4,701,100 shares HANA BIOSCIENCES, INC. Common Stock, $0.001 par value PLACEMENT AGENCY AGREEMENT
Exhibit 10.1
4,701,100 shares
HANA BIOSCIENCES, INC.
Common Stock, $0.001 par value
May 16, 2006
▇▇▇▇▇▇ Brothers Inc.
▇▇▇▇▇▇▇▇▇ & Company, Inc.
▇▇▇▇▇▇▇▇▇▇▇ & Co. Inc.
c/▇ ▇▇▇▇▇▇ Brothers Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ & Company, Inc.
▇▇▇▇▇▇▇▇▇▇▇ & Co. Inc.
c/▇ ▇▇▇▇▇▇ Brothers Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Hana Biosciences, Inc., a Delaware corporation (the “Company”), proposes, subject to the terms
and conditions stated herein, to issue and sell 4,701,100 shares (the “Shares”) of the Company’s
common stock, par value $.001 per share (the “Common Stock”) to certain investors (collectively,
the “Investors”). The Company desires to engage ▇▇▇▇▇▇ Brothers Inc. (the “Representative”),
▇▇▇▇▇▇▇▇▇ & Company, Inc. and ▇▇▇▇▇▇▇▇▇▇▇ & Co. Inc. as its placement agents as named in Schedule 1
attached hereto (each, a “Placement Agent” and collectively, the “Placement Agents”) in connection
with such issuance and sale. The Shares are more fully described in the Registration Statement (as
herein defined).
1. Representations, Warranties and Agreements of the Company. The Company represents, warrants
and agrees that:
(a) A registration statement on Form S-3 (Registration No. 333-133372) relating to the
Shares has (i) been prepared by the Company in conformity with the requirements of the
Securities Act of 1933, as amended (the “Securities Act”), and the rules and regulations
(the “Rules and Regulations”) of the Securities and Exchange Commission (the “Commission”)
thereunder; (ii) been filed with the Commission under the Securities Act; and (iii) become
effective under the Securities Act. Copies of such registration statement and any amendment
thereto have been delivered by the Company to you as the Representative. As used in this
Agreement:
(i) “Applicable Time” means 8:30 a.m. (New York City time) on the date of this
Agreement;
(ii) “Effective Date” means the date and time as of which such registration
statement, or the most recent post-effective amendment thereto, if any, was declared
effective by the Commission;
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(iii) “Issuer Free Writing Prospectus” means each “free writing prospectus” (as
defined in Rule 405 of the Rules and Regulations) prepared by or on behalf of the
Company or used or referred to by the Company in connection with the offering of the
Shares;
(iv) “Preliminary Prospectus” means any preliminary prospectus or prospectus
subject to completion included in the Registration Statement or filed with the
Commission pursuant to Rule 424(b), including any prospectus supplement included
therein, under the Securities Act;
(v) “Pricing Disclosure Package” means, as of the Applicable Time, the most
recent Preliminary Prospectus, together with each Issuer Free Writing Prospectus
filed or used by the Company on or before the Applicable Time, other than a road
show that is an Issuer Free Writing Prospectus but is not required to be filed under
Rule 433 of the Rules and Regulations.
(vi) “Prospectus” means the final prospectus relating to the Shares filed with
the Commission pursuant to Rule 424(b) of the Rules and Regulations including any
prospectus supplement included therein; and
(vii) “Registration Statement” means such registration statement (Registration
No. 333-133372), as amended as of the Effective Date, including any Preliminary
Prospectus and all exhibits and information deemed to be part of the registration
statement.
Any reference to any Preliminary Prospectus or the Prospectus shall be deemed to refer
to and include any documents incorporated by reference therein pursuant to Form S-3 under
the Securities Act as of the date of such Preliminary Prospectus or the Prospectus, as the
case may be. Any reference to the “most recent Preliminary Prospectus” shall be deemed to
refer to the latest Preliminary Prospectus included in the Registration Statement or filed
pursuant to Rule 424(b) prior to or on the date hereof. Any reference to any amendment or
supplement to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include any document filed under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), after the date of such Preliminary Prospectus or the Prospectus, as the
case may be, and before the date of such amendment or supplement and incorporated by
reference in such Preliminary Prospectus or the Prospectus, as the case may be; and any
reference to any amendment to the Registration Statement shall be deemed to include any
annual report of the Company on Form 10-K filed with the Commission pursuant to Section
13(a) or 15(d) of the Exchange Act after the Effective Date and before the date of such
amendment that is incorporated by reference in the Registration Statement. The Commission
has not issued any order preventing or suspending the use of any Preliminary Prospectus or
the Prospectus or suspending the effectiveness of the Registration Statement, and no
proceeding or examination for such purpose has been instituted or threatened by the
Commission.
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(b) The Company was not at the time of initial filing of the Registration Statement and
at the earliest time thereafter that the Company or another offering participant made a bona
fide offer (within the meaning of Rule 164(h)(2) of the Rules and Regulations) of the
Shares, is not on the date hereof and will not be on the Closing Date an “ineligible issuer”
(as defined in Rule 405). The Company has been since the time of initial filing of the
Registration Statement and continues to be eligible to use Form S-3 for the offering of the
Shares.
(c) The Registration Statement conformed and will conform in all material respects on
the Effective Date and on the Closing Date, and any amendment to the Registration Statement
filed after the date hereof will conform in all material respects when filed, to the
requirements of the Securities Act and the Rules and Regulations. The Preliminary
Prospectus conformed, and the Prospectus will conform, in all material respects when filed
with the Commission pursuant to Rule 424(b) and on the Closing Date to the requirements of
the Securities Act and the Rules and Regulations. The documents incorporated by reference
in any Preliminary Prospectus or the Prospectus conformed, when filed with the Commission,
in all material respects to the requirements of the Exchange Act or the Securities Act, as
applicable, and the rules and regulations of the Commission thereunder.
(d) The Registration Statement did not, as of the Effective Date, 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 not misleading; provided that no representation
or warranty is made as to information contained in or omitted from the Registration
Statement in reliance upon and in conformity with written information furnished to the
Company through the Placement Agents by or on behalf of any Placement Agent specifically for
inclusion therein, which information is specified in Section 7(e).
(e) The Prospectus will not, as of its date and on the Closing Date, 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 the light of the circumstances under which
they were made, not misleading; provided that no representation or warranty is made as to
information contained in or omitted from the Prospectus in reliance upon and in conformity
with written information furnished to the Company through the Placement Agents by or on
behalf of any Placement Agent specifically for inclusion therein, which information is
specified in Section 7(e).
(f) The documents incorporated by reference in any Preliminary Prospectus or the
Prospectus did not, when filed with the Commission, 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 the light of the circumstances under which they were made,
not misleading.
(g) The Pricing Disclosure Package did not, as of the Applicable Time, 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 the light of the
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circumstances under which they were made, not misleading, except that the price of the
Shares and disclosures directly relating thereto will be included on the cover page of the
Prospectus; provided that no representation or warranty is made as to information contained
in or omitted from the Pricing Disclosure Package in reliance upon and in conformity with
written information furnished to the Company through the Placement Agents by or on behalf of
any Placement Agent specifically for inclusion therein, which information is specified in
Section 7(e).
(h) Each Issuer Free Writing Prospectus (including, without limitation, any road show
that is a free writing prospectus under Rule 433), when considered together with the Pricing
Disclosure Package as of the Applicable Time, did not 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 the light of the circumstances under which they were made,
not misleading, except that the price of the Shares and disclosures directly relating
thereto will be included on the cover page of the Prospectus; provided that no
representation or warranty is made as to information contained in or omitted from such
Issuer Free Writing Prospectus in reliance upon and in conformity with written information
furnished to the Company through the Placement Agents by or on behalf of any Placement Agent
specifically for inclusion therein, which information is specified in Section 7(e).
(i) Each Issuer Free Writing Prospectus conformed or will conform in all material
respects to the requirements of the Securities Act and the Rules and Regulations on the date
of first use, and the Company has complied with all prospectus delivery and any filing
requirements applicable to such Issuer Free Writing Prospectus pursuant to the Rules and
Regulations. The Company has not made any offer relating to the Shares that would
constitute an Issuer Free Writing Prospectus without the prior written consent of the
Placement Agent. The Company has retained in accordance with the Rules and Regulations all
Issuer Free Writing Prospectuses that were not required to be filed pursuant to the Rules
and Regulations.
