Document:

Unassociated Document

Exhibit
4.2

THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE NOT TRANSFERABLE WITHOUT THE
EXPRESS WRITTEN CONSENT OF HUDSON HEALTH SCIENCES, INC. (THE “COMPANY”) AND HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED
OR HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF A REGISTRATION
STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN
EXEMPTION THEREFROM. ANY SUCH TRANSFER MAY ALSO BE SUBJECT TO APPLICABLE STATE
SECURITIES LAWS.

HUDSON
HEALTH SCIENCES, INC.

Warrant
for the Purchase of Shares of 

Common
Stock

	CSW No. 2004-1 	 	 	
       196,679
Shares

 

FOR VALUE
RECEIVED, HUDSON
HEALTH SCIENCES, INC., a
Delaware corporation (the “Company”),
hereby certifies that Paramount
Capital, Inc., or its
registered assigns (the “Holder”), is entitled to purchase from the Company,
subject to the provisions of this Warrant, at any time commencing from the date
hereof until 5:00 p.m. (New York City time) on February 19, 2009 (the
“Termination
Date”), One
Hundred Ninety Six Thousand Six Hundred Seventy Nine (196,679) fully paid and
non-assessable shares of Common Stock, at an initial per share exercise price
equal to $2.61. The shares of Common Stock or other securities or property
deliverable upon such exercise are hereinafter sometimes referred to as the
“Warrant
Shares.” The
exercise price of a share of Common Stock in effect at any time is hereinafter
sometimes referred to as the “Per
Share Exercise Price” and the
aggregate purchase price payable for the Warrant Shares hereunder is hereinafter
sometimes referred to as the “Aggregate
Exercise Price.” This
Warrant is one of a duly authorized issue of Warrants constituting components of
units sold by the Company on February 19, 2004 (collectively, the “Warrants”).

1. Definitions.

“Change
of Control” means
the (i) acquisition by an individual or legal entity or group (as defined in
Rule 13d-5 of the Securities Exchange Act of 1934, as amended) of more than
one-half of the voting rights or equity interests in the Company; (ii) sale,
conveyance, or other disposition of all or substantially all of the assets,
property or business of the Company, (iii) any reclassification of the Company’s
capital, or (iv) the merger into or consolidation with any other corporation or
other entity (other than a wholly owned subsidiary corporation) or effectuation
of any transaction or series of related transactions where holders of the
Company’s voting securities prior to such transaction or series of transactions
fail to continue to hold at least 50% of the voting power of the
Company.

“Common
Stock” means
(except where the context otherwise indicates) the Common Stock, $0.01 par value
per share, of the Company as constituted on the date hereof, and any capital
stock into which such Common Stock may thereafter be changed or converted, and
shall also include (i) capital stock of the Company of any other class
(regardless of how denominated) issued to the holders of shares of Common Stock
upon any reclassification thereof which is also not preferred as to dividends or
assets on liquidation over any other class of stock of the Company and which is
not subject to redemption and (ii) shares of common stock of any successor or
acquiring corporation received by or distributed to the holders of Common Stock
of the Company in the circumstances contemplated by Section 5.3.

 

2. Exercise
of Warrant.

(a) This
Warrant may be exercised in whole or in part, at any time by the Holder
commencing upon the date hereof and prior to the Termination Date:

(i) by
presentation and surrender of this Warrant (with the subscription form at the
end hereof duly executed) at the address set forth in Section 11 hereof,
together with payment, by certified or official bank check payable to the order
of the Company, of the Aggregate Exercise Price or the proportionate part
thereof if exercised in part; or

(ii) by the
surrender of this Warrant (with the cashless exercise form at the end hereof
duly executed) (a “Cashless Exercise”) at the address set forth in Section 11
hereof. Such presentation and surrender shall be deemed a waiver of the Holder’s
obligation to pay the Aggregate Exercise Price, or the proportionate part
thereof if this Warrant is exercised in part. In the event of a Cashless
Exercise, the Holder shall exchange this Warrant for that number of Warrant
Shares subject to such Cashless Exercise multiplied by a fraction, the numerator
of which shall be the difference between (A) the last sale price of the Common
Stock on the trading day prior to such date or, in case no such reported sales
take place on such day, the average of the last reported bid and asked prices of
the Common Stock on such day, in either case on the principal national
securi--ties exchange on which the Common Stock is admitted to trading or
listed, or if not listed or admitted to trading on any such exchange, the
representative closing sale price of the Common Stock as reported by the
National Association of Securities Dealers, Inc. Automated Quota-tions System
(“NASDAQ”), or
other similar organization if NASDAQ is no longer reporting such information,
or, if the Common Stock is not reported on NASDAQ, the high per share sale price
for the Common Stock in the over-the-counter market as reported by the National
Quotation Bureau or similar organization, or if not so available, the fair
market value of the Common Stock as determined in good faith by the Board of
Directors (the “Current Market Price”) and (B) the Per Share Exercise Price, and
the denominator of which shall be the then Current Market Price. For purposes of
any computation under this Section 2(a), the then Current Market Price shall be
based on the trading day immediately prior to the Cashless
Exercise.

