REGISTRATION RIGHTS AGREEMENT
Registration
Rights Agreement (the “Agreement”), dated as
of February 25, 2010, by and between M-Wise, Inc., a corporation organized
under the laws of Delaware, USA with its principal executive office
at 0 Xxxxx Xxxxxx, Xxxxxxxxx Xxxxxxx, Xxxxxx 00000 (the “Company”), and
Dutchess Opportunity Fund, II, LP, a Delaware Limited Partnership, with its
principal office at 00 Xxxxxxxxxxxx Xxxxxx, Xxxxx 0, Xxxxxx, XX 00000 (the
“Investor”).
Whereas, in connection with the
Investment Agreement by and between the Company and the Investor of this date
(the “Investment
Agreement”), the Company has agreed to issue and sell to the Investor up
to 20,000,000 shares of the Company’s Common Stock, $0.0017 par value per share
(the “Common
Stock”), to be purchased pursuant to the terms and subject to the
conditions set forth in the Investment Agreement; and
Whereas, to induce the Investor
to execute and deliver the Investment 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, the “1933 Act”), and
applicable state securities laws, with respect to the shares of Common Stock
issuable pursuant to the Investment Agreement.
Now therefore, in consideration of the
foregoing promises and the mutual covenants contained hereinafter and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Investor hereby agree as follows:
Section
1. DEFINITIONS.
As used
in this Agreement, the following terms shall have the following
meanings:
“Execution Date” means
the date of this Agreement set forth above.
“Investor” means
Dutchess Opportunity Fund, II, LP, a Delaware Limited Partnership.
“Person” means a
corporation, a limited liability company, an association, a partnership, an
organization, a business, an individual, a governmental or political subdivision
thereof or a governmental agency.
“Principal Market”
shall mean Nasdaq Capital Market, the NYSE Amex, the New York Stock Exchange,
the Nasdaq Global Market, the Nasdaq Global Select Market or the OTC Bulletin
Board, whichever is the principal market on which the Common Stock of the
Company is listed.
“Register,” “Registered,” and
“Registration”
refer to the Registration effected by preparing and filing one (1) or more
Registration Statements in compliance with the 1933 Act and pursuant to Rule 415
under the 1933 Act or any successor rule providing for offering securities on a
continuous basis (“Rule 415”), and the
declaration or ordering of effectiveness of such Registration Statement(s) by
the United States Securities and Exchange Commission (the “SEC”).
“Registrable
Securities” means (i)
the shares of Common Stock issued or issuable pursuant to the Investment
Agreement, and (ii) any
shares of capital stock issued or issuable with respect to such shares of Common
Stock, if any, as a result of any stock split, stock dividend, recapitalization,
exchange or similar event or otherwise, which have not been (x) included in the
Registration Statement that has been declared effective by the SEC, or (y) sold under circumstances
meeting all of the applicable conditions of Rule 144 (or any similar provision
then in force) under the 1933 Act.
“Registration
Statement” means the registration statement of the Company filed under
the 1933 Act covering the Registrable Securities.
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All
capitalized terms used in this Agreement and not otherwise defined herein shall
have the same meaning ascribed to them as in the Investment
Agreement.
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Section
2. REGISTRATION.
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(a) The Company
shall, within twenty-one (21) days of the date of this Agreement, file with the
SEC the Registration Statement or Registration Statements (as is necessary) on
Form S-1 (or, if such form is unavailable for such a registration, on such other
form as is available for such registration), covering the resale of all of the
Registrable Securities, which Registration Statement(s) shall state that, in
accordance with Rule 416 promulgated under the 1933 Act, such Registration
Statement also covers such indeterminate number of additional shares of Common
Stock as may become issuable upon stock splits, stock dividends or similar
transactions. The Company shall initially register for resale
20,000,000 shares of Common Stock, except to the extent that the SEC requires
the share amount to be reduced as a condition of effectiveness.
(b) The Company
shall use all commercially reasonable efforts to have the Registration
Statement(s) declared effective by the SEC within ninety (90) calendar days
after the date that the Registration Statement is filed.