(j) The Company has been duly organized, is validly existing and in good standing as a
corporation or other business entity under the laws of its jurisdiction of organization and
is duly qualified to do business and in good standing as a foreign corporation or other
business entity in each jurisdiction in which its ownership or lease of property or the
conduct of its businesses requires such qualification, except where the failure to be so
qualified or in good standing could not, in the aggregate, reasonably be expected to have a
material adverse effect on the condition (financial or otherwise), results of operations,
stockholders’ equity, properties, business or prospects of the Company (a “Material Adverse
Effect”); the Company has all power and authority necessary to own or hold its properties
and to conduct the businesses in which it is engaged. The Company does not own or control,
directly or indirectly, any corporation, association or other entity.
(k) The Company has an authorized capitalization as set forth in each of the most
recent Preliminary Prospectus and the Prospectus, and all of the issued shares of capital
stock of the Company have been duly authorized and validly issued, are fully paid
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and non-assessable, conform to the description thereof contained in each of the most
recent Preliminary Prospectus and the Prospectus and were issued in compliance with federal
and state securities laws and not in violation of any preemptive right, resale right, right
of first refusal or similar right. All of the Company’s options, warrants and other rights
to purchase or exchange any securities for shares of the Company’s capital stock have been
duly authorized and validly issued, conform to the description thereof contained in each of
the most recent Preliminary Prospectus and the Prospectus and were issued in compliance with
federal and state securities laws.
(l) The Shares to be issued and sold by the Company have been duly authorized and, upon
payment and delivery, will be validly issued, fully paid and non-assessable, will conform to
the description thereof contained in each of the most recent Preliminary Prospectus and the
Prospectus, will be issued in compliance with federal and state securities laws and will be
free of statutory and contractual preemptive rights, rights of first refusal and similar
rights.
(m) The Company has all requisite corporate power and authority to execute, deliver and
perform its obligations under this Agreement. This Agreement has been duly and validly
authorized, executed and delivered by the Company.
(n) The execution, delivery and performance of this Agreement by the Company, the
consummation of the transactions contemplated hereby and the application of the proceeds
from the sale of the Shares as described under “Use of Proceeds” in each of the most recent
Preliminary Prospectus and the Prospectus will not (i) conflict with or result in a breach
or violation of any of the terms or provisions of, impose any lien, charge or encumbrance
upon any property or assets of the Company, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement, license or other agreement or instrument to which
the Company is a party or by which the Company is bound or to which any of the property or
assets of the Company is subject, except for any conflict, breach or violation that could
not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect; (ii) result in any violation of the provisions of the charter or by-laws (or similar
organizational documents) of the Company; or (iii) result in any violation of any statute or
any order, rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its properties or assets.
(o) No consent, approval, authorization or order of, or filing or registration with,
any court or governmental agency or body having jurisdiction over the Company or any of
their properties or assets is required for the execution, delivery and performance of this
Agreement by the Company, the consummation of the transactions contemplated hereby, the
application of the proceeds from the sale of the Shares as described under “Use of Proceeds”
in each of the most recent Preliminary Prospectus and the Prospectus, except for the
registration of the Shares under the Securities Act and such consents, approvals,
authorizations, registrations or qualifications as may be required under the Exchange Act
and applicable state securities laws in connection with the purchase and sale of the Shares.
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(p) There are no contracts, agreements or understandings between the Company and any
person granting such person the right (other than rights which have been waived in writing
in connection with the transactions contemplated by this Agreement or otherwise satisfied)
to require the Company to file a registration statement under the Securities Act with
respect to any securities of the Company owned or to be owned by such person or to require
the Company to include such securities in the securities registered pursuant to the
Registration Statement or in any securities being registered pursuant to any other
registration statement filed by the Company under the Securities Act.
(q) The Company has not sold or issued any securities that would be integrated with the
offering of the Shares contemplated by this Agreement pursuant to the Securities Act, the
Rules and Regulations or the interpretations thereof by the Commission.
(r) The Company has not sustained, since the date of the latest audited financial
statements included or incorporated by reference in the most recent Preliminary Prospectus,
any loss or interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or governmental
action, order or decree, and since such date, there has not been any change in the capital
stock or long-term debt of the Company or any adverse change, or any development involving a
prospective adverse change, in or affecting the condition (financial or otherwise), results
of operations, stockholders’ equity, properties, management, business or prospects of the
Company, in each case except as could not, in the aggregate, reasonably be expected to have
a Material Adverse Effect.
(s) Since the date as of which information is given in the most recent Preliminary
Prospectus, the Company has not (i) incurred any liability or obligation, direct or
contingent, other than liabilities and obligations that were incurred in the ordinary course
of business, (ii) entered into any material transaction not in the ordinary course of
business or (iii) declared or paid any dividend on its capital stock.
(t) The historical financial statements (including the related notes and supporting
schedules) included or incorporated by reference in the most recent Preliminary Prospectus
comply as to form in all material respects with the requirements of Regulation S-X under the
Securities Act and present fairly the financial condition, results of operations and cash
flows of the entities purported to be shown thereby at the dates and for the periods
indicated and have been prepared in conformity with accounting principles generally accepted
in the United States applied on a consistent basis throughout the periods involved.
(u) ▇.▇. ▇▇▇▇, LLP, who have certified certain financial statements of the Company,
whose report appears in the most recent Preliminary Prospectus or is incorporated by
reference therein and who have delivered the initial letter referred to in Section 6(k)
hereof, are an independent registered public accounting firm as required by the Securities
Act and the Rules and Regulations.
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(v) The Company has good and marketable title in fee simple to all real property and
good and marketable title to all personal property owned by it, in each case free and clear
of all liens, encumbrances and defects, except such as are described in the most recent
Preliminary Prospectus or such as do not materially affect the value of such property and do
not materially interfere with the use made and proposed to be made of such property by the
Company; and all assets held under lease by the Company are held by it under valid,
subsisting and enforceable leases, with such exceptions as do not materially interfere with
the use made and proposed to be made of such assets by the Company.
(w) The Company carries, or is covered by, insurance from insurers of recognized
financial responsibility in such amounts and covering such risks as is adequate for the
conduct of its business and the value of its respective properties and as is customary for
companies engaged in a similar business in a similar industry. All policies of insurance of
the Company are in full force and effect; the Company is in compliance with the terms of
such policies in all material respects; and the Company has not received notice from any
insurer or agent of such insurer that capital improvements or other expenditures are
required or necessary to be made in order to continue such insurance; there are no claims by
the Company under any such policy or instrument as to which any insurance company is denying
liability or defending under a reservation of rights clause; and the Company does not have
any 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 at a cost that could not reasonably be expected to have a
Material Adverse Effect.
(x) The statistical and market-related data included under the captions “Summary” and
“Business” in the most recent Preliminary Prospectus and the financial statements of the
Company included or incorporated by reference in the most recent Preliminary Prospectus are
based on or derived from sources that the Company believes to be reliable and accurate in
all material respects.
(y) The Company is not, and as of the Closing Date and, after giving effect to the
offer and sale of the Shares and the application of the proceeds therefrom as described
under “Use of Proceeds” in the most recent Preliminary Prospectus and the Prospectus, will
not be, (i) an “investment company” within the meaning of such term under the Investment
Company Act of 1940, as amended (the “Investment Company Act”), and the rules and
regulations of the Commission thereunder or (ii) a “business development company” (as
defined in Section 2(a)(48) of the Investment Company Act).
(z) Except as described in the most recent Preliminary Prospectus, there are no legal
or governmental proceedings pending to which the Company is a party or of which any property
or assets of the Company is the subject that could, in the aggregate, reasonably be expected
to have a Material Adverse Effect or could, in the aggregate, reasonably be expected to have
a material adverse effect on the performance of this Agreement or the consummation of the
transactions contemplated hereby; and to the Company’s knowledge, no such proceedings are
threatened or contemplated by governmental authorities or others.
