GUARANTY
GUARANTY
(the
“Guaranty”), dated as of September 26, 2007, by
Duska
Scientific Co., a Delaware corporation with an address of Duska Therapeutics,
Inc., Xxx Xxxx Xxxxx, Xxxxx 000, Xxxx Xxxxxx, XX (the
“Guarantor”), in favor of the Purchasers identified in the Purchase Agreement
(as defined below) (collectively, “Secured Parties”).
WHEREAS,
the Guarantor is a subsidiary or affiliate of Duska Therapeutics,
Inc.
(the
“Borrower”);
and
WHEREAS,
in accordance with a certain senior secured convertible note, dated as of the
date hereof (the “Notes”), executed by the Borrower, and certain related
agreements between the Borrower and the Secured Parties (collectively, as
amended, restated, or extended from time to time, the “Loan Documents”), the
Secured Parties have agreed to loan to the Borrower up to Six Million Five
Hundred Thousand Dollars ($6,500,000) (the “Loan”); and
WHEREAS,
the Secured Parties’ willingness to extend the loan is conditioned upon the
Guarantor executing and delivering this Guaranty; and
WHEREAS,
the aforesaid Loan will be beneficial to the Guarantor inasmuch as the proceeds
of the Loan to the Borrower will indirectly benefit the Guarantor;
NOW,
THEREFORE, in order to induce the Secured Parties to make the Loan to the
Borrower pursuant to the Loan Documents, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged
by
the Guarantor, the Guarantor hereby agrees as follows:
1.
Guaranty
of Payment and Performance. The
Guarantor hereby guarantees to the Secured Parties the full and punctual payment
when due (whether at maturity, by acceleration or otherwise), and the
performance, of all liabilities, agreements and other obligations of the
Borrower to the Secured Parties, whether direct or indirect, absolute or
contingent, due or to become due, secured or unsecured, now existing or
hereafter arising or acquired (whether by way of discount, letter of credit,
lease, loan, overdraft or otherwise), including without limitation all
obligations under the Note (collectively, the “Obligations”). This Guaranty is
an absolute, unconditional and continuing guaranty of the full and punctual
payment and performance of the Obligations and not of their collectibility
only
and is in no way conditioned upon any requirement that the Secured Parties
first
attempt to collect any of the Obligations from the Borrower or resort to any
security or other means of obtaining their payment. Should the Borrower default
in the payment or performance of any of the Obligations, the obligations of
the
Guarantor hereunder shall become immediately due and payable to the Secured
Parties, without demand or notice of any nature, all of which are expressly
waived by the Guarantor. Payments by the Guarantor hereunder may be required
by
the Secured Parties on any number of occasions.
2.
Guarantor’s
Agreement to Pay. The
Guarantor further agrees, as the principal obligor and not as a guarantor only,
to pay to the Secured Parties, on demand, all reasonable costs and expenses
(including court costs and reasonable legal expenses) incurred or expended
by
the Secured Parties in connection with enforcement of this Guaranty, together
with interest on amounts recoverable under this Guaranty from the time such
amounts become due under this Guaranty until payment, at the rate per annum
equal to the default rate set forth in the Note; provided that if such interest
exceeds the maximum amount permitted to be paid under applicable law, then
such
interest shall be reduced to such maximum permitted amount.
3. Unlimited
Guaranty. The
liability of the Guarantor hereunder shall be unlimited to the extent of the
Obligations and the other obligations of the Guarantor hereunder (including,
without limitation, under Section 2 above).
