As filed with the Securities and Exchange Commission on July 11, 1997
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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SANO CORPORATION
(Exact Name of Registrant as Specified in its Charter)
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<S> <C> <C>
Florida 2834 65-0263022
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification No.)
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3250 Commerce Parkway
Miramar, Florida 33025
(954) 430-3340
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
Reginald L. Hardy
President
Sano Corporation
3250 Commerce Parkway
Miramar, Florida 33025
(954) 430-3340
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code of Agent for Service)
Please send copies of all communications to:
Gary Epstein, Esq.
Greenberg, Traurig, Hoffman,
Lipoff, Rosen & Quentel, P.A.
1221 Brickell Avenue
Miami, Florida 33131
(305) 579-0500
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after this registration statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, please check the following box and list the Securities
Act registration number of the earlier effective registration statement for the
same offering. [ ]
If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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PROPOSED MAXIMUM PROPOSED
TITLE OF SHARES AMOUNT TO BE AGGREGATE PRICE MAXIMUM AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED PER SHARE OFFERING PRICE REGISTRATION FEE
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Common Stock (par value $.01 per share)... 1,200,000 shares $14.80(1) $17,760,000 $5,381.82
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(1) Estimated solely for the purpose of calculating the registration fee on
the basis of the average of the high and low prices of the Company's
Common Stock as of July 9, 1997, as reported by the National Association
of Securities Dealers Automated Quotation National Market System.
The Registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION DATED JULY 11, 1997
PROSPECTUS
SANO CORPORATION
1,200,000 Shares of Common Stock
This Prospectus relates to an aggregate of 1,200,000 shares (the
"Shares") of Common Stock, par value $.01 per share (the "Common Stock"), of
Sano Corporation, a Florida corporation (the "Company"), being sold by certain
shareholders of the Company (the "Selling Shareholders"). See "Selling
Shareholders." The Company will not receive any proceeds from the sale of the
Shares by the Selling Shareholders.
The Company has registered the Shares under the Securities Act of 1933,
as amended (the "Securities Act"), for sale by the Selling Shareholders. The
Selling Shareholders have advised the Company that they may from time to time
sell all or part of the Shares in one or more transactions (which may involve
block transactions) in the over-the-counter market, on the Nasdaq National
Market ("NNM")(or any exchange on which the Shares may then be listed), in
negotiated transactions, through the writing of options on the Shares (whether
such options are listed on an options exchange or otherwise), or a combination
of such methods of sale, at market prices prevailing at the time of such sales
or at negotiated prices. The Selling Shareholders may effect such transactions
by selling the Shares to or through broker-dealers, and such broker-dealers may
receive compensation in the form of underwriting discounts, concessions or
commissions from the Selling Shareholders and/or purchasers of the Shares for
whom they may act as agent (which compensation may be in excess of customary
commissions). The Selling Shareholders may also pledge the Shares as collateral
for margin accounts or loans and the Shares could be resold pursuant to the
terms of such accounts or loans. In connection with such sales, the Selling
Shareholders and any participating brokers and dealers may be deemed to be
"underwriters" as defined in the Securities Act. Neither the Company nor the
Selling Shareholders can presently estimate the amount of commissions or
discounts, if any, that will be paid by the Selling Shareholders on account of
their sale of the Shares from time to time. The Company will pay all expenses,
estimated to be approximately $145,000, in connection with this offering, other
than underwriting and brokerage commissions, discounts, fees and counsel fees
and expenses incurred by the Selling Shareholders.
The Company's Common Stock is listed on NNM under the symbol "SANO". On
July 9, 1997, the last reported price for the Common Stock as reported by NNM
was $14.80 per share.
-------------------------
See "Risk Factors" beginning on page 3 for a discussion of
certain factors that should be considered by
prospective purchasers of the Shares offered hereby
-------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
-------------------------
The date of this Prospectus is July __, 1997.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information may be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the Atlanta Regional Office of the Commission at
3475 Lenox Road, N.E., Suite 1000, Atlanta, Georgia 30326-7232. Copies of such
materials may also be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. Copies of each document may also be obtained through the Commission's
Internet address at http://www.sec.gov. The Common Stock of the Company is
quoted on NNM. Reports, proxy statements and other information concerning the
Company may also be inspected at the offices of the National Association of
Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C. 20006.
The Company has filed with the Commission a Registration Statement on
Form S-3 (the "Registration Statement") under the Securities Act with respect to
the Shares offered hereby. This Prospectus, which is a part of the Registration
Statement, does not contain all the information set forth in, or annexed as
exhibits to, the Registration Statement, certain portions of which have been
omitted pursuant to rules and regulations of the Commission. For further
information with respect to the Company and the Shares, reference is made to the
Registration Statement, including the exhibits thereto. Copies of the
Registration Statement, including the exhibits, may be obtained from the Public
Reference Section of the Commission at the aforementioned address upon payment
of the fee prescribed by the Commission. Copies of each document may also be
obtained through the Commission's internet address at http://www.sec.gov. The
summaries contained in this Prospectus of additional information included in the
Registration Statement or any exhibit thereto are qualified in their entirety by
reference to such information or exhibit.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents which have been filed by the Company with the
Commission pursuant to the Exchange Act or the Securities Act are incorporated
by reference in this Prospectus:
(i) The Company's Annual Report on Form 10-K for the year ended
December 31, 1996, as filed with the Commission on March 31,
1997;
(ii) The Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1997, as filed with the Commission on May 14,
1997;
(iii) The Company's Definitive Proxy Statement on Schedule 14A as
filed with the Commission on April 3, 1997; and
(iv) The Company's Registration Statement on Form 8-A dated October
25, 1995 as filed with the Commission on October 26, 1995.
In addition, all documents filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the Shares offered
hereby shall be deemed to be incorporated herein by reference and to be a part
hereof from the date of filing of such documents.
Any information contained herein or in a document incorporated by
reference herein shall be deemed to be modified or replaced for purposes of this
Prospectus to the extent that information contained herein or in any other
subsequently filed document which also is incorporated by reference herein
modifies or replaces such
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information. Any such information so modified or replaced shall not be deemed,
except as so modified or replaced, to constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus is delivered,
upon the written or oral request of any such person, a copy of any and all of
the above documents (not including exhibits to any of such documents unless such
exhibits are specifically incorporated by reference into the information that
this Prospectus incorporates). Such requests should be addressed to the
Secretary, Sano Corporation, 3250 Commerce Parkway, Miramar, Florida 33025,
telephone number (954) 430-3340.
THE COMPANY
Sano Corporation ("Sano" or the "Company") develops novel controlled
release drug delivery systems for drug therapies licensed from others and for
off-patent drugs ("Proprietary Products"). The Company also develops generic
versions of branded controlled release products ("Generic Products"), generally
where the advanced nature of the necessary technologies may limit competition
from other manufacturers. The Company's strategy is to develop a comprehensive
line of both Proprietary Products and Generic Products utilizing controlled
release technologies.
Although to date most of the Company's products have utilized
transdermal delivery technologies, the Company is expanding its capabilities to
include other delivery methods, such as solid dose controlled release methods.
The Company believes that its transdermal and solid dose controlled release
technologies and expertise can be applied to a variety of pharmaceutical
products. These technologies are designed to reduce the frequency of drug
administration, improve efficacy, increase patient compliance, reduce side
effects, reduce interaction with other drugs and provide a more consistent and
appropriate drug level in the bloodstream. The Company believes these benefits
will also contribute to lower overall patient care costs, an increasingly
important competitive factor in the managed care environment.
The Company has nine transdermal Proprietary Products in development,
including transdermal buspirone patches for the treatment of anxiety, depression
and attention deficit disorder and patches for the treatment of smoking
addiction, alcohol addiction and motion sickness. The Company's Proprietary
Product development program seeks to develop novel delivery systems for
established drugs which have large addressable markets, where clinical and cost
benefits can be obtained through the use of the Company's controlled release
technology. In most cases, Sano intends to retain the rights to its Proprietary
Products at least until completion of late-stage clinical trials. The Company
believes that this element of its strategy allows greater flexibility in
determining whether to retain marketing rights with respect to a product or to
use a marketing partner. The Company also believes that late-stage licensing
will allow it to negotiate more favorable agreements if it chooses to utilize
marketing partners.
In August 1996, the Company entered into an exclusive worldwide
distribution and supply agreement with Bristol-Myers Squibb Company ("BMS") with
respect to the Company's proprietary transdermal buspirone patches for anxiety,
depression and attention deficit disorder. Sales by BMS of BuSpar(registermark),
its oral formulation of buspirone for the treatment of anxiety, exceeded $369
million in 1996 and were approximately $120 million during the first three
months of 1997. The patent covering BuSpar(registermark) expires in late 2000.
Sano recently received a United States patent covering the transdermal delivery
of buspirone. Pursuant to its agreement with BMS, Sano has received a $15
million non-refundable license payment and a $6 million advance for the purchase
of equipment and is entitled to receive (i) additional payments upon the
achievement of certain milestones and (ii) royalties on sales of the products.
Upon approval of Sano's transdermal buspirone for the treatment of anxiety, BMS
has agreed to switch its marketing effort from BuSpar(registermark) to the
Company's transdermal product. In addition, BMS has also agreed to fund and
conduct all future clinical trials for anxiety, depression and attention deficit
disorder and
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will be responsible for foreign patent applications and regulatory filings in
connection with the Company's transdermal buspirone products for such
applications. BMS has not acquired any rights with respect to the Company's
other products.
Sano has ten transdermal and solid dose Generic Products in
development, including a transdermal nicotine patch for smoking cessation, two
transdermal nitroglycerin patches for angina pectoris, one transdermal clonidine
patch for hypertension and two transdermal estradiol patches for menopausal
symptoms and osteoporosis. The Company has filed an Abbreviated New Drug
Application ("ANDA") for each of its nicotine patch and nitroglycerin patches,
and in July 1996 successfully completed United States Food and Drug
Administration ("FDA") pre-approval inspections of its facilities and
manufacturing processes for all three of these products. The Company has entered
into an exclusive distribution agreement with Pharmaceutical Resources, Inc., a
generic pharmaceutical Company ("PAR"), under which PAR has the right to
distribute the Company's transdermal Generic Products in the United States. See
"Risk Factors - Dependence on Third Parties; Limited Marketing Capabilities."
The Company recently initiated a pilot study on its first solid dose
controlled release Generic Product. This drug delivery system offers benefits
similar to transdermal delivery systems, and provides certain benefits of oral
administration without some of the disadvantages of immediate release oral
dosage forms. Sano currently has four solid dose controlled release
technologies. Sano is evaluating and may acquire other types of controlled
release technology.
The Company was incorporated in the State of Florida in May 1991. The
Company's executive offices are located at 3250 Commerce Parkway, Miramar,
Florida 33025 and its telephone number is (954) 430-3340.
RISK FACTORS
BEFORE PURCHASING ANY OF THE SHARES OFFERED HEREBY, A PROSPECTIVE
PURCHASER SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS, IN ADDITION TO
THE OTHER INFORMATION IN THIS PROSPECTUS. THIS PROSPECTUS CONTAINS CERTAIN
FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND SECTION 21E OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT") WITH RESPECT TO
THE FINANCIAL CONDITION, RESULTS OF OPERATIONS AND BUSINESS OF THE COMPANY.
THESE FORWARD-LOOKING STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES.
FACTORS THAT MAY CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE
CONTEMPLATED BY SUCH FORWARD-LOOKING STATEMENTS INCLUDE, AMONG MANY OTHERS, THE
FOLLOWING: (1) COMPETITIVE CONDITIONS IN THE INDUSTRY IN WHICH THE COMPANY
OPERATES AND (2) GENERAL ECONOMIC CONDITIONS THAT ARE LESS FAVORABLE THAN
EXPECTED.
THE SHARES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. PROSPECTIVE
INVESTORS SHOULD CAREFULLY CONSIDER, AMONG OTHER THINGS, THE FOLLOWING FACTORS
BEFORE A DECISION IS MADE TO PURCHASE ANY SHARES.
EARLY STAGE OF THE COMPANY AND ITS PRODUCTS; TECHNOLOGICAL UNCERTAINTY.