(b) If this
Warrant is exercised in part only, the Company shall, upon presentation of this
Warrant upon such exercise, execute and deliver (with the certificate for the
Warrant Shares purchased) a new Warrant evidencing the rights of the Holder
hereof to purchase the balance of the Warrant Shares purchasable hereunder upon
the same terms and conditions as herein set forth. Upon proper exercise of this
Warrant, the Company promptly shall deliver certificates for the Warrant Shares
to the Holder duly legended as authorized by the subscription form together with
cash in lieu of any fraction of a share, as hereinafter provided, but, in any
event, within three (3) business days after such exercise. No fractional shares
shall be issued upon exercise of this Warrant. With respect to any fraction of a
share called for upon exercise hereof, the Company shall pay to the Holder an
amount in cash equal to such fraction multiplied by the Current Market Price of
one (1) share of Common Stock. The stock certificate or certificates so
delivered shall be, to the extent possible, in such denomination or
denominations as the Holder shall request in the notice and shall be registered
in the name of the Holder or such other name as shall be designated by the
Holder. This Warrant shall be deemed to have been exercised and such certificate
or certificates shall be deemed to have been issued, and the Holder or any other
person so designated to be named therein shall be deemed to have become a Holder
of record of such shares for all purposes, as of the date when the notice,
together with the payment of the applicable exercise price and this Warrant, is
received by the Company as described above. 

1

 

3. Reservation
of Warrant Shares; Fully Paid Shares; Taxes. The
Company hereby undertakes until expiration of this Warrant to reserve for
issuance or delivery upon exercise of this Warrant, such number of shares of the
Common Stock as shall be required for issuance and/or delivery upon exercise of
this Warrant in full in accordance with the terms hereof, and agrees that all
Warrant Shares so issued and/or delivered shall be validly issued, fully paid
and non-assessable and not subject to any preemptive rights, and further agrees
to pay all taxes and charges that may be imposed upon such issuance and/or
delivery.

4. Registration
Under Securities Act of 1933, as Amended. The
Holder of this Warrant shall be entitled to registration rights with respect to
the Warrant Shares to the same extent and on the same terms as those provided to
investors pursuant to Article V of the Subscription Agreements (the
“Subscription Agreements”) accepted as of February 18, 2004 between the Company
and certain purchasers of the shares of Common Stock. If the Holder is not a
party to the Subscription Agreements, by acceptance of this Warrant the Holder
agrees to comply with provisions of Article V thereof to the same extent as if
it were a party thereto. 

5. Adjustments.
The
number of shares of Common Stock for which this Warrant is exercisable, and the
price at which such shares may be purchased upon exercise of this Warrant, shall
be subject to adjustment from time to time as set forth in this Section 5. The
Company shall give the Holder notice of any event described below which requires
an adjustment pursuant to this Section 5 in accordance with Sections 6.1 and
6.2.

5.1 Stock
Dividends, Subdivisions and Combinations. If at
any time while this Warrant is outstanding the Company shall:

(a) take a
record of the holders of its Common Stock for the purpose of entitling them to
receive a dividend payable in, or other distribution of, additional shares of
Common Stock,

(b) subdivide
its outstanding shares of Common Stock into a larger number of shares of Common
Stock, or

(c) combine
its outstanding shares of Common Stock into a smaller number of shares of Common
Stock,

 

then:

	 	
      (1)
	
      the
      number of shares of Common Stock acquirable upon exercise of this Warrant
      immediately after the occurrence of any such event shall be adjusted to
      equal the number of shares of Common Stock which a record holder of the
      same number of shares of Common Stock that would have been acquirable
      under this Warrant immediately prior to the occurrence of such event would
      own or be entitled to receive after the happening of such event,
      and

	 	 	 

	 	(2) 	the
      Per Share Exercise Price shall be adjusted to
equal:

 

	 	
      (A)
	
      the
      Per Share Exercise Price in effect immediately prior to the occurrence of
      such event multiplied by the number of shares of Common Stock into which
      this Warrant is exercisable immediately prior to the adjustment,
      divided
      by 

 

2

 

	 	
      (B)
	
      the
      number of shares of Common Stock into which this Warrant is exercisable
      immediately after such adjustment.