(c) The Company
agrees not to include any other securities in the Registration Statement
covering the Registrable Securities without Investor’s prior written consent
which Investor may withhold in its sole discretion. Furthermore, the Company
agrees that it will not file any other Registration Statement for other
securities, until thirty calendar days after the Registration Statement for the
Registrable Securities is declared effective by the SEC.
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Section
3. RELATED
OBLIGATIONS.
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At such time as the Company is
obligated to prepare and file the Registration Statement with the SEC pursuant
to Section 2(a), the Company shall have the following obligations with respect
to the Registration Statement:
(a) The Company
shall use all commercially reasonable efforts to cause such Registration
Statement relating to the Registrable Securities to become effective within
ninety (90) days after the date that the Registration Statement is filed and
shall keep such Registration Statement effective until the earlier to occur
of the date on which (A) the Investor shall have
sold all the Registrable Securities; or (B) the Company has no right
to sell any additional shares of Common Stock under the Investment Agreement
(the “Registration
Period”). The 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 light of the
circumstances in which they were made, not misleading. The Company shall use all
commercially reasonable efforts to respond to all SEC comments within ten (10)
business days from receipt of such comments by the Company. The Company shall
use all commercially reasonable efforts to cause the Registration Statement
relating to the Registrable Securities to become effective no later than
five (5) business days after notice from the SEC that the
Registration Statement may be declared effective. The Investor agrees
to provide all information which it is required by law to provide to the
Company, including the intended method of disposition of the Registrable
Securities, and the Company’s obligations set forth above shall be conditioned
on the receipt of such information.
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(b) The Company
shall 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 such Registration Statement, which prospectus is to be
filed pursuant to Rule 424 promulgated under the 1933 Act, as may be necessary
to keep such Registration Statement effective during the Registration Period,
and, during such period, comply with the provisions of the 1933 Act with respect
to the disposition of all Registrable Securities of the Company covered by such
Registration Statement until such time as all of such Registrable Securities
shall have been disposed of in accordance with the intended methods of
disposition by the Investor thereof as set forth in such Registration
Statement. In the event the number of shares of Common Stock covered
by the Registration Statement filed pursuant to this Agreement is at any time
insufficient to cover all of the Registrable Securities, the Company shall amend
such Registration Statement, or file a new Registration Statement (on the short
form available therefor, if applicable), or both, so as to cover all of the
Registrable Securities, in each case, as soon as practicable, but in any event
within thirty (30) calendar days after the necessity therefor arises (based on
the then Purchase Price of the Common Stock and other relevant factors on which
the Company reasonably elects to rely), assuming the Company has sufficient
authorized shares at that time, and if it does not, within thirty (30) calendar
days after such shares are authorized. The Company shall use
commercially reasonable efforts to cause such amendment and/or new Registration
Statement to become effective as soon as practicable following the filing
thereof.
(c) The Company
shall make available to the Investor whose Registrable Securities are included
in any Registration Statement and its legal counsel without charge (i) if requested by the
Investor, promptly after the same is prepared and filed with the SEC at least
one (1) copy of such Registration Statement and any amendment(s) thereto,
including financial statements and schedules, all documents incorporated therein
by reference and all exhibits, the prospectus included in such Registration
Statement (including each preliminary prospectus) and, with regards to such
Registration Statement(s), any correspondence by or on behalf of the Company to
the SEC or the staff of the SEC and any correspondence from the SEC or the staff
of the SEC to the Company or its representatives; (ii) upon the effectiveness of
any Registration Statement, the Company shall make available copies of the
prospectus, via XXXXX, included in such Registration Statement and all
amendments and supplements thereto; and (iii) such other documents,
including copies of any preliminary or final prospectus, as the Investor may
reasonably request from time to time in order to facilitate the disposition of
the Registrable Securities.
(d) The Company
shall use commercially reasonable efforts to (i) register and qualify the
Registrable Securities covered by the Registration Statement under such other
securities or “blue sky” laws of such states in the United States as the
Investor reasonably requests; (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 during the Registration Period; (iii) take such other actions
as may be necessary to maintain such registrations and qualifications 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 (x) qualify to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this Section 3(d), or (y) subject itself to general
taxation in any such jurisdiction. The Company shall promptly notify
the Investor who holds Registrable Securities of the receipt by the Company of
any notification with respect to the suspension of the registration or
qualification of any of the Registrable Securities for sale under the securities
or “blue sky” laws of any jurisdiction in the United States or its receipt of
actual notice of the initiation or threatening of any proceeding for such
purpose.
