Document:

asch_ex109.htm

 

EXHIBIT 10.9

 

AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (“Agreement”), dated December 6, 2010, is made by and between CURAXIS PHARMACEUTICAL CORPORATION, a NEVADA corporation (“Company”), and SOUTHRIDGE PARTNERS II, LP, a Delaware limited partnership (the “Investor”).

RECITALS

WHEREAS, upon the terms and subject to the conditions of the Amended and Restated Equity Credit Agreement, dated December 6, 2010 (the “Purchase Agreement”), between the Investor and the Company, the Company has agreed to issue and sell to the Investor shares (the “Put Shares”) of its common stock, par value $0.0001 per share (the “Common Stock”) from time to time for an aggregate investment price of up to TWENTY FIVE MILLION DOLLARS ($25,000,000) the “Registrable Securities” and

WHEREAS, to induce the Investor to execute and deliver the Purchase Agreement, the Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, “Securities Act”), and applicable state securities laws with respect to the Registrable Securities;

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Investor hereby agree as follows:

1.             Definitions.

 

 (a) As used in this Agreement, the following terms shall have the following meaning:

(i) “Subscription Date” means the date of this Agreement.

(ii) “Investor” has the meaning set forth in the preamble to this Agreement.

(iii) “Register,” “registered” and “registration” refer to a registration effected by preparing and filing a Registration Statement or Statements in compliance with the Securities Act and pursuant to Rule 415 under the Securities Act or any successor rule providing for offering securities on a delayed or continuous basis (“Rule 415”), and the declaration or ordering of effectiveness of such Registration Statement by the United States Securities and Exchange Commission (the “SEC”).

(iv) “Registrable Securities” will have the same meaning as set forth in the Purchase Agreement.

  

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(v) “Registration Statement” means the Company’s registration statement on Form S-1, or any similar registration statement of the Company filed with SEC under the Securities Act with respect to the Registrable Securities.

 (vi) “EDGAR” means the SEC’s Electronic Data Gathering, Analysis and Retrieval System.

 (b) Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Purchase Agreement.

2.             [RESERVED]

3.             Obligation of the Company.  In connection with the registration of the Registrable Securities, the Company shall do each of the following:

 (a) Prepare promptly, and file with the SEC within no later than forty five (45)  days after the date hereof, a Registration Statement with respect to not less than the maximum allowable to be registered by the SEC subject to Rule 415 of Registrable Securities, and thereafter use all diligent efforts to cause such Registration Statement relating to the Registrable Securities to become effective within five (5) business days after notice from the Securities and Exchange Commission that such Registration Statement may be declared effective, and keep the Registration Statement effective at all times until the earliest of (i) the date that is six months after the completion of the last Closing Date under the Purchase Agreement, (ii) the date when the Investor may sell all Registrable Securities under Rule 144 without volume limitations, or (iii) the date the Investor no longer owns any of the Registrable Securities (collectively, the “Registration Period”), which Registration Statement (including any amendments or supplements, thereto and prospectuses contained therein) shall not contain any 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;

 (b) Prepare and file with the SEC such amendments (including post-effective amendments) and supplements to the Registration Statement and the prospectus used in connection with the Registration Statement as may be necessary to keep the Registration Statement effective at all times during the Registration Period, and, during the Registration Period, and to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities of the Company covered by the Registration Statement until the expiration of the Registration Period.

 (c) With respect to the Registrable Securities, permit a single firm of counsel designated by Investor to review the Registration Statement and all amendments and supplements thereto a reasonable period of time (but not less than three (3) business days) prior to their filing with the SEC, and not file any document in a form to which such counsel reasonably objects.

  

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 (d) With respect to the Registrable Securities, notify Investor and Investor’s legal counsel identified to the Company (and, in the case of (i)(A) below, not less than one (1) business day 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 proposed to be filed; (B) whenever the SEC notifies the Company whether there will be a “review” of such Registration Statement; (C) whenever the Company receives (or a representative of the Company receives on its behalf) any oral or written comments from the SEC respect of a Registration Statement (copies or, in the case of oral comments, written or oral summaries of such comments shall be promptly furnished by the Company to Investor’s Counsel); and (D) with respect to the Registration Statement or any post-effective amendment, when the same has become effective; (ii) of any request by the SEC or any other Federal or state governmental authority for amendments or supplements to the Registration Statement or the prospectus or for additional information; (iii) of the issuance by the SEC 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 or warranties of the Company contained in any agreement (including any securities purchase 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 to the knowledge of the Company makes any statement made in the Registration Statement or the 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, the 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. In addition, the Company shall furnish counsel to the Investor with copies of all intended written responses to the comments contemplated in clause (C) of this Section not later than one (1) business day in advance of the filing of such responses with the SEC so that Investor shall have the opportunity to comment thereon.