Any
adjustment made pursuant to clause (a) of this paragraph shall become effective
immediately after the record date for the determination of shareholders entitled
to receive such dividend or distribution, and any adjustment pursuant to clauses
(b) or (c) of this paragraph shall become effective immediately after the
effective date of such subdivision or combination.

5.2 Fractional
Interests. In
computing ad-justments under this Section 5, all calculations shall be made to
the near-est 1/100th of a share.

   5.3 Reorganization,
Reclassification, Merger, Consolidation or Disposition of Assets.

(a) If, prior
to the Termination Date, there shall occur a Change of Control and, pursuant to
the terms of such Change of Control, shares of common stock of the successor or
acquiring corporation, or any cash, shares of stock or other securities or
property of any nature whatsoever (including warrants or other subscription or
purchase rights) in addition to or in lieu of common stock of the successor or
acquiring corporation (“Other Property”), are to be received by or distributed
to the holders of Common Stock of the Company, then the Holder of this Warrant
shall have the right thereafter to receive, upon the exercise of the Warrant,
the number of shares of common stock of the successor or acquiring corporation
or of the Company, if it is the surviving corporation, and the Other Property
receivable upon or as a result of such Change of Control by a holder of the
number of shares of Common Stock into which this Warrant is exercisable
immediately prior to such event. 

    (b) In case
of any such Change of Control, the successor or acquiring corporation (if other
than the Company) shall expressly assume the due and punctual observance and
performance of each and every covenant and condition contained in this Warrant
to be performed and observed by the Company and all of the Company’s obligations
and liabilities hereunder, subject to such modifications as may be deemed
appropriate (as determined in good faith by resolution of the Board of Directors
of the Company) in order to provide for adjustments of shares of the Common
Stock into which this Warrant is exercisable which shall be as nearly equivalent
as practicable to the adjustments provided for in this Section 5.

5.4 Other
Action Affecting Common Stock. In case
at any time or from time to time the Company shall take any action in respect of
its Common Stock, then, unless such action will not have a materially adverse
effect upon the rights of the holder of this Warrant, the number of shares of
Common Stock or other stock into which this Warrant is exercisable and/or the
purchase price thereof shall be adjusted in such manner as may be equitable in
the circumstances.

   5.5 Certain
Limitations.
Notwithstanding anything herein to the contrary, the Company agrees not to enter
into any transaction which, by reason of any adjustment hereunder, would cause
the Per Share Exercise Price to be less than the par value per share of Common
Stock.

6. Notices
to Warrant Holders.

   6.1. Certificate
as to Adjustments. Upon
the occurrence of each adjustment or readjustment of the Per Share Exercise
Price, or the number of shares of Common Stock and the amount, if any, of other
property which at the time would be received upon exercise of the Warrants owned
by such Holder, the Company, at its expense, shall promptly compute such
adjustment or readjustment in accordance with the terms hereof and prepare and
furnish to the Holder of this Warrant a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The Company shall, upon the written request
at any time of the Holder of this Warrant, furnish or cause to be furnished to
such Holder a like certificate setting forth (i) such adjustments and
readjustments, (ii) the Per Share Exercise Price at the time in effect and (iii)
the number of shares of Common Stock and the amount, if any, of other property
which at the time would be received upon the exercise of Warrants owned by such
Holder. 

3

 

6.2. Notice
of Corporate Action. If at
any time:

(a) the
Company shall take a record of the holders of its Common Stock for the purpose
of entitling them to receive a dividend or other distribution, or any right to
subscribe for or purchase any evidences of its indebtedness, any shares of stock
of any class or any other securities or property, or to receive any other right,
or

(b) there
shall be any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any consolidation or
merger of the Company with, or any sale, transfer or other disposition of all or
substantially all the property, assets or business of the Company to, another
corporation or other person, or

(c) there
shall be a voluntary or involuntary dissolution, liquidation or winding up of
the Company; 

then, in
any one or more of such cases, the Company shall give to the Holder (i) at least
15 days’ prior written notice of the record date selected for such dividend,
distribution or right or for determining rights to vote in respect of any such
reorganization, reclassification, merger, consolidation, sale, transfer,
disposition, dissolution, liquidation or winding up, and (ii) in the case of any
such reorganization, reclassification, merger, consolidation, sale, transfer,
disposition, dissolution, liquidation or winding up, at least 15 days’ prior
written notice of the date when the same shall take place. Such notice in
accordance with the foregoing clause also shall specify (i) the date on which
any such record is to be taken for the purpose of such dividend, distribution or
right, the date on which the holders of Common Stock shall be entitled to any
such dividend, distribution or right, and the amount and character thereof, and
(ii) the date on which any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up is to take place and the time, if any such time is to be fixed, as of which
the holders of Common Stock shall be entitled to exchange their shares of Common
Stock for securities or other property deliverable upon such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up. Each such written notice shall be
sufficiently given if addressed to the Holder at the last address of the Holder
appearing on the books of the Company and delivered in accordance with Section
11. The failure to give any notice required by this Section 6.2 shall not
invalidate any such corporate action.

