**BACKGROUND**

**1.**
**Company’s      Obligations**
**.**

|   | (a) | **Payment****.**The                Company will pay Mr. Vitale separation pay in the amount of $166,667                (gross), less applicable federal and state income tax and any other                legally required withholding. Payment will be made in a lump sum                on the                first regular Company payday that occurs after eight days have passed                from                the date on which Mr. Vitale signs this                Agreement. |
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|   | (b) | **Insurance                Benefits****.**Mr.                Vitale has the right to elect to continue his coverage in the Company’s                group health and dental insurance programs at his cost under applicable                law; however, as a further benefit of this Agreement, the Company                will pay                the full cost of the coverage through July 31, 2008, or until Mr.                Vitale                obtains comparable replacement coverage, whichever is earlier. After                July                31, 2008, Mr. Vitale will be responsible for the full cost of continuing                this coverage. Mr. Vitale understands that he is responsible for                completing and returning the necessary paperwork in order to elect                to                continue this coverage. |
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|   | (c) | **Release****.**Except                as set forth at the end of this Section 1(c), the Company hereby                fully and                finally releases, waives, and discharges any and all legal claims                against                Mr. Vitale that it has through the date on which this Agreement is                executed on its behalf. This full and final release, waiver, and                discharge                extends to legal and equitable claims of any kind or nature whatsoever                including, without limitation, the                following: |
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|   |   | (i) | All                claims that the Company has now, whether or not it now knows about                the                claims; |
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|   |   | (ii) | All                claims for attorneys fees; |
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|   |   | (iii) | All                claims arising out of Mr. Vitale’s employment or his separation from                employment with the Company including, but not limited to, any alleged                breach of contract, breach of implied contract, or                defamation; |
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|   |   | (iv) | All                claims for reimbursement of any other compensation, including vacation                pay                and bonus pay; and |
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|   |   | (v) | All                claims for any other alleged unlawful conduct arising out of or relating                to his employment or separation from employment with the                Company. |
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|   |   | The                Company will not commence any civil actions against Mr. Vitale except                as                necessary to enforce his obligations under this Agreement. The                consideration that the Company is receiving in this Agreement has                a value                that is greater than anything to which it is entitled. |
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|   |   | Notwithstanding                the provisions of this Section 1(c), the Company does not release,                waive,                or discharge any and all unknown legal claims against Mr. Vitale                constituting fraud, embezzlement, or job-related conduct that would                be                punishable as a felony or gross misdemeanor; and the foregoing covenant                not to sue in this Section 1(c) does not preclude the Company from                commencing an action against Mr. Vitale arising from any or all of                such                claims against him. The Company has no knowledge that Mr. Vitale                has                engaged in any of the foregoing                conduct. |
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|   | (d) | **Non-Disparagement****.**The                Company’s management will not criticize or disparage in any manner or by                any means Mr. Vitale or any aspect of his services to the                Company. |
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|   | (e) | **Reference****.**The                Company has no obligation to respond to reference inquiries about                Mr.                Vitale. However, as an additional benefit of this Agreement, the                Company                will respond to any such request for a reference by stating that                Mr.                Vitale was an original executive officer of the Company, his most                recent                title was Vice President and Chief Business Officer, and he resigned                from                the Company effective January 22, 2008 to pursue other opportunities. |
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**2.**
**Mr.      Vitale’s Obligations**
**.      **

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|   | (a) | Mr.                Vitale hereby fully and finally releases, waives, and discharges                any and                all legal claims against the Company that he has through the date                on which                he signs this Agreement. This full and final release, waiver, and                discharge extends to legal and equitable claims of any kind or nature                whatsoever including, without limitation, the                following: |
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|   |   | (i) | All                claims that Mr. Vitale has now, whether or not he now knows about                the                claims; |
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|   |   | (ii) | All                claims for attorney's fees and                costs; |
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|   |   | (iii) | All                claims for alleged discrimination against him under any applicable                federal, state, and local law including, without limitation, rights                and                claims of age discrimination under the federal Age Discrimination                in                Employment Act (“ADEA”) and federal Older Workers Benefits Protection Act                (“OWBPA”); and discrimination claims under the California Fair Employment                and Housing Act (“CFEHA”), Title VII of the Civil Rights Act of 1964                (“Title VII”), and the Americans With Disabilities Act                (“ADA”); |
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|   |   | (iv) | All                claims arising out of his employment and the termination of his employment                and service as an officer with the Company, including, but not limited                to,                any alleged breach of contract, wrongful termination, termination                in                violation of public policy, defamation, invasion of privacy, fraud,                negligence, infliction of emotional distress, breach of implied contract                and breach of the covenant of good faith and fair dealing; |
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|   |   | (v) | All                claims for any other alleged unlawful employment practices arising                out of                or relating to his employment or separation from employment and service                as                an officer with the Company; and |
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|   |   | (vi) | All                claims for any other form of pay, for example bonus pay, incentive                pay,                holiday pay, and sick pay. |
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|   | (b) | Mr.                Vitale will not bring any lawsuits against the Company, except if                necessary to enforce the provisions of this Agreement. The money                and other                benefits that Mr. Vitale will receive as set forth in this Agreement                are                full and fair payment for the release of all of his claims. The                consideration extended by the Company in return for Mr. Vitale’s                Obligations is more than anything of value to which he is already                entitled. *Provided,                however,*                nothing herein releases Mr. Vitale’s rights, if any, to indemnification                under any applicable directors & officers liability insurance policy,                applicable state and federal law, and the Company’s                bylaws. |
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|   | (c) | Mr.                Vitale will not disparage the Company, or its employees, legal compliance,                products, services, research, development, or with respect to any                other                aspect of the Company’s business. |
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|   | (d) | Mr.                Vitale hereby waives any right to reinstatement to employment with                the                Company. |
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|   | (e) | Mr.                Vitale has returned to the Company any and all of its property in                his                possession or under his control including, for example, computers,                security access cards, credit cards, printers, cell phones, client                files,                reference material, documents pertaining to clients, and any and                all other                documents and materials in my possession or under my control that                pertain                to the Company’s business. These obligations apply to originals and all                copies of any such property. |
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|   | (f) | Mr.                Vitale will cooperate with the Company on any matters in which he                was                involved where information or knowledge that he has will be needed,                including but not limited to, matters such as actual or threatened                legal                claims by Sally Brinkmann. The Company will provide him with as much                notice as possible if it, or its attorneys, need to speak with him                about                such matters. The Company will also reimburse him for any out-of-pocket                expenses that he incurs in order to cooperate, and compensate him                in the                amount of $150 per hour for time spent. If a party adverse to the                Company                serves a subpoena or other legal process on Mr. Vitale, he will promptly                notify the Company’s Chief Financial Officer and not respond until                receiving further instruction from the                Company. |
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|   | (g) | Mr.                Vitale and the Company will represent, if asked, that their relationship                ended mutually and amicably, and they wish each other the best in                the                future. |
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**3.**
**Certain      Definitions**