 (e) Unless available to the Investor without charge through EDGAR, the SEC’s website or the Company’s website, furnish to Investor, (i) promptly after the same is prepared and publicly distributed, filed with the SEC, or received by the Company, one (1) copy of the Registration Statement, each preliminary prospectus and the prospectus, and each amendment or supplement thereto, and (ii) such number of copies of a prospectus, including a preliminary prospectus, and all amendments and supplements thereto and such other documents, as the Investor may reasonably request in order to facilitate the disposition of the Registrable Securities owned by the Investor;

  

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 (f) Use all diligent efforts to (i) register and/or qualify the Registrable Securities covered by the Registration Statement under such other securities or blue sky laws of such jurisdictions as the Investor may reasonably request and in which significant volumes of shares of Common Stock are traded, (ii) prepare and file in those jurisdictions such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain the effectiveness thereof at all times during the Registration Period, (iii) take such other actions as may be necessary to maintain such registrations and qualification in effect at all times during the Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions: provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (A) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(f), (B) subject itself to general taxation in any such jurisdiction, (C) file a general consent to service of process in any such jurisdiction, (D) provide any undertakings that cause more than nominal expense or burden to the Company or (E) make any change in its charter or by-laws or any then existing contracts, which in each case the Board of Directors of the Company determines to be contrary to the best interests of the Company and its stockholders;

 (g) As promptly as practicable after becoming aware of such event, notify the Investor of the happening of any event of which the Company has knowledge, as a result of which the prospectus included in the Registration Statement, as then in effect, includes any untrue statement of a material fact or omits 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 (“Registration Default”), and uses all diligent efforts to promptly prepare a supplement or amendment to the Registration Statement or other appropriate filing with the SEC to correct such untrue statement or omission, and take any other necessary steps to cure the Registration Default, and, unless available to the Investor without charge through EDGAR, the SEC’s website or the Company’s website, deliver a number of copies of such supplement or amendment to the Investor as the Investor may reasonably request.  If the Company fails to cure any Registration Default within ten (10) business days, the Company shall pay to the Investor liquidated damages in an amount equal to 2% of the Purchase Price of all Registrable Securities then held by the Investor and still subject to Rule 144 volume limitations for each thirty (30) calendar day period or portion thereof, beginning on the date of suspension.

 (h) As promptly as practicable after becoming aware of such event, notify the Investor (or, in the event of an underwritten offering, the managing underwriters) of the issuance by the SEC of any notice of effectiveness or any stop order or other suspension of the effectiveness of  the Registration Statement at the earliest possible time;

  

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 (i) Use its commercially reasonable efforts, if eligible, either to (i) cause all the Registrable Securities covered by the Registration Statement to be listed on a national securities exchange and on each additional national securities exchange on which securities of the same class or series issued by the Company are then listed, if any, if the listing of such Registrable Securities is then permitted under the rules of such exchange, or (ii) secure designation of all the Registrable Securities covered by the Registration Statement as a National Association of Securities Dealers Automated Quotations System (“Nasdaq”) security within the meaning of Rule 11Aa2-1 of the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the quotation of the Registrable Securities on the Nasdaq Capital Market; or if, despite the Company’s commercially reasonable efforts to satisfy the preceding clause (i) or (ii), the Company is unsuccessful in doing so, to secure authorization of the Financial Industry Regulatory Authority (“FINRA”) and quotation for such Registrable Securities on the over-the-counter bulletin board and, without limiting the generality of the foregoing, to arrange for at least two market makers to register with FINRA as such with respect to such Registrable Securities;

 (j) Provide a transfer agent for the Registrable Securities not later than the Subscription Date under the Purchase Agreement;

 (k) Cooperate with the Investor to facilitate the timely preparation and delivery of certificates for the Registrable Securities to be offered pursuant to the Registration Statement and enable such certificates for the Registrable Securities to be in such denominations or amounts as the case may be, as the Investor may reasonably request and registration in such names as the Investor may request; and, within five (5) business days after a Registration Statement which includes Registrable Securities is ordered effective by the SEC, the Company shall deliver, and shall cause legal counsel selected by the Company to deliver, to the transfer agent for the Registrable Securities (with copies to the Investor) an appropriate instruction and opinion of such counsel, if so required by the Company’s transfer agent; and

 (l) Take all other reasonable actions necessary to expedite and facilitate distribution to the Investor of the Registrable Securities pursuant to the Registration Statement.

4.             Obligations of the Investor.  In connection with the registration of the Registrable Securities, the Investor shall have the following obligations;

 (a) It shall be a condition precedent to the obligations of the Company to complete the registration pursuant to this Agreement with respect to the Registrable Securities of the Investor that the Investor shall timely furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of the Registrable Securities held by it, as shall be reasonably required to effect the registration of such Registrable Securities and shall timely execute such documents in connection with such registration as the Company may reasonably request.

  

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 (b) The Investor by such Investor’s acceptance of the Registrable Securities agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of the Registration Statement hereunder; and

 (c) The Investor agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(g) or 3(h) above, the Investor will immediately discontinue disposition of Registrable Securities pursuant to the Registration Statement covering such Registrable Securities until the Investor receives the copies of the supplemented or amended prospectus contemplated by Section 3(g) or 3(h) and, if so directed by the Company, the Investor shall deliver to the Company (at the expense of the Company) or destroy (and deliver to the Company a certificate of destruction) all copies in the Investor’s possession, of the prospectus covering such Registrable Securities current at the time of receipt of such notice.

5.             Expenses of Registration.    

 (a) All reasonable expenses incurred in connection with Registrations, filings or qualifications pursuant to Section 3, including, without limitation, all Registration, listing, and qualifications fees, printers and accounting fees, the fees and disbursements of counsel for the Company shall be borne by the Company.

 (b) Except as otherwise provided for in Schedule 5(b) attached hereto, the Company nor any of its subsidiaries has, as of the date hereof, and the Company shall not on or after the date of this Agreement, enter into any agreement with respect to its securities that is inconsistent with the rights granted to Investor in this Agreement or otherwise conflicts with the provisions hereof.  Except as otherwise provided for in Schedule 5(b), the Company has not previously entered into any agreement granting any registration rights with respect to any of its securities to any person.

