Document:

Unassociated Document

    Exhibit
4.2

     

    HANA
BIOSCIENCES, INC.

     

    [FORM
OF] SERIES B WARRANT

     

    NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE
UPON EXERCISE OF THESE SECURITIES HAVE BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL
REASONABLY SATISFACTORY TO THE COMPANY.

    

    THIS
WARRANT AND THE SHARES OF COMMON STOCK ISSUED UPON ITS

    EXERCISE
ARE SUBJECT TO THE RESTRICTIONS ON

    TRANSFER SET FORTH IN
SECTION 5 OF THIS WARRANT

    

    
      	
              Warrant
      No. [   ]

            	
              Number
      of Shares: [           ]

              (subject
      to adjustment)

            
	
              Date
      of Issuance: [           ]

              Original
      Issue Date: [           ]

            	 
      

    

    Hana
Biosciences, Inc.

     

    Common Stock Purchase
Warrant

     

    (Void
after [           ],
2016)

     

    Hana
Biosciences, Inc., a Delaware corporation (the “Company”), for value
received, hereby certifies that [                ],
or its registered assigns (the “Registered Holder”),
is entitled, subject to the terms and conditions set forth below, to purchase
from the Company, at any time or from time to time on or before 5:00 p.m.
(Eastern time) on [           ],
2016 (the “Exercise
Period”), [           ]
shares of Common Stock, $[0.001] par value per share, of the
Company (“Common
Stock”), at a purchase price of $[___] per
share.  The shares purchasable upon exercise of this Warrant, and the
purchase price per share, each as adjusted from time to time pursuant to the
provisions of this Warrant, are hereinafter referred to as the “Warrant Shares” and
the “Purchase
Price,” respectively.  This Warrant is one of a series of
Warrants issued by the Company in connection with a private placement of Common
Stock and of like tenor, except as to the number of shares of Common Stock
subject thereto (collectively, the “Company
Warrants”).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    1. 
Exercise.

     

    (a) 
Exercise for
Cash.  The Registered Holder may, at its option, elect to
exercise this Warrant, in whole or in part and at any time or from time to time
during the Exercise Period, by surrendering this Warrant, with the purchase form
appended hereto as Exhibit I duly
executed by or on behalf of the Registered Holder, at the principal office of
the Company, or at such other office or agency as the Company may designate,
accompanied by payment in full, in lawful money of the United States, of the
Purchase Price payable in respect of the number of Warrant Shares purchased upon
such exercise.  A facsimile signature of the Registered Holder on the
purchase form shall be sufficient for purposes of exercising this Warrant,
provided that the Registered Holder has surrendered this Warrant to the Company
and has tendered payment for the applicable Purchase Price in full.

     

    (b) 
Cashless
Exercise.

     

    (i) 
At any time during the Exercise Period when the resale of the Warrant Shares by
the Registered Holder is not registered pursuant to an effective registration
statement filed with the Securities and Exchange Commission under the Securities
Act of 1933, as amended (the “Securities Act”), the
Registered Holder may, at its option, elect to exercise this Warrant, in whole
or in part, on a cashless basis, by surrendering this Warrant, with the purchase
form appended hereto as Exhibit I duly
executed by or on behalf of the Registered Holder, at the principal office of
the Company, or at such other office or agency as the Company may designate, by
canceling a portion of this Warrant in payment of the Purchase Price payable in
respect of the number of Warrant Shares purchased upon such
exercise.  In the event of an exercise pursuant to this Section 1(b), the
number of Warrant Shares issued to the Registered Holder shall be determined
according to the following formula: 

     

    X = Y(A-B)

               A

     

    
      	
              Where:  X
      =

            	
              the
      number of Warrant Shares that shall be issued to the Registered
      Holder;

            

    

     

    Y
=        the number of Warrant Shares
for which this Warrant is being exercised (which shall include both the number
of Warrant Shares issued to the Registered Holder and the number of Warrant
Shares subject to the portion of the Warrant being cancelled in payment of the
Purchase Price);

     

    
      
        	
                 
      

              	 	
                A
      =

              	
                the
      Fair Market Value (as defined below) of one share of Common Stock;
      and

              
	 	 	 	 
	 	 	B
      =  	the
      Purchase Price then in effect.

      

    

     

    (ii) The
Fair Market Value per share of Common Stock shall be determined as
follows:

     

    (1) 
If the Common Stock is listed on a national securities exchange or traded
on another nationally recognized trading system, including the OTC
Bulletin Board, as of the Exercise Date, the Fair Market Value per share of
Common Stock shall be deemed to be the average of the high and low reported sale
prices per share of Common Stock thereon on the trading day immediately
preceding the Exercise Date (provided that if no
such price is reported on such day, the Fair Market Value per share of Common
Stock shall be determined pursuant to clause (2) below).

     

    
      
        
        

      

      
        - 2
-

        
          

        

      

      
        
        

      

    

     

    (2) 
If the Common Stock is not listed on a national securities exchange or traded
on another nationally recognized trading system, including the OTC
Bulletin Board, as of the Exercise Date, the Fair Market Value per share of
Common Stock shall be deemed to be the amount most recently determined in good
faith by the Board of Directors of the Company (the “Board”) to represent
the fair market value per share of the Common Stock (including without
limitation a determination for purposes of granting Common Stock options or
issuing Common Stock under any plan, agreement or arrangement with employees of
the Company); and, upon request of the Registered Holder, the Board (or a
representative thereof) shall, as promptly as reasonably practicable but in any
event not later than ten (10) days after such request, notify the Registered
Holder of the Fair Market Value per share of Common Stock and furnish the
Registered Holder with reasonable documentation of the Board’s determination of
such Fair Market Value.  Notwithstanding the foregoing, if the Board
has not made such a determination within the three-month period prior to the
Exercise Date, then (A) the Board shall make, and shall provide or cause to be
provided to the Registered Holder notice of, a determination of the Fair Market
Value per share of the Common Stock within fifteen (15) days of a request by the
Registered Holder that it do so, and (B) the exercise of this Warrant pursuant
to this Section 1(b) shall be
delayed until such determination is made and notice thereof is provided to the
Registered Holder.

     

    (c) 
Exercise
Date.  Each exercise of this Warrant shall be deemed to have
been effected immediately prior to the close of business on the day on which
this Warrant shall have been surrendered to the Company as provided in Section 1(a) or 1(b) above (the
“Exercise
Date”).  At such time, the person or persons in whose name or
names any certificates for Warrant Shares shall be issuable upon such exercise
as provided in Section
1(d) below shall be deemed to have become the holder or holders of record
of the Warrant Shares represented by such certificates.

     

    (d) 
Issuance of
Certificates.  As soon as practicable after the exercise of
this Warrant in whole or in part, and in any event within three (3) trading days
thereafter,
(the “Delivery
Date”), the Company, at its expense, will cause to be issued in the name
of the Registered Holder, or as the Registered Holder (upon payment by the
Registered Holder of any applicable transfer taxes) may direct:

     

    (i) 
a certificate or certificates for the number of full Warrant Shares to which the
Registered Holder shall be entitled upon such exercise plus, in lieu of any
fractional share to which the Registered Holder would otherwise be entitled,
cash in an amount determined pursuant to Section 3 hereof or
at the written request of the Registered Holder, the Company shall cause
certificates for Warrant Shares purchased hereunder to be transmitted by the
transfer agent of the Company to the Registered Holder by crediting the account
of the Holder’s prime broker with the Depository Trust Company through its
Deposit Withdrawal Agent Commission system if the Company is a participant in
such system; and

     

    
      
        
        

      

      
        - 3
-

        
          

        

      

      
        
        

      

    

    (ii) 
in case such exercise is in part only, a new warrant or warrants (dated the date
hereof) of like tenor, calling in the aggregate on the face or faces thereof for
the number of Warrant Shares equal (without giving effect to any adjustment
therein) to the number of such shares called for on the face of this Warrant
minus the number of Warrant Shares for which this Warrant was so exercised
(which, in the case of an exercise pursuant to Section 1(b), shall
include both the number of Warrant Shares issued to the Registered Holder
pursuant to such partial exercise and the number of Warrant Shares subject to
the portion of the Warrant being cancelled in payment of the Purchase
Price).

     

    (iii) 
In addition to such Purchaser’s other available remedies, the Company shall pay
to a Purchaser, in cash, as liquidated damages and not as a penalty, for
non-delivery by the Delivery Date, the difference between the closing price of
the Common Stock on Delivery Date and the closing price of the Common Stock on
the date the Common Stock is actually delivered times the number of Warrant
Shares so exercised.

     

    (e) 
Holder’s Restrictions.  The Holder shall not have the right to
exercise any portion of this Warrant, pursuant to Section 1 or otherwise, to
the extent that after giving effect to such
issuance after exercise as set forth on the applicable Exercise Notice, such
Holder (together with such Holder’s Affiliates, and
any other person or entity acting as a group together with such Holder or any of
such Holder’s Affiliates), would
beneficially own in excess of the Beneficial Ownership Limitation (as defined
below).  For purposes of the foregoing sentence, the number of shares
of Common Stock beneficially owned by such Holder and its Affiliates shall
include the number of shares of Common Stock issuable upon exercise of this
Warrant with respect to which such determination is being made, but shall
exclude the number of shares of Common Stock which would be issuable upon (A)
exercise of the remaining, nonexercised portion of this Warrant
beneficially owned by such Holder or any of its Affiliates and (B) exercise or
conversion of the unexercised or nonconverted portion of any other securities of
the Company (including, without limitation, any other Common Stock equivalents)
subject to a limitation on conversion or exercise
analogous to the limitation contained herein beneficially owned by such Holder
or any of its Affiliates.  Except as set forth in the preceding
sentence, for purposes of this Section 4, beneficial ownership shall be calculated in accordance with Section 13(d) of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the rules
and regulations promulgated thereunder, it being acknowledged by the Holder that
the Company is not representing to such
Holder that such calculation is in compliance with Section 13(d) of the Exchange
Act and such Holder is solely responsible for any schedules required to be filed
in accordance therewith.   To the extent that the limitation
contained in this Section 4 applies, the
determination of whether this Warrant is exercisable (in relation to other
securities owned by such Holder together with any Affiliates) and of which
portion of this Warrant is exercisable shall be in the sole discretion of the
Holder, and the submission of a Exercise Notice shall be deemed to be the
Holder’s determination of whether this Warrant is exercisable
(in relation to other securities owned by such Holder together with any
Affiliates) and of which portion of this Warrant is exercisable, in each case
subject the Beneficial Ownership Limitation, and the Company shall have no
obligation to verify or confirm the accuracy of such determination or any
liability under this Section 1(e).  In
addition, a determination as to any group status as contemplated above shall be determined in accordance with
Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder.  For purposes of this Section 4, in determining the number of outstanding shares of
Common Stock, a Holder may rely on the
number of outstanding shares of Common Stock as reflected in (x) the
Company’s most recent Annual Report on Form 10-K or Quarterly
Report on Form 10-Q, or such similar form, as the case may be, or (y) any other
written notice by the Company or the
Company’s transfer agent setting forth the number of shares of
Common Stock outstanding.  In any case, the number of outstanding
shares of Common Stock shall be determined after giving effect to the conversion
or exercise of securities of the Company, including this
Warrant, by such Holder or its Affiliates since the date as of which such number
of outstanding shares of Common Stock was reported.  The “Beneficial Ownership
Limitation” shall be 9.99% of the number of shares of the Common
Stock outstanding immediately after giving
effect to the issuance of shares of Common Stock issuable upon exercise of this
Warrant.  The Beneficial Ownership Limitation provisions of this
Section
4 may be waived by such Holder, at the
election of such Holder, upon not less than
61 days’ prior notice to the Company to change the Beneficial
Ownership Limitation. The provisions of this paragraph shall be construed and
implemented in a manner otherwise than in strict conformity with the terms of
this Section
4 to correct this paragraph (or any portion hereof) which may be defective
or inconsistent with the intended Beneficial Ownership Limitation herein
contained or to make changes or supplements necessary or desirable to properly
give effect to such limitation. The limitations contained in this
paragraph shall apply to a successor holder of this Warrant.