(e) As promptly as
practicable after becoming aware of such event, the Company shall notify
Investor in writing of the happening of any event as a result of which the
prospectus included in the Registration Statement, as then in effect, includes
an untrue statement of a material fact or omission to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading (“Registration
Default”) and use all diligent efforts to promptly prepare a supplement
or amendment to such Registration Statement and take any other necessary steps
to cure the Registration Default (which, if such Registration Statement is on
Form S-3, may consist of a document to be filed by the Company with the SEC
pursuant to Section 13(a), 13(c), 14 or 15(d) of the 1934 Act (as defined below)
and to be incorporated by reference in the prospectus) to correct such untrue
statement or omission, and make available copies of such supplement or amendment
to the Investor. The Company shall also promptly notify the Investor (i) when a prospectus or any
prospectus supplement or post-effective amendment has been filed, and when the
Registration Statement or any post-effective amendment has become effective;
(ii) of any request by
the SEC for amendments or supplements to the Registration Statement or related
prospectus or related information, (iii) of the Company’s
reasonable determination that a post-effective amendment to the Registration
Statement would be appropriate, (iv) in the event the
Registration Statement is no longer effective, or (v) if the Registration
Statement is stale as a result of the Company’s failure to timely file its
financials or otherwise. If a Registration Default occurs during the period
commencing on the Put Notice Date and ending on the Closing Date, the Company
acknowledges that its failure to cure such a Registration Default within ten
(10) business days will cause the Investor to suffer damages in an amount that
will be difficult to ascertain.
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(f) The Company
shall use all commercially reasonable efforts to prevent the issuance of any
stop order or other suspension of effectiveness of the Registration
Statement, or the suspension of the qualification of any of the Registrable
Securities for sale in any jurisdiction and, if such an order or suspension is
issued, to obtain the withdrawal of such order or suspension at the
earliest possible moment and to notify the Investor holding Registrable
Securities being sold of the issuance of such order and
the resolution thereof or its receipt of actual notice of the
initiation or threat of any proceeding concerning the effectiveness of the
Registration Statement.
(g) The Company
shall permit the Investor and one (1) legal counsel, designated by the Investor,
to review and comment upon the Registration Statement and all amendments and
supplements thereto at least one (1) calendar day prior to their filing with the
SEC. However, any postponement of a filing of a Registration
Statement or any postponement of a request for acceleration or any postponement
of the effective date or effectiveness of a Registration Statement by written
request of the Investor (collectively, the "Investor's Delay")
shall not act to trigger any penalty of any kind, or any cash amount due or any
in-kind amount due the Investor from the Company under any and all agreements of
any nature or kind between the Company and the Investor. The event(s)
of an Investor's Delay shall act to suspend all obligations of any kind or
nature of the Company under any and all agreements of any nature or kind between
the Company and the Investor.
(h) Intentionally
Omitted.
(i) The Company
shall hold in confidence and not make any disclosure of information concerning
the Investor unless (i)
disclosure of such information is necessary to comply with federal or
state securities laws, (ii) the disclosure of such
information is necessary to avoid or correct a misstatement or omission in any
Registration Statement, (iii) the release of such
information is ordered pursuant to a subpoena or other final, non-appealable
order from a court or governmental body of competent jurisdiction, (iv) such information has been
made generally available to the public other than by disclosure in violation of
this Agreement or any other agreement, or (v) the Investor has consented
to such disclosure. The Company agrees that it shall, upon learning
that disclosure of such information concerning the Investor is sought in or by a
court or governmental body of competent jurisdiction or through other means,
give prompt written notice to the Investor and allow the Investor, at the
Investor’s expense, to undertake appropriate action to prevent disclosure of, or
to obtain a protective order covering such information.
(j) The Company
shall use all commercially reasonable efforts to maintain designation and
quotation of all the Registrable Securities covered by any Registration
Statement on the Principal Market. The Company shall pay all fees and
expenses in connection with satisfying its obligation under this Section
3(j).