  

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6.             Indemnification.  After Registrable Securities are included in a Registration Statement under this Agreement:

 (a) To the extent permitted by law, the Company will indemnify and hold harmless, the Investor, the directors, if any, of such Investor, the officers, if any, of such Investor, each person, if any, who controls the Investor within the meaning of the Securities Act or the Exchange Act (each, an “Indemnified Person”), against any losses, claims, damages, liabilities or expenses (joint or several) incurred (collectively, “Claims”) to which any of them may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any post-effective amendment thereof or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in the light of the circumstances under which the statements therein were made, not misleading or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation under the Securities Act, the Exchange Act or any state securities law (the matters in the foregoing clauses (i) through (iii) being collectively referred to as  “Violations”).  Subject to Section 6(b) hereof, the Company shall reimburse the Investor, promptly as such expenses are incurred and are due and payable, for any reasonable legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim.   Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(a) shall not (i) apply to any Claims arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of any Indemnified Person expressly for use in connection with the preparation of the Registration Statement or any such amendment thereof or supplement thereto, if such prospectus was timely made available by the Company pursuant to Section 3(b) hereof; (ii) with respect to any preliminary prospectus, inure to the benefit of any such person from whom the person asserting any such Claim purchased the Registrable Securities that are the subject thereof (or to the benefit of any person controlling such person) if the untrue statement or omission of material fact contained in the preliminary prospectus was corrected in the prospectus, as then amended or supplemented, if such prospectus was timely made available by the Company pursuant to Section 3(b) hereof; (iii) be available to the extent such Claim is based on a failure of the Investor to deliver or cause to be delivered the prospectus made available by the Company; or (iv) apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the  Company, which consent shall not be unreasonably withheld.  The Investor will indemnify the Company, its officers, directors and agents (including legal counsel) against any claims arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company, by or on behalf of the Investor, expressly for use in connection with the preparation of the Registration Statement, subject to such limitations and conditions set forth in the previous sentence.  Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Person or Indemnified Party.

  

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 (b) Promptly after receipt by an Indemnified Person under this Section 6 of notice of the commencement of any action (including any governmental action), such Indemnified Person shall, if a Claim in respect thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory to the indemnifying party and the Indemnified Person, as the case may be; provided, however, that an Indemnified Person shall have the right to retain its own counsel with the reasonable fees and expenses to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the indemnifying party, the representation by such counsel of the Indemnified Person and the indemnifying party would be inappropriate due to actual or potential differing interests between such Indemnified Person and any other party represented by such counsel in such proceeding.  In such event, the Company shall pay for only one separate legal counsel for the Investor selected by the Investor.  The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified Person under this Section 6, except to the extent that the indemnifying party is prejudiced in its ability to defend such action.  The indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as such expense, loss, damage or liability is incurred and is due and payable.

7.             Contribution.  To the extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; provided, however, that (a) no contribution shall be made under circumstances where the maker would not have been liable for indemnification under the fault standards set forth in Section 6; (b) no seller of Registrable Securities guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any seller of Registrable Securities who was not guilty of such fraudulent misrepresentation; and (c) contribution by any seller of Registrable Securities shall be limited in amount to the net amount of proceeds received by such seller from the sale of such Registrable Securities.

8.             Reports under Exchange Act.  With a view to making available to the Investor the benefits of Rule 144 promulgated under the Securities Act or any other similar rule or regulation of the SEC that may at any time permit the Investor to sell securities of the Company to the public without registration (“Rule 144”), the Company agrees to use its reasonable best efforts to:

 (a) make and keep public information available, as those terms are understood and defined in Rule 144;

 (b) file with the SEC in a timely manner all reports and other documents required of the Company under the Exchange Act;

  

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 (c) furnish to the Investor so long as the Investor owns Registrable Securities, promptly upon request, (i) a written statement by the Company that it has complied with the reporting requirements of Rule 144, the Securities Act and the Exchange Act, (ii) unless available to the Investor without charge through EDGAR, the SEC’s website or the Company’s website, a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested to permit the Investors to sell such securities pursuant to Rule 144 without registration; and

 (d) at the request of any Investor of Registrable Securities, give its Transfer Agent instructions (supported by an opinion of Company counsel, if required or requested by the Transfer Agent) to the effect that, upon the Transfer Agent’s receipt from such Investor of:

(i) a certificate (a “Rule 144 Certificate”) certifying (A) that such Investor has held the shares of Registrable Securities which the Investor proposes to sell (the “Securities Being Sold”) for a period of not less than (1) year and (B) as to such other matters as may be appropriate in accordance with Rule 144 under the Securities Act, and

 

(ii) an opinion of counsel acceptable to the Company (for which purposes it is agreed that the initial Investor’s Counsel shall be deemed acceptable if such opinion is not given by Company Counsel) that, based on the Rule 144 Certificate, Securities Being Sold  may be sold pursuant to the provisions of Rule 144, even in the absence of an effective Registration Statement, the Transfer Agent is to effect the transfer of the Securities Being Sold and issue to the buyer(s) or transferee(s) thereof one or more stock certificates representing the transferred Securities Being Sold without any restrictive legend and without recording any restrictions on the transferability of such shares on the Transfer Agent’s  books and records (except to the extent any such legend or restriction results from facts other than the identity of the Investor, as the seller or transferor thereof, or the status, including any relevant legends or restrictions, of the shares of the Securities Being Sold while held by the Investor).   If the Transfer Agent requires any additional documentation at the time of the transfer, the Company shall deliver or cause to be delivered all such reasonable additional documentation as may be necessary to effectuate the issuance of an unlegended certificate.