     

    
      
        
        

      

      
        - 4
-

        
          

        

      

      
        
        

      

    

    2. 
Adjustments.

     

    (a) 
Adjustment for Stock
Splits and Combinations.  If the Company shall at any time or
from time to time after the Date of Issuance (as
set forth above) effect a subdivision of the outstanding Common Stock,
the Purchase Price then in effect immediately before that subdivision shall be
proportionately decreased.  If the Company shall at any time or from
time to time after the Date of Issuance
combine the outstanding shares of Common Stock, the Purchase Price then in
effect immediately before the combination shall be proportionately
increased.  Any adjustment under this paragraph shall become effective
at the close of business on the date the subdivision or combination becomes
effective.

     

    (b) 
Adjustment for Certain
Dividends and Distributions.  In the event the Company at any
time, or from time to time after the Date of
Issuance shall make or issue, or fix a record date for the determination
of holders of Common Stock entitled to receive, a dividend or other distribution
payable in additional shares of Common Stock, then and in each such event the
Purchase Price then in effect immediately before such event shall be decreased
as of the time of such issuance or, in the event such a record date shall have
been fixed, as of the close of business on such record date, by multiplying the
Purchase Price then in effect by a fraction:

     

    (1) 
the numerator of which shall be the total number of shares of Common Stock
issued and outstanding immediately prior to the time of such issuance or the
close of business on such record date, and

     

    (2) 
the denominator of which shall be the total number of shares of Common Stock
issued and outstanding immediately prior to the time of such issuance or the
close of business on such record date plus the number of shares of Common Stock
issuable in payment of such dividend or distribution; provided, however, that if such
record date shall have been fixed and such dividend is not fully paid or if such
distribution is not fully made on the date fixed therefor, the Purchase Price
shall be recomputed accordingly as of the close of business on such record date
and thereafter the Purchase Price shall be adjusted pursuant to this paragraph
as of the time of actual payment of such dividends or
distributions.

     

    
      
        
        

      

      
        - 5
-

        
          

        

      

      
        
        

      

    

     

    Simultaneously
with any adjustment to the Purchase Price pursuant to Sections 2(a) and
2(b), the
number of Warrant Shares which may be purchased upon exercise of this Warrant
shall be increased or decreased proportionately, so that after such adjustment,
the aggregate amount of the adjusted Purchase Price multiplied by the aggregate
adjusted amount of Warrant Shares shall equal the aggregate amount of the
unadjusted Purchase Price multiplied by the aggregate unadjusted amount of
Warrant Shares.

     

    (c) 
Adjustments for Other
Dividends and Distributions.  In the event the Company at any
time or from time to time after the Date of
Issuance shall make or issue, or fix a record date for the determination
of holders of Common Stock entitled to receive, a dividend or other distribution
payable in securities of the Company (other than shares of Common Stock) or in
cash or other property (other than regular cash dividends paid out of earnings
or earned surplus, determined in accordance with generally accepted accounting
principles), then and in each such event provision shall be made so that the
Registered Holder shall receive upon exercise hereof, in addition to the number
of shares of Common Stock issuable hereunder, the kind and amount of securities
of the Company, cash or other property which the Registered Holder would have
been entitled to receive had this Warrant been exercised on the date of such
event and had the Registered Holder thereafter, during the period from the date
of such event to and including the Exercise Date, retained any such securities
receivable during such period, giving application to all adjustments called for
during such period under this Section 2 with
respect to the rights of the Registered Holder.

     

    (d) 
Adjustment for
Reorganization.  If there shall occur any reorganization,
recapitalization, reclassification, consolidation or merger involving the
Company in which the Common Stock is converted into or exchanged for securities,
cash or other property  (collectively, a “Reorganization”),
then, following such Reorganization, the Registered Holder shall receive upon
exercise hereof the kind and amount of securities, cash or other property which
the Registered Holder would have been entitled to receive pursuant to such
Reorganization if such exercise had taken place immediately prior to such
Reorganization.  Notwithstanding the foregoing sentence, if (x) there
shall occur any Reorganization in which the Common Stock is converted into or
exchanged for anything other than solely equity securities, and (y) the common
stock of the acquiring or surviving company is publicly traded, then, as part of
such Reorganization, (i) the Registered Holder shall have the right thereafter
to receive upon the exercise hereof such number of shares of common stock of the
acquiring or surviving company as is determined by multiplying (A) the number of
shares of Common Stock subject to this Warrant immediately prior to such
Reorganization by (B) a fraction, the numerator of which is the Fair Market
Value (as defined in Section 1(b)(ii)
above) per share of Common Stock as of the effective date of such
Reorganization, and the denominator of which is the fair market value per share
of common stock of the acquiring or surviving company as of the effective date
of such transaction, as determined in good faith by the Board (using the
principles set forth in Sections 2(d)(i) and
2(d)(ii) to the
extent applicable), and (ii) the exercise price per share of common stock of the
acquiring or surviving company shall be the Purchase Price divided by the
fraction referred to in clause (B) above.  In any such case,
appropriate adjustment (as determined in good faith by the Board) shall be made
in the application of the provisions set forth herein with respect to the rights
and interests thereafter of the Registered Holder, to the end that the
provisions set forth in this Section 2 (including
provisions with respect to changes in and other adjustments of the Purchase
Price) shall thereafter be applicable, as nearly as reasonably may be, in
relation to any securities, cash or other property thereafter deliverable upon
the exercise of this Warrant (the “Transaction
Consideration”). The aggregate Exercise Price for this Warrant will not
be affected by any such Reorganization, but the Company shall apportion such
aggregate Exercise Price among the Transaction Consideration in a reasonable
manner reflecting the relative value of any different components of the
Transaction Consideration, if applicable.  If holders of Common Stock
are given any choice as to the securities, cash or property to be received in a
Reorganization, then the Holder shall be given the same choice as to the
Transaction Consideration it receives upon any exercise of this Warrant
following such Reorganization.  At the Holder's request, any successor
to the Company or surviving or acquiring
entity in such Reorganization shall issue to the Holder a new Warrant
consistent with the foregoing provisions and evidencing the Holder's right to
purchase the Transaction Consideration for the aggregate Exercise Price upon
exercise thereof.  The terms of any agreement pursuant to which a
Reorganization is effected shall include terms requiring any such successor or
surviving or acquiring entity to comply
with the provisions of this paragraph (d) and insuring that the Warrant (or any
such replacement security) will be similarly adjusted upon any subsequent
transaction analogous to a Reorganization.  Notwithstanding anything
to the contrary, in the event of a Reorganization that is (1) an all cash
transaction, (2) a “Rule 13e-3
transaction” as defined in Rule 13e-3 under the Securities Exchange Act
of 1934, as amended, or (3) a Reorganization involving a person or entity not
traded on a national securities exchange, the Nasdaq Global Select Market, the
Nasdaq Global Market, or the Nasdaq Capital Market, the Company or any successor
entity shall pay at the Holder’s option, exercisable at any time concurrently
with or within 30 days after the consummation of the Reorganization, in lieu of
the exercise of this Warrant, an amount of cash equal to the value of this
Warrant as determined in accordance with the Black Scholes Option Pricing Model
obtained from the “OV” function on
Bloomberg L.P. using (i) a price per share of Common Stock equal to the VWAP of
the Common Stock for the Trading Day immediately preceding the date of
consummation of the applicable  Reorganization, (ii) a risk-free
interest rate corresponding to the U.S. Treasury rate for a period equal to the
remaining term of this Warrant as of the date of consummation of the applicable
Reorganization and (iii) an expected volatility equal to the 10 day volatility
obtained from the “HVT” function on
Bloomberg L.P. determined as of the Trading Day immediately following the public
announcement of the applicable Reorganization.

     

    
      
        
        

      

      
        - 6
-

        
          

        

      

      
        
        

      

    

    (e) 
Certificate as to
Adjustments.  Upon the occurrence of each adjustment or
readjustment of the Purchase Price pursuant to this Section 2, the
Company at its expense shall, as promptly as reasonably practicable but in any
event not later than ten (10) days thereafter, compute such adjustment or
readjustment in accordance with the terms hereof and furnish to the Registered
Holder a certificate setting forth such adjustment or readjustment (including
the kind and amount of securities, cash or other property for which this Warrant
shall be exercisable and the Purchase Price) and showing in detail the facts
upon which such adjustment or readjustment is based.  The Company
shall, as promptly as reasonably practicable after the written request at any
time of the Registered Holder (but in any event not later than ten (10) days
thereafter), furnish or cause to be furnished to the Registered Holder a
certificate setting forth (i) the Purchase Price then in effect and (ii) the
number of shares of Common Stock and the amount, if any, of other securities,
cash or property which then would be received upon the exercise of this
Warrant.

     

    3. 
Fractional
Shares.  The Company shall not be required upon the exercise of
this Warrant to issue any fractional shares, but shall pay the value thereof to
the Registered Holder in cash on the basis of the Fair Market Value per share of
Common Stock, as determined pursuant to Section 2(d)
above.

     

    4. 
Adjustment for Certain
Dilutive Issuances.  In the event the Company at any time, or
from time to time after the Original Issue Date shall make or issue, any equity
Securities other than equity granted to employees, directors or consultants of
the Company pursuant to the Company’s stock plan, at a price per share lower
than the Purchase Price effective immediately prior to such event, the Purchase
Price hereunder shall be immediately reduced to such lower price immediately
upon the consummation of such event, but such Purchase Price shall be reduced to
no lower than $0.30 per share, as may be adjusted for the events set forth in
Section 2
hereof.