(k) The Company
shall cooperate with the Investor to facilitate the prompt preparation and
delivery of certificates representing the Registrable Securities to be offered
pursuant to the Registration Statement and enable such certificates to be in
such denominations or amounts, as the case may be, as the Investor may
reasonably request (and after any sales of such Registrable Securities by the
Investor, such certificates not bearing any restrictive legend).
(l) The Company
shall provide a transfer agent for all the Registrable Securities not later than
the effective date of the first Registration Statement filed pursuant
hereto.
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(m) If requested by
the Investor, the Company shall (i) as soon as reasonably
practical incorporate in a prospectus supplement or post-effective amendment
such information as the Investor reasonably determines should be included
therein relating to the sale and distribution of Registrable Securities,
including, without limitation, information with respect to the offering of the
Registrable Securities to be sold in such offering; (ii) make all required filings
of such prospectus supplement or post-effective amendment as soon as reasonably
possible after being notified of the matters to be incorporated in such
prospectus supplement or post-effective amendment; and (iii) supplement or make
amendments to any Registration Statement if reasonably requested by the
Investor.
(n) The Company
shall use all commercially reasonable efforts to cause the Registrable
Securities covered by the applicable Registration Statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary to facilitate the disposition of such Registrable
Securities.
(o) The Company
shall otherwise use all commercially reasonable efforts to comply with all
applicable rules and regulations of the SEC in connection with any registration
hereunder.
(p) Within one (1)
business day after the Registration Statement which includes Registrable
Securities is declared effective by the SEC, the Company shall deliver to the
transfer agent for such Registrable Securities, with copies to the Investor, a
written notification that such Registration Statement has been declared
effective by the SEC.
Section
4. OBLIGATIONS OF THE
INVESTOR.
(a) At least five
(5) calendar days prior to the first anticipated filing date of the Registration
Statement the Company shall notify the Investor in writing of the
information the Company requires from the Investor for the Registration
Statement. 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 and the Investor agrees to furnish to the Company
that information regarding itself, the Registrable Securities and the intended
method of disposition of the Registrable Securities as shall reasonably be
required to effect the registration of such Registrable Securities and the
Investor shall execute such documents in connection with such registration as
the Company may reasonably request. The Investor covenants and agrees
that, in connection with any sale of Registrable Securities by it pursuant to
the Registration Statement, it shall comply with the “Plan of Distribution”
section of the then current prospectus relating to such Registration
Statement.
(b) The Investor,
by its 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 any Registration Statement hereunder.
(c) The Investor
agrees that, upon receipt of written notice from the Company of the happening of
any event of the kind described in Section 3(f) or the first sentence of 3(e),
the Investor will immediately discontinue disposition of Registrable Securities
pursuant to any Registration Statement(s) covering such Registrable Securities
until the Investor’s receipt of the copies of the supplemented or amended
prospectus contemplated by Section 3(f) or the first sentence of Section
3(e).
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Section
5. EXPENSES
OF REGISTRATION.
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All expenses, other than underwriting
discounts and commissions and other than as set forth in the Investment
Agreement, incurred in connection with registrations including comments, filings
or qualifications pursuant to Sections 2 and 3, including, without limitation,
all registration, listing and qualifications fees, printing and accounting fees,
and fees and disbursements of counsel for the Company shall be paid by the
Company.