9.             Miscellaneous.

 (a)   Registered Owners.  A person or entity is deemed to be a holder of Registrable Securities whenever such person or entity owns of record such Registrable Securities.  If the Company receives conflicting instructions, notices or elections from two or more persons or entities with respect to the same Registrable Securities, the Company shall act upon the basis of instructions, notice or election received from the registered owner of such Registrable Securities.

 (b)   Rights Cumulative; Waivers.  The rights of each of the parties under this Agreement are cumulative.  The rights of each of the parties hereunder shall not be capable of being waived or varied other than by an express waiver or variation in writing.  Any failure to exercise or any delay in exercising any of such rights shall not operate as a waiver or variation of that or any other such right.  Any defective or partial exercise of any of such rights shall not preclude any other or further exercise of that or any other such right.  No act or course of conduct or negotiation on the part of any party shall in any way preclude such party from exercising any such right or constitute a suspension or any variation of any such right.

  

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 (c)   Assignment.  Neither this Agreement nor any rights of Investor or the Company hereunder may be assigned by either party to any other person.

 (d)    Entire Agreement.  This Agreement contains the entire agreement between the parties with respect to the subject matter hereof.  There are no promises, agreements, conditions, undertakings, understandings, warranties, covenants or representations, oral or written, express or implied, between them with respect to this Agreement or the matters described in this Agreement, except as set forth in this Agreement and in the other documentation relating to the transactions contemplated by this Agreement.  Any such negotiations, promises, or understandings shall not be used to interpret or constitute this Agreement.

 (e)   Amendment.  Any provision of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and Investor.  Any amendment or waiver affected in accordance with this Section 9 shall be binding upon the Company.

 (f)   Severability.  Each part of this Agreement is intended to be severable.  In the event that any provision of this Agreement is found by any court or other authority of competent jurisdiction to be illegal or unenforceable, such provision shall be severed or modified to the extent necessary to render it enforceable and as so severed or modified, this Agreement shall continue in full force and effect.

 (g)   Notices.  Notices required or permitted to be given hereunder shall be in writing and shall be deemed to be sufficiently given when personally delivered (by hand, by courier, by telephone line facsimile transmission, receipt confirmed, or other means) or sent by certified mail, return receipt requested, properly addressed and with proper postage pre-paid (i) if to the Company, at its executive office and (ii) if to the Investor, at the address set forth under its name in the Purchase Agreement, with a copy to its designated attorney, or at such other address as each such party furnishes by notice given in accordance with this Section 9(a), and shall be effective, when personally delivered, upon receipt and, when so sent by certified mail, five (5) business days after deposit with the United States Postal Service.

 (h)   Governing Law; Jury Trial Waiver.   This Agreement shall be governed by and interpreted in accordance with the laws of the State of New York without regard to the principles of conflicts of law. Each of the Company and Investor hereby submit to the exclusive jurisdiction of the United States Federal and state courts located in New York County, New York with respect to any dispute arising under this Agreement, the agreements entered into in connection herewith or the transactions contemplated hereby or thereby.  The Company and the Investor hereby waive a trial by jury in any action, proceeding or counterclaim brought by either of the parties hereto against the other in respect of any matter arising out of or in connection with this Agreement.

  

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 (i)   Consents.  The person signing this Agreement on behalf of each party hereby represents and warrants that he has the necessary power, consent and authority to execute and deliver this Agreement on behalf of that party.

 (j)   Further Assurances.  In addition to the instruments and documents to be made, executed and delivered pursuant to this Agreement, the parties hereto agree to make, execute and deliver or cause to be made, executed and delivered, to the requesting party such other instruments and to take such other actions as the requesting party may reasonably require to carry out the terms of this Agreement and the transactions contemplated hereby.

 (k)   Section Headings.  The Section headings in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

 (l)   Construction.  Unless the context otherwise requires, when used herein, the singular shall be deemed to include the plural, the plural shall be deemed to include each of the singular, and pronouns of one or no gender shall be deemed to include the equivalent pronoun of the other or no gender.

 (m)          Execution in Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement.  This Agreement, once executed by a party, may be delivered to the other party hereto by telephone line facsimile transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement.  A facsimile transmission of this signed Agreement shall be legal and binding on all parties hereto.

[-SIGNATURES ON FOLLOWING PAGE-]

 

 

 

 

 

  

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[-SIGNATURE PAGE-]

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed by their respective officers thereunto duly authorized as of the day and year first above written.