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(aa) There are no legal or governmental proceedings or contracts or other documents of
a character required to be described in the Registration Statement or the most recent
Preliminary Prospectus or, in the case of documents, to be filed as exhibits to the
Registration Statement, that are not described and filed as required. The Company has no
knowledge that any other party to any such contract, agreement or arrangement has any
intention not to render full performance as contemplated by the terms thereof; and that
statements made in the most recent Preliminary Prospectus under the caption
“Business—License Agreements,” “Business—Government Regulation” and “Description of
Capital Stock,” insofar as they purport to constitute summaries of the terms of statutes,
rules or regulations, legal or governmental proceedings or contracts and other documents,
constitute accurate summaries of the terms of such statutes, rules and regulations, legal
and governmental proceedings and contracts and other documents in all material respects.
(bb) Except as described in the most recent Preliminary Prospectus, no relationship,
direct or indirect, exists between or among the Company, on the one hand, and the directors,
officers, stockholders, customers or suppliers of the Company, on the other hand, that is
required to be described in the most recent Preliminary Prospectus or the Prospectus which
is not so described.
(cc) No labor disturbance by the employees of the Company exists or, to the knowledge
of the Company, is imminent that could reasonably be expected to have a Material Adverse
Effect.
(dd) (i) Each “employee benefit plan” (within the meaning of Section 3(3) of the
Employee Retirement Security Act of 1974, as amended (“ERISA”)) for which the Company or any
member of its “Controlled Group” (defined as any organization which is a member of a
controlled group of corporations within the meaning of Section 414 of the Internal Revenue
Code of 1986, as amended (the “Code”)) would have any liability (each a “Plan”) has been
maintained in compliance in all material respects with its terms and with the requirements
of all applicable statutes, rules and regulations including ERISA and the Code; (ii) with
respect to each Plan subject to Title IV of ERISA (a) no “reportable event” (within the
meaning of Section 4043(c) of ERISA) has occurred or is reasonably expected to occur, (b) no
“accumulated funding deficiency” (within the meaning of Section 302 of ERISA or Section 412
of the Code), whether or not waived, has occurred or is reasonably expected to occur, (c)
the fair market value of the assets under each Plan exceeds the present value of all
benefits accrued under such Plan (determined based on those assumptions used to fund such
Plan) and (d) neither the Company nor any member of its Controlled Group has incurred, or
reasonably expects to incur, any material liability under Title IV of ERISA (other than
contributions to the Plan or premiums to the PBGC in the ordinary course and without
default) in respect of a Plan (including a “multiemployer plan”, within the meaning of
Section 4001(c)(3) of ERISA); and (iii) each Plan that is intended to be qualified under
Section 401(a) of the Code is so qualified and nothing has occurred, whether by action or by
failure to act, which would cause the loss of such qualification.
(ee) The Company has filed all federal, state, local and foreign income and franchise
tax returns required to be filed through the date hereof, subject to permitted
8
extensions, and have paid all taxes due thereon, and no tax deficiency has been
determined adversely to the Company, nor does the Company have any knowledge of any tax
deficiencies that could, in the aggregate, reasonably be expected to have a Material Adverse
Effect.
(ff) The Company (i) is not in violation of its charter or by-laws (or similar
organizational documents), (ii) is not in default, and no event has occurred that, with
notice or lapse of time or both, would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, license or other agreement or instrument to which it is a party or by
which it is bound or to which any of its properties or assets is subject or (iii) is not in
violation of any statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over it or its property or assets or has failed to obtain
any license, permit, certificate, franchise or other governmental authorization or permit
necessary to the ownership of its property or to the conduct of its business, except in the
case of clauses (ii) and (iii), to the extent any such conflict, breach, violation or
default could not, in the aggregate, reasonably be expected to have a Material Adverse
Effect.
(gg) The Company (i) makes and keeps accurate books and records and (ii) maintains and
has maintained effective internal control over financial reporting as defined in Rule 13a-15
under the Exchange Act and a system of internal accounting controls sufficient to provide
reasonable assurance that (A) transactions are executed in accordance with management’s
general or specific authorization, (B) transactions are recorded as necessary to permit
preparation of the Company’s financial statements in conformity with accounting principles
generally accepted in the United States and to maintain accountability for its assets, (C)
access to the Company’s assets is permitted only in accordance with management’s general or
specific authorization and (D) the recorded accountability for the Company’s assets is
compared with existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(hh) (i) The Company has established and maintains disclosure controls and procedures
(as such term is defined in Rule 13a-15 under the Exchange Act), (ii) such disclosure
controls and procedures are designed to ensure that the information required to be disclosed
by the Company in the reports it will file or submit under the Exchange Act is accumulated
and communicated to management of the Company, including its principal executive officer and
principal financial officer, as appropriate, to allow timely decisions regarding required
disclosure to be made and (iii) such disclosure controls and procedures are effective in all
material respects to perform the functions for which they were established.
(ii) Since the date of the most recent balance sheet of the Company reviewed or audited
by ▇.▇. ▇▇▇▇, LLP and the audit committee of the board of directors of the Company, (i) the
Company has not been advised of (A) any significant deficiencies in the design or operation
of internal controls that could adversely affect the ability of the Company to record,
process, summarize and report financial data, or any material weaknesses in internal
controls and (B) any fraud, whether or not material, that involves
9
management or other employees who have a significant role in the internal controls of
the Company, and (ii) since that date, there have been no significant changes in internal
controls or in other factors that could significantly affect internal controls, including
any corrective actions with regard to significant deficiencies and material weaknesses.
(jj) There is and has been no failure on the part of the Company and any of the
Company’s directors or officers, in their capacities as such, to comply with the provisions
of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules and regulations promulgated in connection
therewith.
(kk) The section entitled “Management’s Discussion and Analysis of Financial Condition
and Results of Operations—Critical Accounting Policies” in the Company’s most recent Annual
Report on Form 10-K and Quarterly Report on Form 10-Q accurately and fully describes (A) the
accounting policies that the Company believes are the most important in the portrayal of the
Company’s financial condition and results of operations and that require management’s most
difficult, subjective or complex judgments (“Critical Accounting Policies”); (B) the
judgments and uncertainties affecting the application of Critical Accounting Policies; and
(C) the likelihood that materially different amounts would be reported under different
conditions or using different assumptions and an explanation thereof.
(ll) Except as disclosed in the most recent Preliminary Prospectus, the Company has
such certificates, permits, licenses and other approvals or authorizations of governmental
or regulatory authorities (“Permits”) as are necessary under applicable law to own its
properties and to conduct its business in the manner described in the most recent
Preliminary Prospectus (including without limitation all such certificates, authorizations
and permits required by the United States Food and Drug Administration (the “FDA”) or any
other similar federal, state or foreign agencies or bodies); the Company has fulfilled and
performed all of its obligations with respect to the Permits, and no event has occurred that
allows, or after notice or lapse of time would allow, revocation or termination thereof or
would result in any other impairment of the rights of the holder of any such Permits, except
as disclosed in or contemplated by the most recent Preliminary Prospectus, except for any of
the foregoing that would not reasonably be expected to have a Material Adverse Effect.
(mm) The preclinical and clinical trials conducted by or on behalf of the Company that
are described in the most recent Preliminary Prospectus were and, if still pending, are to
the extent required by law being, conducted in compliance with all applicable current Good
Laboratory Practices, Good Clinical Practices and local, state and federal laws, rules and
regulations in all material respects. The descriptions of the results of such studies and
trials contained in the most recent Preliminary Prospectus are accurate and complete in all
material respects. The Company is not aware of any studies, tests or trials, the results of
which reasonably call into question the studies, tests or clinical trials described or
referred to in the most recent Preliminary Prospectus when viewed in the context in which
such results are described and the clinical state of development. The Company has not
received any notices or correspondence from the FDA or other governmental agency requiring
the termination, suspension or material
10
modification of any clinical trials conducted by, or on behalf, of the Company or in
which the Company has participated.
(nn) The Company owns or possesses adequate rights to all material patents, patent
applications, trademarks, service marks, trade names, trademark registrations, service ▇▇▇▇
registrations, copyrights and licenses necessary for the conduct of its business as
described in the most recent Preliminary Prospectus or presently utilized by it and has no
reason to believe that the conduct of its business as described in the most recent
Preliminary Prospectus infringes or will conflict with, and has not received any notice of
infringement or any claim of conflict with, any such rights of others.