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Section
6. INDEMNIFICATION.
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In the event any Registrable Securities
are included in the Registration Statement under this Agreement:
(a) To the fullest
extent permitted by law, the Company, under this Agreement, will, and hereby
does, indemnify, hold harmless and defend the Investor who holds Registrable
Securities, the directors, officers, partners, employees, counsel, agents,
representatives of, and each Person, if any, who controls, any Investor within
the meaning of the 1933 Act or the Securities Exchange Act of 1934, as amended
(the “1934
Act”) (each, an “Indemnified Person”),
against any losses, claims, damages, liabilities, judgments, fines, penalties,
charges, costs, attorneys’ fees, amounts paid in settlement or expenses, joint
or several (collectively, “Claims”), incurred in
investigating, preparing or defending any action, claim, suit, inquiry,
proceeding, investigation or appeal taken from the foregoing by or before any
court or governmental, administrative or other regulatory agency, body or the
SEC, whether pending or threatened, whether or not an indemnified party is or
may be a party thereto (“Indemnified
Damages”), to which any of them may become subject 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 in the Registration Statement or any
post-effective amendment thereto or in any filing made in connection with the
qualification of the offering under the securities or other “blue sky” laws of
any jurisdiction in which the Investor has requested in writing that the Company
register or qualify the Shares (“Blue Sky Filing”), or
the omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which the statements therein were made, not misleading,
(ii) any untrue
statement or alleged untrue statement of a material fact 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 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 1933 Act, the 1934 Act, any other law,
including, without limitation, any state securities law, or any rule or
regulation thereunder relating to the offer or sale of the Registrable
Securities pursuant to the Registration Statement (the matters in the foregoing
clauses (i) through (iii) being, collectively, “Violations”). Subject
to the restrictions set forth in Section 6(c) the Company shall reimburse the
Investor and each such controlling person, 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): (i) shall not apply to a Claim
arising out of or based upon a Violation which is due to the inclusion in the
Registration Statement of the information furnished to the Company by any
Indemnified Person expressly for use in connection with the preparation of the
Registration Statement or any such amendment thereof or supplement thereto;
(ii) shall not be
available to the extent such Claim is based on (a) a failure of the Investor
to deliver or to cause to be delivered the prospectus made available by the
Company or (b) the
Indemnified Person’s use of an incorrect prospectus despite being promptly
advised in advance by the Company in writing not to use such incorrect
prospectus; (iii) any claims based on the
manner of sale of the Registrable Securities by the Investor or of the
Investor’s failure to register as a dealer under applicable securities laws;
(iv) any omission of the
Investor to notify the Company of any material fact that should be stated in the
Registration Statement or prospectus relating to the Investor or the manner of
sale; and (v) any
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. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of the Indemnified
Person and shall survive the resale of the Registrable Securities by
the Investor pursuant to the Registration Statement.
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(b) In connection
with any Registration Statement in which Investor is participating, the Investor
agrees to severally and jointly indemnify, hold harmless and defend, to
the same extent and in the same manner as is set forth in Section
6(a), the Company, each of its directors, each of its officers who
signs the Registration Statement, each Person, if any, who controls the Company
within the meaning of the 1933 Act or the 1934 Act and the Company’s agents
(collectively and together with an Indemnified Person, an “Indemnified Party”),
against any Claim or Indemnified Damages to which any of them may become
subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim or
Indemnified Damages arise out of or are based upon any Violation, in each case
to the extent, and only to the extent, that such Violation is due to (i) the
inclusion in the Registration Statement of the written information furnished to
the Company by the Investor expressly for use in connection with such
Registration Statement, (ii) a failure of the Investor to deliver or to cause to
be delivered the prospectus made available by the Company or the Investor’s use
of an incorrect prospectus despite being timely advised by the Company in
writing not to use such incorrect prospectus; (iii) the Investor’s failure to
register as a dealer under applicable securities laws; or (iv) any omission of
the Investor to notify the Company of any material fact that should be stated in
the Registration Statement or prospectus relating to the Investor or the manner
of sale; and, subject to Section 6(c), the Investor will reimburse any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such Claim; provided, however, that the
indemnity agreement contained in this Section 6(b) and the agreement with
respect to contribution contained in Section 7 shall not apply to amounts paid
in settlement of any Claim if such settlement is effected without the prior
written consent of the Investor, which consent shall not be unreasonably
withheld; provided, further, however, that the Investor shall only be liable
under this Section 6(b) for that amount of a Claim or Indemnified
Damages as does not exceed the net proceeds to such Investor as a result of the
sale of Registrable Securities pursuant to such Registration
Statement. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such Indemnified Party
and shall survive the resale of the Registrable Securities by the Investor
pursuant to the Registration Statement.
