REGISTRATION RIGHTS AGREEMENT
This
Registration Rights Agreement (this “
Agreement ”)
is made and entered into as of September 26, 2007, by and among
Duska Therapeutics, Inc., a Nevada corporation (the “
Company ”),
and the purchasers listed on
Schedule I hereto
(the “
Purchasers ”).
This
Agreement is being entered into pursuant to the Note and
Warrant Purchase Agreement
dated
as of the date hereof among the Company and the Purchasers (the
“
Purchase Agreement ”).
The
Company and the Purchasers hereby agree as
follows:
1.
Definitions .
Capitalized
terms used and not otherwise defined herein shall have the
meanings given such terms in the Purchase Agreement. As used
in this Agreement, the following terms shall have the
following meanings:
“
Advice ”
shall have meaning set forth in Section 3(m).
“
Affiliate ”
means, with respect to any Person, any other Person that directly
or indirectly controls or is controlled by or under common control
with such Person. For the purposes of this definition,
“
control ,”
when used with respect to any Person, means the possession, direct
or indirect, of the power to direct or cause the direction of the
management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise; and the
terms of “
affiliated ,”
“
controlling ”
and “
controlled ”
have meanings correlative to the foregoing.
“
Board ”
shall have meaning set forth in Section 3(n).
“
Business Day ”
means any day except Saturday, Sunday and any day which shall be a
legal holiday or a day on which banking institutions in the state
of New York generally are authorized or required by law or other
government actions to close.
“
Closing Date ”
means the date of the closing of the purchase and sale of the Notes
and the Warrants pursuant to the Purchase Agreement.
“
Commission ”
means the Securities and Exchange Commission.
“
Common Stock ”
means the Company’s Common Stock, par value $.001 per
share.
“
Effectiveness Date ”
means with respect to the Registration Statement the earlier of the
one hundred and eightieth (180
th )
day following the Closing Date or
the date which is within three (3) Business Days of the date on
which the Commission informs the Company that (i) the Commission
will not review the Registration Statement or (ii)
the Company may request the acceleration of the effectiveness of
the Registration Statement and the Company makes such
request.
“
Effectiveness Period ”
shall have the meaning set forth in Section 2(a).
“
Event ”
shall have the meaning set forth in Section 7(d).
“
Event Date ”
shall have the meaning set forth in Section 7(d).
“
Exchange Act ”
means the Securities Exchange Act of 1934, as amended.
“
Filing Date ”
means the ninetieth (90
th )
day following the Closing Date.
“
Holder ”
or “
Holders ”
means the holder or holders, as the case may be, from time to time
of Registrable Securities, including the Purchasers and their
successors and assigns.
“
Indemnified Party ”
shall have the meaning set forth in Section 5(c).
“
Indemnifying Party ”
shall have the meaning set forth in Section 5(c).
“
Losses ”
shall have the meaning set forth in Section
5(a).
“
Person ”
means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited
liability company, joint stock company, government (or an agency or
political subdivision thereof) or other entity of any
kind.
“
Proceeding ”
means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or
threatened.
“
Prospectus ”
means the prospectus included in the Registration Statement
(including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of
an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented
by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities covered by
the Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments,
and all material incorporated by reference in such
Prospectus.
“
Registrable Securities ”
means (A) one hundred percent (100%) of (i) the shares of Common
Stock issuable upon conversion of the Notes
plus
(ii) the shares of Common Stock issuable upon payment of interest
on the Notes through the maturity thereof and (B) the shares of
Common Stock issuable upon exercise of the Warrants.
“
Registration Statement ”
means the registration statements and any additional registration
statements contemplated by Section 2, including (in each case) the
Prospectus, amendments and supplements to such registration
statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by
reference in such registration statement.
“
Rule 144 ”
means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or
any similar rule or regulation hereafter adopted by the Commission
having substantially the same effect as such Rule.
“
Rule 158 ”
means Rule 158 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or
any similar rule or regulation hereafter adopted by the Commission
having substantially the same effect as such Rule.
“
Rule 415 ”
means Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or
any similar rule or regulation hereafter adopted by the Commission
having substantially the same effect as such Rule.
“
Rule 424 ”
means Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or
any similar rule or regulation hereafter adopted by the Commission
having substantially the same effect as such Rule.
“
Securities Act ”
means the Securities Act of 1933, as amended.
“
Warrants ”
means the warrants to purchase shares of Common Stock issued to the
Holders pursuant to the Purchase Agreement.
2.
Resale Registration.