     

    5. 
Transfers,
etc.

     

    (a) 
Notwithstanding anything to the contrary contained herein, this Warrant and the
Warrant Shares shall not be sold or transferred unless either (i) they first
shall have been registered under the Securities Act of 1933, as amended (the
“Act”), or (ii)
such sale or transfer shall be exempt from the registration requirements of the
Act and the Company shall have been furnished with an opinion of legal counsel,
reasonably satisfactory to the Company, to the effect that such sale or transfer
is exempt from the registration requirements of the
Act.  Notwithstanding the foregoing, no registration or opinion of
counsel shall be required for (i) a transfer by a Registered Holder which is an
entity to a wholly owned subsidiary of such entity, a transfer by a Registered
Holder which is a partnership to a partner of such partnership or a retired
partner of such partnership or to the estate of any such partner or retired
partner, or a transfer by a Registered Holder which is a limited liability
company to a member of such limited liability company or a retired member or to
the estate of any such member or retired member, provided that the
transferee in each case agrees in writing to be subject to the terms of this
Section 5, or
(ii) a transfer made in accordance with Rule 144 under the Act.

     

    (b) 
The Company will maintain a register containing the name and address of the
Registered Holder of this Warrant.  The Registered Holder may change
its address as shown on the warrant register by written notice to the Company
requesting such change.

     

    (c) 
Subject to the provisions of Section 5 hereof,
this Warrant and all rights hereunder are transferable, in whole or in part,
upon surrender of this Warrant with a properly executed assignment (in the form
of Exhibit II
hereto) at the principal office of the Company (or, if another office or agency
has been designated by the Company for such purpose, then at such other office
or agency).

     

    6. 
No
Impairment.  The Company will not, by amendment of its charter
or through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such action as may be necessary or appropriate in order
to protect the rights of the Registered Holder against impairment.

     

    
      
        
        

      

      
        - 7
-

        
          

        

      

      
        
        

      

    

    7. 
Notices of Record
Date, etc.  In the event:

     

    (a) 
the Company shall take a record of the holders of its Common Stock (or other
stock or securities at the time deliverable upon the exercise of this Warrant)
for the purpose of entitling or enabling them to receive any dividend or other
distribution, or to receive any right to subscribe for or purchase any shares of
stock of any class or any other securities, or to receive any other right;
or

     

    (b) 
of any Reorganization; or

     

    (c) 
of the voluntary or involuntary dissolution, liquidation or winding-up of the
Company, 

     

    (d) 
then, and in each such case, the Company will send or cause to be sent to the
Registered Holder a notice specifying, as the case may be, (i) the record date
for such dividend, distribution or right, and the amount and character of such
dividend, distribution or right, or (ii) the effective date on which such
reorganization, reclassification, consolidation, merger, transfer, dissolution,
liquidation or winding-up is to take place, and the time, if any is to be fixed,
as of which the holders of record of Common Stock (or such other stock or
securities at the time deliverable upon the exercise of this Warrant) shall be
entitled to exchange their shares of Common Stock (or such other stock or
securities) for securities or other property deliverable upon such
Reorganization, dissolution, liquidation or winding-up.  Such notice
shall be sent at least ten (10) days prior to the record date or effective date
for the event specified in such notice.

     

    8. 
Reservation of
Stock.  The Company will at all times reserve and keep
available, solely for issuance and delivery upon the exercise of this Warrant,
such number of Warrant Shares and other securities, cash and/or property, as
from time to time shall be issuable upon the exercise of this
Warrant.

     

    9. 
Exchange or
Replacement of Warrants.

     

    (a) 
Upon the surrender by the Registered Holder, properly endorsed, to the Company
at the principal office of the Company, the Company will, subject to the
provisions of Section
5 hereof, issue and deliver to or upon the order of the Registered
Holder, at the Company’s expense, a new Warrant or Warrants of like tenor, in
the name of the Registered Holder or as the Registered Holder (upon payment by
the Registered Holder of any applicable transfer taxes) may direct, calling in
the aggregate on the face or faces thereof for the number of shares of Common
Stock (or other securities, cash and/or property) then issuable upon exercise of
this Warrant.

     

    (b) 
Upon receipt of evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of this Warrant and (in the case of loss, theft
or destruction) upon delivery of an indemnity agreement (with surety if
reasonably required) in an amount reasonably satisfactory to the Company, or (in
the case of mutilation) upon surrender and cancellation of this Warrant, the
Company will issue, in lieu thereof, a new Warrant of like tenor.

     

    
      
        
        

      

      
        - 8
-

        
          

        

      

      
        
        

      

    

    10. 
Notices.  All
notices and other communications from the Company to the Registered Holder in
connection herewith shall be mailed by certified or registered mail, postage
prepaid, or sent via a reputable nationwide overnight courier service
guaranteeing next business day delivery, to the address last furnished to the
Company in writing by the Registered Holder.  All notices and other
communications from the Registered Holder to the Company in connection herewith
shall be mailed by certified or registered mail, postage prepaid, or sent via a
reputable nationwide overnight courier service guaranteeing next business day
delivery, to the Company at its principal office set forth below.  If
the Company should at any time change the location of its principal office to a
place other than as set forth below, it shall give prompt written notice to the
Registered Holder and thereafter all references in this Warrant to the
location of its principal office at the particular time shall be as so specified
in such notice. All such notices and communications shall be deemed delivered
one business day after being sent via a reputable international overnight
courier service guaranteeing next business day delivery.

     

    11. 
No Rights as
Stockholder.  Until the exercise of this Warrant, the
Registered Holder shall not have or exercise any rights by virtue hereof as a
stockholder of the Company.  Notwithstanding the foregoing, in the
event (i) the Company effects a split of the Common Stock by means of a stock
dividend and the Purchase Price of and the number of Warrant Shares are adjusted
as of the date of the distribution of the dividend (rather than as of the record
date for such dividend), and (ii) the Registered Holder exercises this Warrant
between the record date and the distribution date for such stock dividend, the
Registered Holder shall be entitled to receive, on the distribution date, the
stock dividend with respect to the shares of Common Stock acquired upon such
exercise, notwithstanding the fact that such shares were not outstanding as of
the close of business on the record date for such stock dividend.

     

    12. 
Amendment or
Waiver.  This Warrant may only be modified or amended or the
provisions hereof waived with the written consent of the Company and the
Registered Holder.

     

    13. 
Section
Headings.  The section headings in this Warrant are for the
convenience of the parties and in no way alter, modify, amend, limit or restrict
the contractual obligations of the parties.

     

    14. 
Governing
Law.  This Warrant will be governed by and construed in
accordance with the internal laws of the State of New York (without reference to
the conflicts of law provisions thereof).

     

    15. 
Facsimile
Signatures. This Warrant may be executed by facsimile
signature.

     

    * * * * *
* *

     

    
      
        
        

      

      
        - 9
-

        
          

        

      

      
        
        

      

    

     

    EXECUTED
as of the Date of Issuance indicated above.

     

    
      
        	 	HANA BIOSCIENCES,
      INC.	 
	 	 	 	 
	
                 

              	
                By:
      

              	 	 
	 	 	Name 	 
	 	 	Title 	 
	 	 	 	 

      

    

     

     

    ATTEST:

     

    
      
        

      

    

     

    
      
        
        

      

      
        - 10
-

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
I

     

    PURCHASE
FORM

    
    

     

    
      	
              To: [___] 

            	
              Dated:____________

            

    

     

    The
undersigned, pursuant to the provisions set forth in the attached Warrant (No.
___), hereby elects to purchase (check applicable
box):

     

    
      	
               
      

            	
              ·

            	
              ____
      shares of the Common Stock of [___] covered by such
      Warrant; or 

            

    

     

    
      	
               
      

            	
              ·

            	
              ____
      the maximum number of shares of Common Stock covered by such Warrant
      pursuant to the cashless exercise procedure set forth in Section
      1(b).

            

    

     

    The
undersigned herewith makes payment of the full purchase price for such shares at
the price per share provided for in such Warrant.  Such payment takes
the form of (check applicable
box or boxes):

     

    
      	
               
      

            	
              ·

            	
              $______
      in lawful money of the United States;
and/or

            

    

     

    
      	
               
      

            	
              ·

            	
              the
      cancellation of such portion of the attached Warrant as is exercisable for
      a total of _____ Warrant Shares (using a Fair Market Value of $_____ per
      share for purposes of this calculation) ;
and/or

            

    

     

    
      	
               
      

            	
              ·

            	
              the
      cancellation of such number of Warrant Shares as is necessary, in
      accordance with the formula set forth in Section 1(b),
      to exercise this Warrant with respect to the maximum number of Warrant
      Shares purchasable pursuant to the cashless exercise procedure set forth
      in Section
      1(b).

            

    

     

    
      
        	
                 

              	 	 
	 	 	 	 
	 	Signature:   	 	 
	 	 	 	 
	 	Address: 	 	 
	 	 	 	 
	 	 	 	 

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    EXHIBIT
II

     

    ASSIGNMENT
FORM

     

    FOR VALUE
RECEIVED, ______________________________________ hereby sells, assigns and
transfers all of the rights of the undersigned under the attached Warrant (No.
____) with respect to the number of shares of Common Stock of [___] covered thereby set
forth below, unto:

     

    
      	
              Name of
      Assignee

            	
              Address

            	
              No. of
      Shares

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      

    

    Dated:_____________________

     

    Signature:________________________________

     

    Signature
Guaranteed:

     

    By:
_______________________

     

    The
signature should be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership in
an approved signature guarantee medallion program) pursuant to Rule 17Ad-15
under the Securities Exchange Act of 1934, as amended.Unassociated Document

     

    Exhibit
10.1

     

    HANA
BIOSCIENCES, INC.

     

    [FORM
OF] SECURITIES PURCHASE AGREEMENT

     

     

    This
Securities Purchase Agreement, dated on and as of the date set forth on the
signature page hereto (this “Agreement”), is made
among Hana Biosciences, Inc., a Delaware corporation (the “Company”), and the
persons listed on Exhibit A (the “Purchasers”).

     

    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 units (the “Units”) from the
Company. Each Unit shall consist of (i) (A) one share (each, a “Share,” and
collectively, the “Shares”) of the
Company’s common stock, $0.001 par value per share (the
“Common
Stock”), or (B) a warrant (the “Series A Warrants”)
to purchase one Series A Warrant Share (as defined below) at an exercise price
of $0.01 per share and such other terms as described in the form of Series A
Warrant attached hereto as Exhibit C-1, and (ii)
a seven-year warrant to purchase one-tenth of a Share or Series A Warrant Share
purchased by the Purchaser (the “Series B Warrants”
and together with the Series A Warrants, the “Warrants”), with an
exercise price of 100% of the Market Price per share not to exceed $0.70, and
such other terms as described in the form of Series B Warrant attached hereto as
Exhibit
C-2.  The Shares and the Warrants are collectively referred to
herein as the “Securities.”  The
Securities shall be allocated as set forth in Section 1.1
below.  “Market Price” means
the last closing bid price of the Common Stock on the last completed trading day
prior to the entry into this Agreement.