6.3. Notice
to Stockholders. The
Holder shall be entitled to the same rights to receive notice of corporation
action as any holder of Common Stock.

7. No
Impairment.
The
Company shall not by any action, including, without limitation, amending its
certificate of incorporation 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 actions as may be
necessary or appropriate to protect the rights of the Holder against impairment.
Without limiting the generality of the foregoing, the Company will (a) not
increase the par value of any shares of Common Stock receivable upon the
exercise of this Warrant above the amount payable therefor upon such exercise
immediately prior to such increase in par value, (b) take all such action as may
be necessary or appropriate in order that the Company may validly and legally
issue fully paid and nonassessable shares of Common Stock upon the exercise of
this Warrant, and (c) use its best efforts to obtain all such authorizations,
exemptions or consents from any public regulatory body having jurisdiction
thereof as may be necessary to enable the Company to perform its obligations
under this Warrant. Upon the request of the Holder, the Company will at any time
during the period this Warrant is outstanding acknowledge in writing, in form
satisfactory to the Holder, the continuing validity of this Warrant and the
obligations of the Company hereunder.

4

 

8. Limited
Transferability.

(a) The
Holder represents that by accepting this Warrant it understands that this
Warrant and any securities obtainable upon exercise of this Warrant have not
been registered for sale under Federal or state securities laws and are being
offered and sold to the Holder pursuant to one or more exemptions from the
registration requirements of such securities laws. In the absence of an
effective registration of such securities or an exemption therefrom, any
certificates for such securities shall bear the legend set forth on the first
page hereof. The Holder understands that it must bear the economic risk of its
investment in this Warrant and any securities obtainable upon exercise of this
Warrant for an indefinite period of time, as this Warrant and such securities
have not been registered under Federal or state securities laws and therefore
cannot be sold unless subsequently registered under such laws, unless an
exemption from such registration is available. 

 

(b) The
Holder, by its acceptance of this Warrant, represents to the Company that it is
acquiring this Warrant and will acquire any securities obtainable upon exercise
of this Warrant for its own account for investment and not with a view to, or
for sale in connection with, any distribution thereof in violation of the
Securities Act of 1933, as amended (the “Act”). The Holder agrees that this
Warrant and any such securities may not be sold or otherwise transferred unless
(i) a registration statement with respect to such transfer is effective under
the Act and any applicable state securities laws or (ii) such sale or transfer
is made pursuant to one or more exemptions from the Act.

(c) This
Warrant may not be sold, transferred, assigned or hypothecated for six (6)
months from the date hereof except (i) to any firm or corporation that succeeds
to all or substantially all of the business of Paramount Capital, Inc., (ii) to
any of the officers, employees, associates or affiliated companies of Paramount
Capital, Inc., or of any such successor firm, or (iii) in the case of an
individual, pursuant to such individual’s last will and testament or the laws of
descent and distribution, and is so transferable only upon the books of the
Company which the Company shall cause to be maintained for such purpose. The
Company may treat the registered Holder of this Warrant as it appears on the
Company’s books at any time as the Holder for all purposes. The Company shall
permit any Holder of a Warrant or its duly authorized attorney, upon written
request during ordinary business hours, to inspect and copy or make extracts
from its books showing the registered Holders of Warrant. All Warrants issued
upon the transfer or assignment of this Warrant will be dated the same date as
this Warrant, and all rights of the holder thereof shall be identical to those
of the Holder.

9. Loss,
etc., of Warrant. Upon
receipt of evidence satisfactory to the Company of the loss, theft, destruction
or mutilation of this Warrant, and of indemnity reasonably satisfactory to the
Company, if lost, stolen or destroyed, and upon surrender and cancellation of
this Warrant, if mutilated, the Company shall execute and deliver to the Holder
a new Warrant of like date, tenor and denomination.

10. Status
of Holder. This
Warrant does not confer upon the Holder any right to vote or to consent to or
receive notice as a stockholder of the Company, as such, in respect of any
matters whatsoever, or any other rights or liabilities as a stockholder, prior
to the exercise hereof.