Sano was formed in May 1991 and commenced operations in October 1992. The
Company has not commenced the commercial manufacture or sale of any products and
has not generated any revenues from product sales. In the near term, revenues,
if any, are expected to consist principally of revenues from license fees,
milestone payments and payments from other entities under collaborative
marketing and other agreements, such as the Company's agreements with BMS. The
timing of such payments is likely to be irregular and unpredictable and the
amounts are likely to fluctuate. Payments from strategic partners may also be
conditioned on the Company's achievement of specified goals or benchmarks within
specified time frames. The Company's objective, subject to the receipt of
regulatory approvals, is to commence the sale of its first product in 1997, but
no assurance can be given that such approvals will be received or that any sales
will occur. To achieve significant revenues and profitable operations on a
continuing basis, the Company, either alone or through partners, must
successfully develop, manufacture and market its
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products. The Company's products are in various stages of development, and the
period necessary to achieve regulatory approval and market acceptance of any
individual product is uncertain and typically lengthy. Additionally, all of the
Company's products are required to undergo a number of human clinical trials
prior to regulatory approval. Because of the nature of such trials, interim
results are not always indicative of final results. Clinical studies involving
certain of the Company's products, particularly those for the treatment of
central nervous system ("CNS") disorders, such as anxiety and depression,
frequently encounter high placebo effects which may adversely affect study
results and regulatory approval. As a result, the Company might pursue the
development of products that ultimately will not be proven effective, might
abandon the development of products that would, if pursued, have proven
effective, and might pursue the development of products notwithstanding
unfavorable initial or interim results if, in the judgment of the Company and
its technical consultants, such results are not indicative of the anticipated
final results or results of subsequent studies. No assurance can be given that
the Company's product development efforts will be successfully completed, that
required regulatory approvals will be obtained, that products under development
can be manufactured at acceptable cost and with the appropriate quality or that
any approved products can be successfully introduced or will achieve and sustain
market acceptance.
HISTORY OF LOSSES AND UNCERTAINTY OF FUTURE RESULTS. At March 31, 1997,
the Company had an accumulated deficit of $20,367,070 resulting from expenses
incurred in research and development, clinical trials, facilities operations,
the acquisition of supplies and, to a lesser extent, general and administrative
operations. The Company expects to incur losses at least through 1997, which
losses will be substantial. As more of the Company's products enter the clinical
trial phase, the level of the Company's expenditures will continue to increase
substantially. Additionally, as the Company licenses drugs or therapies from
others, negotiations of some of which are currently under way, it will be
obligated to make up-front payments, which may be substantial, and to conduct
and fund clinical trials, without any assurance that the resulting products will
achieve commercialization. To achieve sustained profitable operations, Sano,
alone or with partners, must successfully develop, manufacture and market its
products. The time required to reach profitability is highly uncertain, and no
assurance can be given that the Company will be able to achieve profitability.
Moreover, if profitability is achieved, the level of profitability cannot be
predicted.
UNCERTAINTY OF GOVERNMENT REGULATORY REQUIREMENTS; LENGTHY APPROVAL
PROCESS. All of the Company's products require regulatory approval by
governmental agencies before they can be marketed. The process of obtaining such
approvals is costly and time-consuming, and is subject to unanticipated delays.
There can be no assurance that required approvals for any of the Company's
products will be granted on a timely basis, if ever. Any delay or failure to
obtain such approvals could materially and adversely affect the ability of the
Company to market products successfully and to generate revenues from sales.
Regulatory requirements could adversely affect the Company's ability to
undertake clinical trials or to manufacture or market its products. The
Company's products require the approval of the FDA before they can marketed in
the United States. There can be no assurance that problems will not arise that
could delay or prevent the commercialization of the Company's products or that
the FDA will grant the necessary approvals for the Company to begin marketing
its products. The Company is also subject to regulation by foreign governmental
authorities relating to the clinical study, manufacture and marketing of its
products abroad. Approval of a product by a foreign regulatory authority must be
obtained prior to marketing the product in any such country, regardless of
whether FDA approval has been obtained. The approval process varies from country
to country, and the time required in any given country may be longer than that
required for FDA approval.
Future United States or foreign legislative or administrative action
also could prevent or delay regulatory approval of the Company's products. There
can be no assurance that The Company will be able to obtain the necessary
approvals for clinical trials or for the manufacturing or marketing of any
products. In addition, any approved products are subject to continuing
regulation, and noncompliance by the Company with applicable requirements can
result in criminal penalties, civil penalties, fines, recall or seizure,
injunctions requiring suspension of production, orders requiring ongoing
supervision by the FDA, or refusal by the government to approve marketing or
export applications or to allow the Company to enter into supply contracts. The
FDA also has the authority to revoke previously granted marketing approvals,
clinical testing authorizations and export
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approvals, and to require changes in labeling, the occurrence of any of which
could have a material adverse effect on the Company's business, financial
condition or results of operations. All manufacturing operations are subject to
the FDA's Good Manufacturing Practice ("GMP") requirements on an ongoing basis.
Any additional regulation could result in restrictions on the Company's ability
to utilize its technology, thereby adversely affecting the Company's operations.
On April 19, 1996 the FDA's Nonprescription Advisory Committee voted
unanimously to recommend that two of the four branded transdermal nicotine
patches available in the United States be switched from prescription to
over-the-counter ("OTC") status (an "OTC Switch") and as of the date of this
Prospectus, two nicotine patches Nicoderm(registermark) and
Nicotrol(registermark), had been approved by the FDA for an OTC Switch and had
been granted three years exclusivity. The Company has filed an ANDA for approval
of a generic version of Habitrol(registermark), which was not one of the
nicotine patches approved for the OTC Switch. At this time management is unable
to predict whether Habitrol(registermark) would also receive three years of
marketing exclusivity, and what effect, if any, the OTC Switch will have on the
Company. In the event that Habitrol(registermark) is approved for the OTC
Switch, any period of exclusivity granted by the FDA for the OTC version of
Habitrol(registermark) would delay the launch of the Company's generic nicotine
patch and the Company's receipt of revenue from this product, and could have a
material adverse effect on the Company's ability to successfully market the
product.
The Company is also subject to regulation under the Occupational Safety
and Health Act, state and federal environmental protection laws, national
restrictions on technology transfer, import, export and customs regulations and
other local, state and federal regulations. The Company is unable to predict
whether any additional regulations will be adopted or whether, if adopted, they
will adversely affect the Company's business.
RISK OF LITIGATION IN CONNECTION WITH GENERIC PRODUCTS. Because of the
uncertainty of patent and other proprietary protection in the pharmaceuticals
industry, it is possible that one or more of the Company's products may be found
to infringe patents or other proprietary rights of other parties. This risk is
particularly significant for the Company's Generic Products, where it is
foreseeable that the holders of unexpired patents on branded products for which
the Company seeks to market generic counterparts may institute infringement
suits that could prevent or delay the Company's entry into those markets.
The Drug Price Competition and Restoration Act of 1984 requires that
when a drug developer files an ANDA for a generic drug and an unexpired patent
has been listed with the FDA as covering the related branded product, the
developer must certify to the FDA that such patent either will not be infringed
by the developer's product or is invalid or unenforceable. That certification
must also be provided to the patent holder, who may challenge the developer's
certification of non-infringement, invalidity or unenforceability by filing a
suit for patent infringement. If such a suit is filed within 45 days of the
patent holder's receipt of such certification, the FDA may review and approve
the ANDA, but is precluded from granting final marketing approval of the product
until a final judgment in the action has been rendered or until 30 months from
the date the certification was received, whichever is sooner. Patent litigation
is extremely costly, protracted and burdensome, and the Company could be at a
disadvantage in patent litigation commenced by competitors with substantially
greater resources than the Company. To date, of the three Generic Products for
which the Company has filed an ANDA, one is the subject of litigation.
DEPENDENCE ON THIRD PARTIES; LIMITED MARKETING CAPABILITIES. The
Company's strategy for the commercialization of the majority of its products
contemplates that it will enter into arrangements with partners, licensors and
others. The Company has entered into a distribution and supply agreements with
BMS giving BMS the exclusive worldwide right to distribute the Company's
transdermal buspirone patches. BMS will share in or control the clinical trials
and will be responsible for foreign patent applications and regulatory filings
as well as marketing of the products, and inaction or delay on the part of BMS
in performing any of such responsibilities could have a material adverse effect
on the Company. The Company also has entered into a distribution agreement with
PAR, pursuant to which PAR has the exclusive right to distribute the Company's
transdermal Generic Products in the United States. In the event that PAR is
unable to meet its obligations to market and distribute the
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Company's transdermal Generic Products, the Company may be required to find
another distribution partner. In addition, under the Company's agreement with
PAR, because the Company had not received approval of an ANDA for a Generic
Product covered by the agreement prior to November 30, 1996, PAR is entitled to
terminate the agreement. There can be no assurance that PAR will not terminate
the agreement or that such termination would not have a material and adverse
effect on the Company's financial condition and results of operations. The
Company is in the process of renegotiating its agreement with PAR. If the
agreement is renegotiated, PAR will have distribution rights and obligations
only with respect to the Company's transdermal nicotine and nitroglycerin
generic products in the United States, the Company will make certain payments to
PAR, and the Company would be free to make arrangements with other distributors
for other Generic Products and territories. No assurance can be given that Sano
will be able to enter into transactions with other entities on terms as
favorable as those obtained from PAR, or at all. The Company intends to depend
on partners such as BMS to fund a portion of the Company's product development
costs, to market the Company's products and, in some cases, to participate in
clinical testing and to obtain regulatory approvals. The level of resources and
attention devoted by any partner to the Company's products will not be within
the Company's control. The Company expects to market and sell its products
through licensing or other distribution arrangements with third parties and has
no present intention to establish a direct sales capability. Since the Company
intends to sell its products through licensing and distribution arrangements,
any revenues received by the Company will be substantially dependent on the
efforts of third parties, and no assurance can be given that such efforts will
be successful. The Company's business strategy includes the licensing of
products and technologies from other pharmaceutical companies or inventors for
use in product development. No assurance can be given that the Company will be
able to identify such products or technologies or be able to negotiate license
agreements on acceptable terms or at all. Failure by the Company to identify
such products or technologies or to negotiate satisfactory agreements could have
a material adverse effect on the Company's business, financial condition and
results of operations.
POSSIBLE NEED FOR ADDITIONAL CAPITAL. The Company anticipates that its
existing capital resources will enable the Company to maintain its current and
planned operations through March 31, 1998. The Company expects negative cash
flow from operations to continue at least until that time as a result of the
Company's utilization of substantial funds to continue research and development,
to conduct pre-clinical testing and clinical trials and to establish
commercial-scale manufacturing processes and facilities for all of its intended
products. In the event that the Company does not achieve its product objectives
or receive timely regulatory approvals, or incurs higher than expected research
and development or other costs, or if its expectations with respect to product
sales are not fulfilled, the Company will be required to seek additional funding
through public or private financing, including equity financing, or through
collaborative arrangements. Adequate funds for these purposes may not be
available when needed or may not be available on terms acceptable to the
Company. If additional funds are raised by the issuance of equity securities,
dilution to shareholders is likely to result. If funding is insufficient, the
Company may be required to delay, scale back or eliminate some or all of its
research and development programs or to license third parties to commercialize
products or technologies that the Company might otherwise have sought to develop
itself. The Company's future cash requirements will be affected by results of
research and development, pre-clinical studies and clinical trials, acquisitions
of products or technology, if any, relationships with collaborators, if any, the
direction of the Company's research and development programs, competing
technological and market developments, the time and costs associated with
obtaining regulatory approvals and in obtaining, maintaining and enforcing
patents and other intellectual property rights, the costs of manufacturing
scale-up and commercialization activities and other factors.
COMPETITION. Sano is engaged in the rapidly evolving field of drug
delivery systems. The Company's primary competitors have competitive products on
the market and additional products under development. Other companies, including
pharmaceutical companies, have also developed and are marketing drug delivery
systems, including transdermal patches. Such companies have greater financial,
operational, research and development and sales and marketing resources than the
Company. Competitors have developed or are in the process of developing
technologies that are, or in the future may be, the basis for competitive or
superior products or technologies. New drugs or future developments in
alternative drug delivery technologies may provide therapeutic or cost
advantages for competitive products. No assurance can be given that developments
by others will not render the Company's
6
<PAGE>
products or technologies uncompetitive or obsolete. Any such development would
have a material adverse effect on the Company's financial condition and results
of operations.