     

    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:

     

    Section
1

    Subscription

     

    1.1 Authorization.  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 opposite such Purchaser’s name on Exhibit A attached
hereto (the “Subscription
Amount”).  The number and type of Securities to be issued to a
Purchaser hereunder shall consist of (i) Shares in an amount equal to the
quotient resulting from (x) the
Subscription Amount, divided by (y) the Offering Price, rounded down to the
nearest whole number (referred to herein as the “Subscription Share
Amount”), and if the Purchaser so elects, limited to 9.99% of the
outstanding shares of Common Stock of the Company after giving effect to the issuance of the Securities at
the Closing per Purchaser (referred to herein as the “Capped Share
Amount”), (ii) a Series A Warrant to purchase such number of shares of
Common Stock equal to the difference of the Subscription Share Amount and the
Capped Share Amount (referred to herein as the “Series A Warrant
Shares”), if any, and (iii) a Series B 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 10 aggregate Subscription Share Amount Shares purchased
hereunder, rounded down to the nearest whole number.  

     

    
      
        
        

      

      
        - 1
-

        
          

        

      

      
        
        

      

    

     

    1.2 Sale of
Securities.  For purposes of this Agreement, the “Offering Price” shall
be $0.30, which shall be the price per Unit to
be paid by the Purchasers.  If applicable to such Purchaser, the
Offering Price shall be reduced by $0.01 per Unit for each Series A Warrant
Share issued to such Purchaser.  The Company shall allocate the
Subscription Amount between the Shares and the Warrants prior to the Closing (as
defined below) as set forth on Exhibit A attached
hereto.

     

    1.3 Deerfield
Subscription.  Notwithstanding anything to the contrary
contained herein, in accordance with the terms of a letter agreement dated
September 2, 2009 (the “Deerfield Agreement”)
among the Company and Deerfield Private Design Fund, L.P., Deerfield Special
Situations Fund, L.P., Deerfield Special Situations Fund International Limited
and Deerfield Private Design International, L.P. (collectively, “Deerfield”),
Deerfield may purchase Securities pursuant to this Agreement by utilizing the
$3,871,843.77 of “Major Transaction Warrant Redemption Price” (as such term is
defined in the Deerfield Agreement) in lieu of cash.  Deerfield hereby
elects to have the Major Transaction Warrant Price satisfied by investing such
amount in this Offering on the terms described herein.  The Securities
purchased by Deerfield pursuant to the foregoing election shall be referred to
herein as the “Deerfield Warrant Redemption
Securities.”  The parties to this Agreement agree that, except
as otherwise provided herein, Deerfield shall for all purposes be deemed a
Purchaser with respect to the Deerfield Warrant Redemption
Securities.

     

    Section
2

    Closing Date:
Delivery

     

    2.1 Closing
Date.  The closing of the purchase and sale of the Securities
hereunder is expected to occur as set forth below
(the “Closing”), and shall be held at the offices of
Fredrikson & Byron, P.A., 200 South Sixth Street, Suite 4000, Minneapolis,
Minnesota 55402, at or before 2:00 p.m. Eastern time, on or before October 9,
2009.   At the Closing, the Company will sell and issue to the
Purchasers, and the Purchasers will purchase from the Company, Securities having an aggregate Subscription Amount not
to exceed $12,700,000 (excluding the Deerfield Warrant Redemption
Securities).

     

    2.2 Delivery.  Subject
to the terms and conditions of this Agreement, as soon as practicable after each
Closing, but in no event later that five (5) business days, the Company shall
deliver, or cause to be delivered, a certificate or certificates, registered in
the name or names as each Purchaser shall designate, representing the Shares and
Warrants purchased by such Purchaser at such Closing. 

     

    2.3 Offering; Terms and
Conditions.  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.

     

    
      
        
        

      

      
        - 2
-

        
          

        

      

      
        
        

      

    

     

    Section
3

    Representations and
Warranties of the Company

     

    Except as
set forth under the corresponding section of the disclosure schedules delivered
to the Purchasers concurrently herewith (the “Disclosure
Schedules”), which Disclosure Schedules shall be deemed a part hereof, or
except as set forth in the SEC Reports, the Company hereby makes the following
representations and warranties to the Purchaser, which shall survive the Closing
and the purchase and sale of the Securities.

     

    3.1 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”).  

     

    3.2 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 September 30, 2009, there were 32,583,004 shares of Common Stock and no shares of preferred stock
issued and outstanding.  As of September
30, 2009, the Company had reserved (i) 1,141,390 shares of Common Stock
for issuance pursuant to its 2003 Stock Option Plan, of which 399,664 shares are
subject to outstanding, unexercised options as of such date, (ii) 6,432,404
shares of Common Stock for issuance pursuant to its 2004 Stock Incentive Plan,
of which 4,550,661 shares of Common Stock
are subject to outstanding, unexercised options as of such
date,  (iii) 421,504 shares of Common
Stock for issuance under its 2006 Employee Stock Purchase Plan (together with
the 2003 Stock Option Plan and the 2004 Stock Incentive Plan, the “Company Option
Plans”), all of which are subject to outstanding, options or rights to
purchase as of such date, and (iv) 1,996,687 shares of Common Stock 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. 

     

    3.3 Issuance; Reservation of
Shares.  The issuance of the Shares at the Closing has been, or at the time of such Closing will be, duly
and validly authorized by all necessary corporate action, and such Shares, when issued and paid for pursuant to
this Agreement, will be validly issued, fully paid and
non-assessable.  The issuance of the Warrants at the Closing has been, or at the time of such Closing will be, duly
and validly authorized by all necessary corporate action, and the Warrant
Shares, when issued upon the due exercise of such Warrants, will be validly issued, fully paid
and non-assessable.  Upon their delivery
in accordance with the terms of this Agreement, the Warrants have been
(or upon delivery will have been) duly executed by the Company and will
constitute a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to,
or affecting generally the enforcement of, creditors’ rights and remedies or by
other equitable principles of general application.  The Company
has reserved, and will reserve, at all times that the Warrants remain
outstanding, such number of shares of Common Stock sufficient to enable the full
exercise of the Warrants.

     

    
      
        
        

      

      
        - 3
-

        
          

        

      

      
        
        

      

    

     

    3.4 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.  The
issuance and sale of the Securities contemplated hereby will not give rise to
any preemptive rights or rights of first refusal on behalf of any
person.  

     

    3.5 No Conflict; Governmental
and Other Consents.

     

    (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 any U.S. or non-U.S. government, regulatory or administrative
authority, agency, instrumentality or commission or any court, tribunal,
judicial or arbitral body or other similar authority (a “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 8
hereof).

     

    (b) Other than the approval of the Charter Amendment at the
Stockholders’ Meeting, 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”) and with any
state or foreign blue sky or securities regulatory authority.

     

    
      
        
        

      

      
        - 4
-

        
          

        

      

      
        
        

      

    

     

    3.6 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.

     

    3.7 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.

     

    3.8 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-Q 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. 

     

    3.9 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.

     

    3.10
Sarbanes-Oxley 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 Sarbanes-Oxley 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 Sarbanes-Oxley Act of 2002 not currently in
effect upon the effectiveness of such provisions.

     

    3.11
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.

     

    
      
        
        

      

      
        - 5
-

        
          

        

      

      
        
        

      

    

     

    3.12
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.

     

    3.13
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.

     

    3.14
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.

     

    3.15
Certain
Fees.  Except as set forth on the Disclosure Schedules
(including the fees owed), no brokers’, finders’ or financial advisory fees or
commissions will be payable by the Company with respect to the transactions
contemplated by this Agreement.

     

    3.16
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-K (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.

     

    3.17
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-K or any company or other entity controlled by
such person.

     

    3.18
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.  

     

    
      
        
        

      

      
        - 6
-

        
          

        

      

      
        
        

      

    

     

    3.19
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.

     

    3.20
Environmental
Matters.  Except as disclosed in the SEC Reports, to the Company’s knowledge, 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. 

     

    
      
        
        

      

      
        - 7
-

        
          

        

      

      
        
        

      

    

     

    3.21
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, trade 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.    

     

    3.22 Regulatory
Matters.

     

    (a) Since January
1, 2009, the Company has not received any written notices or statements from
the United States Food and Drug Administration (the
“FDA”), European
Medicines Agency (the “EMEA”) or any other
governmental agency, and otherwise has no knowledge, that any license, approval,
permit or authorization to conduct any clinical trial of any product of the
Company has been, will be or may be suspended, revoked, modified or limited,
except as would not, individually or in the aggregate, have or reasonably be
expected to have a Material Adverse Effect.

     

    (b) The
Company has all franchises, permits, licenses, and any similar authority, including without limitation all franchises, permits
and licenses required by the FDA or any other
federal, state or foreign agencies or bodies engaged in the regulation of
pharmaceuticals or biohazardous materials, necessary for the conduct of
its business as now being conducted by it and as currently proposed to be
conducted as disclosed in the SEC Reports,
except where the failure to do so would not, individually or in the aggregate,
have or reasonably be expected to have a Material Adverse Effect.  The
Company is not in violation of or default under any of such franchises, permits,
licenses, or other similar authority, except where such violation or default
would not, individually or in the aggregate, have or reasonably be expected to
have a Material Adverse Effect.

     

    (c) In
connection with the Company’s product candidates known as Marqibo, Alocrest,
Brakiva and topical menadione (the “Investigational
Products”), the Company has made available to the Lead Investor all (i)
approved and pending new drug applications (including Section 505(b)(2)
applications) and abbreviated new drug applications as of the date hereof and
(ii) all pre-clinical and clinical studies and trials and bioequivalence studies
referenced in the Company’s investigational new drug applications, pending new
drug applications (including Section 505(b)(2) applications) and abbreviated new
drug applications previously or as of the date hereof currently undertaken or
sponsored by the Company or any subsidiary of the Company. The Company has made
available to the Lead Investor true, complete and accurate copies of all
material data and reports with respect to such applications, studies and trials,
and all other material information regarding the quality, efficacy and safety of
the Investigational Products.  The Company has made available to the
Lead Investor all material correspondence and contact information between the
Company, the FDA, EMEA and other Governmental Authorities regarding the
Investigational Products, and, to the extent provided to the Company or any
subsidiary of the Company, material correspondence between the FDA, EMEA and
other Governmental Authorities relating thereto, including but not limited to
(1) reports of inspection observations from any governmental authority related
to manufacturing facilities where the Investigational Products are being
manufactured, to the extent such report relates to a product, (2) establishment
inspection reports from any Governmental Authority, to the extent such report
relates to an Investigational Product, (3) any FDA Form 483s relating to the
Investigational Products or any equivalent thereto from any Governmental
Authority in any applicable jurisdiction, (4) any minutes of meetings between
the Company and FDA, EMEA or other governmental authorities regarding the
Investigational Products and (5) any notice, warning letter, regulatory letter,
Section 305 notice, or any other similar communication to the Company or any of
the subsidiaries stating that their businesses were or are in material violation
of any law, clearance, Company Permit, consent, guidance or guideline, or were
or are the subject of any material pending or, to the knowledge of the Company,
threatened Governmental Authority investigation, proceeding, review or
inquiry.