5

 

11. Notices. No
notice or other communi-cation under this Warrant shall be effective unless, but
any notice or other communication shall be effective and shall be deemed to have
been given if, the same is in writing and is mailed by first-class mail, postage
prepaid, addressed to:

If to the
Holder: 787
Seventh Avenue, 48th Floor, 

	 	
      
	
      
	
      
	
      New
      York, NY 10019;
      or

If to the
Company: Hudson
Health Sciences, Inc. 

	 	
      
	
      
	
      
	
      400
      Oyster Point Blvd, Suite 215

	 	
      
	
      
	
      
	
      South
      San Francisco, CA 94080

	 	
      
	
      
	
      
	
      Attn:
      Chief Executive Officer

12. Headings. The
headings of this Warrant have been inserted as a matter of convenience and shall
not affect the construction hereof.

13. Applicable
Law. This
Warrant shall be governed by and construed in accordance with the laws of the
State of New York, without regard to principles of conflicts of law. The parties
agree to settle any disputes through binding arbitration in the city, county and
State of New York.

14. Successors
and Assigns. Subject
to compliance with the provisions of Section 8, this Warrant and the rights
evidenced hereby shall inure to the benefit of and be binding upon the
successors of the Company and the successors and assigns of the Holder. The
provisions of this Warrant are intended to be for the benefit of all Holders
from time to time of this Warrant, and shall be enforceable by any such Holder,
but nothing in this Warrant shall be construed to give any person or corporation
or other entity, other than the Company and the Holder and their respective
successors and assigns, any legal or equitable right, remedy or cause under this
Warrant.

IN
WITNESS WHEREOF, the Company has caused this Warrant to be signed by its duly
authorized officer this 19th day of February, 2004

	 	 	HUDSON HEALTH SCIENCES, INC. 	 
	 	 	 	 
	 	 	By: 
      /s/ Mark J. Ahn 	 
	 	 	Name:  Mark
      J. Ahn 	 
	 	 	Title: President
      & Chief Executive Officer 	 

 

6

 

SUBSCRIPTION

The
undersigned, ___________________, pursuant to the provisions of the foregoing
Warrant, hereby elects to exercise the within Warrant to the extent of
purchasing ____________________ shares of Common Stock thereunder and hereby
makes payment of $___________ by certified or official bank check in payment of
the exercise price therefor.

The
undersigned hereby represents and warrants to the Company that the undersigned
is acquiring the shares of the Company’s Common Stock pursuant to exercise of
the within Warrant for investment purposes only. The undersigned hereby further
acknowledges that the undersigned understands that such shares (a) have not been
registered under the Securities Act of 1933, as amended, and are being issued to
the undersigned by the Company in reliance upon the foregoing representation and
warranty and (b) may not be resold except in accordance with the requirements of
the Act, including Rule 144 thereunder, if applicable. The undersigned further
consents to the placing of a legend on the certificates for the shares being
purchased to the foregoing effect.

	Dated:_______________ 	 	Signature:____________________ 	 
	 	 	 	 
	 	 	
      Address:______________________
	 

   

ASSIGNMENT

 

FOR VALUE
RECEIVED _______________ hereby sells, assigns and transfers unto
____________________ the foregoing Warrant and all rights evidenced thereby, and
does irrevocably constitute and appoint _____________________, attorney, to
transfer said Warrant on the books of Hudson Health Sciences, Inc.

	Dated:_______________ 	 	Signature:____________________ 	 
	 	 	 	 
	 	 	
      Address:______________________
	 

   

 

 

7

CASHLESS
EXERCISE

 

8

The
undersigned ___________________, pursuant to the provisions of the foregoing
Warrant, hereby elects to exchange its Warrant for ___________________ shares of
Common Stock, par value $.001 per share, of Hudson Health Sciences, Inc.
pursuant to the Cashless Exercise provisions of the Warrant.

 

	Dated:_______________ 	 	Signature:____________________ 	 
	 	 	 	 
	 	 	
      Address:______________________
	 

   

 

PARTIAL
ASSIGNMENT

FOR VALUE
RECEIVED _______________ hereby assigns and transfers unto ____________________
the right to purchase _______ shares of the Common Stock, $.001 par value per
share, of Hudson Health Sciences, Inc. covered by the foregoing Warrant, and a
proportionate part of said Warrant and the rights evidenced thereby, and does
irrevocably constitute and appoint ____________________, attorney, to transfer
that part of said Warrant on the books of Hudson Health Sciences,
Inc.

	Dated:_______________ 	 	Signature:____________________ 	 
	 	 	 	 
	 	 	
      Address:______________________
	 

   

 

 

9Unassociated Document

EXHIBIT
4.3

HANA
BIOSCIENCES,
INC.

STOCK
OPTION AGREEMENT

This
Stock Option Agreement (this “Agreement”) is entered into on December 1, 2004 to
be effective as of February 9, 2004 (the “Grant Date”), between Hana
Biosciences, Inc., a Delaware Company (the “Company”),
and __________________
(“Holder”).