**4.**
**Additional      Agreements and Understandings**
**.      **

|   | (a) | The                Company does not admit that it is responsible or legally obligated                to Mr.                Vitale, and in fact the Company denies that it is responsible or                legally                obligated to him even though the Company has provided him with valuable                benefits in this Agreement to release his legal claims as outlined                above. |
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|   | (b) | Mr.                Vitale has been paid his final salary and for any accrued but unused                vacation and other earnings through his last day of                employment. |
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|   | (c) | If                Mr. Vitale becomes eligible for unemployment compensation benefits,                the                Company will not challenge a claim that he files, but the Company                will                report to state authorities the payment that he received under this                Agreement and reserves the right to respond if it disagrees with                anything                that he says in support of that                claim. |
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|   | (d) | Nothing                in this Agreement affects Mr. Vitale’s rights in any benefit plan or                program in which he was a participant while employed by the Company. |
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|   | (e) | Mr.                Vitale understands that the Company has granted to him four separate                stock                option awards, which are evidenced by separate stock option agreements                dated February 1, 2004 (as amended on June 30, 2006), April 11, 2005,                November 10, 2005 and December 12, 2006, respectively. In this Agreement,                these stock option agreements are collectively referred to as the“Option                Agreements.” Pursuant to the terms of the Employment Agreement, Mr. Vitale                understands that the vesting schedule relating to his right to purchase                the shares of Company common stock under each Option Agreement will                be                accelerated such that any unvested installment of the stock options                scheduled to vest on or before November 1, 2008 will be deemed vested                as                of the last day of his employment with the Company. Accordingly,                as of Mr.                Vitale’s last day of employment, his right to purchase shares pursuant                each Option Agreements will be vested as                follows: |
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| Date                of Option Agreement | Shares                Vested |
|-----------------------------------------|------------------------------|
| February                1, 2004         | 141,007                      |
| April                11, 2005           | 85,000                       |
| November                10, 2005        | 100,000                      |
| December                12, 2006        | 41,666                       |

|   |   | Except                to the extent vested as described in the table above, Mr. Vitale                understands that all of his rights to purchase shares of the Company’s                common stock under the Option Agreements will terminate on his last                day of                employment with the Company. Further, following his last day of employment                with the Company, Mr. Vitale understands that his right to purchase                shares                pursuant to any of the Option Agreements, including the length of                time he                has to purchase such shares following the end of his employment,                shall be                governed by the terms of the respective Option Agreement, which shall                survive the execution of this                Agreement. |
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|   | (f) | Mr.                Vitale hereby represents that he has no knowledge of engaging in                acts or                omissions that caused the Company a legal                injury. |
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|   | (g) | Upon                presentation of the necessary documentation, the Company will reimburse                Mr. Vitale for the valid business expenses he incurred in connection                with                his employment with the Company according to established corporate                policy. |
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|   | (h) | The                Company will permit Mr. Vitale to review in advance its press release                announcing his departure to pursue other opportunities. The form                and                content of such a press release is within the sole discretion of                the                Company. Nothing herein restricts the Company from making any disclosures                that it reasonably believes are necessary to comply with stock exchange                regulations and applicable laws and government rules. |
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**5.**
**Rights      to Counsel, Consider, and Revoke and Rescind**
**.      **

**6.**
**Charges**

**7.**
**Notice      of Section 1542 Rights**
**.      **

**8.**
**Notice      of Section 1541 Rights**

**9.**
**Binding      Effect**

**10.**
**No      Oral Modification**

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**11.**
**No      Oral Waiver**

**12.**
**Counterparts**

**13.**
**Severability**

**14.**
**Agreement      Freely Entered Into**

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|                                     |                                     |
|                                |                                |                                    |
| Date: January              23, 2008 | By:                            | /s/              Fred              L. Vitale |
|                                     |                                          |
|                                     | Fred              L.              Vitale |

|         |                                              |                                |
|--------------|---------------------------------------------------|-------------------------------------|
|         | Hana              Biosciences,              Inc.  |
|    |                                         |                           |
| Date:   | By:                                     | /s/              Steven R. Deitcher |
|         |                                                   |
|         | Its              President              & CEO |

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