     

    
      
        
        

      

      
        - 8
-

        
          

        

      

      
        
        

      

    

     

    (d)
Except as would not result in a Material Adverse Effect, none of the Company,
any of its subsidiaries or any officers or, to the Company’s knowledge,
employees of the Company or any of its subsidiaries is currently, or has been
convicted of any crime or been debarred pursuant to 21 U.S.C. Section 335a(a) or
21 U.S.C. Section 335a(b) or any similar law or to the Company’s knowledge,
engaged in any conduct for which debarment is mandated by 21 U.S.C. Section
335a(a) or any similar law or authorized by 21 U.S.C. Section 335a(b), or been
charged with or convicted under U.S. law for conduct relating to the development
or approval, or otherwise relating to the regulation of any product that is a
drug under the Generic Drug Enforcement Act of 1992, or any other relevant or
analogous law in any applicable jurisdiction.

     

    (e)  None
of the Company, any of its subsidiaries or any officers or, to the Company’s
knowledge, employees of the Company or any of its subsidiaries is currently
excluded from participating in the federal health care programs under Section
1128 of the Social Security Act or any similar law, or otherwise made ineligible
to participate in U.S. federal or state health care programs, or any other
relevant or analogous law in any applicable jurisdictions or, to the Company’s
knowledge, engaged in any conduct for which such person could be excluded from
participating in the federal health care programs under Section 1128 of the
Social Security Act or any similar law, or otherwise made ineligible to
participate in U.S. federal or state health care programs, or any other relevant
or analogous law in any applicable jurisdictions. Except as would not result in
a Material Adverse Effect, none of the Company, any of its subsidiaries or any
officers or, to the Company’s knowledge, employees of the Company or any of its
subsidiaries is currently, or has violated or caused a violation of any federal
or state health care fraud and abuse or false claims statute or regulation,
including, without limitation, the Medicare/Medicaid Anti-kickback provisions of
the Social Security Act, 42 U.S.C. § 1320a-7b(b), and the relevant regulations
in 42 C.F.R. Part 1001, or any other relevant or analogous law in any applicable
jurisdictions. Except as would not result in a Material Adverse Effect, neither
the Company nor any subsidiary, nor any officer, nor, to the Company’s
knowledge, employee or agent acting on behalf of the Company or any subsidiary,
has, unless corrected in a subsequent statement, act or disclosure made prior to
the date hereof, made an untrue statement of a material fact or fraudulent
statement to the FDA or any other Governmental Authority, failed to disclose a
material fact required to be disclosed to the FDA or any other Governmental
Authority, or committed an act, made a statement, or failed to make a statement
that, at the time such disclosure was made, would reasonably be expected to
violate the FDA policy respecting “Fraud, Untrue Statements of Material Fact,
Bribery, and Illegal Gratuities,” set forth in 56 Fed Reg. 46191 (September 10,
1991) or any similar policy or other relevant or analogous law in any applicable
jurisdiction. Except as would not result in a Material Adverse Effect, none of
the Company, any of its subsidiaries or any officers or, to the Company’s
knowledge, employees of the Company or any of its subsidiaries has provided any
false or fraudulent information to the Centers for Medicare & Medicaid
Services, any of its contractors, or Part D prescription drug plans, for any
purpose, including, but not limited to, coverage of any of its products or the
setting of any reimbursement rates. Except as would not result in a Material
Adverse Effect, none of the Company, any of its subsidiaries or any officers or,
to the Company’s knowledge, employees of the Company or any of its subsidiaries
has provided any false or fraudulent information to any compendia that are used
by any Federal healthcare program to establish coverage or payment for any of
the Company’s products. Except as would not result in a Material Adverse Effect,
none of the Company, any of its subsidiaries or any officers or, to the
Company’s knowledge, employees of the Company or any of its subsidiaries has
furnished any false or fraudulent reimbursement advice to any actual or
potential customer, or has indicated how any actual or potential customer could
profit from seeking reimbursement for any of the Company’s products. Except as
would not result in a Material Adverse Effect, each of the Company, its
subsidiaries’ officers and, to the Company’s knowledge, employees of the Company
or any of its subsidiaries, are all in material compliance with the PhRMA Code
on Interactions with Healthcare Professionals.

     

    
      
        
        

      

      
        - 9
-

        
          

        

      

      
        
        

      

    

     

    (f)
Except as would not result in a Material Adverse Effect, none of the
Investigational Products manufactured, tested, distributed, held and/or marketed
by the Company or any of its subsidiaries has been recalled, withdrawn,
suspended or discontinued (whether voluntarily or otherwise) since the date such
product was acquired by the Company or one of its subsidiaries. Except as would
not result in a Material Adverse Effect, no proceedings (whether completed or
pending) seeking the recall, withdrawal, suspension or seizure of any such
product or pre-market approvals or marketing authorizations of any such product
are pending, or to the knowledge of the Company, threatened, against the Company
or any of its subsidiaries, nor have any such proceedings been pending at any
time since the date such product was acquired by the Company or one of its
subsidiaries. The Company has provided or made available to the Lead Investor
all material current U.S. annual periodic reports and all information about
adverse drug experiences obtained or otherwise received by the Company, in each
case since December 31, 2006, from any
source, in the United States or outside the United States, including information
derived from clinical investigations prior to any market authorization
approvals, commercial marketing experience, postmarketing clinical
investigations, postmarketing epidemiological/surveillance studies, reports in
the scientific literature, and unpublished scientific papers, relating to any
product or, to the Company’s knowledge, Investigational Product manufactured,
tested, distributed, held and/or marketed by the Company, any of its
subsidiaries in the possession of the Company or any of its subsidiaries, except
for any adverse drug experiences or reports which would not result in a Material
Adverse Effect.

     

    3.23
Labor, Employment and
Benefit Matters.  

     

    (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”).

     

    3.24
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.

     

    
      
        
        

      

      
        - 10
-

        
          

        

      

      
        
        

      

    

     

    3.25
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.  

     

    3.26
No Integrated
Offering.  Assuming the accuracy of each Purchaser’s
representations and warranties set forth in Section 4 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.

     

    3.27
General
Solicitation.  Neither the Company nor, to 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.

     

    3.28
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.

     

    3.29
No
Registration.  Assuming the accuracy of the representations and
warranties made by, and compliance with the covenants of, the Purchasers in
Section 4
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.

     

    3.30
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.

     

    
      
        
        

      

      
        - 11
-

        
          

        

      

      
        
        

      

    

     

    3.31
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.

     

    3.32
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.

     

    3.33
Nonpublic
Information.  The Company
understands and confirms that the Purchaser will rely on the representations and
covenants set forth in this section in effecting its offering of securities of
the Company hereunder.  To the Company’s knowledge, the Company has
not provided to any Purchaser any information that the Company believes
constitutes material, non-public information, other than information relating to
the fact that the Company was considering and engaged in the transactions
contemplated by this Agreement and the terms of transactions which shall be set
forth therein.

     

    Section
4

    Representations and
Warranties of the Purchasers

     

    Each
Purchaser, severally and not jointly, hereby represents and warrants to the
Company, and agrees with the Company as follows:

     

    (a) The
Purchaser has carefully read this Agreement and the form of Warrant attached
hereto as Exhibit
C (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 SEC Reports, including, without limitation, the
Company’s (a) Annual Report on Form 10-K for the fiscal year ended December 31, 2008 (the “2008 Form 10-K”),
including, without limitation, the financial statements included therein and the
sections therein entitled “Item 1. Business,” “Item 1A Risk Factors” (which
immediately follows “Item 1. Business”), and “Item 7. Management’s Discussion
and Analysis of Financial Condition and Results of Operations,” and (b)
Quarterly Report on Form 10-Q for the quarter ended June 30, 2009, including, without limitation, the
subsections of such Form 10-Q 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.

     

    
      
        
        

      

      
        - 12
-

        
          

        

      

      
        
        

      

    

     

    (b) 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).

     

    (c) 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.

     

    (d) 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.

     

    (e) 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.

     

    (f) 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.

     

    (g) 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 8 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.

     

    
      
        
        

      

      
        - 13
-

        
          

        

      

      
        
        

      

    

     

    (h) 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.

     

    (i) 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.

     

    (j) The
information contained in the purchaser questionnaire in the form of Exhibit D attached
hereto (the “Purchaser
Questionnaire”) delivered by the Purchaser in connection with this
Agreement is complete and accurate in all respects as of the date of this
Agreement and will be correct as of the effective date of the Registration
Statement; provided, that the Purchaser shall be entitled to update such
information by providing written notice thereof to the Company, 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 thereof, 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.

     

    
      
        
        

      

      
        - 14
-

        
          

        

      

      
        
        

      

    

     

    (k) The
information contained in the selling stockholder questionnaire in the form of
Exhibit E
attached hereto (the “Selling Stockholder
Questionnaire”) delivered by the Purchaser in connection with this
Agreement is complete and accurate in all respects as of the date of this
Agreement and will be correct as of the effective date of the Registration
Statement; provided, that the Purchaser shall be entitled to update such
information by providing written notice thereof to the Company.

     

    (l) 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.

     

    Section
5

    Conditions to Closing of
Purchasers

     

    Each
Purchaser’s obligation to purchase the Securities at the Closing is, at the
option of such Purchaser, subject to the fulfillment or waiver as of the Closing
Date of the following conditions:

     

    5.1 Representations and
Warranties.  The representations and warranties made by the
Company in Section
3 hereof shall be true and correct in all material respects when made
(other than those qualified as to materiality, which shall be true and correct
when made), and shall be true and correct in all material respects on the
Closing Date (other than those qualified as to materiality, which shall be true
and correct on the Closing Date) with the same force and effect as if they had
been made on and as of said date.

     

    5.2 Covenants.  All
covenants, agreements and conditions contained in this Agreement to be performed
by the Company on or prior to the Closing Date shall have been performed or
complied with in all material respects.

     

    5.3 Blue
Sky.  The Company shall have obtained all necessary blue sky
law permits and qualifications, or secured exemptions therefrom, required by any
state or foreign or other jurisdiction for the offer and sale of the
Securities.

     

    5.4 Legal
Opinions.  The Purchasers shall have received a legal opinion
of counsel to the Company, with respect to the matters set forth on Exhibit B attached
hereto.

     

    5.5 Market
Listing.  The Common Stock
shall be eligible for quotation on the OTC Bulletin Board.

     

    5.6 Absence of
Litigation.  No proceeding challenging this Agreement or the
transactions contemplated hereby, or seeking to prohibit, alter, prevent or
materially delay the Closing, shall have been instituted or be pending before
any court, arbitrator, governmental body, agency or official.

     

    5.7 No Governmental
Prohibition.  The sale of Securities by the Company shall not
be prohibited by any law or governmental order or regulation.

     

    
      
        
        

      

      
        - 15
-

        
          

        

      

      
        
        

      

    

     

    5.8 No Material Adverse
Change.  There shall have not occurred a Material Adverse
Effect (as defined above).

     

    5.9 Officer’s
Certificate.  The Company shall
deliver to the Purchasers at the Closing a certificate of its Chief Executive
Officer or Chief Financial Officer, dated as of such Closing Date, certifying to
the fulfillment of the conditions specified in Sections 5.1, 5.2, 5.6, 5.7,  5.8 and 5.9.