SECTION
1. Grant
of Option. The
Company hereby grants to Holder, as of the Grant Date, a Stock Option (the
“Option”) to purchase an aggregate of _________________ shares (the “Option
Shares”) of common stock of the Company, par value $0.001 per share (the “Common
Stock”), at an exercise price of one dollar and one cent ($1.01) per share (the
“Option Price”), subject to adjustment and the other terms and conditions set
forth herein. 

SECTION
2. Exercise
of Option.

(a)
 General. Subject
to the earlier termination of the Option as provided herein, the Option may be
exercised by written notice to the Company at any time and from time to time
after the Grant Date. The exercise of this Option and the issuance of Option
Shares upon such exercise shall be subject to compliance by the Company and
Holder with all applicable requirements of law. The inability of the Company to
obtain approval from any regulatory body having authority deemed by the Company
to be necessary to the lawful issuance and sale of any Common Stock pursuant to
this Option shall relieve the Company of any liability with respect to the
non-issuance or sale of the Common Stock as to which such approval shall not
have been obtained. The Option shall be exercised by the delivery to the Company
prior to the Expiration Date (as defined below) of (A) a written notice of
intent to purchase a specific number of Option Shares subject to the option in
accordance with the terms hereof and (B) payment in full of the aggregate Option
Price of such specific number of Option Shares to be received. Payment of
the Option Price shall be made by cash, check, or wire transfer;

(b)
 Expiration
of Option. This
Option shall not be exercisable after the tenth (10th) anniversary of the Grant
Date (the “Expiration Date”). Notwithstanding the foregoing, in the event of
Holder’s death (if the Holder is a natural person), the Option shall
automatically expire, if not exercised beforehand, on the earlier of the
ninetieth (90th) day following the date of such death or the Expiration
Date.

SECTION
3. Exercise
of Option and Conditions to Exercise. This
Option may not be exercised by Holder unless the following conditions are
met:

(a) Notice.
This
Option shall be exercised by delivering written notice in the form attached
hereto as Exhibit I to the Company at its principal office addressed to the
attention of its Secretary. Such notice shall specify the number of shares of
Common Stock with respect to which the Option is being exercised and shall be
signed by Holder. This Option may not be exercised for a fraction of a share of
Common Stock;

(b) Securities
Requirements. Legal
counsel for the Company must be satisfied at the time of exercise that the
issuance of Option Shares upon exercise will be in compliance with the
Securities Act of 1933, as amended (the “1933 Act”) and applicable United States
federal, state, local and foreign laws; and

(c) Payment
of Exercise Price. Holder
must pay at the time of exercise the full purchase price for the shares of
Common Stock being acquired hereunder as described in Section 2(a) in cash or
its equivalent. 

SECTION
4. Transferability.

(a)
General. This
Option may not be sold, assigned, transferred, pledged, hypothecated or
otherwise disposed of by Holder, except, in the case that Holder is a natural
person, by will or the laws of descent and distribution (in which case, the
transferee shall succeed to the rights and obligations of Holder hereunder) and
is exercisable during Holder’s lifetime only by Holder or his or her guardian or
legal representative. If Holder or anyone claiming under or through Holder
attempts to violate this Section 4, such attempted violation shall be null and
void and without effect, and the Company’s obligation hereunder shall terminate.

(b)
Lock-up. Holder
hereby agrees to be subject to a lock-up period of 180 days or such longer
period of time as may be requested by a managing underwriter in connection with
and following any public offering, which may be imposed by the Company or the
managing underwriter(s) of such offering; provided, that in
the event of the death of Holder, any heirs of Holder shall not be bound by such
lock-up. In addition, during such lock-up period Holder will not directly or
indirectly, through related parties or otherwise, purchase, trade, offer,
pledge, sell, contract to sell or to purchase or sell “short” or “short against
the box” (as those terms are generally understood in the securities markets), or
otherwise dispose of or acquire, any securities of the Company or options in
respect of such securities.

SECTION
5. Anti-dilution
Adjustments. The
provisions of this Option are subject to adjustment as provided in this
Section 5.