(a)
On
or prior to the Filing Date the Company shall prepare and file
with the Commission a “resale” Registration
Statement providing for the resale of all Registrable
Securities for an offering to be made on a continuous basis
pursuant to Rule 415. The Registration Statement shall be on
Form SB-2 (except if the Company is not then eligible to
register for resale the Registrable Securities on Form SB-2,
in which case such registration shall be on another
appropriate form in accordance with the Securities Act and the
rules promulgated thereunder). The Company shall (i) not
permit any securities other than the Registrable Securities
and the securities to be listed on
Schedule II hereto
to be included in the Registration Statement and (ii) subject to
Section 2(b), use its best efforts to cause the Registration
Statement to be declared effective under the Securities Act as
promptly as possible after the filing thereof, but in any event
prior to the Effectiveness Date, and to keep such Registration
Statement continuously effective under the Securities Act until
such date as is the earlier of (x) the date when all Registrable
Securities covered by such Registration Statement have been sold or
(y) the date on which the Registrable Securities may be sold
without any restriction pursuant to Rule 144(k) as determined by
the counsel to the Company pursuant to a written opinion letter,
addressed to the Company’s transfer agent to such effect (the
“
Effectiveness Period ”).
If at any time and for any reason, an additional Registration
Statement is required to be filed because at such time the actual
number of shares of Common Stock into which the Notes and the
Warrants are exercisable or convertible, the Company shall have
thirty-five (35) days to file such additional Registration
Statement, and the Company shall use its best efforts to cause such
additional Registration Statement to be declared effective by the
Commission as soon as possible, but in no event later than ninety
(90) days after filing.
(b)
Notwithstanding
anything to the contrary set forth herein, in the event the
Commission does not permit the Company to register all of the
Registrable Securities in the Registration Statement because
of the Commission’s application of Rule 415 as evidenced
in a comment letter from the Commission with respect to the
Registration Statement, the Company shall register in the
Registration Statement such number of Registrable Securities
as is permitted by the Commission, provided, however, that the
number of Registrable Securities to be included in such
Registration Statement or any subsequent registration
statement shall be determined in the following order: (i)
first, the Registrable Securities issuable upon conversion of
the Notes; (ii) second, the Registrable Securities issuable
upon exercise of the Warrants ; (iii) third, the Registrable
Securities issuable as payment of interest on the Notes (in
each case, pro rata among the Purchasers based on the amount
of Registrable Securities held by such Purchasers) and (iv)
any other securities required to be included in the
Registration Statement. In the event the Commission does not
permit the Company to register all of the Registrable
Securities in the initial Registration Statement, the Company
shall use its best efforts to file subsequent Registration
Statements to register the Registrable Securities that were
not registered in the initial Registration Statement as
promptly as possible and in a manner permitted by the
Commission. For purposes of a subsequent filing under this
paragraph, “Filing Date” means with respect to
each subsequent Registration Statement filed pursuant hereto,
as promptly as practicable, but in no event more than 15 days
after the later of (i) sixty (60) days following the sale of
substantially all of the Registrable Securities, determined,
to the extent permitted by the Commission, on a per holder
(and its affiliates) basis, included in the initial
Registration Statement or any subsequent Registration
Statement and (ii) six (6) months following the effective date
of the initial Registration Statement or any subsequent
Registration Statement, as applicable, or such earlier date as
permitted by the Commission. For purposes of a subsequent
filing under this paragraph, “Effectiveness Date”
means with respect to each subsequent Registration Statement
filed pursuant hereto, the earlier of (A) the ninetieth (90th)
day following the filing date of such Registration Statement
or (B) the date that is three (3) Business Days after the date
on which the Commission informs the Company (i) that the
Commission will not review such Registration Statement or (ii)
that the Company may request the acceleration of the
effectiveness of such Registration Statement and the Company
makes such request; provided that, if the Effectiveness Date
falls on a Saturday, Sunday or any other day which shall be a
legal holiday or a day on which the Commission is authorized
or required by law or other government actions to close, the
Effectiveness Date shall be the following Business Day. Such
subsequent Registration Statement shall be subject to the
terms of this Agreement as a Registration Statement under
Section 2 hereof.
3.
Registration Procedures.