(oo) The Company has duly and properly filed or caused to be filed with the United
States Patent and Trademark Office (the “PTO”) and applicable foreign and
international patent authorities all patent applications owned by the Company (the “Company
Patent Applications”). To the knowledge of the Company, the Company has complied with the
PTO’s duty of candor and disclosure for the Company Patent Applications and has made no
material misrepresentation in the Company Patent Applications. The Company is not aware of
any information material to a determination of patentability regarding the Company Patent
Applications not called to the attention of the PTO or similar foreign authority. The
Company is not aware of any information not called to the attention of the PTO or similar
foreign authority that would preclude the grant of a patent for the Company Patent
Applications. The Company has no knowledge of any information that would preclude the
Company from having clear title to the Company Patent Applications.
(pp) Except as described in the most recent Preliminary Prospectus, (A) there are no
proceedings that are pending, or known to be contemplated, against the Company under any
laws, regulations, ordinances, rules, orders, judgments, decrees, permits or other legal
requirements of any governmental authority, including without limitation any international,
national, state, provincial, regional, or local authority, relating to the protection of
human health or safety, the environment, or natural resources, or to hazardous or toxic
substances or wastes, pollutants or contaminants (“Environmental Laws”) in which a
governmental authority is also a party, other than such proceedings regarding which it is
reasonably believed no monetary sanctions of $100,000 or more will be imposed, (B) the
Company is not aware of any issues regarding compliance with Environmental Laws, or
liabilities or other obligations under Environmental Laws or concerning hazardous or toxic
substances or wastes, pollutants or contaminants, that could reasonably be expected to have
a material effect on the capital expenditures, earnings or competitive position of the
Company, and (C) the Company does not anticipate material capital expenditures relating to
Environmental Laws.
(qq) The Company is not in violation of and has not received notice of any violation
with respect to any federal or state law relating to discrimination in the hiring, promotion
or pay of employees, nor any applicable federal or state wage and hour laws, nor any state
law precluding the denial of credit due to the neighborhood in which a property is situated,
the violation of any of which could reasonably be expected to have a Material Adverse
Affect.
11
(rr) Neither the Company nor, to the knowledge of the Company, any director, officer,
agent, employee or other person associated with or acting on behalf of the Company, has (i)
used any corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expense relating to political activity; (ii) made any direct or indirect unlawful
payment to any foreign or domestic government official or employee from corporate funds;
(iii) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act
of 1977; or (iv) made any bribe, rebate, payoff, influence payment, kickback or other
unlawful payment.
(ss) The operations of the Company are and have been conducted at all times in
compliance with applicable financial recordkeeping and reporting requirements of the
Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering
statutes of all jurisdictions, the rules and regulations thereunder and any related or
similar rules, regulations or guidelines, issued, administered or enforced by any
governmental agency (collectively, the “Money Laundering Laws”) and no action, suit or
proceeding by or before any court or governmental agency, authority or body or any
arbitrator involving the Company with respect to the Money Laundering Laws is pending or, to
the knowledge of the Company, threatened, except, in each case, as would not reasonably be
expected to have a Material Adverse Effect.
(tt) Neither the Company nor, to the knowledge of the Company, any director, officer,
agent, employee or affiliate of the Company is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury Department
(“OFAC”); and the Company will not directly or indirectly use the proceeds of the offering,
or lend, contribute or otherwise make available such proceeds to any joint venture partner
or other person or entity, for the purpose of financing the activities of any person
currently subject to any U.S. sanctions administered by OFAC.
(uu) The Company has not distributed and, prior to the later to occur of the Closing
Date and completion of the distribution of the Shares, will not distribute any offering
material in connection with the offering and sale of the Shares other than any Preliminary
Prospectus, the Prospectus, or any Issuer Free Writing Prospectus to which the Placement
Agent have consented in accordance with Section 1(i) or Section 4(a)(vi).
(vv) The Company has not taken and will not take, directly or indirectly, any action
designed to or that has constituted or that could reasonably be expected to cause or result
in the stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the shares of the Shares.
(ww) The Shares has been approved for listing, subject to official notice of issuance,
in The NASDAQ National Market.
Any certificate signed by any officer of the Company and delivered to the Placement Agent or
counsel for the Placement Agent in connection with the offering of the Shares shall be deemed a
representation and warranty by the Company, as to matters covered thereby, to the Placement Agent.
12
2. Placement of the Shares by the Placement Agents. On the basis of the representations and
warranties and agreements of the Company contained in, and subject to the terms and conditions of,
this Agreement, the Placement Agents agree to act as the Company’s exclusive placement agents in
connection with the issuance and sale, on a best efforts basis, by the Company of the Shares to the
Investors. Upon the occurrence of the Closing (as hereinafter defined), the Company shall pay to
the Representative on behalf of the Placement Agents 6.0% of the proceeds received by the Company
from the sale of the Shares to all Investors (the “Placement Agent Fee”), provided, however, that
no Placement Agent Fee shall be paid with respect to any of the Shares sold to any officer or
director of the Company or any affiliate of an officer or director of the Company.
3. Delivery of and Payment for the Shares. Concurrently with the execution and delivery of
this Agreement, the Company, the Representative, and JPMorgan Chase Bank, as escrow agent (the
"Escrow Agent”), shall enter into an Escrow Agreement substantially in the form of Exhibit A
attached hereto (the “Escrow Agreement”), pursuant to which an escrow account will be established,
at the Company’s expense, for the benefit of the Company and the Investors (the “Escrow Account”).
Prior to the Closing Date (as hereinafter defined), each of the Investors will deposit in the
Escrow Account an amount equal to the price per Share as shown on the cover page of the Prospectus
multiplied by the number of Shares to be purchased by such Investor (such amounts in the aggregate
are herein referred to as the “Escrow Funds”). At 9:00 a.m., New York City time, on May 19, 2006
or at such other time on such other date as may be agreed upon by the Company and the Placement
Agent (such date is hereinafter referred to as the “Closing Date”), the Escrow Agent will disburse
the Escrow Funds from the Escrow Account to the Company, the Placement Agent and the Escrow Agent
as provided in the Escrow Agreement, and the Company shall deliver the Shares to the Investors,
which delivery may be made through the facilities of The Depository Trust Company. The closing of
the sale of the Shares to the Investors (the “Closing”) shall take place at the offices of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Brand, LLP. All actions taken at the Closing shall be deemed to have occurred
simultaneously.
Certificates evidencing the Shares shall be in definitive form and shall be registered in such
names and in such denominations as the Placement Agent shall request by written notice to the
Company and the Company shall deliver the Shares to the Investors on the Closing Date, which
delivery may be made through the facilities of the Depository Trust Company.