DEPENDENCE ON KEY PERSONNEL. Because of the specialized scientific
nature of the Company's business, the Company is highly dependent upon its
ability to retain its current personnel, including, in particular, Marc M.
Watson, Chairman of the Board, Reginald L. Hardy, President, Charles Betlach,
Ph.D., Senior Vice President Research and Development, Cheryl M. Gentile, Vice
President - Research and Development, Jesus Miranda, Vice President - Research
and Development, and Joseph Gentile, Vice President - Operations. The loss of
the services of any of these individuals could have a material adverse effect on
the business of the Company. The Company's success is also dependent upon its
ability to continue to attract and retain qualified scientific and technical
personnel. There is intense competition for such personnel, and there can be no
assurance that the Company will be able to continue to attract and retain the
qualified personnel necessary for the development of its business. Loss of the
services of, or failure to recruit, key scientific, technical and other
personnel could be detrimental to the Company's product development programs.
IMPORTANCE OF PATENTS, PROPRIETARY TECHNOLOGY AND TRADE SECRETS. Sano's
success will depend, in part, on its ability to protect trade secrets and to
operate without infringing the proprietary rights of others. The Company does
not intend to rely on patented technology in connection with all of its
products. No assurance can be given that the Company can meaningfully protect
any of its rights in its proprietary technology, that any obligation to maintain
the confidentiality of such proprietary technology will not be breached by
employees, consultants, advisors or others, or that others will not
independently develop substantially equivalent technology. Any unauthorized use
of the Company's patents or other proprietary technology could have a material
adverse effect on the Company's financial condition and results of operations.
No assurance can be given that patents for which the Company applies will be
issued, that any patents that are issued to the Company will provide it with
competitive advantages or will not be challenged or designed around by others,
or that the existence of patents, proprietary rights or trade secrets of others
will not have a material adverse effect on the ability of the Company to conduct
its business. In addition, although the Company believes that it does not
infringe any patents, proprietary rights or trade secrets, the Company may be
required to obtain licenses to patents or other proprietary rights or trade
secrets of other parties. No assurance can be given that any licenses required
under any such patents, proprietary rights or trade secrets would be made
available on terms acceptable to the Company, or at all. If the Company does not
obtain such licenses, it could encounter delays in product market introductions
while it attempts to design around such patents, proprietary rights or trade
secrets or could find that the development, manufacture or sale of products
requiring such licenses could be foreclosed. The Company could also experience a
loss of revenues in the event that the Company ceases to market any of its
products as a result of suits brought against it and could incur substantial
costs in defending itself and indemnifying its partners in suits brought against
it or one or more of its partners with respect to such patents, proprietary
rights or trade secrets or in suits in which the Company's patents, proprietary
rights or trade secrets may be asserted by it against other parties. There can
be no assurance that any such litigation will not divert the time, attention and
other resources of management or that any such diversion will not have a
material adverse effect on the Company's financial condition and results of
operations. Further, no assurance can be given that any patent, proprietary
right or trade secret obtained or licensed by the Company will be held valid and
enforceable if challenged by another party.
LIMITED MANUFACTURING CAPABILITIES; SINGLE FACILITY. The Company
believes that it currently has the capacity to manufacture approximately 100
million patches annually, based upon the Company's anticipated product mix, and
is in the process of increasing this capacity. However, the Company has not
launched any product commercially and has no experience in manufacturing
products in commercial quantities. To be successful, the Company's products must
be manufactured in commercial quantities, in compliance with regulatory
requirements, including the FDA's stringent GMP requirements, and at acceptable
cost. Production of these products, especially in commercial quantities, will
create technical as well as financial challenges for the Company. In order to
establish and successfully manage commercial-scale manufacturing operations, the
Company will be required to enhance its quality control, regulatory, marketing,
sales and administrative capabilities and systems. No assurance can be given
that manufacturing or quality control problems will not arise
7
<PAGE>
as the Company attempts to produce these products or as additional facilities
are required in the future, or that the Company will ultimately be able to
manufacture successfully any of its products in commercial quantities. In
addition, the Company has only one facility, located in Miramar, Florida. All of
the Company's development, administrative and manufacturing operations take
place at such facility. Any catastrophe, such as a fire, flood or hurricane,
that renders the facility substantially unusable for an extended period of time,
would have a material adverse affect on the Company.
UNCERTAINTY OF HEALTH CARE REIMBURSEMENT. The Company's ability to
commercialize its products successfully may depend in part on the extent to
which reimbursement for the costs of such products and related treatments will
be available from government health administration authorities, private health
coverage insurers and other organizations. Significant uncertainty exists as to
the extent to which newly approved health care products will be reimbursed by
such third parties, and no assurance can be given that adequate coverage will be
available for the Company to maintain price or volume levels sufficient for
realization of an appropriate return on its investment in developing new drug
delivery systems. Government and other third-party payors are increasingly
sensitive to the containment of health care costs and are limiting both coverage
and levels of reimbursement for new therapeutic products approved for marketing,
and are refusing, in some cases, to provide any coverage for indications for
which the FDA and other national health regulatory authorities have not granted
marketing approval. If adequate coverage and reimbursement levels are not
provided by government and third-party payors for uses of the Company's
products, market acceptance of these products would be materially and adversely
affected.
PRODUCT LIABILITY EXPOSURE; LIMITED INSURANCE. The Company's business
exposes it to potential product liability risks which are inherent in the
testing, manufacturing, marketing and sale of therapeutic products. Product
liability insurance for the pharmaceutical industry generally is expensive, to
the extent that it is available at all. The Company has obtained limited product
liability insurance in connection with clinical trials; however, no assurance
can be given that it will be able to maintain such insurance on acceptable
terms, that the Company will be able to secure increased coverage as the
commercialization of its products proceeds or that the insurance will provide
adequate protection against potential liabilities. A successful claim brought
against the Company in excess of the Company's insurance coverage would have a
material adverse effect upon the Company.
HAZARDOUS MATERIALS; ENVIRONMENTAL MATTERS. The Company's research and
development and manufacturing activities involve the use of certain hazardous
materials. The Company is subject to federal, state and local laws and
regulations governing the use, manufacture, storage, handling and disposal of
such materials and certain waste products. The risk of accidental contamination
or injury from these materials cannot be completely eliminated. In the event of
such an accident, the Company could be held liable for any damages that result,
and any such liability could exceed the Company's resources. The Company's
operations, business or assets may be materially adversely affected by current
or future environmental laws or regulations. The Company is required to obtain
permits from local, state and federal agencies in connection with emissions from
its manufacturing processes. In order to scale up its manufacturing capacity to
commercial levels, it will be necessary for the Company to apply for and obtain
additional federal, state and local environmental and other regulatory approvals
and there can be no assurance that any such approvals will be granted in a
timely manner, if at all. The failure to obtain any such approvals could have a
material adverse effect on the Company's financial condition and results of
operations. The Company may be required to incur significant costs in order to
comply with applicable regulations or to obtain future permits.
DEPENDENCE ON SOLE SOURCE SUPPLIERS. Some materials used in the
Company's products are currently available only from sole source suppliers.
Although Sano has not experienced difficulty acquiring the materials for product
development to date, no assurance can be given that interruptions in supplies
will not occur in the future or that the Company will not have to obtain
substitute materials which would require additional product validations and
regulatory submissions before the Company could continue to manufacture and
market any products incorporating such substitute materials. Any such
interruption of supply could have a material adverse effect on the Company's
ability to manufacture its products or to obtain or maintain regulatory approval
of such products.
8
<PAGE>
POTENTIAL VOLATILITY OF STOCK PRICE. The stock market recently has
experienced significant price and volume fluctuations that were often unrelated
to the operating performance of particular companies. The market price of the
Common Stock, as with that of securities of many similar companies, is likely to
be highly volatile. Factors such as the results of pre-clinical studies and
clinical trials by the Company or its competitors, regulatory progress or the
lack thereof with respect to products in the Company's pipeline or those of the
Company's competitors, evidence of the safety, efficacy or market acceptance of
the products of the Company or its competitors, announcements of technological
innovations or new products by the Company or its competitors, changes in
governmental regulation, developments in patent or other proprietary rights of
the Company or its competitors, including litigation, fluctuations in the
Company's operating results and changes in general market conditions for drug
delivery or other pharmaceutical companies could have a significant impact on
the market price of the Common Stock.
NO DIVIDENDS. The Company has not paid cash dividends on its Common
Stock in the past, and it does not expect to declare or pay cash dividends in
the foreseeable future.
CONCENTRATION OF COMMON STOCK OWNERSHIP AND ANTITAKEOVER
CONSIDERATIONS. Following the closing of the Company's anticipated private
offering of the Shares, the Company's directors and executive officers and
certain of their affiliates will beneficially own approximately 47% of the
Common Stock. Accordingly, these shareholders are likely to have the ability to
control the election of the Company's directors and the outcome of most other
matters submitted to a vote of the Company's shareholders. The Company has the
authority to issue 5,000,000 shares of Preferred Stock in one or more series and
to fix the powers, designations, preferences and relative rights thereof without
any further vote or action by the Company's shareholders. The issuance of
Preferred Stock could dilute the voting power of holders of Common Stock and
could have the effect of delaying, deferring or preventing a change in control
of the Company. Certain provisions of the Company's Articles of Incorporation
and By-laws, as well as Florida law, may operate in a manner that could
discourage or render more difficult a takeover of the Company or the removal of
management or may limit the price certain investors may be willing to pay for
shares of Common Stock.
SHARES ELIGIBLE FOR FUTURE SALE. Upon the effectiveness of the
Registration Statement, the Company has outstanding 10,448,488 shares of Common
Stock, assuming no exercise of options or warrants outstanding as of the date
hereof. Of such shares of Common Stock, approximately 6,650,000 shares will be
immediately available for sale without restriction in the public market, and
approximately 3,800,000 shares will be eligible for sale under Rule 144 of the
Securities Act. Certain holders of the Company's shares are entitled to
registration rights with respect to an aggregate of 2,193,045 shares of Common
Stock. Sales of substantial amounts of such shares in the public market or the
prospect of such sales could adversely affect the market price of the Common
Stock.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares being offered by the Selling Shareholders hereunder. Expenses expected to
be incurred by the Company in connection with this offering are estimated at
approximately $145,000.
SELLING SHAREHOLDERS
The Shares covered by this Prospectus were acquired from the Company in
a private offering pursuant to Common Stock Purchase Agreements (the "Purchase
Agreements") for an aggregate purchase price of $16,200,000 ($13.50 per share).
The offer and sale by the Company of the Common Stock to the Selling
Shareholders pursuant to the Purchase Agreements was made pursuant to an
exemption from the registration requirements of the Securities Act provided by
Section 4(2) thereof. The Purchase Agreements contain representations and
warranties as to each Selling Shareholder's status as an "accredited investor"
as such term is
9
<PAGE>
defined in Rule 501 promulgated under the Securities Act. Dillon, Read & Co.
Inc., the placement agent, was paid a fee equal to 5.8% of the aggregate
purchase price in connection with the sale of the Shares by the Company to the
Selling Shareholders pursuant to the Purchase Agreements. In addition, the
Company agreed to reimburse such placement agent for its travel and
out-of-pocket expenses incurred in connection with the sale of the Shares by the
Company to the Selling Shareholders pursuant to the Purchase Agreements up to a
maximum of $65,000.
Pursuant to the Purchase Agreements, each Selling Shareholder has
represented that he, she or it acquired the Shares for its own account as
principal, for investment purposes only, and not with a present view to, or for,
the resale distribution thereof, in whole or in part, within the meaning of the
Securities Act or any State Securities Law . The Company agreed, in such
Purchase Agreements, to use its best efforts to prepare and file a registration
statement no later than 10 days after the effective date of the Purchase
Agreements and to bear all expenses in connection with the offering, other than
selling commissions, underwriting fees and stock transfer taxes applicable to
the Shares and all fees and disbursements of counsel for any Selling
Shareholder. Accordingly, in order to permit the Selling Shareholders to sell
the Shares when each deems appropriate, the Company has filed with the
Commission a Registration Statement on Form S-3, of which this Prospectus forms
a part, with respect to the resale of the Shares from time to time as described
herein and has agreed to prepare and file such amendments and supplements to the
Registration Statement as may be necessary to keep the Registration Statement
effective until all Shares offered hereby have been sold pursuant thereto or
until such Shares are no longer, by reason of Rule 144 under the Securities Act
or any other rule of similar effect, required to be registered for the sale
thereof by the Selling Shareholders.