In
connection with the Company’s registration obligations
hereunder, the Company shall:
(a)
Prepare
and file with the Commission on or prior to the Filing Date, a
Registration Statement on Form SB-2 (or if the Company is not
then eligible to register for resale the Registrable
Securities on Form SB-2 such registration shall be on another
appropriate form in accordance with the Securities Act and the
rules promulgated thereunder) in accordance with the method or
methods of distribution thereof as specified by the Holders
(except if otherwise directed by the Holders), and use its
reasonable best efforts to cause the Registration Statement to
become effective and remain effective as provided
herein;
provided ,
however ,
that not less than five (5) Business Days prior to the filing of
the Registration Statement or any related Prospectus or any
amendment or supplement thereto (including any document that would
be incorporated therein by reference), the Company shall (i)
furnish to the Holders copies of all such documents proposed to be
filed, which documents (other than those incorporated by reference)
will be subject to the review of such Holders, and (ii) cause its
officers and directors, counsel and independent certified public
accountants to respond to such inquiries as shall be necessary, in
the reasonable opinion of the Holders, to conduct a reasonable
investigation within the meaning of the Securities Act. The Company
shall not file the Registration Statement or any such Prospectus or
any amendments or supplements thereto to which the Holders of a
majority of the Registrable Securities shall reasonably object in
writing within three (3) Business Days of their receipt
thereof.
(b)
(i)
Prepare and file with the Commission such amendments,
including post-effective amendments, to the Registration
Statement as may be necessary to keep the Registration
Statement continuously effective as to the applicable
Registrable Securities for the Effectiveness Period and
prepare and file with the Commission such additional
Registration Statements as necessary in order to register for
resale under the Securities Act all of the Registrable
Securities; (ii) cause the related Prospectus to be amended or
supplemented by any required Prospectus supplement, and as so
supplemented or amended to be filed pursuant to Rule 424 (or
any similar provisions then in force) promulgated under the
Securities Act; (iii) respond as promptly as possible, but in
no event later than ten (10) Business Days, to any comments
received from the Commission with respect to the Registration
Statement or any amendment thereto and as promptly as possible
provide the Holders true and complete copies of all
correspondence from and to the Commission relating to the
Registration Statement; and (iv) comply in all material
respects with the provisions of the Securities Act and the
Exchange Act with respect to the disposition of all
Registrable Securities covered by the Registration Statement
during the applicable period in accordance with the intended
methods of disposition by the Holders thereof set forth in the
Registration Statement as so amended or in such Prospectus as
so supplemented.
(c)
Notify
the Holders of Registrable Securities to be sold as promptly
as possible (and, in the case of (i)(A) below, not less than
five (5) days prior to such filing) and (if requested by any
such Person) confirm such notice in writing no later than one
(1) Business Day following the day (i)(A) when a Prospectus or
any Prospectus supplement or post-effective amendment to the
Registration Statement is filed; (B) when the Commission
notifies the Company whether there will be a
“review” of such Registration Statement and
whenever the Commission comments in writing on such
Registration Statement and (C) with respect to the
Registration Statement or any post-effective amendment, when
the same has become effective; (ii) of any request by the
Commission or any other Federal or state governmental
authority for amendments or supplements to the Registration
Statement or Prospectus or for additional information; (iii)
of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement covering any
or all of the Registrable Securities or the initiation of any
Proceedings for that purpose; (iv) if at any time any of the
representations and warranties of the Company contained in any
agreement contemplated hereby ceases to be true and correct in
all material respects; (v) of the receipt by the Company of
any notification with respect to the suspension of the
qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction, or the
initiation or threatening of any Proceeding for such purpose;
and (vi) of the occurrence of any event that makes any
statement made in the Registration Statement or Prospectus or
any document incorporated or deemed to be incorporated therein
by reference untrue in any material respect or that requires
any revisions to the Registration Statement, Prospectus or
other documents so that, in the case of the Registration
Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not
misleading.
(d)
Use
its reasonable best efforts to avoid the issuance of, or, if
issued, obtain the withdrawal of, (i) any order suspending the
effectiveness of the Registration Statement or (ii) any
suspension of the qualification (or exemption from
qualification) of any of the Registrable
Securities
for sale in any jurisdiction, at the earliest practicable
moment.
(e)
If
requested by the Holders of a majority in interest of the
Registrable Securities, (i) promptly incorporate in a
Prospectus supplement or post-effective amendment to the
Registration Statement such information as the Company
reasonably agrees should be included therein and (ii) make all
required filings of such Prospectus supplement or such
post-effective amendment as soon as practicable after the
Company has received notification of the matters to be
incorporated in such Prospectus supplement or post-effective
amendment.
(f)
Furnish
to each Holder, without charge, at least one conformed copy of
each Registration Statement and each amendment thereto,
including financial statements and schedules, all documents
incorporated or deemed to be incorporated therein by
reference, and all exhibits to the extent requested by such
Person (including those previously furnished or incorporated
by reference) promptly after the filing of such documents with
the Commission.