4. Further Agreements of the Company and the Placement Agents. (a) The Company agrees:
(i) To prepare the Prospectus in a form approved by the Placement Agents and to file
such Prospectus pursuant to Rule 424(b) under the Securities Act not later than the
Commission’s close of business on the second business day following the execution and
delivery of this Agreement; to make no further amendment or any supplement to the
Registration Statement or the Prospectus prior to the Closing Date except as provided
herein; to advise the Placement Agents, promptly after it receives notice thereof, of the
time when any amendment or supplement to the Registration Statement or the Prospectus has
been filed and to furnish the Placement Agents with copies thereof; to advise the Placement
Agents, promptly after it receives notice thereof, of the issuance by the Commission of any
stop order or of any order preventing or suspending the use of the Prospectus or any Issuer
Free Writing Prospectus, of the suspension of the qualification of the Shares for offering
or sale in any jurisdiction, of the initiation or threatening of any
13
proceeding or examination for any such purpose or of any request by the Commission for
the amending or supplementing of the Registration Statement, the Prospectus or any Issuer
Free Writing Prospectus or for additional information; and, in the event of the issuance of
any stop order or of any order preventing or suspending the use of the Prospectus or any
Issuer Free Writing Prospectus or suspending any such qualification, to use promptly its
best efforts to obtain its withdrawal;
(ii) To furnish promptly to the Representative and to counsel for the Representative a
signed copy of the Registration Statement as originally filed with the Commission, and each
amendment thereto filed with the Commission, including all consents and exhibits filed
therewith;
(iii) To deliver promptly to the Placement Agents such number of the following
documents as the Placement Agents shall reasonably request: (A) conformed copies of the
Registration Statement as originally filed with the Commission and each amendment thereto
(in each case excluding exhibits other than this Agreement and the computation of per share
earnings), (B) each Preliminary Prospectus, the Prospectus and any amended or supplemented
Prospectus, (C) each Issuer Free Writing Prospectus and (D) any document incorporated by
reference in any Preliminary Prospectus or the Prospectus; and, if the delivery of a
prospectus is required at any time after the date hereof in connection with the offering or
sale of the Shares or any other securities relating thereto and if at such time any events
shall have occurred as a result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not misleading, or, if for any other
reason it shall be necessary to amend or supplement the Prospectus in order to comply with
the Securities Act, to notify the Placement Agents and, to file such document and to prepare
and furnish without charge to the Placement Agents as many copies as the Placement Agents
may from time to time reasonably request of an amended or supplemented Prospectus that will
correct such statement or omission or effect such compliance;
(iv) To file promptly with the Commission any amendment or supplement to the
Registration Statement or the Prospectus that may, in the judgment of the Company or the
Placement Agents, be required by the Securities Act or requested by the Commission;
(v) Prior to filing with the Commission any amendment or supplement to the Registration
Statement or the Prospectus, any document incorporated by reference in the Prospectus or any
amendment to any document incorporated by reference in the Prospectus, to furnish a copy
thereof to the Placement Agents and counsel for the Representative and obtain the consent of
the Placement Agent to the filing;
(vi) Not to make any offer relating to the Shares that would constitute an Issuer Free
Writing Prospectus without the prior written consent of the Representative.
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(vii) To retain in accordance with the Rules and Regulations all Issuer Free Writing
Prospectuses not required to be filed pursuant to the Rules and Regulations; and if at any
time after the date hereof any events shall have occurred as a result of which any Issuer
Free Writing Prospectus, as then amended or supplemented, would conflict with the
information in the Registration Statement, the most recent Preliminary Prospectus or the
Prospectus or would include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or, if for any other reason it
shall be necessary to amend or supplement any Issuer Free Writing Prospectus, to notify the
Placement Agents and, upon their request, to file such document and to prepare and furnish
without charge to the Placement Agents as many copies as the Placement Agents may from time
to time reasonably request of an amended or supplemented Issuer Free Writing Prospectus that
will correct such conflict, statement or omission or effect such compliance;
(viii) As soon as practicable after the Effective Date (it being understood that the
Company shall have until at least 400 or, if the fourth quarter following the fiscal quarter
that includes the Effective Date is the last fiscal quarter of the Company’s fiscal year,
425 days after the end of the Company’s current fiscal quarter), to make generally available
to the Company’s security holders and to deliver to the Placement Agents an earnings
statement of the Company (which need not be audited) complying with Section 11(a) of the
Securities Act and the Rules and Regulations (including, at the option of the Company, Rule
158);
(ix) Promptly from time to time to take such action as the Placement Agents may
reasonably request to qualify the Shares for offering and sale under the securities laws of
such jurisdictions as the Placement Agents may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such jurisdictions for as long as
may be necessary to complete the distribution of the Shares; provided that in connection
therewith the Company shall not be required to (i) qualify as a foreign corporation in any
jurisdiction in which it would not otherwise be required to so qualify, (ii) file a general
consent to service of process in any such jurisdiction or (iii) subject itself to taxation
in any jurisdiction in which it would not otherwise be subject;
(x) For a period commencing on the date hereof and ending on the 90th day
after the date of the Prospectus (the “Lock-Up Period”), not to, directly or indirectly, (1)
offer for sale, sell, pledge or otherwise dispose of (or enter into any transaction or
device that is designed to, or could be expected to, result in the disposition by any person
at any time in the future of) any shares of Common Stock or securities convertible into or
exchangeable for Common Stock (other than the Shares and shares issued pursuant to employee
benefit plans, qualified stock option plans or other employee compensation plans existing on
the date hereof or pursuant to currently outstanding options, warrants or rights, and other
than shares the Company may become obligated to issue to Inex Pharmaceuticals Corporation
(“Inex”) pursuant to the terms of the Registration Rights Agreement between the Company and
Inex dated May 6, 2006), or sell or grant options, rights or warrants with respect to any
shares of Common Stock or securities convertible into or exchangeable for Common Stock
(other than the grant of options pursuant to
15
option plans existing on the date hereof), (2) enter into any swap or other derivatives
transaction that transfers to another, in whole or in part, any of the economic benefits or
risks of ownership of such shares of Common Stock, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of Common Stock or other securities, in
cash or otherwise, (3) make any demand for or exercise any right or cause to be filed a
registration statement, including any amendments thereto, with respect to the registration
of any shares of Common Stock or securities convertible into or exercisable or exchangeable
for Common Stock or any other securities of the Company (other than any registration
statement on Form S-8, and other than the filing of a registration statement for the resale
of 1,118,568 shares of Common Stock issued to Inex as of May 6, 2006 pursuant to the terms
of the Registration Rights Agreement between the Company and Inex dated May 6, 2006) or (4)
publicly disclose the intention to do any of the foregoing, for a period commencing on the
date hereof and ending on the expiration of the Lock Up Period and to cause each officer,
director and stockholder of the Company set forth on Schedule 2 hereto to furnish to
the Representative, prior to the Closing Date, a letter or letters, substantially in the
form of Exhibit B hereto (the “Lock-Up Agreements”); notwithstanding the foregoing,
if (1) during the last 17 days of the Lock-Up Period, the Company issues an earnings release
or material news or a material event relating to the Company occurs or (2) prior to the
expiration of the Lock-Up Period, the Company announces that it will release earnings
results during the 16-day period beginning on the last day of the Lock-Up Period, then the
restrictions imposed by this Section 6 shall continue to apply until the expiration of the
18-day period beginning on the issuance of the earnings release or the announcement of the
material news or the occurrence of the material event, unless ▇▇▇▇▇▇ Brothers Inc. waives
such extension in writing. The Company hereby further agrees that, prior to engaging in any
transaction or taking any other action that is subject to the terms of this Section 4(x)
during the period from the date of this Lock-Up Letter Agreement to and including the
34th day following the expiration of the Lock-Up Period, it will give notice
thereof to ▇▇▇▇▇▇ Brothers Inc. and will not consummate such transaction or take any such
action unless it has received written confirmation from ▇▇▇▇▇▇ Brothers Inc. that the
Lock-Up Period (as such may have been extended pursuant to this paragraph) has expired; and
(xi) To apply the net proceeds from the sale of the Shares being sold by the Company as
set forth in the Prospectus.
(b) Each Placement Agent agrees that it shall not include any “issuer information” (as defined
in Rule 433) in any “free writing prospectus” (as defined in Rule 405) used or referred to by such
Placement Agent without the prior written consent of the Company (any such issuer information with
respect to whose use the Company has given its written consent, “Permitted Issuer Information”);
provided that (i) no such consent shall be required with respect to any such issuer information
contained in any document filed by the Company with the Commission prior to the use of such free
writing prospectus and (ii) “issuer information,” as used in this Section 4(b), shall not be deemed
to include information prepared by or on behalf of a Placement Agent on the basis of or derived
from issuer information.