     

    Section
6

    Conditions to Closing of
Company

     

    The
Company’s obligation to sell and issue the Securities at the Closing is, at the
option of the Company, subject to the fulfillment or waiver as of the Closing
Date of the following conditions:

     

    6.1 Representations and
Warranties.  The representations made by the Purchasers in
Section 4
hereof shall be true and correct in all material respects when made, and shall
be true and correct in all material respects on the Closing Date with the same
force and effect as if they had been made on and as of such date.

     

    6.2 Covenants.  All
covenants, agreements and conditions contained in this Agreement to be performed
by the Purchasers on or prior to the Closing Date shall have been performed or
complied with in all material respects.

     

    6.3 Blue
Sky.  The Company shall have obtained all necessary blue sky
law permits and qualifications, or secured exemptions therefrom, required by any
state for the offer and sale of the Securities and the shares of Common Stock
issuable upon exercise of the Warrants.

     

    6.4 Absence of
Litigation.  No proceeding
challenging this Agreement or the transactions contemplated hereby, or seeking
to prohibit, alter, prevent or materially delay the Closing, shall have been
instituted or be pending before any court, arbitrator, governmental body, agency
or official.

     

    6.5 No Governmental
Prohibition.  The sale of
Securities by the Company shall not be prohibited by any law or governmental
order or regulation.

     

    6.6 Payment of Purchase
Price.  Except as otherwise contemplated by this Agreement,
each Purchaser (other than Deerfield with respect to its subscription for the
Deerfield Warrant Redemption Securities) shall deposit the amount of readily
available funds equal to such Purchaser’s Subscription Amount in the escrow
account described on Schedule A hereto or, if directed by the Company, remit
such funds to an account of the Company, by wire transfer of immediately
available funds pursuant to the instructions to be delivered by the Company
prior to the Closing.

     

    6.7 Voting
Agreement.  The Purchaser shall have executed and delivered the
Voting Agreement (as defined in Section 7(h)).

     

    
      
        
        

      

      
        - 16
-

        
          

        

      

      
        
        

      

    

     

    Section
7

    Understandings

     

    Each of
the Purchasers understands, acknowledges and agrees with the Company as
follows:

     

    (a) 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 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.

     

    (b) 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.

     

    (c) 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.

     

    (d)
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.

     

    (e) 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.  The Company agrees to issue a press release disclosing the
terms of the Offering immediately upon execution of this Agreement, and the
Company will file a Form 8-K along with any exhibits thereto within one business
day after the execution of this Agreement.  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, and the Company
agrees that it will not provide the Purchaser or its Agent, without its consent,
with any information that constitutes material non-public information for so
long as such Purchaser continues to hold any Securities of the
Company.

     

    
      
        
        

      

      
        - 17
-

        
          

        

      

      
        
        

      

    

     

    (f) The
Purchaser agrees that beginning on the date hereof and until the Offering is
publicly announced by the Company (which the Company has agreed to undertake in
accordance with the provisions of Section 10.3 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.

     

    (g) Certificates evidencing the Securities shall bear any legend as required by the
“blue sky” laws of any applicable state and a restrictive legend in
substantially the following form, until such time as they are not otherwise
required under Section 10.4:

     

    THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS OR BLUE SKY LAWS AS EVIDENCED BY A LEGAL
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY.

     

    (h) The
Purchaser understands and acknowledges that the Company intends, in accordance
with its certificate of incorporation, bylaws and the General Corporation Law of
Delaware, to call a meeting of its stockholders (the “Stockholder Meeting”)
for the purpose of obtaining approval to increase the number of authorized
shares of Common Stock available for issuance under the Company’s certificate of
incorporation (the “Charter Amendment”).
Each Purchaser shall enter into a voting agreement
in substantially the form attached hereto
as Exhibit
G (the “Voting Agreement”), pursuant to which such Purchaser will agree to vote
all of shares of Common Stock beneficially owned by such Purchaser in favor of
the Charter Amendment.

     

    Section
8

    Registration
Rights

     

    8.1 Certain
Definitions.  For purposes of this Section 8, the following
terms shall have the meanings ascribed to them below.

     

    (a) “Effectiveness
Date” means, with respect to a Registration
Statement required to be filed under Section 8.2, the 90th calendar day following the Closing; provided,
however, that, if the SEC reviews and has written comments to the filed
Registration Statement, then the Effectiveness Date shall be the 120th calendar
day following the Closing Date; provided further, however, that in the event the
Company is notified by the SEC that the Registration Statement will not be
reviewed or is no longer subject to further review and comments, the
Effectiveness Date shall be the fifth business day following the date on which
the Company is so notified if such date precedes the dates required above;
provided further, however, that if the Effectiveness Date falls on a Saturday,
Sunday or other day on which the Commission is not open for business, then the
Effectiveness Date shall be extended to the next day on which the SEC is open
for business.

     

    
      
        
        

      

      
        - 18
-

        
          

        

      

      
        
        

      

    

     

    (b) “Filing Date” means, with respect to the Registration Statement
required to be filed pursuant to Section 8.2, the 30th calendar day following the Closing Date;
provided,
however, that if the Filing Date falls on a
Saturday, Sunday or other day that the SEC is closed for business, the Filing
Date shall be extended to the next business day on which the SEC is open for
business.

     

    (c)
“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.

     

    (d)
“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.

     

    (e)
“Registration
Statement” means the registration statement required to be filed under
this Section 8, 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.

     

    8.2 Shelf
Registration.

     

    (a) The
Company shall use its best efforts to cause to prepare and file with the SEC, on
or prior to the Filing Date, a 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.  The Registration Statement
shall be on Form S-1 (or Form S-3 if such form is
then available to the Company) and shall contain (except if otherwise
directed by the Purchasers) a “Plan of Distribution”
substantially in the form attached hereto as Exhibit
F.  Each Purchaser will furnish to the Company, within five (5)
days of the Closing, a completed questionnaire in the form set forth as Exhibit E 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.

     

    
      
        
        

      

      
        - 19
-

        
          

        

      

      
        
        

      

    

     

    (b) The
Company shall use its best efforts to cause the Registration Statement to be
declared effective by the SEC by the Effectiveness
Date, and shall use its best efforts to keep the Registration Statement
continuously effective under the Securities Act until the date on which all
Registrable Securities covered by such Registration Statement have been sold or
may be sold without volume restrictions pursuant to Rule 144 as determined by
counsel to the Company pursuant to a written opinion letter to such effect,
addressed and acceptable to the Company’s transfer agent and the affected
holders but in any event for no more than two years from the date on which all
of the Warrant Shares have been issued (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 9:00 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) If the Registration Statement is not filed with the SEC
on or prior to the Filing Date (such 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 percent (1.0%) 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 such Registration Statement is filed, one percent
(1.0%) 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, such
liquidated damages not to exceed an amount equal to 10% of the value of the
aggregate purchase price in the aggregate; or

     

    (ii) the
Registration Statement is not declared effective on or prior to the Effectiveness Date, in which
case the Company shall pay to each Purchaser an amount in cash equal to: (A) for
the first thirty (30) days after such 90th day, one percent (1.0%) 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 percent (1.0%) 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; provided,
however, that the Company shall not be required to pay any such
liquidated damages under this subparagraph (ii) in
the event the SEC or its staff prevents all of the Registrable Securities from
being included on one Registration Statement and the Company otherwise complies
with the provisions of Section 8.2(e) below.

     

    
      
        
        

      

      
        - 20
-

        
          

        

      

      
        
        

      

    

     

                          The
payment obligations of the Company under this Section 8.2(d) shall be cumulative, but in no event shall the
amount of such liquidated damages payable pursuant to this Section 8.2(d) exceed an amount equal to 10% of the aggregate purchase price paid by the Purchasers in the
aggregate.  

     

    (e) Notwithstanding the registration obligations set forth
in this Section 8.2, in the event the SEC informs the Company that all of the
Registrable Securities cannot, as a result of the application of Rule 415
promulgated under the Securities Act (“Rule 415”), be registered for resale on a single registration
statement, the Company agrees to promptly (i) inform each of the holders
thereof; (ii) permit counsel of such holders (subject to Section 4, at such holders expense) to review and participate in
discussions regarding the Company’s response to the SEC regarding the
application of Rule 415 to the Registration Statement, (iii) use its reasonable
best efforts to file amendments to any such Registration Statement as required
by the SEC and/or (iv) if required by the SEC, withdraw such Registration
Statement and file a new registration statement, in either case covering the
maximum number of Registrable Securities permitted to be registered by the
Commission on Form S-1 or such other form available to register for resale the
Registrable Securities.  In the event the Company amends any such
Registration Statement or files a new registration statement, the Company will
use its reasonable best efforts to file with the SEC, as promptly as allowed by
SEC or staff guidance provided to the Company or to registrants of securities in
general, one or more Registration Statements on Form S-1 or such other form
available to register for resale those Registrable Securities that were not
registered for resale on any such initial Registration Statement, as amended, or
any such new registration statement. Notwithstanding the foregoing, the Company
and each Purchaser agree that in the event of a cutback in accordance with Rule
415, the Registrable Securities underlying the Deerfield Warrant Redemption
Securities shall not be registered on the initial registration statement until
all other Registrable Securities may be registered.

     

    8.3 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 true and
complete copies of all correspondence from and to the SEC relating to the
Registration Statement.

     

    (b)
Notify the Purchasers as promptly as reasonably possible, and confirm such
notice in writing no later than one (1) business 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 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 8.3(b).

     

    
      
        
        

      

      
        - 21
-

        
          

        

      

      
        
        

      

    

     

    (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 9:00 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) Upon
the effectiveness of the Registration Statement, deliver to the transfer agent
of the Common Stock a blanket opinion
covering the resale of all of the Registrable Securities set forth on the
Registration Statement. .

     

    (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
Section 8.3(f), or (ii) subject
itself to taxation.

     

    
      
        
        

      

      
        - 22
-

        
          

        

      

      
        
        

      

    

     

    (g) Upon
the occurrence of any event described in Section 8.3(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 sixty (60) days (unless the holders
of at least a majority 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 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 8.3(g) shall be deemed an
“Event” and for
each such default, Purchaser shall be entitled to the liquidated damages as provided in Section 8.2(d).

     

    (h)
Comply with all applicable rules and regulations of the SEC and the applicable
stock exchange in all material respects.

     

    (i) Have
obtained all necessary blue sky laws permits and qualifications, or secured
exemptions therefrom, required by any state or foreign or other jurisdiction for
the offer and sale of Securities.

     

    (j) Use
commercially reasonable efforts to regain
compliance and list with the NASDAQ Stock Market to the extent the Company meets
the listing requirements thereof.

     

    

    8.4 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, stock exchange 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 $10,000, 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.