Prior to their acquisition of the Shares, none of the Selling
Shareholders had a material relationship with the Company.
The following table sets forth the names of the Selling Shareholders,
the number of shares of Common Stock owned beneficially by the Selling
Shareholders as of July 9, 1997 and the number of shares which may be offered by
each of them pursuant to this Prospectus. This information is based upon
information provided by the Selling Shareholders. There are currently no
agreements, arrangements or understandings with respect to the sale of any of
the Shares by the Selling Shareholders. The Shares are being registered to
permit public secondary trading of the Shares, and the Selling Shareholders may
offer the Shares for resale from time to time.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNERSHIP OF SHARES OF
OWNED PRIOR TO THE COMMON STOCK AFTER
NAME OF SELLING SHAREHOLDER OFFERING OFFERING(1)
- -------------------------------- --------------------------------- NUMBER OF SHARES -----------------------
SHARES PERCENTAGE OFFERED HEREBY SHARES PERCENTAGE
-------------- ---------------- ------------------ --------- ------------
<S> <C> <C> <C> <C> <C>
Kane & Co. 600,000 5.7% 600,000 -0- *
Coral Basin & Co. 340,000 3.2% 340,000 -0- *
Hare & Co. 140,000 1.3% 140,000 -0- *
Coral Rock & Co. 120,000 1.1% 120,000 -0- *
</TABLE>
- ----------------
* Less than 1%
(1) Assumes all Shares registered hereby are sold. Since the Selling
Shareholders may sell all, some or none of their Shares, no actual
estimate can be made of the aggregate number of Shares that each
Selling Shareholder will own upon completion of the offering to which
this Prospectus relates.
PLAN OF DISTRIBUTION
The Selling Shareholders have advised the Company that they may from
time to time sell all or part of the Shares in one or more transactions (which
may involve block transactions) in the over-the-counter market, on the NNM (or
any exchange on which the Shares may then be listed), in negotiated
transactions, through the writing of options on the Shares (whether such options
are listed on an options exchange or otherwise), or a combination of
10
<PAGE>
such methods of sale, at market prices prevailing at the time of such sales or
at negotiated prices. The Selling Shareholders may effect such transactions by
selling the Shares to or through broker-dealers, and such broker-dealers may
receive compensation in the form of underwriting discounts, concessions or
commissions from the Selling Shareholders and/or purchasers of the Shares for
whom they may act as agent (which compensation may be in excess of customary
commissions). The Selling Shareholders may also pledge the Shares as collateral
for margin accounts or loans and the Shares could be resold pursuant to the
terms of such accounts or loans. In connection with such sales, the Selling
Shareholders and any participating brokers and dealers may be deemed to be
"underwriters" as defined in the Securities Act. Neither the Company nor the
Selling Shareholders can presently estimate the amount of commissions or
discounts, if any, that will be paid by the Selling Shareholders on account of
their sale of the Shares from time to time. In addition to sales under the
Registration Statement, Shares may be sold by the Selling Shareholders through
an applicable exemption from registration, including, without limitation,
pursuant to Rule 144 under the Securities Act.
Under the securities laws of certain states, the Shares may be sold in
such states only through registered or licensed brokers or dealers. In addition,
in certain states the Shares may not be sold unless the Shares have been
registered or qualified for sale in such state or an exemption from registration
or qualification is available and is complied with.
The Company has agreed to indemnify the Selling Shareholders against
certain liabilities, including liabilities under the Securities Act. The Selling
Shareholders have also agreed to indemnify the Company against certain
liabilities, including liabilities under the Securities Act.
The Selling Shareholders and other persons participating in the
distribution of the Shares offered hereby are subject to the applicable
requirements of Regulation M promulgated under the Exchange Act in connection
with the sale of the Shares.
LEGAL MATTERS
The validity of the issuance of the Shares offered hereby has been
passed upon for the Company by Greenberg Traurig Hoffman Lipoff Rosen & Quentel,
P.A., Miami, Florida.
EXPERTS
The financial statements incorporated by reference in this prospectus
and registration statement have been audited by Arthur Andersen LLP, independent
certified public accountants, as indicated in their report with respect thereto,
and is incorporated herein by reference, in reliance upon the authority of said
firm as experts in accounting and auditing in giving said report.
11
<PAGE>
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
No dealer, salesperson or any other person is authorized to give any
information or to make any representation other than as contained in this
Prospectus and, if given or made, such information or representation must not be
relied upon as having been authorized by the Company. This Prospectus does not
constitute an offer to sell, or a solicitation of an offer to buy, by any person
in any jurisdiction in which it is unlawful to make such an offer or
solicitation. Neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create any implication that the
information contained herein is correct as of any time subsequent to the date
hereof.
____________________
TABLE OF CONTENTS
PAGE
----
Available Information...............................1
Incorporation of Certain Information by Reference...1
The Company.........................................2
Risk Factors........................................3
Use of Proceeds.....................................9
Selling Shareholders................................9
Plan of Distribution...............................11
Legal Matters......................................11
Experts............................................11
1,200,000 SHARES
SANO CORPORATION
COMMON STOCK
----------------------------------------------
PROSPECTUS
----------------------------------------------
July ____, 1997
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses, excluding solicitation fees, in connection with
this offering are as follows:
AMOUNT
------------------
Registration Fee.................................. $ 5,381
NASD filing Fee................................... $ 17,500
Legal fees and expenses........................... $100,000
Accounting fees and expenses...................... $ 10,000
Miscellaneous..................................... $ 12,000
-------------------
Total........................... $145,000
===================
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company has authority under the Florida Business Corporation Act to
indemnify its directors and officers to the extent provided for in such statute.
The Company's Amended and Restated Articles of Incorporation require the Company
to indemnify the Company's directors, officers, employees and agents. Insofar as
indemnification for liabilities under the Securities Act may be permitted to
directors, officers or persons controlling the Company, pursuant to the
foregoing provisions, or otherwise, the Company has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. The Company also maintains directors' and officers' liability
insurance.
ITEM 16. EXHIBITS
The following exhibits are included as a part of this Registration
Statement:
EXHIBIT
NUMBER DESCRIPTION
- ------------- --------------------------------------------------------------
1.1 Form of Common Stock Purchase Agreement
3.1 Amended and Restated Articles of Incorporation of Registrant(1)
3.2 By-laws of Registrant(1)
5.1 Opinion of Greenberg Traurig Hoffman Lipoff Rosen & Quentel, P.A.
23.1 Consent of Greenberg Traurig Hoffman Lipoff Rosen & Quentel, P.A.
(contained in exhibit 5.1)
23.2 Consent of Arthur Andersen LLP
24.1 Reference is made to the Signatures section of this Registration
Statement for the Power of Attorney contained therein
- ----------------------------------
(1) Incorporated by reference to the same exhibit number filed as part of
the Company's Registration Statement on Form S-1, number 33-97194.
II-1
<PAGE>
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or
high and of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 20 percent
change in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) To include any material information with
respect to the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement;
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the shares offered therein, and
the offering of such shares at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the shares being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the shares offered therein, and the offering of such shares at that
time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim of
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the shares being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Miramar, Florida, as of July 9, 1997.
SANO CORPORATION
By:/s/ Reginald L. Hardy
-----------------------------
Reginald L. Hardy
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Reginald L. Hardy and Marc M.
Watson true and lawful attorneys-in-fact, each acting alone, with full powers of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities to sign any or all amendments, including any
post-effective amendments, to this registration statement, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact or their substitutes, each acting alone, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated as of July 9, 1997.
/s/ Reginald L. Hardy
------------------------------------------------
Reginald L. Hardy, President and Director
(Principal Executive Officer)
/s/ Marc M. Watson
------------------------------------------------
Marc M. Watson, Chairman of the Board
/s/ Gerald S. Coombs
------------------------------------------------
Gerald S. Coombs, Chief Financial Officer
(Principal Financial Officer and Principal
Accounting Officer)
/s/ Charles J. Betlach II
------------------------------------------------
Charles J. Betlach, II, Director
/s/ Hubert E. Huckel, M.D.
------------------------------------------------
Hubert E. Huckel, M.D., Director
/s/ Marco Possati
------------------------------------------------
Marco Possati, Director
/s/ Roy S. Walzer
------------------------------------------------
Roy S. Walzer, Director
II-3
<PAGE>
EXHIBIT INDEX
EXHIBIT
- --------
1.1 Form of Common Stock Purchase Agreement
5.1 Opinion of Greenberg Traurig Hoffman Lipoff Rosen & Quentel, P.A.
23.2 Consent of Arthur Andersen LLP
EXHIBIT 1.1
--------------------------------------------------------------
SANO CORPORATION
FORM OF
COMMON STOCK PURCHASE AGREEMENT
July ___, 1997
--------------------------------------------------------------
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
<S> <C>
SECTION 1 AUTHORIZATION AND SALE OF COMMON STOCK............................................................... 1
1.1 Authorization................................................................................. 1
1.2 Sale of Common................................................................................ 1
SECTION 2 CLOSING DATE: DELIVERY............................................................................... 1
2.1 Closing Date.................................................................................. 1
2.2 Delivery...................................................................................... 1
SECTION 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY........................................................ 2
3.1 Organization and Standing..................................................................... 2
3.2 Corporate Power, Authorization................................................................ 2
3.3 Issuance and Delivery of the Shares........................................................... 2
3.4 Private Placement Offering Memorandum: SEC Documents,
Financial Statement........................................................................... 2
3.5 Governmental Consents......................................................................... 3
3.6 No Material Adverse Change.................................................................... 3
3.7 Intellectual Property......................................................................... 3
3.8 Authorized Capital Stock...................................................................... 4
3.9 Litigation.................................................................................... 4
3.10 Use of Proceeds............................................................................... 4
3.11 Accountants................................................................................... 4
3.12 Compliance With Other Instruments............................................................. 5
3.13 Permits....................................................................................... 5
3.14 Investment Company............................................................................ 5
3.15 Offering Materials............................................................................ 5
SECTION 4 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASERS.......................................... 5
4.1 Power; Authorization.......................................................................... 5
4.2 Investment Experience......................................................................... 5
4.3 Investment Intent............................................................................. 6
4.4 Registration or Exemption Requirements........................................................ 6
SECTION 5 CONDITIONS TO CLOSING OF PURCHASERS.................................................................. 6
5.1 Representations and Warranties................................................................ 6
5.2 Covenants..................................................................................... 7
5.3 Blue Sky...................................................................................... 7
5.4 Legal Opinion................................................................................. 7
5.5 Registration Statement........................................................................ 7
5.6 Nasdaq Qualification.......................................................................... 7
SECTION 6 CONDITIONS TO CLOSING OF COMPANY..................................................................... 7
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
(CONTINUED)
<S> <C>
6.1 Representations and Warranties................................................................ 7
6.2 Covenants..................................................................................... 7
6.3 Blue Sky...................................................................................... 7
6.4 Registration Statement........................................................................ 7
6.5 Nasdaq Qualification.......................................................................... 8
SECTION 7 AFFIRMATIVE COVENANTS OF THE COMPANY................................................................. 8
7.1 Financial Information......................................................................... 8
7.2 Registration Requirements..................................................................... 8
7.3 Indemnification and Contribution.............................................................. 10
SECTION 8 RESTRICTIONS ON TRANSFERABILITY OF SHARES: COMPLIANCE WITH SECURITIES ACT............................ 12
8.1 Restrictions on Transferability............................................................... 12
8.2 Restrictive Legend............................................................................ 12
8.3 Transfer of Shares After Registration......................................................... 13
8.4 Purchaser Information......................................................................... 13
SECTION 9 MISCELLANEOUS........................................................................................ 13
9.1 Waivers and Amendments........................................................................ 13
9.2 Placement Agent Fee........................................................................... 13
9.3 Governing Law................................................................................. 14
9.4 Survival...................................................................................... 14
9.5 Successors and Assigns........................................................................ 14
9.6 Entire Agreement.............................................................................. 14
9.7 Notices, etc.................................................................................. 14
9.8 Severability of this Agreement................................................................ 14
9.9 Counterparts.................................................................................. 14
9.10 Further Assurances............................................................................ 14
9.11 Termination................................................................................... 15
9.12 Expenses...................................................................................... 15
9.13 Currency...................................................................................... 15
Exhibit A - Schedule of Purchasers
Exhibit B - Form of Purchaser's Questionnaire
Exhibit C - Form of Purchaser's Legend Removal Certificate
Exhibit D - Form of Purchaser's Certificate of Subsequent Sale
</TABLE>
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SANO CORPORATION
FORM OF
COMMON STOCK PURCHASE AGREEMENT
This Common Stock Purchase Agreement (the "Agreement") is made
as of July ___, 1997, by and among Sano Corporation, a Florida corporation (the
"Company") with its principal office at 3250 Commerce Parkway, Miramar, Florida
33025, and the persons listed on the Schedule of Investors attached hereto as
Exhibit A (the "Purchasers")
SECTION 1
AUTHORIZATION AND SALE OF COMMON STOCK
1.1 AUTHORIZATION. The Company has authorized the sale
and issuance of __________ shares of its Common Stock pursuant to this Agreement
(the "Shares").