(a) Stock
Splits, Dividends and Combinations. The
Option Price shall be adjusted from time to time such that in case the Company
shall hereafter:

	 	
      (i)
      
	
      pay
      any dividends on any class of stock of the Company payable in Common Stock
      or securities convertible into Common
Stock;

	 	
      (ii)
      
	
      subdivide
      its then outstanding shares of Common Stock into a greater number of
      shares; or

	 	
      (iii)
      
	
      combine
      outstanding shares of Common Stock, by reclassification or
      otherwise;

then, in
any such event, the Option Price in effect immediately prior to such event shall
(until adjusted again pursuant hereto) be adjusted immediately after such event
to a price (calculated to the nearest full cent) determined by dividing
(A) the number of shares of Common Stock outstanding immediately prior to
such event, multiplied by the then existing Option Price, by (B) the total
number of shares of Common Stock outstanding immediately after such event
(including in each case the maximum number of shares of Common Stock issuable in
respect of any securities convertible into Common Stock), and the resulting
quotient shall be the adjusted Option Price per share. An adjustment made
pursuant to this Subsection shall become effective immediately after the record
date in the case of a dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision, combina-tion
or reclassification. If, as a result of an adjustment made pursuant to this
Subsection, the Holder of any Option thereafter surrendered for exercise shall
become entitled to receive shares of two or more classes of capital stock or
shares of Common Stock and other capital stock of the Company, the 

 

1

Board of
Directors (whose determination shall be conclusive) shall determine the
allocation of the adjusted Option Price between or among shares of such classes
of capital stock or shares of Common Stock and other capital stock. All
calculations under this Subsection shall be made to the nearest cent or to the
nearest 1/100 of a share, as the case may be. In the event that at any time as a
result of an adjustment made pursuant to this Subsection, the holder of any
Option thereafter surrendered for exercise shall become entitled to receive any
shares of the Company other than shares of Common Stock, thereafter the Option
Price of such other shares so receivable upon exercise of any Option shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to Common Stock
contained in this Section.

(b) Mechanics
of Adjustment for Stock Splits, Dividends and Combinations. Upon
each adjustment of the Option Price pursuant to Section 5(a) above, the
Holder of each Option shall thereafter (until another such adjustment) be
entitled to purchase at the adjusted Option Price the number of shares,
calculated to the nearest full share, obtained by multiplying the number of
shares specified in such Option (as adjusted as a result of all adjustments in
the Option Price in effect prior to such adjustment) by the Option Price in
effect prior to such adjustment and dividing the product so obtained by the
adjusted Option Price.

(c) Consolidations,
Mergers and Reorganization Events. In case
of any consolidation or merger to which the Company is a party other than a
merger or consolidation in which the Company is the continuing Company, or in
case of any sale or conveyance to another Company of the property of the Company
as an entirety or substantially as an entirety, or in the case of any statutory
exchange of securities with another Company (including any exchange effected in
connection with a merger of a third Company into the Company), there shall be no
adjustment under Subsection (a) of this Section 5; but the Holder of each
Option then outstanding shall have the right thereafter to convert such Option
into the kind and amount of shares of stock and other securities and property
which he would have owned or have been entitled to receive immediately after
such consolidation, merger, statutory exchange, sale or conveyance had such
Option been converted immediately prior to the effective date of such
consolidation, merger, statutory exchange, sale or conveyance and, in any such
case, if necessary, appropriate adjustment shall be made in the application of
the provisions set forth in this Section with respect to the rights and
interests thereafter of any Holders of the Option, to the end that the
provisions set forth in this Section shall thereafter correspondingly be made
applicable, as nearly as may reasonably be, in relation to any shares of stock
and other securities and property thereafter deliverable on the exercise of the
Option. The provisions of this Subsection shall similarly apply to successive
consolidations, mergers, statutory exchanges, sales or conveyances.

 

(d) Certificate
as to Adjustments. Upon
the occurrence of each adjustment or readjustment of the Option Price or the
number of Options covered hereby pursuant to this Section, the Company, at its
expense, shall promptly compute such adjustment or readjustment in accordance
with the terms hereof and furnish to the Holder a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The Company shall, upon the written request
at any time of the Holder, furnish or cause to be furnished to the Holder a like
certificate setting forth (i) such adjustments and readjustments,
(ii) the Option Price at the time in effect, and (iii) the number of
shares of Common Stock and the amount, if any, of other property which at the
time would be received upon the exercise of this Option.

(e) No
Further Adjustment for Certain Transactions.
Notwithstanding the provisions of this Section 5, Holder understands and
acknowledges that the Option Price and the number of Option Shares subject to
this Agreement have already been adjusted to reflect all stock splits, stock
dividends, combinations, mergers, consolidations and reorganizations that have
been effected from the Grant Date through the date of this Agreement.

2

SECTION
6. Administration. Any
action taken or decision made by the Company or its Board of Directors or its
delegates arising out of or in connection with the construction, administration,
interpretation or effect of this Agreement shall lie within its sole and
absolute discretion, as the case may be, and shall be final, conclusive and
binding on Holder and all persons claiming under or through Holder. By accepting
this grant, Holder and each person claiming under or through Holder shall be
conclusively deemed to have indicated acceptance and ratification of, and
consent to, any action taken under by the Company or the Board or its
delegates.