     

    
      
        
        

      

      
        - 23
-

        
          

        

      

      
        
        

      

    

     

    8.5 Indemnification.

     

    (a) Indemnification by the
Company.  The Company shall, notwithstanding any termination of
this Agreement, indemnify and hold harmless each Purchaser, and each of their
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 breach by the Company of any
representation, warranty, covenant or agreement contained in this Agreement or
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 are based upon information regarding such
Purchaser furnished in writing to the Company by such Purchaser expressly for
use therein, or to the extent that such information 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 as Exhibit F), or (ii)
in the case of an occurrence of an event of the type specified in Section 8.3(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 Section 8.6
below.  The Company shall notify and 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.

     

    (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 are based upon information regarding such Purchaser furnished in
writing to the Company by such Purchaser expressly for use therein, or to the
extent that such information 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 as Exhibit F), or (ii)
in the case of an occurrence of an event of the type specified in Paragraph
8.3(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 8.6 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.

     

    
      
        
        

      

      
        - 24
-

        
          

        

      

      
        
        

      

    

     

    (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 separate counsel 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 (10) 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).

     

    
      
        
        

      

      
        - 25
-

        
          

        

      

      
        
        

      

    

     

    (d) Contribution.  If
a claim for indemnification under Section 8.5(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 Section
8.5(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 Section 8.5(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 Section 8.5(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 Section
8.5(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.

    

    8.6 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 Section 8.3(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
Section 8.3(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.

     

    
      
        
        

      

      
        - 26
-

        
          

        

      

      
        
        

      

    

     

    8.7 No Piggy-Back on
Registrations.  Neither the Company nor any of its security
holders 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.

     

    8.8 Piggy-Back
Registrations.  If at any time during the Effectiveness Period,
other than any suspension period referred to in Section 8.3(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.

     

    8.9 Rule
144.  Following the date hereof and until such time as all
Registrable Securities have been sold, the Company agrees with each holder of
Registrable Securities to:

     

    (a) use
its best efforts to comply with the requirements of Rule 144 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 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.

     

    
      
        
        

      

      
        - 27
-

        
          

        

      

      
        
        

      

    

     

    Section
9

    Covenants of the
Company

     

    9.1 Restrictions on Sales and
Issuance of Common Stock.  Except with the consent of the
Purchasers of a majority of the Securities under this Agreement then
outstanding, the Company hereby agrees that, for a period until the later of (i)
ninety (90) days after the Closing Date or (ii) ninety (90) days after the
earlier of (A) the effectiveness of the Registration Statement registering all
of the Registrable Securities, or (B) the date upon which all of the Shares
issued under this Agreement may be sold in compliance with the requirements of
Rule 144 (such later date, referred to herein as the “Resale Date”), it
shall not issue or sell any Common Stock, 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 pursuant to the exercise of an
option, warrant or other right to acquire Common Stock outstanding as of the
date of this Agreement or the grant of any Common Stock, option, or other right
to acquire Common Stock to any employee, director or consultant to the Company
pursuant to the Company’s stock plan, subject to Section 9.4
below.

     

    9.2 Registration
Requirements;
Disclosure.  

     

    (a) Until
the later of (i) one hundred eighty (180) days following the Closing or (ii)
ninety (90) days following the Resale Date, 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.

     

    (b) 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.

     

    (c) 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.

     

    9.3 Conduct of Business by the
Company.  From the date hereof until the later of the Closing
or the Resale Date, the Company shall, and shall cause its subsidiaries to,
conduct its and their business in the ordinary course and use reasonable best
efforts to preserve intact their business organizations and relationships with
third parties and to keep available the services of their present officers and
employees and preserve their relationships with customers, suppliers,
distributors, licensors, licensees and others having business dealings with the
Company or its subsidiaries; provided, however,
that nothing herein shall be construed to prohibit the Company modifying the
terms of or terminating its agreements or business relationships entered into in
the ordinary course of its business.  Without limiting the
generality of the foregoing, except as expressly otherwise provided in this
Agreement, and except with the consent of the Purchasers of a majority of the
Securities under this Agreement then outstanding, from the date hereof until the
Closing, the Company shall not, and shall cause its subsidiaries not to,
directly or indirectly:

     

    
      
        
        

      

      
        - 28
-

        
          

        

      

      
        
        

      

    

     

    (a)
declare or pay any dividends on or make other distributions in respect of any of
its capital stock (except for dividends by any direct or indirect wholly-owned
subsidiary of the Company to its parent), (ii) split, combine or reclassify any
of its capital stock or (iii) repurchase, redeem or otherwise acquire any shares
of capital stock of the Company or any of its subsidiaries or any other
securities thereof or any rights, warrants or options to acquire any such shares
or other securities;

     

    (b) other than any Permitted Issuance, issue,
deliver, sell, pledge or encumber, or authorize or propose the issuance,
delivery, sale, pledge or Encumbrance of, any shares of its capital stock or any
other security or interest therein other than the issuance of shares of Common
Stock upon the exercise of options under the Company’s 2003 Stock Option Plan,
2004 Stock Incentive Plan, and the 2006 Employee Stock Purchase Plan
(collectively the “Company Option Plans”) outstanding on the date of this
Agreement and in accordance with the existing terms of such Company Option
Plans;

     

    (c) other than any Permitted Issuance, grant or
authorize or propose any grant of any options, stock appreciation rights,
phantom rights, profit participation rights or other rights to acquire
securities or accelerate, amend or change the period of exercisability or
vesting of options or other rights (including the exercise price thereof)
granted under its unit or stock plans or authorize cash payments in exchange for
any options or other rights granted under any of such plans;

     

    (d) alter
or amend or propose to alter or amend its certificate of incorporation and
bylaws and the certificate of incorporation and bylaws (or corresponding
organizational documents) of each of its subsidiaries (collectively, the “Charter Documents”),
other than the Charter Amendment or as otherwise contemplated by the this
Agreement;

     

    (e)
except in connection with ordinary course treasury or cash management functions,
acquire or agree to acquire, by purchase, merger,
consolidation or otherwise, any material assets (including securities),
acquire any capital stock or equity interests of any corporation, partnership,
association or other business organization or division thereof or engage in any
similar transaction or make any loans, advances or capital contributions to, or
investments in, any person other than an existing subsidiary;

     

    (f) sell,
lease, license, encumber or otherwise dispose of any fixed assets material to the Company’s business or any
interest therein, other than in the ordinary course, or take any action to adopt
or implement a plan of complete or partial liquidation, dissolution, merger,
consolidation, restructuring or other reorganization;

     

    (g) make
or agree to make any capital expenditures in excess of what was set forth in the
Company’s budget provided to the Purchasers as of the date of this Agreement
other than immaterial expenditures in the ordinary course of
business;

     

    
      
        
        

      

      
        - 29
-

        
          

        

      

      
        
        

      

    

     

    (h) pay,
discharge, settle or satisfy any claims, liabilities or obligations (absolute,
accrued, asserted or unasserted, contingent or otherwise), other than the
payment, discharge, settlement or satisfaction, in the ordinary course of
business or in accordance with their terms, of such claims, liabilities or
obligations;

     

    (i) sell,
assign, license, lease, sublease, mortgage, pledge or otherwise encumber or
dispose of any Company intellectual property
material to the Company’s business, or enter into any other agreement
regarding the foregoing, except among the Company and its
subsidiaries;

     

    (j) take
any action (or fail to take any action) that could reasonably be expected to
result in the loss, lapse or abandonment of any Company intellectual property
owned by or under the control of the Company or its subsidiaries and material to its business (other than (i)
copyrights and patents expiring at the end of their natural term and (ii)
abandonment or permitted lapse of any other Company intellectual property (other
than patents) for which the Company determines in its reasonable business
judgment that the cost of maintaining such Company intellectual property would
outweigh the benefits);

     

    (k) make
any change in its accounting methods, principles or practices other than in a
manner required by United States generally accepted accounting principles,
change any fiscal year or annual accounting period;

     

    (l)
assume, incur or guarantee any material (A)
indebtedness for borrowed money, (B) obligations evidenced by bonds, debentures,
notes or other similar instruments, (C) obligations to pay the deferred purchase
price of property or services, except trade accounts payable and other current
liabilities arising in the ordinary course of business, (D) obligations as
lessee under capitalized leases, other than in the
ordinary course of business, (E) indebtedness created or arising under
any conditional sale or other title retention agreement with respect to acquired
property, (F) obligations, contingent or otherwise, under acceptance credit,
letters of credit or similar facilities, and (G) guaranty of any of the
foregoing (collectively, “Indebtedness”) (other
than endorsements for collection in the ordinary course of business), except for
draws under the Company’s existing line(s) of credit in the ordinary course of
business, (ii) modify the terms of any existing Indebtedness or (iii) repay any
existing Indebtedness in advance of its maturity date; mortgage, pledge or
permit to become subject to any encumbrance any properties or assets of the
Company or any of its subsidiaries, other than in the ordinary course of
business or in connection with the incurrence of Indebtedness permitted
hereunder;

     

    (m) other
than travel loans or advances in the ordinary course of business or other than
to a direct or indirect wholly owned subsidiary of the Company, make any loans,
advances or capital contributions to, or investments in, any other
person;

     

    (n) (i)
amend, modify or terminate, or waive, any material term of any Material Agreement or waive, release or assign any
material rights under any Material Agreement,
except in the ordinary course of the Company’s business consistent with past
practices or (ii) enter into any contract not in the ordinary course of the Company’s business
which, if entered into prior to the date hereof, would have been required
to be set forth in the Company Disclosure Schedule; provided, however,
that notwithstanding anything to the contrary contained herein, following
approval of the Charter Amendment, the Company shall be permitted to amend the
Company Option Plans in order to increase the number of shares of Common Stock
available for issuance under each such plan to an amount not to exceed the
number of shares of Common Stock that were available for issuance under each
such plan as of September 30, 2009; or

     

    
      
        
        

      

      
        - 30
-

        
          

        

      

      
        
        

      

    

     

    (o)
authorize any of, or commit or agree to take any of, the foregoing actions or
any action that would result in a breach of any representation or warranty of
the Company contained in Section 3 of this
Agreement as of the date when made or as of any future date or would result in
any of the conditions to Closing not being satisfied or in a material delay in
the satisfaction of such conditions.

     

    For
purposes hereof, the term “Permitted
Issuance” shall mean (i) shares of Common
Stock or other equity incentives authorized for issuance under the Company
Option Plans, including, without limitation, options to purchase Common Stock
issued to employees, directors or consultants of the Company; (ii) shares of
Common Stock issued by reason of a dividend, stock split, split-up or other
distribution on shares of Common Stock that is otherwise permitted; (iii) shares
of Common Stock issued upon exercise of any currently outstanding option,
warrant or other right to acquire Common Stock; (iv) shares of Common Stock or
options, warrants or other rights to acquire Common Stock issued to researchers,
collaborators, suppliers or other third party service providers in connection
with the provision of goods or services pursuant to transactions approved by the
Board of Directors of the Corporation.