(c) Promptly after
receipt by an Indemnified Person or Indemnified Party under this Section 6 of
notice of the commencement of any action or proceeding (including any
governmental action or proceeding) involving a Claim, such Indemnified Person or
Indemnified Party 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 or the Indemnified Party, as the
case may be; provided, however, that an Indemnified Person or Indemnified Party
shall have the right to retain its own counsel with the fees and expenses to be
paid by the indemnifying party, if, in the reasonable opinion of counsel
retained by the Indemnified Person or Indemnified Party, the representation by
counsel of the Indemnified Person or Indemnified Party and the indemnifying
party would be inappropriate due to actual or potential differing interests
between such Indemnified Person or Indemnified Party and any other party
represented by such counsel in such proceeding. The indemnifying
party shall pay for only one (1) separate legal counsel for the Indemnified
Persons or the Indemnified Parties, as applicable, and such counsel shall be
selected by the Investor, if the Investor is entitled to indemnification
hereunder, or the Company, if the Company is entitled to indemnification
hereunder, as applicable. The Indemnified Party or Indemnified Person
shall cooperate fully with the indemnifying party in connection with any
negotiation or defense of any such action or Claim by the indemnifying party and
shall furnish to the indemnifying party all information reasonably available to
the Indemnified Party or Indemnified Person which relates to such action or
Claim. The indemnifying party shall keep the Indemnified Party or
Indemnified Person fully apprised at all times as to the status of the defense
or any settlement negotiations with respect thereto. No indemnifying
party shall be liable for any settlement of any action, claim or proceeding
affected without its written consent, provided, however, that the indemnifying
party shall not unreasonably withhold, delay or condition its consent. No
indemnifying party shall, without the consent of the Indemnified Party or
Indemnified Person, consent to entry of any judgment or enter into any
settlement or other compromise which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such Indemnified Party or
Indemnified Person of a release from all liability in respect to such
Claim. Following indemnification as provided for hereunder, the
indemnifying party shall be subrogated to all rights of the Indemnified Party or
Indemnified Person with respect to all third parties, firms or corporations
relating to the matter for which indemnification has been made. 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 or Indemnified Party under this
Section 6, except to the extent that the indemnifying party is prejudiced in its
ability to defend such action.
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(d) The indemnity
agreements contained herein shall be in addition to (i) any cause of action or
similar right of the Indemnified Party or Indemnified Person against the
indemnifying party or others, and (ii) any liabilities the
indemnifying party may be subject to pursuant to the law.
Section
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: (i) 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; (ii) no seller of
Registrable Securities guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 0000 Xxx) shall be entitled to contribution from
any seller of Registrable Securities who was not guilty of fraudulent
misrepresentation; and (iii)
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.
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Section
8.
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REPORTS UNDER THE 1934
ACT.
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With a view to making available to the
Investor the benefits of Rule 144 promulgated under the 1933 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”), provided
that the Investor holds any Registrable Securities are eligible for resale under
Rule 144 and such information is necessary in order for the Investor to sell
such Securities pursuant to Rule 144, the Company agrees 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 1933 Act and the 1934 Act so long as the Company remains
subject to such requirements (it being understood that nothing herein shall
limit the Company’s obligations under Section 5(c) of the Investment Agreement)
and the filing of such reports and other documents is required for the
applicable provisions of Rule 144; and
(c) furnish
to the Investor, promptly upon request, (i) a written statement by the
Company that it has complied with the reporting requirements of Rule 144, the
1933 Act and the 1934 Act, (ii) 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 Investor to sell such securities
pursuant to Rule 144 without registration.
Section
9. NO
ASSIGNMENT OF REGISTRATION RIGHTS.
The rights and obligations under this
Agreement shall not be assignable.
Section
10. AMENDMENT OF REGISTRATION
RIGHTS.
The provisions of this Agreement may be
amended only with the written consent of the Company and Investor.
Section
11. MISCELLANEOUS.
(a) Any notices or
other communications required or permitted to be given under the terms of this
Agreement that must be in writing will be deemed to have been delivered (i) upon receipt, when
delivered personally; (ii)
upon receipt, when sent by facsimile or email with the signed document
attached in PDF format (provided a confirmation of transmission is mechanically
or electronically generated and kept on file by the sending party); or (iii) one (1) day after
deposit with a nationally recognized overnight delivery service, in each case
properly addressed to the party to receive the same. The addresses
and facsimile numbers for such communications shall be:
8
If to the
Company:
M-Wise
Inc.