1.2 SALE OF COMMON. Subject to the terms and conditions of
this Agreement, the Company agrees to issue and sell to each Purchaser and each
Purchaser severally agrees to purchase from the Company the number of Shares set
forth opposite each Purchaser's name on EXHIBIT A for $_____ per share.
SECTION 2
CLOSING DATE: DELIVERY
2.1 CLOSING DATE. The closing of the purchase and sale of the
Shares hereunder (the "Closing") shall be held at the offices of Greenberg
Traurig Hoffman Lipoff Rosen & Quentel, P.A., 1221 Brickell Avenue, Miami,
Florida 33131 at or before 10:00 a.m. New York Time, on that date that is two
business days after the date on which the Registration Statement (as defined
herein) is declared effective or at such time and place upon which the Company,
Dillon, Read & Co. Inc. (the "Placement Agent") and the Purchasers shall agree.
The date of the Closing is hereinafter referred to as the "Closing Date."
2.2 DELIVERY. At the Closing, the Company will deliver to each
Purchaser a certificate, registered in the Purchaser's name as shown on EXHIBIT
A, representing the number of Shares to be purchased by the Purchaser. Such
delivery shall be against payment of the purchase price therefor by wire
transfer to the Company's bank account in the amount set forth on EXHIBIT A.
<PAGE>
SECTION 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Purchasers as of
the Closing Date as follows:
3.1 ORGANIZATION AND STANDING. The Company is a corporation
duly organized and validly existing under, and by virtue of, the laws of the
State of Florida and is in good standing as a domestic corporation under the
laws of said state and has all requisite corporate power and authority to
conduct its business as currently conducted and disclosed in the Memorandum (as
defined below).
3.2 CORPORATE POWER, AUTHORIZATION. The Company has all
requisite legal and corporate power and has taken all requisite corporate action
to execute and deliver this Agreement, to sell and issue the Shares and to carry
out and perform all of its obligations under this Agreement. This Agreement
constitutes the legal, valid and binding obligation of the Company, enforceable
in accordance with its terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization or similar laws relating to or affecting the
enforcement of creditors' rights generally and (ii) as limited by equitable
principles generally. The execution and delivery of this Agreement does not, and
the performance of this Agreement and the compliance with the provisions hereof
and the issuance, sale and delivery of the Shares by the Company will not,
conflict with or result in a breach or violation of the terms, conditions or
provisions of, or constitute a default under, or result in the creation or
imposition of any lien pursuant to the terms of, the Certificate of
Incorporation or Bylaws of the Company or any statute, law, rule or regulation
or any state or federal order, judgment or decree or any indenture, mortgage,
lease or other agreement or instrument to which the Company or any of its
properties is subject.
3.3 ISSUANCE AND DELIVERY OF THE SHARES. The Shares, when
issued in compliance with the provisions of this Agreement, will be validly
issued, fully paid and nonassessable. The issuance and delivery of the Shares is
not subject to preemptive or any other similar rights of the stockholders of the
Company or any liens or encumbrances.
3.4 PRIVATE PLACEMENT OFFERING MEMORANDUM: SEC DOCUMENTS,
FINANCIAL STATEMENT. Each complete or partial statement, report, or proxy
statement included within the Company's Private Placement Offering Memorandum
dated June 26, 1997 (the "Memorandum") is a true and complete copy of or excerpt
from such document as filed by the Company with the Securities and Exchange
Commission (the "SEC"). The Company has filed in a timely manner all documents
that the Company was required to file with the SEC under Sections 13, 14(a) and
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
during the twelve (12) months preceding the date of this Agreement. As of their
respective filing dates, all documents filed by the Company with the SEC (the
"SEC Documents") complied in all material respects with
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the requirements of the Exchange Act or the Securities Act of 1933, as amended
(the "Securities Act"), as applicable. Neither the Memorandum nor any of the SEC
Documents as of their respective dates contained any untrue statement of
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading. The financial statements of the
Company included in the SEC Documents (the "Financial Statements") comply as to
form in all material respects with applicable accounting requirements and with
the published rules and regulations of the SEC with respect thereto. The
Financial Statements have been prepared in accordance with generally accepted
accounting principles consistently applied and fairly present the consolidated
financial position of the Company and any subsidiaries at the dates thereof and
the consolidated results of their operations and consolidated cash flows for the
periods then ended; provided, however, that the unaudited financial statements
are subject to normal recurring year-end adjustments (which in any case will not
be material) and do not contain all footnotes required under generally accepted
accounting principles.
3.5 GOVERNMENTAL CONSENTS. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state, or local governmental authority on the part of
the Company is required in connection with the consummation of the transactions
contemplated by this Agreement except for (a) compliance with the securities and
blue sky laws in the states in which Shares are offered and/or sold, (b) the
filing of the Registration Statement and all amendments thereto with the SEC as
contemplated by Section 7.2 of this Agreement and (c) all required filings with
the Nasdaq National Market necessary for the listing of the Shares.
3.6 NO MATERIAL ADVERSE CHANGE. Except as otherwise disclosed
in the Offering Memorandum, since March 31, 1997, there have not been any
changes in the assets, liabilities, financial condition or operations of the
Company from that reflected in the Financial Statements except changes in the
ordinary course of business which have not been, either individually or in the
aggregate, materially adverse.
3.7 INTELLECTUAL PROPERTY. The Company owns or possesses
sufficient rights to use all patents, patent rights, inventions, trade secrets,
know-how, proprietary rights and processes that are necessary for the conduct
and proposed conduct of its business as described in the Memorandum (the
"Company's Proprietary Rights") without any conflict with or infringement of the
rights of others that might result in a material adverse effect on the condition
(financial or otherwise), earnings, operations, business or business prospects
of the Company. The Company believes that there are no third parties who have or
will be able to establish rights to any of the Company's Proprietary Rights that
might result in a material adverse effect on the condition (financial or
otherwise), earnings, operations, business or business prospects of the Company,
except for (i) the ownership rights of the third party licensors to the
Company's Proprietary Rights which are licensed to the Company by such third
party licensors and (ii) the third party licensees of the Company's Proprietary
Rights which are licensed by the Company to such third party licensees.
To the knowledge of Company, there is no infringement by any third parties of
any of the
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Company's Proprietary Rights. Except as disclosed in the Offering Memorandum,
the Company has not received any notice of, or has no knowledge of any basis
for, any infringement of or conflict with asserted rights of others with respect
to any patent, patent right, invention, trade secret, know-how or other
proprietary rights that, individually or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, or settlement, or otherwise, would have
a material adverse effect on the condition (financial or otherwise), earnings,
operations, business or business prospects of the Company.
3.8 AUTHORIZED CAPITAL STOCK. All outstanding shares of
capital stock of the Company have been duly authorized and validly issued and
are fully paid and nonassessable, have been issued in compliance with all
federal and state securities laws, were not issued in violation of or subject to
any preemptive rights or other rights to subscribe for or purchase securities,
and the authorized and outstanding capital stock of the Company conforms, as of
the dates for which such information is given, in all material respects to the
statements relating thereto contained in the Memorandum; there is no capital
stock outstanding as of such dates other than as described in the Memorandum;
and all issued and outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid and nonassessable. Except
as disclosed in or contemplated by the Memorandum and the Financial Statements
of the Company and the related notes thereto included in the Memorandum, the
Company does not have outstanding any options to purchase, or any preemptive
rights or other rights to subscribe for or to purchase, any securities or
obligations convertible into, or any contracts or commitments to issue or sell,
shares of its capital stock or any such options, rights, convertible securities
or obligations. No stockholder of the Company, other than the Purchasers, has
any right (which has not been waived or has not expired by reason of lapse of
time following notification of the Company's intent to file the Registration
Statement) to require the Company to register the sale of any shares owned by
such stockholder under the Securities Act in the Registration Statement, except
stockholders of the Company with such rights that are eligible to sell all of
such securities pursuant to Rule 144(k) promulgated under the Securities Act.
3.9 LITIGATION. Except as set forth in the Memorandum, there
are no actions, suits, proceedings or investigations pending or, to the best of
the Company's knowledge, threatened against the Company or any of its properties
before or by any court or arbitrator or any governmental body, agency or
official in which there is the possibility of an adverse decision that (a) would
reasonably be expected to have a material adverse effect on the Company's
properties or assets or the business of the Company as presently conducted or
proposed to be conducted or (b) would reasonably be expected to impair the
ability of the Company to perform its obligations under this Agreement.
3.10 USE OF PROCEEDS. The Company will apply the net proceeds
from the sale of the shares substantially in the manner set forth under the
caption "Use of Proceeds" in the Memorandum.
3.11 ACCOUNTANTS. Arthur Andersen LLP, who have expressed
their opinion with
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<PAGE>
respect to the audited financial statements and schedules to be filed with the
Commission as a part of the Registration Statement and included in the
Registration Statement and the Prospectus which forms a part thereof, are
independent accountants as required by the Securities Act and the rules and
regulations promulgated thereunder (the "Rules and Regulations").
3.12 COMPLIANCE WITH OTHER INSTRUMENTS. Except as to defaults,
violations and breaches which individually or in the aggregate would not be
material to the Company, the Company is not in violation or default of any
provision of its Articles of Incorporation or Bylaws, each as amended to date,
or of any agreement, license, permit, instrument, judgment, order, writ or
decree to which it is a party or by which it is bound, or, to the best of its
knowledge, of any provision of any federal or state statute, rule or regulation
applicable to the Company.
3.13 PERMITS. The Company has all franchises, permits,
licenses, and any similar authority necessary for the conduct of its business as
now being conducted by it, the lack of which could materially and adversely
affect the business, properties, prospects, or financial condition of the
Company. The Company is not in default in any material respect under any of such
franchises, permits, licenses, or other similar authority.
3.14 INVESTMENT COMPANY. The Company is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
3.15 OFFERING MATERIALS. The Company has not distributed and
will not distribute prior to the Closing Date any offering material in
connection with the offering and sale of the Shares other than the Memorandum.
SECTION 4
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASERS
Each Purchaser hereby severally represents and warrants to the
Company, effective as of the Closing Date, as follows:
4.1 POWER; AUTHORIZATION. (i) Such Purchaser has all requisite
legal and corporate or other power and capacity and has taken all requisite
corporate or other action to execute and deliver this Agreement, to purchase the
Shares to be purchased by it and to carry out and perform all of its obligations
under this Agreement; and (ii) this Agreement constitutes the legal, valid and
binding obligation of such Purchaser, enforceable in accordance with its terms,
except (a) as limited by applicable bankruptcy, insolvency, reorganization, or
similar laws relating to or affecting the enforcement of creditors' rights
generally and (b) as limited by equitable principles generally.
4.2 INVESTMENT EXPERIENCE. Such Purchaser is an "accredited
investor" as defined in Rule 501(a) under the Securities Act. Such Purchaser has
received and reviewed the
5
<PAGE>
Memorandum, is aware of the Company's business affairs and financial condition
and has had access to and has acquired sufficient information about the Company
to reach an informed and knowledgeable decision to acquire the Shares. Purchaser
has such business and financial experience as is required to permit it to
protect its own interests in connection with the purchase of the Shares.