     

    9.4 No
Solicitation.

     

    (a) The
Company agrees that from the date hereof through the Closing, (i) it and its
subsidiaries shall not, and (ii) it shall cause its and its subsidiaries’
Representatives to not, directly or indirectly, (x) solicit, initiate, seek,
facilitate or encourage (including by way of providing information) the
submission of any Proposal or any inquiries, proposals or offers that reasonably
may be expected to lead to, any Proposal or (y) engage in any discussions or
negotiations with respect thereto or otherwise cooperate with or assist or
participate in, or facilitate any such inquiries, proposals, discussions or
negotiations, or provide any confidential information relating to a
Proposal.  The Company shall, and shall direct each of its
subsidiaries and each Representative to immediately cease any discussions,
negotiations, or communications with any party with respect to any Proposal and
use commercially reasonable efforts to obtain the return from all such persons
or cause the destruction of all copies of confidential information previously
provided to such parties by the Company, its subsidiaries or its officers,
directors, employees, agents, counsel, accountants, financial advisors and other
representatives (collectively known as “Representatives”).  

     

    (b) For
purposes of this Agreement, “Proposal” means
(other than the transactions expressly provided for in this Agreement) any new
issuance of securities or capital stock of the Company, other than a Permitted
Issuance.  However, nothing in this Section 9.4 shall be construed to
prohibit the Company from conducting meetings with stockholders or potential
investors, presenting at investor or industry conferences or otherwise engage in
activity that is consistent with its past investor relations
activities.

     

    
      
        
        

      

      
        - 31
-

        
          

        

      

      
        
        

      

    

     

    9.5 Notification of Certain
Matters.  The Company shall give prompt notice to Purchaser of
any fact, event or circumstance known to it that (a) individually or taken
together with all other facts, events and circumstances known to it, has had or
would reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, (b) would cause or constitute a breach of any of its
representations, warranties, covenants or agreements contained herein, (c) the
failure of any condition precedent to Purchaser’s obligations, (d) any notice or
other communication from any third party alleging that the consent of such third
party is or may be required in connection with the transactions contemplated by
this Agreement, (e) any notice or other communication from any Governmental
Authority in connection with the transactions contemplated by this Agreement, or
(f) any actions, suits or proceedings, claims, arbitration, litigation or
investigations commenced relating to the Company or any of its subsidiaries
that, if pending on the date of this Agreement, would have been required to have
been disclosed pursuant to Section 3.24;
provided, however, that (i) the delivery of any notice pursuant to this Section 9.6 shall not
limit or otherwise affect any remedies available to Purchaser or prevent or cure
any misrepresentations, breach of warranty or breach of covenant, and (ii)
disclosure by the Company shall not be deemed to amend or supplement the Company
Disclosure Schedule or constitute an exception to any representation or
warranty.  Each Purchaser understands and acknowledges that a notice
delivered by the Company pursuant to this Section 9.5 may contain material,
non-public information concerning the Company and, notwithstanding anything to
the contrary contained in this Agreement, each Purchaser agrees to hold the
information contained in such notice in confidence for as long as such
information remains non-public and understands that its receipt and possession
of such information may preclude the Purchaser from trading in the Company’s
Securities.  Under no circumstances shall a breach of this Section 9.6 cause the
conditions set forth in Section 5.1 not to be
satisfied.

     

    9.6 Expenses.  The
Company shall pay Lead Investor (as defined on Exhibit A) an amount
not to exceed $50,000 for its out-of-pocket
legal expenses incurred in connection with the transaction contemplated hereby,
including the review of the Registration Statement, payable whether or not a
Closing is effected and if the Closing is effected, such expenses shall be paid
at the Closing. Such expenses may be withheld from the proceeds otherwise
payable to the Company at the Closing.

     

    9.7 Use of
Proceeds.  The Company shall use the net proceeds from the
Offering only for the development and commercialization of Marqibo for the
ongoing Phase II study in adult patients with Philadelphia chromosome-negative
acute lymphoblastic leukemia (“ALL”) in the second
relapse or who have failed two prior lines of therapy or a randomized
confirmatory phase III study for Marqibo in Adult ALL or all the necessary
regulatory and clinical development of Marqibo for the latter
indication.  The net proceeds shall not be for the clinical or
regulatory development of Menadione.

     

    Section
10

    Restrictions on
Transferability of Shares and Warrants: Compliance With Securities
Act

     

    10.1
Securities Law
Transfer Restrictions.  No Purchaser shall sell, assign,
pledge, transfer or otherwise dispose of or encumber any of the Securities, except (i) pursuant to an effective
registration statement under the Securities Act, provided that, the Company will
have a blanket opinion on file with the transfer agent or (ii) pursuant to an
available exemption from registration under the Securities Act and applicable
state securities law.  Any transfer or purported transfer of the Securities in violation of this Section 10.1 shall be
voidable by the Company.  The Company shall not register any transfer
of the Securities in violation of this
Section
10.1.  The Company may, and may instruct any transfer agent for
the Company, to place such stop transfer orders as may be required on the
transfer books of the Company in order to ensure compliance with the provisions
of this Section
10.1.

     

    
      
        
        

      

      
        - 32
-

        
          

        

      

      
        
        

      

    

     

    10.2
Transfer of Shares
After Registration.  Each Purchaser hereby covenants with the
Company not to make any sale of the Securities except either (i) in accordance with
the Registration Statement, in which case such Purchaser covenants to comply
with the requirement of delivering a current prospectus, or (ii) pursuant to an
available exemption from registration under the Securities Act and applicable
state securities laws.

     

    10.3
Purchaser
Information.  Each Purchaser covenants that it will promptly
notify the Company of any changes in the information set forth in the
Registration Statement regarding such Purchaser or such Purchaser’s Plan of
Distribution and of any sale of Shares or Warrant
Shares by such Purchaser.

     

    10.4
Restrictive
Legend.  

     

    (a)
Certificates evidencing the Shares and the Warrant Shares shall not be required
to contain a restrictive legend or any other legend: (i) upon the effective date
of the Registration Statement; or (ii) if such Shares or Warrant Shares are
eligible for sale under Rule 144 without limitation as to volume; or (iii)
following any sale of such Shares or Warrant Shares pursuant to Rule 144 or have
been sold pursuant to the Registration Statement; or (iv) 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).  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 even if the Shares or
Warrant Shares are not being sold), and the Company will rescind any stop
transfer orders with respect to such shares given to the Company’s transfer
agent.  The Purchaser hereby represents and covenants to the Company
that 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, and otherwise in compliance with the Securities Act,
including the prospectus delivery requirements of such act. The Purchaser agrees
to furnish the Company’s legal counsel with a certification consistent with the
foregoing representations and undertakings, as such counsel reasonably requires
in order to support the blanket legal opinion to the Company’s transfer agent
allowing for removal of such legends. 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
(the “Legend Removal
Date”) 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, deliver or cause to be delivered, at the option of each
Purchaser, (i) a certificate representing such Shares or Warrant Shares that is
free from the foregoing legend, or (ii) the Company shall cause certificates for
the Shares or Warrant Shares purchased hereunder to be transmitted by the
transfer agent of the Company to the Purchaser by crediting the account of the
Purchaser’s prime broker with the Depository Trust Company through its Deposit
Withdrawal Agent Commission system.

     

    
      
        
        

      

      
        - 33
-

        
          

        

      

      
        
        

      

    

     

    (b) In
addition to such Purchaser’s other available remedies, the Company shall pay to
a Purchaser, in cash, as liquidated damages and not as a penalty, for each Share
or Warrant Share delivered for removal of the restrictive legend, the difference
between the closing price of the Common Stock on the date such Securities are
submitted to the Company or to the Company’s transfer agent and the closing
price on the date the Securities are actually delivered, for each business day
following the Legend Removal Date until such certificate is delivered without a
legend.  Nothing herein shall limit such Purchaser’s right to pursue
actual damages for the Company’s failure to deliver certificates representing
any Securities as required by the transactions contemplated by this Agreement,
and such Purchaser shall have the right to pursue all remedies available to it
at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief.

     

    Section
11

    Miscellaneous

     

    11.1
Notices,
etc.  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):

     

    (a) if to
the Company, at:

     

    Hana
Biosciences, Inc.

    7000 Shoreline Court, Suite 370

    South San Francisco,
CA  94080

    Fax No.:
(650) 228-2754

    Attention:
Chief Executive Officer

     

    
      	 	
              or
      such other address as it shall have specified to the Purchaser in writing,
      with a copy (which shall not constitute notice)
  to:

            

    

     

    Fredrikson & Byron, P.A.

    200 South Sixth Street, Suite 4000

    Minneapolis, MN  55402

    Fax No.:
(612) 492-7077

    Attention:
Christopher J. Melsha, Esq.

     

    (b) if to
the Purchaser (except Deerfield), 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, with a copy to:

     

    Morgan
Lewis & Bockius, LLP

    502
Carnegie Center

    Princeton,
New Jersey 08540

    Tel No. 609.919.6633

    Fax No.
609.919.6701

    Attention
Emilio Ragosa, Esq.

     

    
      
        
        

      

      
        - 34
-

        
          

        

      

      
        
        

      

    

    

    (c) if to
Deerfield, to:

     

    c/o Deerfield Management

    780 Third Avenue, 37th
Floor

    New York, New
York  10017

    Fax No. (212) 573-8111

    Attention:  James E.
Flynn

    

    Or at such other address as it shall
have specified to the Company in writing, with a copy (which shall not
constitute notice) to:

    

    Katten Muchin Rosenman LLP

    575 Madison Avenue

    New York, New York 10022

    Fax No.: (212) 894-5877

    Attention: Mark I. Fisher,
Esq.

    

    11.2
Waiver.  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.

     

    11.3
Governing
Law.  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.  

     

    11.4
Severability of this
Agreement.  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.

     

    11.5
Remedies.  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.  In addition to the foregoing, the Company hereby
agrees to reimburse the Purchaser for legal expenses incurred in connection with
the enforcement of this Agreement.

     

    
      
        
        

      

      
        - 35
-

        
          

        

      

      
        
        

      

    

     

    11.6
Obligations of the
Purchaser.  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.

     

    11.7
Amendments.  Except
as otherwise provided herein, this Agreement may be amended, and compliance with
any provision of this Agreement may be omitted or waived, only by the written
agreement of the Company and the Purchasers (or their permitted transferees)
holding at least a majority of the Securities then held by the
Purchasers.  

     

    11.8
Counterparts.  This
Agreement may be executed in any number of counterparts, each such counterpart
shall be deemed to be an original instrument, and all such counterparts together
shall constitute but one agreement.  Facsimile transmission of
execution copies or signature pages for this Agreement shall be legal, valid and
binding execution and delivery for all purposes.

     

    11.9
Entire
Agreement.  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.  Nothing in this Agreement shall create or be deemed to
create any rights in any person or entity not a party to this Agreement, except
for the holders of Registrable Securities.

     

    Section
12

    Signature

     

    The
signature page of this Agreement is contained as part of the applicable
subscription package, entitled “Signature
Page.”

     

     

    * * * * *
* *

     

    
      
        
        

      

      
        - 36
-

        
          

        

      

      
        
        

      

    

     

    SIGNATURE
PAGE

     

    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:
      October _____, 2009

            

    

     

    
      	
              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 ____, 2009

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00163-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00163-of-00352.parquet"}]]