a particular offer will be set forth in an
accompanying prospectus supplement or, if appropriate, a post-effective
amendment to the registration statement that includes this
prospectus.
In
order
to comply with the securities laws of some states, if applicable, the common
stock may be sold in these jurisdictions only through registered or licensed
brokers or dealers. In addition, in some states the common stock may not be
sold
unless it has been registered or qualified for sale or an exemption from
registration or qualification requirements is available and is complied
with.
We
have
advised the selling stockholders that the anti-manipulation rules of Regulation
M under the Exchange Act may apply to sales of shares in the market and to
the
activities of the selling stockholders and their affiliates. In addition, we
will make copies of this prospectus (as it may be supplemented or amended from
time to time) available to the selling stockholders for the purpose of
satisfying the prospectus delivery requirements of the Securities Act. The
selling stockholders may indemnify any broker-dealer that participates in
transactions involving the sale of the shares against certain liabilities,
including liabilities arising under the Securities Act.
We
have
agreed to indemnify the selling stockholders against liabilities, including
liabilities under the Securities Act and state securities laws, relating to
the
registration of the shares offered by this prospectus.
We
have
agreed with the selling stockholders to keep the registration statement that
includes this prospectus effective until the earlier of (1) such time as all
of
the shares covered by this prospectus have been disposed of pursuant to and
in
accordance with the registration statement or (2) the date on which the shares
may be sold pursuant to Rule 144(k) of the Securities Act.