4.3 INVESTMENT INTENT. Such Purchaser is purchasing the Shares
for its own account as principal, for investment purposes only, and not with a
present view to, or for, the resale distribution thereof, in whole or in part,
within the meaning of the Securities Act or any state securities laws. Purchaser
understands that its acquisition of the Shares has not been registered under the
Securities Act or registered or qualified under any state law in reliance on
specific exemptions therefrom, which exemptions may depend upon, among other
things, the bona fide nature of such Purchaser's investment intent as expressed
herein. Such Purchaser has completed or caused to be completed the Purchaser
Questionnaire attached hereto as EXHIBIT B for use in preparation of the
Registration Statement (as defined below), and the responses provided therein
shall be true and correct as of the effective date of the Registration Statement
and as of the Closing Date. Purchaser has, in connection with its decision to
purchase the number of Shares set forth in EXHIBIT A hereto, relied solely upon
the Memorandum and the documents attached as appendices thereto and the
representations and warranties of the Company contained herein. Such Purchaser
will not, directly or indirectly, offer, sell, pledge, transfer or otherwise
dispose of (or solicit any offers to buy, purchase or otherwise acquire or take
a pledge of) any of the Shares except in compliance with the Securities Act, and
the rules and regulations promulgated thereunder and applicable state securities
laws.
4.4 REGISTRATION OR EXEMPTION REQUIREMENTS. Such Purchaser
further acknowledges, understands and agrees that the Shares may not be resold
or otherwise transferred except in a transaction registered under the Securities
Act or unless an exemption from such registration is available. Such Purchaser
understands that the certificate(s) evidencing the Shares will be imprinted with
a legend that prohibits the transfer of the Shares unless (i) they are
registered or such registration is not required, and (ii) if the transfer is
pursuant to an exemption from registration other than Rule 144 under the
Securities Act and, if the Company shall so request in writing, an opinion of
counsel reasonably satisfactory to the Company is obtained to the effect that
the transaction is so exempt.
SECTION 5
CONDITIONS TO CLOSING OF PURCHASERS
Each Purchaser's obligation to purchase the Shares at the
Closing is, at the option of such Purchaser, subject to the fulfillment or
waiver as of the Closing Date of the following conditions:
5.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties made
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by the Company in Section 3 hereof shall be true and correct in all material
respects when made, and shall be true and correct in all material respects on
the Closing Date with the same force and effect as if they had been made on and
as of said date.
5.2 COVENANTS. All covenants, agreements and conditions
contained in this Agreement to be performed by the Company on or prior to the
Closing Date shall have been performed or complied with in all respects.
5.3 BLUE SKY. The Company shall have obtained all necessary
blue sky law permits and qualifications, or secured exemptions therefrom,
required by any state or foreign or other jurisdiction for the offer and sale of
the Shares.
5.4 LEGAL OPINION. The Purchasers shall have received a legal
opinion of Greenberg Traurig Hoffman Lipoff Rosen & Quentel, P.A., counsel to
the Company, in the form attached hereto as Exhibit C.
5.5 REGISTRATION STATEMENT. The Registration Statement (as
defined below) registering the resale of the Shares by the Purchasers shall have
been filed with and declared effective by the SEC, and no stop order suspending
the effectiveness thereof and no proceedings therefor shall be pending or
threatened by the SEC.
5.6 NASDAQ QUALIFICATION. The Shares shall be duly authorized
for listing by the Nasdaq National Market.
SECTION 6
CONDITIONS TO CLOSING OF COMPANY
The Company's obligation to sell and issue the Shares at the
Closing is, at the option of the Company, subject to the fulfillment or waiver
of the following conditions:
6.1 REPRESENTATIONS AND WARRANTIES. The representations made
by the Purchasers in Section 4 hereof shall be true and correct in all material
respects when made, and shall be true and correct in all material respects on
the Closing Date with the same force and effect as if they had been made on and
as of such date.
6.2 COVENANTS. All covenants, agreements and conditions
contained in this Agreement to be performed by the Purchasers on or prior to the
Closing Date shall have been performed or complied with in all material
respects.
6.3 BLUE SKY. The Company shall have obtained all necessary
blue sky law permits and qualifications, or secured exemptions therefrom,
required by any state for the offer and sale of the Shares.
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6.4 REGISTRATION STATEMENT. The Registration Statement (as
defined below) registering the resale of the Shares by the Purchasers shall have
been filed with and declared effective by the SEC, and no stop order suspending
the effectiveness thereof and no proceedings therefor shall be pending or
threatened by the SEC.
6.5 NASDAQ QUALIFICATION. The Shares shall be duly authorized
for listing by the Nasdaq National Market.
SECTION 7
AFFIRMATIVE COVENANTS OF THE COMPANY
The Company hereby covenants and agrees us follows:
7.1 FINANCIAL INFORMATION. The Company will mail the following
reports to each Purchaser until such Purchaser transfers, assigns or sells the
Shares purchased by such Purchaser pursuant to this Agreement:
(a) Within one hundred (100) days after the end of
each fiscal year, a copy of its Annual Report on Form 10-K.
(b) Within fifty-five (55) days after the end of the
first, second and third quarterly accounting periods of each fiscal year of the
Company, a copy of its Quarterly Report on Form 10-Q.
(c) Within ten (10) days after the Company files any
Current Report on Form 8-K with the SEC, such Current Report on Form 8-K
7.2 REGISTRATION REQUIREMENTS.
(a) The Company shall use its best efforts to
prepare and file a registration statement with the SEC under the Securities Act
to register the resale of the Shares by the Purchasers (the "Registration
Statement") no later than ten (10) days after the date hereof.
(b) The Company shall pay all Registration
Expenses (as defined below) in connection with any registration, qualification
or compliance hereunder, and each Purchaser shall pay all Selling Expenses (as
defined below) and other expenses that are not Registration Expenses relating to
the Shares resold by such Purchaser. Registration Expenses shall mean all
expenses, except for Selling Expenses, incurred by the Company in complying with
the registration provisions herein described, including, without limitation, all
registration, qualification and filing fees, printing expenses, escrow fees,
fees and disbursements of counsel for the Company, blue sky fees and expenses,
and the expense of any special audits incident to or required by any such
registration.
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Selling Expenses shall mean all selling commissions, underwriting fees and
stock transfer taxes applicable to the Shares and all fees and disbursements of
counsel for any Purchaser.
(c) In the case of the registration effected by
the Company pursuant to these registration provisions, the Company will use its
reasonable best efforts to: (i) keep such registration effective until the
earlier of (a) the second anniversary of the date hereof, (b) such date as all
of the Shares have been resold by the original Purchasers thereof, or (C) such
time as all of the Shares held by the Purchasers can be sold within a given
three-month period without compliance with the registration requirements of the
Securities Act pursuant to Rule 144; (ii) prepare and file with the SEC such
amendments and supplements to the Registration Statement and the prospectus used
in connection with the Registration Statement as may be necessary to comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by the Registration Statement; (iii) furnish such number of
prospectuses and other documents incident thereto, including any amendment of or
supplement to the prospectus, as a Purchaser from time to time may reasonably
request; (iv) cause all Shares registered as described herein to be listed on
each securities exchange and quoted on each quotation service on which similar
securities issued by the Company are then listed or quoted; (v) provide a
transfer agent and registrar for all Shares registered pursuant to the
Registration Statement and a CUSIP number for all such Shares; (vi) otherwise
use its best efforts to comply with all applicable rules and regulations of the
SEC; and (vii) file the documents required of the Company and otherwise use its
best efforts to maintain requisite blue sky clearance in (A) all jurisdictions
in which any of the Shares are originally sold and (B) all other states
reasonably specified in writing by a Purchaser, provided as to clause (B),
however, that the Company shall not be required to qualify to do business or
consent to service of process in any state in which it is not now so qualified
or has not so consented.
(d) The Company shall furnish to each Purchaser
upon request a reasonable number of copies of a supplement to or an amendment of
such prospectus as may be necessary in order to facilitate the public sale or
other disposition of all or any of the Shares held by such Purchaser.
(e) With a view to making available to the
Purchasers the benefits of Rule 144 promulgated under the Securities Act ("Rule
144") and any other rule or regulation of the SEC that may at any time permit a
Purchaser to sell Shares to the public without registration or pursuant to a
registration on Form S-3, the Company covenants and agrees to: (i) make and keep
public information available, as those terms are understood and defined in Rule
144, until the earlier of (A) the second anniversary of the date hereof or (B)
such date as all of the Shares shall have been resold; (ii) file with the SEC in
a timely manner all reports and other documents required of the Company under
the Securities Act and the Exchange Act; and (iii) furnish to any Purchaser upon
request, as long as the Purchaser owns any Shares, (A) a written statement by
the Company that it has complied with the reporting requirements of the
Securities Act and the Exchange Act, (B) a copy of the most recent annual or
quarterly report of the Company, and (C) such other information as may be
reasonably requested in order to avail any Purchaser of any rule or regulation
of the SEC that permits the selling of any such Shares without registration or
pursuant to
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such Form S-3.
(f) At any time the Company may refuse to
permit a Purchaser to resell any Shares pursuant to the Registration Statement;
provided, however, that in order to exercise this right, the Company must
deliver a certificate in writing to the Purchasers and the Placement Agent to
the effect that a cessation of the ability to sell under, or a withdrawal of,
such Registration Statement is necessary because a sale pursuant to the
Registration Statement in its then-current form would constitute a violation of
the federal securities laws. In such an event, the Company shall use its best
efforts to promptly amend the Registration Statement if necessary and take all
other actions necessary to allow such sale under the federal securities laws,
and shall notify the Purchasers and the Placement Agent promptly after it has
determined that such sale has become permissible under the federal securities
laws. Each Purchaser hereby covenants and agrees that it will not sell any
Shares pursuant to the Registration Statement during the periods the
Registration Statement is withdrawn or the ability to sell thereunder is
suspended as set forth in this Section 7.2(f).
7.3 INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold
harmless each Purchaser from and against any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) to which such
Purchaser may become subject (under the Securities Act or otherwise) insofar as
such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of or are based upon, any untrue statement of a
material fact contained in the Registration Statement, on the effective date
thereof, or arise out of any failure by the Company to fulfill any undertaking
included in the Registration Statement, and the Company will, as incurred,
reimburse such Purchaser for any legal or other expenses reasonably incurred in
investigating, defending or preparing to defend any such action, proceeding or
claim; provided, however, that the Company shall not be liable in any such case
to the extent that such loss, claim, damage or liability arises out of or is
based upon (i) an untrue statement made in such Registration Statement in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of such Purchaser specifically for use in preparation of
the Registration Statement, (ii) the failure of such Purchaser to comply with
the covenants and agreements contained in Section 8.3 hereof, or (iii) any
untrue statement in any Prospectus that is corrected in any subsequent
Prospectus that was delivered to the Purchaser prior to the pertinent sale or
sales by the Purchaser.
(b) Each Purchaser, severally and not jointly,
agrees to indemnify and hold harmless the Company from and against any losses,
claims, damages or liabilities (or actions or proceedings in respect thereof) to
which the Company may become subject (under the Securities Act or otherwise)
insofar as such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) arise out of or are based upon (i) an untrue
statement made in such Registration Statement in reliance upon and in conformity
with written information furnished to the Company by or on behalf of such
Purchaser specifically for use in preparation of the Registration Statement,
provided, however, that no Purchaser shall be liable in any such case for any
untrue statement included in any Prospectus which statement has been corrected,
in writing, by such Purchaser and
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delivered to the Company before the sale from which such loss occurred, (ii) the
failure of such Purchaser to comply with the covenants and agreements contained
in Section 8.3 hereof, or (iii) any untrue statement in any prospectus that is
corrected in any subsequent Prospectus that was delivered to the Purchaser prior
to the pertinent sale or sales by the Purchaser, and each Purchaser, severally
and not jointly, will, as incurred, reimburse the Company for any legal or other
expenses reasonably incurred in investigating, defending or preparing to defend
any such action, proceeding or claim; provided that each Purchasers' obligations
pursuant to this Section 7.3(b) shall be limited to the aggregate purchase price
paid for Shares by such Purchaser.