 

	  	
COMPANY:

	  
	  	  	  
	  	
CURAXIS PHARMACEUTICAL CORPORATION

	  
	  	  	  	  
	  	  	  	  
	  	
By:

	/s/ Patrick S. Smith	  
	  	
Name:

	
Patrick S. Smith

	  
	  	
Title:

	
Chief Executive Officer

	  
	  	  	  	  
	  	  	  
	  	
INVESTOR:

	  
	  	  	  
	  	
SOUTHRIDGE PARTNERS II, LP, by

Southridge Advisors LLC

	  
	  	  	  
	  	  	  
	  	
By:

	/s/ Stephen Hicks	  
	  	
Name:

	
Stephen Hicks

	  
	  	
Title:

	
Manager

	  

  

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SCHEDULE 5 (B)

 

 

 

 

 

 

 

 

13Exhibit 10.1
2011 Incentive Compensation Plan

                         NATIONAL ASSET RECOVERY CORP.
                                (the "Company")

                       2011 INCENTIVE COMPENSATION PLAN

1.	PURPOSE

The purpose of this 2011 Incentive Compensation Plan of NATIONAL ASSET
RECOVERY CORP., is to advance the interests of the Company (as herein defined)
by encouraging Eligible Employees (as herein defined) to acquire shares of the
Company, thereby increasing their proprietary interest in the Company,
encouraging them to remain associated with the Company and furnishing them
with additional incentive to advance the interests of the Company in the
conduct of their affairs.

2.	DEFINITIONS

As used herein, the following definitions shall apply:

(a)	"Administrator" means the Board or a Committee of the Board duly
appointed by the Board as the Administrator hereof.

(b)	"Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in the Securities Act.

(c)	"Applicable Laws" means the legal requirements relating to the
administration of incentive compensation plans, if any, under applicable
provisions of federal securities laws, state corporate and securities laws,
the Securities Act, the rules of any applicable stock exchange or national
market system, and the rules of any foreign jurisdiction applicable to Awards
granted to residents therein.

(d)	"Award" means the grant of Performance Shares or other right or benefit
under the Plan.

(e)	"Award Agreement" means the written agreement evidencing the grant of an
Award executed by the Company and the Grantee, including any amendments
thereto.

(f)	"Board" means the Board of Directors of the Company.

(g)	"Cause" means, with respect to the termination by the Company or a
Related Entity of the Grantee's Continuous Service, that such termination is
for `Cause' as such term is expressly defined in a then-effective written
agreement between the Grantee and the Company or such Related Entity, or in
the absence of such then-effective written agreement and definition, is based
on, in the determination of the Administrator, the Grantee's:

(i)	refusal or failure to act in accordance with any specific, lawful
direction or order of the Company or a Related Entity;

(ii)	unfitness or unavailability for service or unsatisfactory performance
(other than as a result of Disability);

(iii)	performance of any act or failure to perform any act in bad faith and to
the detriment of the Company or a Related Entity;

(iv)	dishonesty, intentional misconduct or material breach of any agreement
with the Company or a Related Entity; or

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(v)	commission of a crime involving dishonesty, breach of trust, or physical
or emotional harm to any person.

(h)	"Change in Control" means a change in ownership or control of the
Company effected through either of the following transactions:

(i)	the direct or indirect acquisition by any person or related group of
persons (other than an acquisition by the Company or by a Company-sponsored
employee benefit plan or by a person that directly or indirectly controls, is
controlled by, or is under common control with, the Company) of beneficial
ownership of securities possessing more than fifty percent (50%) of the total
combined voting power of the Company's outstanding securities pursuant to a
tender or exchange offer made directly to the Company's shareholders which a
majority of the Continuing Directors who are not Affiliates or Associates of
the offeror do not recommend such shareholders accept, or

(ii)	a change in the composition of the Board over a period of thirty-six
(36) months or less such that a majority of the Board members (rounded up to
the next whole number) ceases, by reason of one or more contested elections
for Board membership, to be comprised of individuals who are Continuing
Directors.

(i)	"Committee" means any committee appointed by the Board to administer the
Plan.

(j)	"Common Stock" means the common stock of the Company.

(k)	"Company" means NATIONAL ASSET RECOVERY CORP., a Nevada company.

(l)	"Consultant" means any person (other than an Employee or solely with
respect to rendering services in such person's capacity as a Director) who is
engaged by the Company or any Related Entity to render consulting or advisory
services to the Company or such Related Entity.

(m)	"Continuing Directors" means members of the Board who either (i) have
been Board members continuously for a period of at least thirty-six (36)
months or (ii) have been Board members for less than thirty-six (36) months
and were elected or nominated for election as Board members by at least a
majority of the Board members described in clause 2.(h)(ii) who were still in
office at the time such election or nomination was approved by the Board.

(n)	"Continuous Service" means that the provision of services to the Company
or a Related Entity in any capacity of Employee or Consultant is not
interrupted or terminated. Continuous Service shall not be considered
interrupted in the case of (i) any approved leave of absence, (ii) transfers
between locations of the Company or among the Company, any Related Entity, or
any successor, in any capacity of Employee, Director or Consultant, or (iii)
any change in status as long as the individual remains in the service of the
Company or a Related Entity in any capacity of Employee, Director or
Consultant (except as otherwise provided in the Award Agreement). An approved
leave of absence shall include sick leave, military leave, or any other
authorized personal leave. No such leave may exceed ninety (90) days, unless
reemployment upon expiration of such leave is guaranteed by statute or
contract.

(o)	"Corporate Transaction" means any of the following transactions:

(i)	a merger or consolidation in which the Company is not the surviving
entity, except for a transaction the principal purpose of which is to change
the jurisdiction in which the Company is organized;

(ii)	the sale, transfer or other disposition of all or substantially all of
the assets of the Company (including the capital stock of the Company's
subsidiary corporations) in connection with the complete liquidation or
dissolution of the Company; or

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 (iii)	any reverse merger in which the Company is the surviving entity
but in which securities possessing more than fifty percent (50%) of the total
combined voting power of the Company's outstanding securities are transferred
to a person or persons different from those who held such securities
immediately prior to such merger.