5. Expenses. The Company agrees, whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, to pay all costs, expenses, fees and
taxes
16
incident to and in connection with (a) the authorization, issuance, sale and delivery of the
Shares and any stamp duties or other taxes payable in that connection, and the preparation and
printing of certificates for the Shares; (b) the preparation, printing and filing under the
Securities Act of the Registration Statement (including any exhibits thereto), any Preliminary
Prospectus, the Prospectus, any Issuer Free Writing Prospectus and any amendment or supplement
thereto; (c) the distribution of the Registration Statement (including any exhibits thereto), any
Preliminary Prospectus, the Prospectus, any Issuer Free Writing Prospectus and any amendment or
supplement thereto, or any document incorporated by reference therein, all as provided in this
Agreement; (d) the production and distribution of this Agreement, any supplemental agreement among
Placement Agents, and any other related documents in connection with the offering, purchase, sale
and delivery of the Shares; (e) any required review by the National Association of Securities
Dealers, Inc. (the “NASD”) of the terms of sale of the Shares (including related fees and expenses
of counsel to the Placement Agent); (f) the listing of the Shares on The NASDAQ National Market;
(g) the qualification of the Shares under the securities laws of the several jurisdictions as
provided in Section 4(a)(ix) and the preparation, printing and distribution of a Blue Sky
Memorandum (including related fees and expenses of counsel to the Representative); (h) the investor
presentations on any “road show” undertaken in connection with the marketing of the Shares,
including, without limitation, expenses associated with any electronic roadshow, travel and lodging
expenses of the representatives and officers of the Company and the cost of any aircraft chartered
in connection with the road show; (i) the reasonable expenses of the Representative (including
reasonable fees and expenses of counsel to the Representative in an amount not to exceed $75,000)
incurred in connection with its acting as a Placement Agent hereunder; and (j) all other costs and
expenses incident to the performance of the obligations of the Company under this Agreement.
6. Conditions of Placement Agents’ Obligations. The respective obligations of the Placement
Agents hereunder are subject to the accuracy, when made and on the Closing Date, of the
representations and warranties of the Company contained herein, to the performance by the Company
of its obligations hereunder, and to each of the following additional terms and conditions:
(a) The Prospectus shall have been timely filed with the Commission in accordance with
Section 4(a)(i); the Company shall have complied with all filing requirements applicable to
any Issuer Free Writing Prospectus used or referred to after the date hereof; no stop order
suspending the effectiveness of the Registration Statement or preventing or suspending the
use of the Prospectus or any Issuer Free Writing Prospectus shall have been issued and no
proceeding or examination for such purpose shall have been initiated or threatened by the
Commission; and any request of the Commission for inclusion of additional information in the
Registration Statement or the Prospectus or otherwise shall have been complied with.
(b) The Placement Agents shall not have discovered and disclosed to the Company on or
prior to the Closing Date that the Registration Statement, the Prospectus or the Pricing
Disclosure Package, or any amendment or supplement thereto, contains an untrue statement of
a fact which, in the opinion of Cooley Godward LLP, counsel for the Representative,
is material or omits to state a fact which, in the opinion of such counsel, is material and
is required to be stated therein or is necessary to make the statements therein not
misleading.
17
(c) All corporate proceedings and other legal matters incident to the authorization,
form and validity of this Agreement, the Shares, the Registration Statement, the Prospectus
and any Issuer Free Writing Prospectus, and all other legal matters relating to this
Agreement and the transactions contemplated hereby shall be reasonably satisfactory in all
material respects to counsel for the Representative, and the Company shall have furnished to
such counsel all documents and information that they may reasonably request to enable them
to pass upon such matters.
(d) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Brand, LLP shall have furnished to the Placement Agents its
written opinion, as counsel to the Company, addressed to the Placement Agents and dated the
Closing Date, in form and substance reasonably satisfactory to the Representative,
substantially in the form attached hereto as Exhibit C.
(e) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP shall have furnished to the Placement Agents its
written opinion, as counsel to the Company, addressed to the Placement Agents and dated the
Closing Date, in form and substance reasonably satisfactory to the Representative,
substantially in the form attached hereto a Exhibit D.
(f) ▇▇▇▇▇, Day, shall have furnished to the Placement Agents their written opinion, as
counsel to the Company, addressed to the Placement Agents and dated the Closing Date, in
form and substance reasonably satisfactory to the Representative, substantially in the form
attached hereto as Exhibit E-1.
(g) SEED IP shall have furnished to the Placement Agents their written opinion, as
counsel to the Company, addressed to the Placement Agents and dated the Closing Date, in
form and substance reasonably satisfactory to the Representative, substantially in the form
attached hereto as Exhibit E-2.
(h) Lahive & ▇▇▇▇▇▇▇▇▇ shall have furnished to the Placement Agents their written
opinion, as counsel to the Company, addressed to the Placement Agents and dated the Closing
Date, in form and substance reasonably satisfactory to the Representative, substantially in
the form attached hereto as Exhibit E-3.
(i) The Placement Agents shall have received from ▇▇▇▇▇▇ Godward LLP, counsel for the
Representative, such opinion or opinions, dated the Closing Date, with respect to the
issuance and sale of the Shares, the Registration Statement, the Prospectus and the Pricing
Disclosure Package and other related matters as the Representative may reasonably require,
and the Company shall have furnished to such counsel such documents as they reasonably
request for the purpose of enabling them to pass upon such matters.
(j) At the time of execution of this Agreement, the Placement Agents shall have
received from ▇.▇. ▇▇▇▇, LLP a letter, in form and substance satisfactory to the
Representative, addressed to the Placement Agents and dated the date hereof (i) confirming
that they are a registered independent public accounting firm within the meaning of the
Securities Act and are in compliance with the applicable requirements relating to the
qualification of accountants under Rule 2-01 of Regulation S-X of the
18
Commission, and (ii) stating, as of the date hereof (or, with respect to matters
involving changes or developments since the respective dates as of which specified financial
information is given in the most recent Preliminary Prospectus, as of a date not more than
three days prior to the date hereof), the conclusions and findings of such firm with respect
to the financial information and other matters ordinarily covered by accountants’ “comfort
letters” to Placement Agents in connection with registered public offerings.
(k) With respect to the letter of ▇.▇. ▇▇▇▇, LLP referred to in the preceding paragraph
and delivered to the Placement Agents concurrently with the execution of this Agreement (the
“initial letter”), the Company shall have furnished to the Placement Agents a letter (the
“bring-down letter”) of such accountants, addressed to the Placement Agents and dated the
Closing Date (i) confirming that they are a registered independent public accounting firm
within the meaning of the Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule 2-01 of Regulation S-X
of the Commission, (ii) stating, as of the date of the bring-down letter (or, with respect
to matters involving changes or developments since the respective dates as of which
specified financial information is given in the Prospectus, as of a date not more than three
days prior to the date of the bring-down letter), the conclusions and findings of such firm
with respect to the financial information and other matters covered by the initial letter
and (iii) confirming in all material respects the conclusions and findings set forth in the
initial letter.
(l) The Company shall have furnished to the Placement Agents a certificate, dated the
Closing Date, of its Chief Executive Officer and its Chief Financial Officer stating that:
(i) The representations, warranties and agreements of the Company in Section 1
are true and correct on and as of the Closing Date, and the Company has complied
with all its agreements contained herein and satisfied all the conditions on its
part to be performed or satisfied hereunder at or prior to the Closing Date;
(ii) No stop order suspending the effectiveness of the Registration Statement
has been issued; and no proceedings or examination for that purpose have been
instituted or, to the knowledge of such officers, threatened; and
(iii) They have carefully examined the Registration Statement, the Prospectus
and the Pricing Disclosure Package, and, in their opinion, (A) (1) the Registration
Statement, as of the Effective Date, (2) the Prospectus, as of its date and on the
applicable Closing Date, or (3) the Pricing Disclosure Package, as of the Applicable
Time, did not and do not contain any untrue statement of a material fact and did not
and do not omit to state a material fact required to be stated therein or necessary
to make the statements therein (except in the case of the Registration Statement, in
the light of the circumstances under which they were made) not misleading, except,
in the case of the Pricing Disclosure Package, that the price of the Shares and
disclosures directly relating thereto are included on the cover page of the
Prospectus, and (B) since the Effective Date, no event has occurred that should have
been set forth in a supplement or amendment to the
19
Registration Statement, the Prospectus or any Issuer Free Writing Prospectus
that has not been so set forth;
(m) Except as described in the most recent Preliminary Prospectus, (i) the Company
shall not have sustained, since the date of the latest audited financial statements included
or incorporated by reference in the most recent Preliminary Prospectus, any loss or
interference with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action, order or
decree or (ii) since such date there shall not have been any change in the capital stock or
long-term debt of the Company or any change, or any development involving a prospective
change, in or affecting the condition (financial or otherwise), results of operations,
stockholders’ equity, properties, management, business or prospects of the Company, the
effect of which, in any such case described in clause (i) or (ii), is, in the judgment of
the Representative, so material and adverse as to make it impracticable or inadvisable to
proceed with the public offering or the delivery of the Shares being delivered on the
Closing Date on the terms and in the manner contemplated in the Prospectus.