4. Waivers
by Guarantor; Secured Party’s Freedom to Act. The
Guarantor agrees that the Obligations will be paid and performed strictly in
accordance with their respective terms regardless of any law, regulation or
order now or hereafter in effect in any jurisdiction affecting any of such
terms
or the rights of the Secured Parties with respect thereto. The Guarantor waives
presentment, demand, protest, notice of acceptance, notice of Obligations
incurred and all other notices of any kind, all defenses which may be available
to Borrower by virtue of any valuation, stay, moratorium law or other similar
law now or hereafter in effect, any right to require the marshalling of assets
of the Borrower, and all suretyship defenses generally. Without limiting the
generality of the foregoing, the Guarantor agrees to the provisions of any
instrument evidencing, securing or otherwise executed in connection with any
Obligation and agrees that the obligations of the Guarantor hereunder shall
not
be released or discharged, in whole or in part, or otherwise affected by
(i) the
failure of any Secured Party to assert any claim or demand or to enforce any
right or remedy against the Borrower; (ii) any
extensions or renewals of any Obligation; (iii) any
rescissions, waivers, amendments or modifications of any of the terms or
provisions of any agreement evidencing, securing or otherwise executed in
connection with any Obligation (provided, that, the obligations of the Guarantor
hereunder shall be appropriately modified to reflect any amendment or
modification of the Obligations); (iv) the
substitution or release of any entity primarily or secondarily liable for any
Obligation; (v) the
adequacy of any rights any Secured Party may have against any collateral or
other means of obtaining repayment of the Obligations; (vi) the
impairment of any collateral securing the Obligations, including without
limitation the failure to perfect or preserve any rights a Secured Party might
have in such collateral or the substitution, exchange, surrender, release,
loss
or destruction of any such collateral; or (vii) any
other act or omission which might in any manner or to any extent vary the risk
of the Guarantor or otherwise operate as a release or discharge of any other
guarantor, all of which may be done without notice to the
Guarantor.
5. Unenforceability
of Obligations Against Borrower.
If for
any reason the Borrower has no legal existence or is under no legal obligation
to discharge any of the Obligations, or if any of the Obligations have become
irrecoverable from the Borrower by operation of law or for any other reason,
this Guaranty shall nevertheless be binding on the Guarantor to the same extent
as if the Guarantor at all times had been the principal obligor on all such
Obligations. In the event that acceleration of the time for payment of the
Obligations is stayed upon the insolvency, bankruptcy or reorganization of
the
Borrower, or for any other reason, all such amounts otherwise subject to
acceleration under the terms of any agreement evidencing, securing or otherwise
executed in connection with any Obligation shall be immediately due and payable
by the Guarantor.
6. Subrogation;
Subordination.
Until
the payment and performance in full of all Obligations, the Guarantor shall
not
exercise any rights against the Borrower arising as a result of payment by
any
Guarantor hereunder, by way of subrogation or otherwise, and will not prove
any
claim in competition with any Secured Party or its affiliates in respect of
any
payment hereunder in bankruptcy or insolvency proceedings of any nature; the
Guarantor will not claim any set-off or counterclaim against the Borrower in
respect of any liability of the Guarantor to the Borrower; and the Guarantor
waives any benefit of and any right to participate in any collateral which
may
be held by any Secured Party. The payment of any amounts due with respect to
any
indebtedness of the Borrower now or hereafter held by the Guarantor is hereby
subordinated to the prior payment in full of the Obligations. The Guarantor
agrees that after the occurrence of any default in the payment or performance
of
the Obligations, after the expiration of any applicable cure period, it will
not
demand, xxx for or otherwise attempt to collect after such time any such
indebtedness of the Borrower to the Guarantor until the Obligations shall have
been paid in full. If, notwithstanding the foregoing sentence, the Guarantor
shall collect, enforce or receive any amounts in respect of such indebtedness,
such amounts shall be collected, enforced and received by the Guarantor as
trustee for the Secured Parties and be paid over to the Secured Parties on
account of the Obligations without affecting in any manner the liability of
the
Guarantor under the other provisions of this Guaranty.
7. Further
Assurances.
The
Guarantor agrees to do all such things and execute all such documents, as a
Secured Party may consider reasonably necessary or desirable to give full effect
to this Guaranty and to perfect and preserve the rights and powers of a Secured
Party hereunder.
8. Termination;
Reinstatement.
This
Guaranty shall remain in full force and effect until the earlier of: (i) the
Obligations are paid in full or otherwise satisfied (including by the conversion
in full of the Notes) (other than contingent indemnity obligations), and not
subject to any recapture or preference in bankruptcy or similar proceedings,
and
the Secured Parties have no further commitment to extent credit to the Borrower
or (ii) the Secured Parties are given written notice of the Guarantor’s
intention to discontinue this Guaranty, notwithstanding any intermediate or
temporary payment or settlement of the whole or any part of the Obligations.
No
such notice under (ii) above shall be effective against a Secured Party unless
received and acknowledged by an officer of a Secured Party at its head office.
Without limiting the generality of the foregoing sentence, the Guarantor will
be
released from all liability hereunder concurrently with either the repayment
of
in full of all amounts owed under the Notes or the conversion in full of the
Notes. No notice under (ii) above shall affect any rights of a Secured Party
or
of any affiliate hereunder with respect to any Obligations incurred prior to
such notice. This Guaranty shall continue to be effective or be reinstated,
notwithstanding any notice or termination, if at any time any payment made
or
value received with respect to an Obligation is rescinded or must otherwise
be
returned by a Secured Party upon the insolvency, bankruptcy or reorganization
of
the Borrower, or otherwise, all as though such payment had not been made or
value received.