(c) Promptly after receipt by any indemnified
person of a notice of a claim or the beginning of any action in respect of which
indemnity is to be sought against an indemnifying person pursuant to this
Section 7.3, such indemnified person shall notify the indemnifying person in
writing of such claim or of the commencement of such action, and, subject to the
provisions hereinafter stated, in case any such action shall be brought against
an indemnified person and the indemnifying person shall have been notified
thereof, the indemnifying person shall be entitled to participate therein, and,
to the extent that it shall wish, to assume the defense thereof, with counsel
reasonably satisfactory to the indemnified person. After notice from the
indemnifying person to such indemnified person of the indemnifying person's
election to assume the defense thereof, the indemnifying person shall not be
liable to such indemnified person for any legal expenses subsequently incurred
by such indemnified person in connection with the defense thereof, provided,
however, that if there exists or shall exist a conflict of interest that would
make it inappropriate in the reasonable judgment of the indemnified person for
the same counsel to represent both the indemnified person and such indemnifying
person or any affiliate or associate thereof, the indemnified person shall be
entitled to retain its own counsel at the expense of such indemnifying person.
(d) If the indemnification provided for in this
Section 7.3 is unavailable to or insufficient to hold harmless an indemnified
party under subsection (a) or (b) above in respect of any losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) referred
to therein, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative fault of the Company on the one hand and the Purchasers
on the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities (or actions in respect thereof), as
well as any other relevant equitable considerations. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or a Purchaser on the other and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Company and the Purchasers agree that it would not be just and equitable if
contribution pursuant to this subsection (d) were determined by pro rata
allocation (even if the Purchasers were treated as one entity for such purpose)
or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The amount
paid or payable by an
11
<PAGE>
indemnified party as a result of the losses, claim, damages, or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include 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 subsection (d), no Purchaser
shall be required to contribute any amount in excess of the amount by which the
net amount received by the Purchaser from the sale of the Shares to which such
loss relates exceeds the amount of any damages which such Purchaser has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Purchasers' obligations in this subsection (d)
to contribute are several in proportion to their respective sales of Shares to
which such loss relates and not joint.
(e) The obligations of the Company and the
Purchasers under this Section 7.3 shall be in addition to any liability which
the Company and the respective Purchasers may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls the
Company or any Purchaser within the meaning of the Act.
SECTION 8
RESTRICTIONS ON TRANSFERABILITY OF SHARES:
COMPLIANCE WITH SECURITIES ACT
8.1 RESTRICTIONS ON TRANSFERABILITY. The Shares shall not be
transferable in the absence of a registration under the Securities Act or an
exemption therefrom or in the absence of compliance with any term of this
Agreement. The Company shall be entitled to give stop transfer instructions to
its transfer agent with respect to the Shares in order to enforce the foregoing
restrictions.
8.2 RESTRICTIVE LEGEND. Each certificate representing Shares
shall bear substantially the following legends (in addition to any legends
required under applicable securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR INVESTMENT PURPOSES ONLY AND HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933. THE SHARES MAY NOT BE SOLD
OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
EXEMPTION THEREFROM.
ADDITIONALLY THE TRANSFER OF THE SHARES REPRESENTED BY THIS
CERTIFICATE IS SUBJECT TO CERTAIN RESTRICTIONS SPECIFIED IN
THE COMMON
12
<PAGE>
STOCK PURCHASE AGREEMENT DATED ____________, 1997
BETWEEN THE COMPANY AND THE ORIGINAL PURCHASER, AND NO
TRANSFER OF SHARES SHALL BE VALID OR EFFECTIVE ABSENT
COMPLIANCE WITH SUCH RESTRICTIONS. ALL SUBSEQUENT HOLDERS OF
THIS CERTIFICATE WILL HAVE AGREED TO BE BOUND BY CERTAIN OF
THE TERMS OF THE AGREEMENT, INCLUDING SECTIONS 7.2 AND 8.3 OF
THE AGREEMENT. COPIES OF THE AGREEMENT MAY BE OBTAINED AT NO
COST BY WRITTEN REQUEST MADE BY THE REGISTERED HOLDER OF THIS
CERTIFICATE TO THE SECRETARY OF THE COMPANY.
The legend contained in this Section 8.2 may be removed from a
certificate either in accordance with Section 8.3 or immediately upon receipt by
the Transfer Agent of a certificate substantially in the form attached hereto as
EXHIBIT D.
8.3 TRANSFER OF SHARES AFTER REGISTRATION. Each Purchaser
hereby covenants with the Company not to make any sale of the Shares except
either (i) in accordance with the Registration Statement, in which case
Purchaser covenants to comply with the requirement of delivering a current
prospectus, or (ii) in accordance with Rule 144, in which case Purchaser
covenants to comply with Rule 144. Purchaser further acknowledges and agrees
that such Shares are not transferable on the books of the Company unless the
certificate submitted to the Company's transfer agent evidencing such Shares is
accompanied by a separate certificate executed by an officer of, or other person
duly authorized by, the Purchaser in the form attached hereto as EXHIBIT E.
8.4 PURCHASER INFORMATION. Each Purchaser covenants that it
will promptly notify the Company of any changes in the information set forth in
the Registration Statement regarding such Purchaser or such Purchaser's "Plan of
Distribution."
SECTION 9
MISCELLANEOUS
9.1 WAIVERS AND AMENDMENTS. With the exception of Sections 7.1
and 7.2 hereof, the terms of this Agreement may be waived or amended with the
written consent of the Company and each Purchaser. With respect to Sections 7.1
and 7.2 hereof, with the written consent of the Company and the record holders
of more than fifty percent (50%) of the Shares then outstanding and held by
Purchasers, the terms of the Agreement may be waived or amended and any such
amendment or waiver shall be binding upon the Company and all holders of Shares.
9.2 PLACEMENT AGENT FEE. Each Purchaser acknowledges that the
Company
13
<PAGE>
intends to pay a fee to Dillon, Reed & Co. Inc. in respect of the sale of the
Shares to the Purchaser. Each of the parties hereto hereby represents that, on
the basis of any actions and agreements by it, there are no other brokers or
finders entitled to compensation in connection with the sale of the Shares to
the Purchasers.
9.3 GOVERNING LAW. This Agreement shall be governed in all
respects by and construed in accordance with the laws of the State of New York
without any regard to conflicts of laws principles.
9.4 SURVIVAL. The representations, warranties, covenants and
agreements made in this Agreement shall survive any investigation made by the
Company or the Purchasers and the Closing.
9.5 SUCCESSORS AND ASSIGNS. The provisions hereof shall inure
to the benefit of, and be binding upon, the successors, assigns, heirs,
executors and administrators of the parties to this Agreement. Notwithstanding
the foregoing, no Purchaser shall assign this Agreement without the prior
written consent of the Company.
9.6 ENTIRE AGREEMENT. This Agreement constitutes the full and
entire understanding and agreement between the parties with regard to the
subjects thereof.
9.7 NOTICES, ETC. All notices and other communications
required or permitted under this Agreement shall be effective upon receipt and
shall be in writing and may be delivered in person, by telecopy, overnight
delivery service or registered or certified United States mail addressed to the
Company or the Purchasers, as the case may be, at their respective addresses set
forth at the beginning of this Agreement or on Exhibit A or at such other
address as the Company or the Purchasers shall have furnished to the other party
in writing. All notices and other communications shall be effective upon the
earlier of actual receipt thereof by the person to whom notice is directed or
(i) in the case of notices and communications sent by personal delivery or
telecopy, one business day after such notice or communication arrives at the
applicable address or was successfully sent to the applicable telecopy number,
(ii) in the case of notices and communications sent by overnight delivery
service, at noon (local time) on the second business day following the day such
notice or communication was sent, and (iii) in the case of notices and
communications sent by United States mail seven days after such notice or
communication shall have been deposited in the United States mail.
9.8 SEVERABILITY OF THIS AGREEMENT. If any provision of this
Agreement shall be judicially determined to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
9.9 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.
14
<PAGE>
9.10 FURTHER ASSURANCES. Each party to this Agreement shall do
and perform or cause to be done and performed all such further acts and things
and shall execute and deliver all such other agreements, certificates,
instruments and documents as the other party hereto may reasonably request in
order to carry out the intent and accomplish the purposes of this Agreement and
the consummation of the transactions contemplated hereby.
9.11 TERMINATION. In the event that the Closing shall not have
occurred on or before sixty (60) days from the date hereof, the Purchasers shall
have the option to terminate this Agreement at the close of business on such
date, and in the event that the Closing shall not have occurred on or before
ninety (90) days from the date hereof, this Agreement shall terminate at the
close of business on such date.
9.12 EXPENSES. The Company and each such Purchaser shall bear
its own expenses incurred on its behalf with respect to this Agreement and the
transactions contemplated hereby, including fees of legal counsel.
9.13 CURRENCY. All references to "dollars" or "$" in this
Agreement shall be deemed to refer to United States dollars.
The foregoing agreement is hereby executed as of the date
first above written.
"COMPANY"
SANO CORPORATION
a Florida corporation
By:_______________________
Title:____________________
15
<PAGE>
"PURCHASERS"
Name:_____________________
By:_______________________
Title:____________________
Name:_____________________
By:_______________________
Title:____________________
Name:_____________________
By:_______________________
Title:____________________
16
<PAGE>
EXHIBIT A
PURCHASER SHARES PURCHASE PRICE
A-1
<PAGE>
EXHIBIT B
INSTRUCTION SHEET FOR PURCHASER
(to be read in conjunction with the entire
Common Stock Purchase Agreement)
A. Complete the following items in the Common Stock Purchase Agreement:
1. Provide the information regarding the Purchaser requested on
the signature page. The Agreement must be executed by an
individual authorized to bind the Purchaser.
2. Exhibit B-1 - Stock Certificate Questionnaire:
Provide the information requested by the Stock Certificate
Questionnaire;
3. Exhibit B-2 - Registration Statement Questionnaire:
Provide the information requested by the Registration
Statement Questionnaire.
4. Exhibit B-3 - Purchaser Certificate:
Provide the information requested by the Certificate for
Individual Purchasers or the Certificate for Corporate,
Partnership, Trust, Foundation and Joint Purchasers, as
applicable.
5. Return the signed Purchase Agreement including the properly
completed Exhibit 4.2 to:
Brobeck, Phleger & Harrison LLP
1633 Broadway, 47th Floor
New York, New York 10019
Telephone: (212) 581-1600
Attn: Nicholas Kontizas, Esq.
B. Instructions regarding the transfer of funds for the purchase of Shares
will be telecopied to the Purchaser by the Placement Agent at a later
date.
C. Upon the resale of the Shares by the Purchaser after the Registration
Statement covering the Shares is effective, as described in the
Purchase Agreement, the Purchaser:
(i) must deliver a current prospectus, and annual and
quarterly reports of the Company to the buyer
(prospectuses, and annual and quarterly reports may
be obtained from the Company at the Purchaser's
request); and
(ii) must send a letter in the form of Exhibit D to the
Company so that the Shares may be properly
transferred.
B-1
<PAGE>
EXHIBIT B-1
SANO CORPORATION
STOCK CERTIFICATE QUESTIONNAIRE
Pursuant to Section 4.3 of the Agreement, please provide us
with the following information:
1. The exact name that the Shares are to be
registered in (this is the name that will appear on
the stock certificate(s)). You may use a
nominee name if appropriate: ---------------
2. The relationship between the Purchaser of the
Shares and the Registered Holder listed in
response to item 1 above: ---------------
3. The mailing address of the Registered Holder
listed in response to item 1 above: ---------------
---------------
---------------
---------------
4. The Tax Identification Number of the Registered
Holder listed in response to item 1 above: ---------------
B-1-1
<PAGE>
EXHIBIT B-2
SANO CORPORATION
REGISTRATION STATEMENT QUESTIONNAIRE
In connection with the preparation of the Registration
Statement, please provide us with the following information regarding the
Purchaser.
1. Please state your organization's name exactly as it should
appear in the Registration Statement:
2. Have you or your organization had any position, office or
other material relationship within the past three years with the Company or its
affiliates other than as disclosed in the prospectus included in the
Registration Statement?