(n) Subsequent to the execution and delivery of this Agreement there shall not have
occurred any of the following: (i) trading in securities generally on the New York Stock
Exchange or the American Stock Exchange or in the over-the-counter market, or trading in any
securities of the Company on any exchange or in the over-the-counter market, shall have been
suspended or materially limited or the settlement of such trading generally shall have been
materially disrupted or minimum prices shall have been established on any such exchange or
such market by the Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a banking moratorium shall have been
declared by federal or state authorities, (iii) the United States shall have become engaged
in hostilities, there shall have been an escalation in hostilities involving the United
States or there shall have been a declaration of a national emergency or war by the United
States or (iv) there shall have occurred such a material adverse change in general economic,
political or financial conditions, including, without limitation, as a result of terrorist
activities after the date hereof (or the effect of international conditions on the financial
markets in the United States shall be such), as to make it, in the judgment of the
Representative, impracticable or inadvisable to proceed with the public offering or delivery
of the Shares being delivered on the Closing Date on the terms and in the manner
contemplated in the Prospectus.
(o) The NASDAQ National Market, Inc. shall have approved the Shares for listing,
subject only to official notice of issuance.
(p) The Lock-Up Agreements between the Placement Agents and the officers, directors and
stockholders of the Company set forth on Schedule 2, delivered to the Representative
on or before the date of this Agreement, shall be in full force and effect on the Closing
Date.
20
All opinions, letters, evidence and certificates mentioned above or elsewhere in this
Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form
and substance reasonably satisfactory to counsel for the Representative.
7. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each Placement Agent, its directors,
officers and employees and each person, if any, who controls such Placement Agent within the
meaning of Section 15 of the Securities Act, from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof (including, but not limited
to, any loss, claim, damage, liability or action relating to purchases and sales of Shares),
to which such Placement Agent, director, officer, employee or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in (A) any Preliminary Prospectus, the
Registration Statement, the Prospectus or in any amendment or supplement thereto, (B) any
Issuer Free Writing Prospectus or in any amendment or supplement thereto or (C) any
Permitted Issuer Information used or referred to in any “free writing prospectus” (as
defined in Rule 405) used or referred to by the Placement Agent, or (D) any Blue Sky
application or other document prepared or executed by the Company (or based upon any written
information furnished by the Company for use therein) specifically for the purpose of
qualifying any or all of the Shares under the securities laws of any state or other
jurisdiction (any such application, document or information being hereinafter called a “Blue
Sky Application”), (ii) the omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement, the Prospectus, any Issuer Free Writing Prospectus
or in any amendment or supplement thereto or in any Permitted Issuer Information, or any
Blue Sky Application, any material fact required to be stated therein or necessary to make
the statements therein not misleading or (iii) any act or failure to act or any alleged act
or failure to act by any Placement Agent in connection with, or relating in any manner to,
the Shares or the offering contemplated hereby, and which is included as part of or referred
to in any loss, claim, damage, liability or action arising out of or based upon matters
covered by clause (i) or (ii) above (provided that the Company shall not be liable under
this clause (iii) to the extent that it is determined in a final judgment by a court of
competent jurisdiction that such loss, claim, damage, liability or action resulted directly
from any such acts or failures to act undertaken or omitted to be taken by such Placement
Agent through its gross negligence or willful misconduct), and shall reimburse each
Placement Agent and each such director, officer, employee or controlling person promptly
upon demand for any legal or other expenses reasonably incurred by that Placement Agent,
director, officer, employee or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability or action
as such expenses are incurred; provided, however, that the Company shall not be liable in
any such case to the extent that any such loss, claim, damage, liability or action arises
out of, or is based upon, any untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement, the
Prospectus, any Issuer Free Writing Prospectus or in any such amendment or supplement
thereto or in any Permitted Issuer Information, or any Blue Sky Application, in reliance
upon and in
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conformity with written information concerning such Underwriter furnished to the
Company through the Placement Agents by or on behalf of any Placement Agent specifically for
inclusion therein, which information consists solely of the information specified in Section
7(e). The foregoing indemnity agreement is in addition to any liability which the Company
may otherwise have to any Placement Agent or to any director, officer, employee or
controlling person of that Placement Agent.
(b) Each Placement Agent, severally and not jointly, shall indemnify and hold harmless
the Company, its directors, officers and employees, and each person, if any, who controls
the Company within the meaning of Section 15 of the Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any action in respect thereof, to
which the Company or any such director, officer, employee or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement, the Prospectus, any Issuer Free Writing Prospectus or in any
amendment or supplement thereto or in any Blue Sky Application, or (ii) the omission or
alleged omission to state in any Preliminary Prospectus, the Registration Statement, the
Prospectus, any Issuer Free Writing Prospectus or in any amendment or supplement thereto or
in any Blue Sky Application, any material fact required to be stated therein or necessary to
make the statements therein not misleading, but in each case only to the extent that the
untrue statement or alleged untrue statement or omission or alleged omission was made in
reliance upon and in conformity with written information concerning such Placement Agent
furnished to the Company through a Placement Agent by or on behalf of that Placement Agent
specifically for inclusion therein, which information is limited to the information set
forth in Section 7(e). The foregoing indemnity agreement is in addition to any liability
that any Placement Agent may otherwise have to the Company or any such director, officer,
employee or controlling person.
(c) Promptly after receipt by an indemnified party under this Section 7 of notice of
any claim or the commencement of any action, the indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party under this Section 7, notify
the indemnifying party in writing of the claim or the commencement of that action; provided,
however, that the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 7 except to the extent it has been materially
prejudiced by such failure and, provided, further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may have to an
indemnified party otherwise than under this Section 7. If any such claim or action shall be
brought against an indemnified party, and it shall notify the indemnifying party thereof,
the indemnifying party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume the defense
thereof with counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the defense of such
claim or action, the indemnifying party shall not be liable to the indemnified party under
this Section 7 for any legal or other expenses subsequently incurred by the indemnified
party in connection with the defense thereof other than
22
reasonable costs of investigation; provided, however, that a Placement Agent shall have
the right to employ counsel to represent such Placement Agent if (i) the Company and the
Placement Agent shall have so mutually agreed; (ii) the Company has failed within a
reasonable time to retain counsel reasonably satisfactory to the Placement Agent; (iii) the
Placement Agent and their respective directors, officers, employees and controlling persons
shall have reasonably concluded that there may be legal defenses available to them that are
different from or in addition to those available to the Company; or (iv) the named parties
in any such proceeding (including any impleaded parties) include both the Placement Agent or
their respective directors, officers, employees or controlling persons, on the one hand, and
the Company, on the other hand, and representation of both sets of parties by the same
counsel would be inappropriate due to actual or potential differing interests between them,
and in any such event the fees and expenses of such separate counsel shall be paid by the
Company; provided, however, that the Company shall not be liable for the expenses of more
than one such separate counsel (in addition to local counsel) representing the indemnified
parties that are subject to such action. No indemnifying party shall (i) without the prior
written consent of the indemnified parties (which consent shall not be unreasonably
withheld), settle or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which indemnification
or contribution may be sought hereunder (whether or not the indemnified parties are actual
or potential parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability arising out
of such claim, action, suit or proceeding and does not include any findings of fact or
admissions of fault or culpability as to the indemnified party, or (ii) be liable for any
settlement of any such action effected without its written consent (which consent shall not
be unreasonably withheld), but if settled with the consent of the indemnifying party or if
there be a final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any loss or
liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 7 shall for any reason be
unavailable to or insufficient to hold harmless an indemnified party under Section 7(a) or
7(b) in respect of any loss, claim, damage or liability, or any action in respect thereof,
referred to therein, then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified party as a
result of such loss, claim, damage or liability, or action in respect thereof, (i) in such
proportion as shall be appropriate to reflect the relative benefits received by the Company,
on the one hand, and the Placement Agents, on the other, from the offering of the Shares or
(ii) if the allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Company, on the one hand, and the
Placement Agents, on the other, with respect to the statements or omissions that resulted in
such loss, claim, damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations. The relative benefits received by the Company, on the
one hand, and the Placement Agents, on the other, with respect to such offering shall be
deemed to be in the same proportion as the total net proceeds from the offering of the
Shares purchased under this Agreement (before deducting expenses)
23
received by the Company, as set forth in the table on the cover page of the Prospectus,
on the one hand, and the total underwriting discounts and commissions received by the
Placement Agents with respect to the shares of the Shares purchased under this Agreement, as
set forth in the table on the cover page of the Prospectus, on the other hand. The relative
fault shall be determined by reference to whether the untrue or alleged untrue statement of
a material fact or omission or alleged omission to state a material fact relates to
information supplied by the Company or the Placement Agents, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Placement Agents agree that it would not be just
and equitable if contributions pursuant to this Section 7(d) were to be determined by pro
rata allocation (even if the Placement Agents were treated as one entity for such purpose)
or by any other method of allocation that does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, damage or liability, or action in respect thereof, referred to
above in this Section 7(d) shall be deemed to include, for purposes of this Section 7(d),
any legal or other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the provisions of this
Section 7(d), no Placement Agent shall be required to contribute any amount in excess of the
amount by which the net proceeds from the sale of the Shares underwritten by it exceeds the
amount of any damages that such Placement Agent has otherwise paid or become liable to pay
by reason of any 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 Placement Agents’ obligations to contribute as provided
in this Section 7(d) are several in proportion to their respective underwriting obligations
and not joint.