SECTION
7. No
Rights as Stockholder. Unless
and until a certificate or certificates representing shares of Common Stock
shall have been issued to Holder (or any person acting under Section 4 above)
pursuant to an exercise hereunder, Holder shall not be or have any of the rights
or privileges of a stockholder of the Company with respect to shares of Common
Stock acquirable upon exercise of the Option. 

SECTION
8. Investment
Representation. Holder
hereby acknowledges that the shares of Common Stock which Holder may acquire by
exercising the Option shall be acquired for investment without a view to
distribution, within the meaning of the 1933 Act, and shall not be sold,
transferred, assigned, pledged or hypothecated in the absence of an effective
registration statement for the shares of Common Stock under the 1933 Act and
applicable states securities laws or an applicable exemption from the
registration requirements of the 1933 Act and any applicable state securities
laws. Holder also agrees that the shares of Common Stock which Holder may
acquire by exercising the Option will not be sold or otherwise disposed of in
any manner which would constitute a violation of any applicable securities laws,
whether federal or state and that the certificate representing the shares of
Common Stock shall contain a legend to such effect.

SECTION
9. Listing
and Registration of Common Stock. The
Company, in its discretion, may postpone the issuance and/or delivery of shares
of Common Stock upon any exercise of this Option until completion of such stock
exchange listing, or registration, or other qualification of such shares under
any state and/or federal law, rule or regulation as the Company may reasonably
in good faith consider appropriate.

SECTION
10. Notices. Any
notice hereunder to the Company shall be addressed to the Company at 400 Oyster
Point Blvd., Suite 215, South San Francisco, CA, 94080, Attention: Secretary,
and any notice hereunder to Holder shall be addressed to Holder at Holder’s last
address on the records of the Company, subject to the right of either party to
designate at any time hereafter in writing some other address. Any notice shall
be deemed to have been duly given when delivered personally, one day following
dispatch if sent by reputable overnight courier, fees prepaid, or three days
following mailing if sent by registered mail, return receipt requested, postage
prepaid and addressed as set forth above.

SECTION
11. Binding
Effect. This
Agreement shall be binding upon and inure to the benefit of any successors to
the Company and all persons lawfully claiming under Holder.

SECTION
12. Governing
Law. This
Agreement shall be governed by the substantive laws, but not the choice of law
rules, of the State of Delaware.

 

Signature
page to follow.

3

 

 

IN
WITNESS WHEREOF, the Company and Holder have executed this Agreement as of
December 1, 2004.

	 	 	HANA BIOSCIENCES, INC. 	 
	 	 	 	 
	 	 	_________________________________ 	 
	 	 	Name: Mark Ahn, Ph.D. 	 
	 	 	Title: President and Chief Executive
      Officer 	 

 

Holder
has reviewed this Option Agreement in its entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Option Agreement and fully
understands all provisions of this Option Agreement. Holder hereby agrees to
accept as binding, conclusive and final all decisions or interpretations of the
Board upon any questions arising under this Agreement.

	 	 	HOLDER: 	 
	 	 	 	 
	 	 	By:____________________________ 	 
	 	 	
      Its:_________________________ 
	 

 

 

 

4

EXHIBIT
I

NOTICE OF
EXERCISE OF STOCK OPTION

Reference
is hereby made to the Stock Option Agreement (the “Agreement”) dated December 1,
2004, between [     ] and
Hana Biosciences, Inc., a Delaware Company (the “Company”). The undersigned
hereby notifies the Company that the undersigned elects to purchase ___________
shares of the Company’s Common Stock (the “Purchased Shares”) at the option
exercise price of $[___] per share (the “Exercise Price”) pursuant to that
certain option subject to the Agreement (the “Option”).

Concurrently
with the delivery of this Exercise Notice to the Secretary of the Company, the
undersigned shall pay to the Company the Exercise Price for the Purchased Shares
in accordance with the provisions of the undersigned’s agreement with the
Company evidencing this Option and shall deliver whatever additional documents
may be required by such agreement as a condition for exercise to effect the
payment of the Exercise Price for the Purchased Shares if the Common Stock is
registered under Section 12(g) of the Securities Exchange Act of
1934).

Date: ____________________

_________________________________

Holder

Address:
___________________________

___________________________________

___________________________________

Print
name in exact manner

it is to
appear on the 

stock
certificate:  ________________________

Address
to which certificate 

is to be
sent, if different

from
address above:  ________________________

________________________

________________________

Social
Security Number ________________________

5

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