(g)
Promptly
deliver to each Holder, without charge, as many copies of the
Prospectus or Prospectuses (including each form of prospectus)
and each amendment or supplement thereto as such Persons may
reasonably request; and the Company hereby consents to the use
of such Prospectus and each amendment or supplement thereto by
each of the selling Holders in connection with the offering
and sale of the Registrable Securities covered by such
Prospectus and any amendment or supplement
thereto.
(h)
Prior
to any public offering of Registrable Securities, use its
reasonable best efforts to register or qualify or cooperate
with the selling Holders in connection with the registration
or qualification (or exemption from such registration or
qualification) of such Registrable Securities for offer and
sale under the securities or Blue Sky laws of such
jurisdictions within the United States as any Holder requests
in writing, to keep each such registration or qualification
(or exemption therefrom) effective during the Effectiveness
Period and to do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of
the Registrable Securities covered by a Registration
Statement;
provided ,
however ,
that the Company shall not be required to qualify generally to do
business in any jurisdiction where it is not then so qualified or
to take any action that would subject it to general service of
process in any such jurisdiction where it is not then so subject or
subject the Company to any material tax in any such jurisdiction
where it is not then so subject.
(i)
Cooperate
with the Holders to facilitate the timely preparation and
delivery of certificates representing Registrable Securities
to be sold pursuant to a Registration Statement, which
certificates shall be free of all restrictive legends
(provided that the issuance of such unlegended certificates is
in compliance with applicable securities laws), and to enable
such Registrable Securities to be in such denominations and
registered in such names as any Holder may request in writing
at least two (2) Business Days prior to any sale of
Registrable Securities.
(j)
Upon
the occurrence of any event contemplated by Section 3(c)(vi),
as promptly as possible, prepare a supplement or amendment,
including a post-effective amendment, to the Registration
Statement or a supplement to the related Prospectus or any
document incorporated or deemed to be incorporated therein by
reference, and file any other required document so that, as
thereafter delivered, neither the Registration Statement nor
such Prospectus will contain an untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading.
(k)
Use
its reasonable best efforts to cause all Registrable
Securities relating to the Registration Statement to be
listed, traded or quoted, as the case may be, on the OTC
Bulletin Board
or
any other securities exchange, quotation system or market, if any,
on which similar securities issued by the Company are then listed,
traded or quoted as and when required pursuant to the Purchase
Agreement.
(l)
Comply
in all material respects with all applicable rules and
regulations of the Commission and make generally available to
its security holders earning statements satisfying the
provisions of Section 11(a) of the Securities Act and Rule 158
not later than 45 days after the end of any 3-month period (or
75 days after the end of any 12-month period if such period is
a fiscal year) commencing on the first day of the first fiscal
quarter of the Company after the effective date of the
Registration Statement, which statement shall conform to the
requirements of Rule 158.
(m)
The
Company may require each selling Holder to furnish to the
Company information regarding such Holder and the distribution
of such Registrable Securities as is required by law to be
disclosed in the Registration Statement, and the Company may
exclude from such registration the Registrable Securities of
any such Holder who unreasonably fails to furnish such
information within a reasonable time after receiving such
request.
If
the Registration Statement refers to any Holder by name or
otherwise as the holder of any securities of the Company, then
such Holder shall have the right to require (if such reference
to such Holder by name or otherwise is not required by the
Securities Act or any similar federal statute then in force)
the deletion of the reference to such Holder in any amendment
or supplement to the Registration Statement filed or prepared
subsequent to the time that such reference ceases to be
required.
Each
Holder covenants and agrees that (i) it will not sell any
Registrable Securities under the Registration Statement until
it has received copies of the Prospectus as then amended or
supplemented as contemplated in Section 3(g) and notice from
the Company that such Registration Statement and any
post-effective amendments thereto have become effective as
contemplated by Section 3(c) and (ii) it and its officers,
directors or Affiliates, if any, will comply with the
prospectus delivery requirements of the Securities Act as
applicable to them in connection with sales of Registrable
Securities pursuant to the Registration
Statement.
Each
Holder agrees by its acquisition of such Registrable
Securities that, upon receipt of a notice from the Company of
the occurrence of any event of the kind described in Section
3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v), 3(c)(vi) or 3(n), such
Holder will forthwith discontinue disposition of such
Registrable Securities under the Registration Statement until
such Holder’s receipt of the copies of the supplemented
Prospectus and/or amended Registration Statement contemplated
by Section 3(j), or until it is advised in writing (the
“
Advice ”)
by the Company that the use of the applicable Prospectus may be
resumed, and, in either case, has received copies of any additional
or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus or Registration
Statement.
(n)
If
(i) there is material no
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