(p)	"Director" means a member of the Board or the board of directors of any
Related Entity.

(q)	"Disability" means that a Grantee is unable to carry out the
responsibilities and functions of the position held by the Grantee by reason
of any medically determinable physical or mental impairment. A Grantee will
not be considered to have incurred a Disability unless he or she furnishes
proof of such impairment sufficient to satisfy the Administrator in its
discretion.

(r)	"Eligible Employee" means any person who is an Employee or a Consultant.

(s)	"Employee" means any person, including an Officer or Director, who is a
full-time or part-time employee of the Company or any Related Entity.

(t)	"Fair Market Value" means, as of any date, the value of Common Stock
determined as follows:

(i)	Where there exists a public market for the Common Stock, the Fair Market
Value shall be (A) the average closing price for a Share for the last seven
(7) market trading days prior to the time of the determination (or, if no
closing price was reported on those days, on the last seven trading days on
which a closing price was reported) on the stock exchange determined by the
Administrator to be the primary market for the Common Stock or the NASDAQ
National Market, whichever is applicable or (B) if the Common Stock is not
traded on any such exchange or national market system, the average of the
closing bid and asked prices of a Share on the NASDAQ Small Cap Market for the
seven (7) days prior to the time of the determination (or, if no such prices
were reported on those days, on the last seven days on which such prices were
reported), in each case, as reported in The Wall Street Journal or such other
source as the Administrator deems reliable; or

(ii)	In the absence of an established market for the Common Stock of the type
described in 2.(t)(i), above, the Fair Market Value thereof shall be
determined by the Administrator in good faith.

(u)	"Grantee" means an Eligible Employee who receives an Award pursuant to
an Award Agreement under the Plan.

(v)	"Insider" means:

(i)	a Director or Senior Officer of the Company;

(ii)	a Director or Senior Officer of a person that is itself an Insider or
Subsidiary of the Company;

(iii)	a person that has:

A.	direct or indirect beneficial ownership of,

B.	control or direction over, or

C.	a combination of direct or indirect beneficial ownership of and control
or direction over

securities of the Company carrying more than 10% of the voting rights attached
to all the Company's outstanding voting securities, excluding, for the purpose
of the calculation of the percentage held, any securities held by the person
as underwriter in the course of a distribution, or

                                       3
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 (iv)	the Company itself, if it has purchased, redeemed or otherwise acquired
any securities of its own issue, for so long as it continues to hold those
securities.

(w)	"Officer" means a person who is an officer, including a Senior Officer,
of the Company or a Related Entity within the meaning prescribed to under the
Securities Act and the rules and regulations promulgated thereunder.

(x)	"Option" means an option to purchase Shares pursuant to an Award
Agreement granted under the Plan.

(y)	"Parent" means a "parent corporation", whether now or hereafter
existing, which holds a majority of the voting shares of the Company.

(z)	"Performance Shares" means Shares or an Award denominated in Shares
which may be earned in whole or in part upon attainment of performance
criteria established by the Administrator not to exceed an aggregate of 2.2
million Shares.

(aa)	"Performance Units" means an Award which may be earned in whole or in
part upon attainment of performance criteria established by the Administrator
and which may be settled for cash, Shares or other securities or a combination
of cash, Shares or other securities as established by the Administrator.

(bb)	"Plan" means this 2011 Incentive Compensation Plan as approved by Board
consent with effect from December 8, 2010.

(cc)	"Related Entity" means any Parent, Subsidiary and any business,
corporation, partnership, limited liability company or other entity in which
the Company, a Parent or a Subsidiary holds a substantial ownership interest,
directly or indirectly.

(dd)	"Restricted Stock" means Shares issued under the Plan to the Grantee for
such consideration, if any, and subject to such restrictions on transfer,
rights of first refusal, repurchase provisions, forfeiture provisions, and
other terms and conditions as established by the Administrator.

(ee)	"SAR" means a stock appreciation right entitling the Grantee to Shares
or cash compensation, as established by the Administrator, measured by
appreciation in the value of Common Stock.

(ff)	"Securities Act" means the Securities Act of 1933, as amended.

(gg)	"Senior Officer" means:

(i)	the chair or vice chair of the Board, the president, a vice-president,
the secretary, the treasurer or the general manager of the Company;

(ii)	any individual who performs functions for a person similar to those
normally performed by an individual occupying any office specified in
paragraph 2.(gg)(i) above, and

(iii)	the five (5) highest paid employees of the Company, including any
individual referred to in paragraph 2.(gg)(i) or 2.(gg)(ii) and excluding a
commissioned salesperson who does not act in a managerial capacity.

                                       4
<page>
(hh)	"Share" means a share of the Common Stock.

(ii)	"Subsidiary" means a "subsidiary corporation", whether now or hereafter
existing, as determined by British Columbia corporate law.

(jj)	"Stock Incentive Plan" means the current stock option plan and any
subsequent such plans approved by the shareholders of the Company.

(kk)	"Related Entity Disposition" means the sale, distribution or other
disposition by the Company of all or substantially all of the Company's
interests in any Related Entity effected by a sale, merger or consolidation or
other transaction involving that Related Entity or the sale of all or
substantially all of the assets of that Related Entity.

