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Exhibit
10.1
NEITHER THIS NOTE NOR ANY OF THE
SECURITIES ISSUABLE HEREUNDER HAS BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY
NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT
WITH RESPECT TO THE SECURITIES, OR DELIVERY TO THE COMPANY OF AN
OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE
COMPANY THAT SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION
IS IN COMPLIANCE WITH THE ACT OR UNLESS SOLD IN FULL COMPLIANCE
WITH RULE 144 UNDER THE ACT.
CONVERTIBLE PROMISSORY
NOTE
Duska Therapeutics, Inc. a
Nevada Corporation whose address is Two Bala Plaza, Suite 300, Bala
Cynwyd, Pennsylvania 19004 (the “ Company ”),
for value received, hereby promises to pay to ICON Capital
Partners, L.P. or their permitted assignees (each, a “
Holder ” and together, the “ Holders
”), the principal amount of One Hundred Thousand Dollars
($100,000) in accordance with the terms hereof.
1. Maturity . Except
to the extent converted into Conversion Units (as defined below)
pursuant to Section 3 hereof, the principal amount of this
Promissory Note (this “ Note ”) shall be due and
payable on November 24, 2007 (the “ Maturity Date
”).
2. Payments . Except
in the event the Holders elect to convert the principal amount
hereof pursuant to Section 3 hereof into Conversion Units
pursuant to Section 3 hereof, those amounts shall be paid on
the Maturity Date. All payments of principal and other amounts
payable on or in respect of this Note or the indebtedness evidenced
hereby shall be made to the Holders in U.S. dollars, by wire
transfer, certified check or Company check. This Note may be
prepaid by the Company, at any time, in whole or in part, from time
to time, without penalty, at the principal amount hereunder.
Payment of this Note shall not be secured by any of the
Company’s assets.
3. Conversion . At the
option of the Holders, upon the consummation of any equity or
equity linked financing of the Company of at least $5,000,000 (the
“ Offering ”), this Note shall be automatically
converted into the units of common stock and warrants (the “
Conversion Units ”) being offered by the Company
pursuant to the Offering (the “ Exchange ”). The
number of Conversion Units to be issued upon conversion shall equal
the principal being converted divided by the price per Conversion
Unit in the Offering. The common stock and warrants comprising the
Conversion Units shall have the same terms as those offered in the
Offering. By electing to convert all or a portion of the principal
balance of this Note into Conversion Units, each Holder shall be
deemed to have irrevocably subscribed for Conversion Units. At any
time prior to the Exchange, the principal amount of this Note can
be fully converted into shares of the Company’s common stock,
$.001 par value per share, by dividing the principal amount under
the Note by $0.40, subject to adjustments as provided
herein.
4. Warrant Coverage .
Each Holder will receive, in the form attached hereto as Exhibit
A , a warrant to purchase (the “ Warrant ”),
in accordance with such Holder’s pro rata share, fully paid
and nonassessable shares of common stock of the Company at a price
equal to $0.40 (the “ Exercise Price ”) if
exercised before August 24, 2012.
5. Registration Rights
. In the event that the Company has not repaid this Note by the
Maturity Date, the Company shall prepare promptly and file with the
Securities and Exchange Commission (the “ SEC ”)
as soon as practicable, but in no event later than the thirtieth
(30 th
) day
following the Maturity Date
(the “ Filing Date ”), a Registration Statement
(the “ Registration Statement ”) on Form SB-2
(or, if Form SB-2 is not then available, on such form of
Registration Statement as is then available) to effect a
registration of all of the securities underlying the Warrants. The
Company shall use its best efforts to cause the Registration
Statement required to be filed pursuant to this Section to become
effective as soon as practicable, but in no event later than the
ninetieth (90 th ) day (or 120 days if such Registration Statement is
reviewed by the SEC) following the Filing Date (the “
Registration Deadline ”). If the Registration
Statement has not been declared effective by the Registration
Deadline, the Company shall pay to the Holders an amount equal to
1.5% of the amount outstanding hereunder for each 30 day period
beyond the Registration Deadline, provided that no more than
$20,000 in such fees shall be payable .
6. Right of First
Refusal . At any time while this Note remains outstanding, but
in no event later than the date that is six months after the date
hereof, subject to the terms and conditions specified in this
Section 7, the Holders shall have a right to participate with
respect to the issuance or possible issuance of any equity or
equity-linked securities or debt which is convertible into equity
or in which there is an equity component (as the case may be,
“ Additional Securities ”) on the same terms and
conditions as offered by the Company to the other purchasers of
such Additional Securities. Each time the Company proposes to offer
any Additional Securities, the Company shall make an offering of
such Additional Securities to each Holder in accordance with the
following provisions:
(1) At least 10 days prior to
the issuance of any Additional Securities, the Company shall
deliver a notice (the “ Issuance Notice ”) to
each Holder stating (a) its bona fide intention to offer such
Additional Securities, (b) the number of such Additional
Securities to be offered, (c) the price and terms, if any,
upon which it proposes to offer such Additional Securities, and
(d) the anticipated closing date of the sale of such
Additional Securities.
(2) By written notification
received by the Company, within 10 business days after giving of
the Issuance Notice, each Holder may elect to purchase or obtain,
at the price and on the terms specified in the Issuance Notice, up
to that number of such Additional Securities which equals such
Holder’s Pro Rata Amount (as defined below). The “
Pro Rata Amount ” for such Holder shall equal that
portion of the Additional Securities that the Company proposes to
offer which equals the proportion that the number of shares of
common stock that such Holder owns or has the right to acquire
bears to the total number of shares of common stock then
outstanding (assuming in each case the full conversion, exercise or
exchange of all Convertible Securities and Purchase Rights then
outstanding).
7. Covenants of the
Company .
(a) The Company shall not,
without the prior written consent of a majority in interest of the
Holders (such consent not to be unreasonably withheld), incur or
suffer to exist any new indebtedness for borrowed money that ranks
senior to this Note.
(b) The Company shall not,
without the prior approval of the Holders, create any sub-committee
of the Board of Directors that is permitted to take action on
behalf of the Company without the prior authorization and approval
of the Board of Directors.
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(c) Within 4 days following
the execution of and delivery of this Note, the Company shall file
with the Securities and Exchange Commission a statement on form 8-K
(including the transaction documents of this financing as exhibits
thereto) disclosing the details of this transaction.
8. Board
Representation . Upon
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