(e) The Placement Agents severally confirm and the Company acknowledges and agrees that
the paragraph relating to placement agents’ fee and reimbursement of expenses to the
Representative appearing under the caption “Plan of Distribution” in, the Prospectus are
correct and constitute the only information concerning such Placement Agents furnished in
writing to the Company by or on behalf of the Placement Agents specifically for inclusion in
any Preliminary Prospectus, the Registration Statement, the Prospectus, any Issuer Free
Writing Prospectus or in any amendment or supplement thereto.
8. Termination. The obligations of the Placement Agents hereunder may be terminated by the
Representative by notice given to and received by the Company prior to delivery of and payment for
the Shares if, prior to that time, any of the events described in Sections 6(j) or 6(k) shall have
occurred or if the Placement Agent shall decline to purchase the Shares for any reason permitted
under this Agreement.
9. Research Analyst Independence. The Company acknowledges that the Placement Agents’
research analysts and research departments are required to be independent from their respective
investment banking divisions and are subject to certain regulations and internal policies, and that
such Placement Agent’s research analysts may hold views and make statements or investment
24
recommendations and/or publish research reports with respect to the Company and/or the
offering that differ from the views of their respective investment banking divisions. The Company
hereby waives and releases, to the fullest extent permitted by law, any claims that the Company may
have against the Placement Agent with respect to any conflict of interest that may arise from the
fact that the views expressed by their independent research analysts and research departments may
be different from or inconsistent with the views or advice communicated to the Company by such
Placement Agent’s investment banking divisions. The Company acknowledges that each of the
Placement Agents is a full service securities firm and as such from time to time, subject to
applicable securities laws, rules and regulations, may effect transactions for its own account or
the account of its customers and hold long or short positions in debt or equity securities of the
Company; provided, however, that nothing in this Section 9 shall relieve the Placement Agent of any
responsibility or liability they may otherwise bear in connection with activities in violation of
applicable securities laws, rules and regulations.
10. No Fiduciary Duty. The Company acknowledges and agrees that in connection with this
offering, sale of the Shares or any other services the Placement Agents may be deemed to be
providing hereunder, notwithstanding any preexisting relationship, advisory or otherwise, between
the parties or any oral representations or assurances previously or subsequently made by the
Placement Agents: (i) no fiduciary or agency relationship between the Company and any other person,
on the one hand, and the Placement Agents, on the other, exists; (ii) the Placement Agents are not
acting as advisors, expert or otherwise, to the Company, including, without limitation, with
respect to the determination of the public offering price of the Shares, and such relationship
between the Company, on the one hand, and the Placement Agents, on the other, is entirely and
solely commercial, based on arms-length negotiations; (iii) any duties and obligations that the
Placement Agents may have to the Company shall be limited to those duties and obligations
specifically stated herein; and (iv) the Placement Agents and their respective affiliates may have
interests that differ from those of the Company. The Company hereby waives any claims that the
Company may have against the Placement Agents with respect to any breach of fiduciary duty in
connection with the sale of the Shares.
11. Notices, Etc. All statements, requests, notices and agreements hereunder shall be in
writing, and:
(a) if to the Placement Agents, shall be delivered or sent by mail or facsimile
transmission to ▇▇▇▇▇▇ Brothers Inc., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Syndicate Registration (Fax: ▇▇▇-▇▇▇-▇▇▇▇), with a copy, in the case of
any notice pursuant to Section 7(c), to the Director of Litigation, Office of the
General Counsel, ▇▇▇▇▇▇ Brothers Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (Fax: ▇▇▇-▇▇▇-▇▇▇▇); and
(b) if to the Company, shall be delivered or sent by mail or facsimile
transmission to the address of the Company set forth in the Registration Statement,
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ (Fax: ▇▇▇-▇▇▇-▇▇▇▇).
Any such statements, requests, notices or agreements shall take effect at the time of receipt
thereof. The Company shall be entitled to act and rely upon any request, consent, notice or
agreement given or made on behalf of the Placement Agent by ▇▇▇▇▇▇ Brothers Inc.
25
12. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of
and be binding upon the Placement Agents, the Company and their respective successors. This
Agreement and the terms and provisions hereof are for the sole benefit of only those persons,
except that (A) the representations, warranties, indemnities and agreements of the Company
contained in this Agreement shall also be deemed to be for the benefit of the directors, officers
and employees of the Placement Agents and each person or persons, if any, who control the Placement
Agents within the meaning of Section 15 of the Securities Act and (B) the indemnity agreement of
the Placement Agents contained in Section 7(b) of this Agreement shall be deemed to be for the
benefit of the directors of the Company, the officers of the Company who have signed the
Registration Statement and any person controlling the Company within the meaning of Section 15 of
the Securities Act. Nothing in this Agreement is intended or shall be construed to give any
person, other than the persons referred to in this Section 12, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision contained herein. The term
“successors” as used in this Section 12 shall not include any of the Investors.
13. Survival. The respective indemnities, representations, warranties and agreements of the
Company and the Placement Agents contained in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall survive the delivery of and payment for the Shares
and shall remain in full force and effect, regardless of any investigation made by or on behalf of
any of them or any person controlling any of them.
14. Definition of the Term “Business Day". For purposes of this Agreement, “business day”
means each Monday, Tuesday, Wednesday, Thursday or Friday that is not a day on which banking
institutions in New York are generally authorized or obligated by law or executive order to close.
15. Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
16. Counterparts. This Agreement may be executed in one or more counterparts and, if
executed in more than one counterpart, the executed counterparts shall each be deemed to be an
original but all such counterparts shall together constitute one and the same instrument.
17. Headings. The headings herein are inserted for convenience of reference only and are not
intended to be part of, or to affect the meaning or interpretation of, this Agreement.
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If the foregoing correctly sets forth the agreement between the Company and the Placement
Agents, please indicate your acceptance in the space provided for that purpose below.
| Very truly yours, Hana Biosciences, Inc. |
||||
| By: | /s/ ▇▇▇▇ ▇. ▇▇▇ | |||
| Name: | ▇▇▇▇ ▇. ▇▇▇ | |||
| Title: | President & CEO | |||
| Accepted: | ||||
| ▇▇▇▇▇▇ Brothers Inc. | ||||
By:
|
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇
|
|||
| ▇▇▇▇▇▇▇▇▇ & Company, Inc. | ||||
By:
|
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
|
|||
| ▇▇▇▇▇▇▇▇▇▇▇ & Co. Inc. | ||||
By:
|
/s/ ▇▇▇ ▇▇▇▇▇ | |||
| Authorized Representative | ||||
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