3.	OPTIONS ISSUED UNDER THE PLAN

All Options issued under the Plan shall be subject to the provisions of the
Stock Incentive Plan.

4.	ADMINISTRATION

(a)	Plan Administrator

(i)	Administration with Respect to Eligible Employees. With respect to
grants of Awards to Eligible Employees, the Plan shall be administered by (A)
the Board or (B) a Committee designated by the Board, which Committee shall be
constituted in such a manner as to satisfy the Applicable Laws. Once
appointed, such Committee shall continue to serve in its designated capacity
until otherwise directed by the Board.

(ii)	Administration Errors. In the event an Award is granted in a manner
inconsistent with the provisions of this subsection 4(a), such Award shall be
presumptively valid as of its grant date to the extent permitted by the
Applicable Laws.

(b)	Powers of the Administrator. Subject to Applicable Laws and the
provisions of the Plan (including any other powers given to the Administrator
hereunder), and except as otherwise provided by the Board, the Administrator
shall have the authority, in its discretion:

(i)	to select the Eligible Employees to whom Awards may be granted from time
to time hereunder;

(ii)	to determine whether and to what extent Awards are granted hereunder;

(iii)	to determine the number of Performance Shares or the amount of other
consideration to be covered by each Award granted hereunder;

(iv)	to approve forms of Award Agreements for use under the Plan;

(v)	to determine the terms and conditions of any Award granted hereunder;

(vi)	to suspend the right of an Eligible Employee to receive an Award for any
reason that the Administrator considers in the best interest of the Company;

(vii)	to establish additional terms, conditions, rules or procedures to
accommodate the rules or laws of applicable foreign jurisdictions and to
afford Grantees favourable treatment under such laws; provided, however, that
no Award shall be granted under any such additional terms, conditions, rules
or procedures with terms or conditions which are inconsistent with the
provisions of the Plan; and

(viii)	to take such other action, not inconsistent with the terms of the
Plan, as the Administrator deems appropriate.

                                       5
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 (c)	Effect of Administrator's Decision. All decisions, determinations and
interpretations of the Administrator shall be conclusive and binding on all
persons. However, the Board reserves the right to override such decisions,
determinations and interpretations of the Administrator.

5.	ELIGIBILITY

Awards may be granted to Eligible Employees. An Eligible Employee, who has
been granted an Award may, if otherwise eligible, be granted additional
Awards.

6.	TERMS AND CONDITIONS OF AWARDS

(a)	Type of Awards. The Administrator is authorized under the Plan to award
any type of arrangement to an Eligible Employee that is not inconsistent with
the provisions of the Plan and that by its terms involves or might involve the
issuance of (i) Performance Shares, (ii) an Option, (iii) a SAR or similar
right with a fixed or variable price related to the Fair Market Value of the
Shares and with an exercise or conversion privilege related to the passage of
time, the occurrence of one or more events, or the satisfaction of performance
criteria or other conditions, (iv) cash or (v) any other security with the
value derived from the value of the Shares. Such Awards may include, without
limitation, cash, Shares, Options, SARs, Restricted Stock, Performance Units
or Performance Shares, and an Award may consist of one such security or
benefit, or two (2) or more of them in any combination or alternative.

(b)	Designation of Award. Each Award shall be designated in the Award
Agreement.

(c)	Conditions of Award. Subject to the terms of the Plan and Applicable
Laws, the Administrator shall determine the provisions, terms, and conditions
of each Award including, but not limited to, the Award vesting schedule,
forfeiture provisions, form of payment (cash, Shares, or other consideration)
upon settlement of the Award, and satisfaction of any performance criteria.
The performance criteria established by the Administrator may be based on any
one of, or combination of, economic value added, market value added,
achievement of individual or corporate objectives, or other measures of
performance selected by the Administrator. Partial achievement of the
specified criteria may result in a payment or vesting corresponding to the
degree of achievement as specified in the Award Agreement.

(d)	Acquisitions and Other Transactions. The Administrator may issue Awards
under the Plan in settlement, assumption or substitution for, outstanding
awards or obligations to grant future awards in connection with the Company or
a Related Entity acquiring another entity, an interest in another entity or an
additional interest in a Related Entity whether by merger, stock purchase,
asset purchase or other form of transaction.

(e)	Deferral of Award Payment. The Administrator may establish one or more
programs under the Plan to permit selected Grantees the opportunity to elect
to defer receipt of consideration upon an Award, satisfaction of performance
criteria, or other event that absent the election would entitle the Grantee to
payment or receipt of Shares or other consideration under an Award. The
Administrator may establish the election procedures, the timing of such
elections, the mechanisms for payments of, and accrual of interest or other
earnings, if any, on amounts, Shares or other consideration so deferred, and
such other terms, conditions, rules and procedures that the Administrator
deems advisable for the administration of any such deferral program.

(f)	Award Exchange Programs. The Administrator may establish one or more
programs under the Plan to permit selected Grantees to exchange an Award under
the Plan for one or more other types of Awards under the Plan on such terms
and conditions as determined by the Administrator from time to time.

                                       6
<page>
 (g)	Separate Programs. The Administrator may establish one or more separate
programs under the Plan for the purpose of issuing particular forms of Awards
to one or more classes of Grantees on such terms and conditions as determined
by the Administrator from time to time.

(h)	Term of Award. The term of each Award shall be the term stated in the
Award Agreement.