____ Yes ____ No
If yes, please indicate the nature of any such relationship
below:
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
B-2-1
<PAGE>
EXHIBIT B-3
SANO CORPORATION
CERTIFICATE FOR INDIVIDUAL PURCHASERS
If the investor is an individual Purchaser (or married couple)
the Purchaser must complete, date and sign this Certificate.
CERTIFICATE
I certify that the representations and responses below are
true and accurate:
In order for the Company to offer and sell the Shares in
conformance with state and federal securities laws, the following information
must be obtained regarding your investor status. Please initial each category
applicable to you as an investor in the Company.
(1) A natural person whose individual
net worth, or joint net worth with that person's spouse, at the time of his
purchase exceeds $1,000,000;
(2) A natural person who had an
individual income in excess of $200,000 in each of the two most recent years, or
joint income with that person's spouse in excess of $300,000, in each of those
years, and has a reasonable expectation of reaching the same income level in the
current year;
(3) An executive officer or director of
the Company.
Dated:___________ ___________________________________________________
Name(s) of Purchaser
___________________________________________________
Signature
___________________________________________________
Signature
B-3-1
<PAGE>
EXHIBIT B-4
SANO CORPORATION
CERTIFICATE FOR CORPORATE, PARTNERSHIP,
TRUST, FOUNDATION AND JOINT PURCHASERS
If the investor is a corporation, partnership, trust, pension
plan, foundation, joint purchaser (other than a married couple) or other entity,
an authorized officer, partner, or trustee must complete, date and sign this
Certificate.
CERTIFICATE
The undersigned certifies that the representations and
responses below are true and accurate:
(a) The investor has been duly formed and is validly existing
and has full power and authority to invest in the Company. The person signing on
behalf of the undersigned has the authority to execute and deliver the Common
Stock Purchase Agreement on behalf of the Purchaser and to take other actions
with respect thereto.
(b) Indicate the form of entity of the undersigned:
___________ Limited Partnership
___________ General Partnership
___________ Corporation
___________ Revocable Trust (identify each grantor and
indicate under what circumstances the trust
is revocable by the grantor): _____________
___________________________________________
___________________________________________
___________________________________________
_____________. (Continue on a separate piece
of paper, if necessary.)
___________ Other type of Trust (indicate type of trust
and, for trusts other than pension trusts,
name the grantors and beneficiaries):_______
____________________________________________
____________________________________________
B-4-1
<PAGE>
_________. (Continue on a separate piece
of paper, if necessary.)
___________ Other form of organization (indicate form
of organization (___________________________
______________________).
(c) Indicate the approximate date the undersigned entity was
formed:_______________________________.
(d) In order for the Company to offer and sell the Shares in
conformance with state and federal securities laws, the following information
must be obtained regarding your investor status. Please initial each category
applicable to you as an investor in the Company.
1. A bank as defined in Section 3(a)(2)
of the Securities Act, or any savings and loan
association or other institution as defined in
Section 3(a)(5)(A) of the Securities Act whether
acting in its individual or fiduciary capacity;
2. A broker or dealer registered
pursuant to Section 15 of the Securities Exchange
Act of 1934;
3. An insurance company as defined in
Section 2(13) of the Securities Act;
4. An investment company registered
under the Investment Company Act of 1940 or a
business development company as defined in Section
2(a)(48) of that Act;
5. A Small Business Investment Company
licensed by the U.S. Small Business Administration
under Section 301(c) or (d) of the Small Business
Investment Act of 1958;
6. A plan established and maintained
by a state, its political subdivisions, or any
agency or instrumentality of a state or its political
subdivisions, for the benefit of its employees, if
such plan has total assets in excess of $5,000,000;
7. An employee benefit plan within the
meaning of the Employee Retirement Income Security
Act of 1974, if the investment decision is made by a
plan fiduciary, as defined in Section 3(21) of such
Act, which is either a bank, savings and loan
association, insurance company, or registered
investment advisor, or if the employee benefit plan
has total assets in excess of $5,000,000 or, if a
self-directed plan, with investment decisions made
solely by persons that are accredited investors;
B-4-2
<PAGE>
8. A private business development company
as defined in Section 202(a)(22) of the Investment
Advisers Act of 1940;
9. An organization described in Section
501(c)(3) of the Internal Revenue Code, corporation,
Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of
acquiring the Shares, with total assets in excess of
$5,000,000;
10. A trust, with total assets in excess of
$5,000,000, not formed for the specific purpose of
acquiring the Shares, whose purchase is directed by a
sophisticated person as described in Rule
506(b)(2)(ii) of the Exchange Act;
11. An entity in which all of the equity
owners qualify under any of the above subparagraphs.
If the undersigned belongs to this investor category
only, list the equity owners of the undersigned, and
the investor category which each such equity owner
satisfies:
____________________________________________________
____________________________________________________
____________________________________________________
____________________________________________________.
(Continue on a separate piece of paper, if
necessary.)
Dated: _________________________, 19__
___________________________________________________
Name of investor
___________________________________________________
Signature and title of authorized officer, partner or trustee
B-4-3
<PAGE>
EXHIBIT C
OPINION OF COMPANY COUNSEL
(a) the Company is a corporation validly
existing and in good standing under the laws of the jurisdiction of its
incorporation;
(b) the Company has corporate power and
authority to enter into this Agreement and to issue, sell and deliver to the
Purchasers the Shares to be issued and sold by it hereunder.
(c) This Agreement has been duly authorized by
all necessary corporate action on the part of the Company and has been duly
executed and delivered by the Company.
(d) The performance by the Company of this
Agreement and the consummation by the Company of the transactions herein
contemplated will not (i) contravene any provision of the Company's charter or
bylaws or of any applicable statute, rule or regulation, or (ii) to the
knowledge of counsel, result in the material breach or violation of any of the
terms and provisions, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement, bond, debenture, note agreement or other evidence
of indebtedness, or any lease, contract or other agreement or instrument to
which the Company is a party or by which its properties are bound, or, to such
counsel's knowledge, any order, writ or decree of any court or governmental
agency or body having jurisdiction over the Company, or over any of its
properties or operations; provided however, that no opinion need be rendered
concerning state or foreign securities or Blue Sky laws.
(e) This Agreement constitutes a legal, valid
and binding obligation of the Company, enforceable against the Company according
to its terms, except as rights to indemnity and contribution may be limited by
applicable law and except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors'
rights generally or by general equitable principles; and
(f) the Shares to be issued by the Company
pursuant to the terms of this Agreement will be, upon issuance and delivery
against payment therefor in accordance with the terms hereof and thereof, duly
authorized and validly issued and fully paid and nonassessable, and the
stockholders of the Company have no preemptive or other rights to purchase any
of the Shares.
C-1
<PAGE>
EXHIBIT D
PURCHASER'S LEGEND REMOVAL CERTIFICATE
To: American Stock Transfer & Trust Company
40 Wall Street
New York, New York 10005
Attention: Isaac Kagan
The undersigned, the Purchaser or an officer of, or other
person duly authorized by the Purchaser, hereby certifies that ________________
institution was the (fill in name of Purchaser)
Purchaser of the Shares evidenced by the attached certificate, and in order to
induce the Company to remove the legends contained on the certificates
representing the Common Stock purchased by such Purchaser, Purchaser will sell
such Shares (i) in accordance with the registration statement, file number
___________in which case the Purchaser will satisfy the requirement of
delivering a current prospectus in connection with such sale, or (ii) in
accordance with Rule 144 under the Securities Act of 1933 ("Rule 144"), in which
case the Purchaser certifies that it has complied with or will comply with the
requirements of Rule 144.
Print or type:
Name of Purchaser: __________________________________________
Name of Individual
representing
Purchaser (if an
Institution): __________________________________________
Title of Individual
representing
Purchaser (if an
Institution): __________________________________________
Signature by:
Purchaser or
Individual representing
Purchaser: __________________________________________
D-1
<PAGE>
EXHIBIT E
PURCHASER'S CERTIFICATE OF SUBSEQUENT SALE
To: American Stock Transfer & Trust Company
40 Wall Street
New York, New York 10005
Attention: Isaac Kagan
The undersigned, the Purchaser or an officer of, or other
person duly authorized by the Purchaser, hereby certifies that
_______________________________ institution was the
(fill in name of Purchaser)
Purchaser of the Shares evidenced by the attached certificate, and as such,
proposes to transfer such Shares on or about ________________________________
either (i) in accordance with the (date)
registration statement, file number _________, in which case the Purchaser
certifies that the requirement of delivering a current prospectus has been
complied with or will be complied with in connection with such sale, or (ii) in
accordance with Rule 144 under the Securities Act of 1933 ("Rule 144"), in which
case the Purchaser certifies that it has complied with or will comply with the
requirements of Rule 144.
Print or type:
Name of Purchaser: __________________________________________
Name of Individual
representing
Purchaser (if an
Institution): __________________________________________
Title of Individual
representing
Purchaser (if an
Institution): __________________________________________
Signature by:
Purchaser or
Individual representing
Purchaser: __________________________________________
E-1
EXHIBIT 5.1
GREENBERG TRAURIG
[LETTERHEAD]
July 11, 1997
Sano Corporation
3250 Commerce Parkway
Miramar, Florida 33025
Re: REGISTRATION STATEMENT ON FORM S-3
Ladies and Gentlemen:
We have acted as counsel to Sano Corporation, a Florida corporation
(the "Company"), in connection with the registration statement on Form S-3 (the
"Registration Statement") being filed by the Company under the Securities Act of
1933, as amended, with respect to 1,200,000 shares (the "Shares") of the
Company's common stock, par value $.01 per share (the "Common Stock"), which may
be sold from time to time by the certain shareholders of the Company (the
"Selling Shareholders") named therein. All Shares to be sold by the Selling
Shareholders are issued and outstanding.
In connection with the Registration Statement, we have examined,
considered and relied upon the following documents (collectively, the
"Documents"): the Registration Statement; the Common Stock Purchase Agreement,
dated as of July 1, 1997, between the Company and the Selling Shareholders; the
Placement Agent Agreement, dated as of July 1, 1997, between the Company and
Dillon Read & Co. Inc.; the Private Placement Offering Memorandum, dated as of
June 26, 1997; the Company's Amended and Restated Articles of Incorporation and
Amended and Restated Bylaws and corporate minute book; a certificate of good
standing of the Company issued as of July 9, 1997, by the Secretary of State of
the State of Florida; and such matters of law as we
<PAGE>
Sano Corporation
July 11, 1997
Page 2
have considered necessary or appropriate for the expression of the opinions
contained herein.
In rendering the opinions set forth below, we have assumed without
investigation the genuineness of all signatures and the authenticity of all
documents submitted to us as originals, the conformity to authentic original
documents of all documents submitted to us as copies, and the veracity of the
Documents. As to questions of fact material to the opinions expressed herein, we
have relied upon the representations and warranties of the Company and the
Selling Shareholder made in the Documents.
Based solely upon and subject to the Documents, and subject to the
qualifications set forth below, we are of the opinion that the Shares have been
duly authorized and are validly issued, fully paid and non-assessable.
Although we have acted as counsel to the Company in connection with
certain other matters, our engagement is limited to matters about which we have
been consulted. Consequently, there exist matters of a legal nature involving
the Company in which we have not been consulted and have not represented the
Company. This opinion letter is limited to the matters stated herein and no
opinions may be implied or inferred beyond the matters expressly stated herein.
The opinions expressed herein are given as of this date, and we assume no
obligation to update or supplement our opinions to reflect any facts or
circumstances that may come to our attention or any change in law that may occur
or become effective at a later date.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the caption "Legal
Matters" in the prospectus contained in the Registration Statement.
Marc Watson, Chairman of the Board and a director of the Company is of
counsel to this firm.
Very truly yours,
GREENBERG, TRAURIG, HOFFMAN,
LIPOFF, ROSEN & QUENTEL, P.A.
By: /s/ GARY M. EPSTEIN
----------------------------
Gary M. Epstein
EXHIBIT 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the
incorporation by reference in this registration statement of our report dated
january 30, 1997 included in the Company's Form 10-K for the year ended December
31, 1996 and to all references to our firm included in this registration
statement.
ARTHUR ANDERSEN LLP
Miami, Florida,
July 9, 1997