9. Successors
and Assigns.
This
Guaranty shall be jointly and severally binding upon the Guarantor, its
successors and assigns, and shall inure to the benefit of and be enforceable
by
the Secured Parties and their successors, transferees and assigns. Without
limiting the generality of the foregoing sentence, the Secured Parties may
assign or otherwise transfer any agreement or any note held by it evidencing,
securing or otherwise executed in connection with the Obligations, or sell
participations in any interest therein, to any other person or entity, and
such
other person or entity shall thereupon become vested, to the extent set forth
in
the agreement evidencing such assignment, transfer or participation, with all
the rights in respect thereof granted to the Secured Parties
herein.
10. Amendments
and Waivers.
No
amendment or waiver of any provision of this Guaranty nor consent to any
departure by the Guarantor therefrom shall be effective unless the same shall
be
in writing and signed by the Secured Parties holding a majority of the principal
amount of the Notes. No failure on the part of a Secured Party to exercise,
and
no delay in exercising, any right hereunder shall operate as a waiver thereof;
nor shall any single or partial exercise of any right hereunder preclude any
other or further exercise thereof or the exercise of any other
right.
12. Governing
Law; Consent to Jurisdiction.
This
Guaranty shall be governed by, and construed in accordance with, the laws of
the
State of New York without reference to its conflicts of laws provisions. The
Guarantor agrees that any suit for the enforcement of this Guaranty may be
brought in the courts of the State of New York or any federal court sitting
therein and consents to the non-exclusive jurisdiction of such court and to
service of process in any such suit being made upon the Guarantor by mail at
the
address specified in Section 11 hereof. The Guarantor hereby waives any
objection that it may now or hereafter have to the venue of any such suit or
any
such court or that such suit was brought in an inconvenient court. Any
enforcement action relating to this Guarantee may be brought by motion for
summary judgment in lieu of a complaint pursuant to Section 3213 of the New
York
Civil Practice Law and Rules.
13. WAIVER
OF JURY TRIAL. THE GUARANTOR AND, BY THEIR ACCEPTANCE OF THIS GUARANTY, EACH
SECURED PARTY, HEREBY WAIVES TRIAL BY JURY IN ANY LITIGATION IN ANY COURT WITH
RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF: (A) THIS GUARANTY OR ANY
OTHER INSTRUMENT OR DOCUMENT DELIVERED IN CONNECTION WITH THE OBLIGATIONS;
(B) THE VALIDITY, INTERPRETATION, COLLECTION OR ENFORCEMENT THEREOF; OR
(C) ANY OTHER CLAIM OR DISPUTE HOWEVER ARISING BETWEEN THE GUARANTOR AND
ANY SECURED PARTY.
14. Certain
References.
All
pronouns and any variations thereof shall be deemed to refer to the masculine,
feminine, neuter, singular or plural, as the identity of the person, persons,
entity or entities may require. The terms “herein”, “hereof” or “hereunder” or
similar terms used in this Guaranty refer to this entire Guaranty and not only
to the particular provision in which the term is used.
15. Miscellaneous.
This
Guaranty, together with the Security Agreement, delivered by the Guarantor
as of
the date hereof to the Secured Parties, constitutes the entire agreement of
the
Guarantor with respect to the matters set forth herein. The rights and remedies
herein provided are cumulative and not exclusive of any remedies provided by
law
or any other agreement, and this Guaranty shall be in addition to any other
guaranty of the Obligations. The invalidity or unenforceability of any one
or
more sections of this Guaranty shall not affect the validity or enforceability
of its remaining provisions. Captions are for the ease of reference only and
shall not affect the meaning of the relevant provisions. The meanings of all
defined terms used in this Guaranty shall be equally applicable to the singular
and plural, masculine, feminine and generic forms of the terms defined.
IN
WITNESS WHEREOF,
the
Guarantor has caused this Guaranty to be executed and delivered as of the date
appearing in the introductory paragraph of this Guaranty.
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DUSKA
SCIENTIFIC CO.
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By:
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/s/ Xxxx Xxxxxx | |
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Name:
Xxxx Xxxxxx
Title:
President
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