(i)	Transferability of Awards. Awards shall be transferable to the extent
provided in the Award Agreement.

(j)	Time of Granting Awards. The date of grant of an Award shall for all
purposes be the date on which the Administrator makes the determination to
grant such Award, or such other date as is determined by the Administrator.
Notice of the grant determination shall be given to each Employee or
Consultant to whom an Award is so granted within a reasonable time after the
date of such grant.

(k)	Termination of Continuous Service. If Continuous Service is terminated
by the Company or a Related Party for Cause, or by a Grantee voluntarily, any
unvested benefits under the Plan will expire. If Continuous Service is
terminated by retirement, death or Disability of a Grantee, or by the Company
for other than Cause, unvested benefits will be earned in accordance with the
vesting schedule in the Award Agreement.

(l)	Shares Reserved.

(a)	Pool.	The aggregate number of shares of Stock that may be issued under
this Plan will not exceed 8,200,000 (the "Pool").

(b)	Adjustments Upon Changes in Stock.	In the event of any change in the
outstanding Stock of the Company as a result of a stock split, reverse stock
split, stock dividend, recapitalization, combination or reclassification,
appropriate proportionate adjustments will be made in: (i) the aggregate
number of shares of Stock in the Pool that may be issued hereunder; (ii) other
rights and matters determined on a per share basis under this Plan hereunder.
Any such adjustments will be made only by the Board, and when so made will be
effective, conclusive and binding for all purposes with respect to this Plan.
No such adjustments will be required by reason of the issuance or sale by the
Company for cash or other consideration of additional shares of its Stock or
securities convertible into or exchangeable for shares of its Stock.

7.	CONDITIONS UPON ISSUANCE OF SHARES

(a)	Shares shall not be issued pursuant to an Award unless such Award and
the issuance and delivery of such Shares pursuant thereto shall comply with
all Applicable Laws, and shall be further subject to the approval of counsel
for the Company with respect to such compliance.

(b)	As a condition to an Award, the Company may require the person receiving
Performance Shares to represent and warrant at the time of any such Award that
the Shares are only for investment and without any present intention to sell
or distribute such Shares if, in the opinion of counsel for the Company, such
a representation is required by any Applicable Laws.

8.	CORPORATE TRANSACTIONS/CHANGES IN CONTROL/RELATED ENTITY DISPOSITIONS

Except as may be provided in an Award Agreement the Administrator shall have
the authority, exercisable either in advance of any actual or anticipated
Corporate Transaction, Change in Control or Related Entity Disposition or at
the time of an actual Corporate Transaction, Change in Control or Related
Entity Disposition at the time of the grant of an Award under the Plan or any
time while an Award remains outstanding, to provide for the full automatic
vesting of one or more outstanding unvested Awards under the Plan and the
release from restrictions on transfer and repurchase or forfeiture rights of
such Awards in connection with a Corporate Transaction, Change in Control or

                                       7
<page>
Related Entity Disposition, on such terms and conditions as the Administrator
may specify. The Administrator also shall have the authority to condition any
such Award vesting or release from such limitations upon the subsequent
termination of the Continuous Service of the Grantee within a specified period
following the effective date of the Corporate Transaction, Change in Control
or Related Entity Disposition. The Administrator may provide that any Awards
so vested or released from such limitations in connection with a Change in
Control or Related Entity Disposition shall remain fully vested or released
until the termination of the Award. Effective upon the consummation of a
Corporate Transaction, all outstanding Awards under the Plan shall terminate
unless assumed by the successor company or its parent.

9.	EFFECTIVE DATE AND TERM OF PLAN

The Plan shall become effective as of December 8, 2010. It shall continue in
effect until January 1, 2021 unless sooner terminated.

10.	AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN

(a)	The Board may at any time amend, suspend or terminate the Plan. To the
extent necessary to comply with Applicable Laws, the Company shall obtain
shareholder approval of any Plan amendment in such a manner and to such a
degree as required.

(b)	No Award may be granted during any suspension of the Plan or after
termination of the Plan.

(c)	Any amendment, suspension or termination of the Plan (including
termination of the Plan under Section 10(a), above) shall not affect Awards
already granted, and such Awards shall remain in full force and effect as if
the Plan had not been amended, suspended or terminated, unless mutually agreed
otherwise between the Grantee and the Administrator, which agreement must be
in writing and signed by the Grantee and the Company.

11.	NO EFFECT ON TERMS OF EMPLOYMENT/CONSULTING RELATIONSHIP

The Plan shall not confer upon any Grantee any right with respect to the
Grantee's Continuous Service, nor shall it interfere in any way with his or
her right or the Company's right to terminate the Grantee's Continuous Service
at any time, with or without Cause.

12.	NO EFFECT ON RETIREMENT AND OTHER BENEFIT PLANS

Except as specifically provided in a retirement or other benefit plan of the
Company or a Related Entity, Awards shall not be deemed compensation for
purposes of computing benefits or contributions under any retirement plan of
the Company or a Related Entity, and shall not affect any benefits under any
other benefit plan of any kind or any benefit plan subsequently instituted
under which the availability or amount of benefits is related to level of
compensation.

13.	GOVERNING LAW

The Plan shall be governed by the laws of the State of Nevada and the Federal
laws of the United States applicable therein; provided, however, that any
Award Agreement may provide by its terms that it shall be governed by the laws
of any other jurisdiction as may be deemed appropriate by the parties thereto.

                                       8
<page>

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