0 Xxxxx
Xxxxxx
Xxxxxxxxx
Xxxxxxx, Xxxxxx 00000
Telephone:
000-00-000-0000
Facsimile:
000-00-000-0000
With Copy
to:
Xxxxxx X.
Xxxxxx, Esq.
Xxxxxxx
Savage LLP
000
Xxxxxxxxx Xxxxxx, 0xx
Xxxxx
Xxx Xxxx,
Xxx Xxxx 00000
If to the
Investor:
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Dutchess
Opportunity Fund, II, LP
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00
Xxxxxxxxxxxx Xxx, Xxxxx 0
|
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Xxxxxx,
XX 00000
|
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Telephone:
(000) 000-0000
|
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Facsimile: (000)
000-0000
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Each party shall provide five (5)
business days prior notice to the other party of any change in address, phone
number, facsimile number ore-mail address.
(b) Failure of any
party to exercise any right or remedy under this Agreement or otherwise, or
delay by a party in exercising such right or remedy, shall not operate as a
waiver thereof.
(c) This
Agreement and the Investment Agreement constitute the entire agreement among the
parties hereto with respect to the subject matter hereof and
thereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein and
therein.
(d) This Agreement
and the Investment Agreement supersede all prior agreements and understandings
among the parties hereto with respect to the subject matter hereof and
thereof.
(e) The headings in this
Agreement are for convenience of reference only and shall not limit or otherwise
affect the meaning hereof. Whenever required by the context of this
Agreement, the singular shall include the plural and masculine shall include the
feminine. This Agreement shall not be construed as if it had been
prepared by one of the parties, but rather as if all the parties had prepared
the same.
(f) This Agreement
may be executed in two or more identical 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 facsimile transmission or by e-mail delivery of a
PDF format of a copy of this Agreement bearing the signature of the
party so delivering this Agreement.
(g) Each party
shall do and perform, or cause to be done and performed, all such further acts
and things, and shall execute and deliver all such other agreements,
certificates, instruments and documents, as the other party may reasonably
request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated
hereby.
9
(h) In case any provision of
this Agreement is held by a court of competent jurisdiction to be excessive in
scope or otherwise invalid or unenforceable, such provision shall be adjusted
rather than voided, if possible, so that it is enforceable to the maximum extent
possible, and the validity and enforceability of the remaining provisions of
this Agreement will not in any way be affected or impaired thereby.
Section
12. DISPUTES SUBJECT TO
ARBITRATION GOVERNED BY MASSACHUSETTS LAW
All disputes arising under this
agreement shall be governed by and interpreted in accordance with the laws of
the Commonwealth of Massachusetts, without regard to principles of conflict of
laws. The parties to this agreement will submit all disputes arising
under this agreement to arbitration in Boston, Massachusetts before a single
arbitrator of the American Arbitration Association (“AAA”). The
arbitrator shall be selected by application of the rules of the AAA, or by
mutual agreement of the parties, except that such arbitrator shall be an
attorney admitted to practice law in the Commonwealth of
Massachusetts. No party to this agreement will challenge the
jurisdiction or venue provisions as provided in this section. Nothing
contained herein shall prevent the party from obtaining an
injunction.
*.*.*
10
SIGNATURE
PAGE OF REGISTRATION RIGHTS AGREEMENT
Your
signature on this Signature Page evidences your agreement to be bound by the
terms and conditions of the Investment Agreement and the Registration Rights
Agreement as of the date first written above.
The
undersigned signatory hereby certifies that he has read and understands the
Registration Rights Agreement, and the representations made by the undersigned
in this Registration Rights Agreement are true and accurate, and agrees to be
bound by its terms.
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By:
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/s/
Xxxxxxx X. Xxxxxxxx
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Xxxxxxx
X. Xxxxxxxx
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Managing
Member of:
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Dutchess
Capital Management, II, LLC
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General
Partner to:
|
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Dutchess
Opportunity Fund, II, LP
|
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M-WISE,
INC.
|
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By:
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/s/
Xxxxxxxxx Xxxxxx
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Name:
Xxxxxxxxx Xxxxxx
|
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Title:
Chairman
|
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/s/
Xxxxxxx Xxxxxx
|
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Name:
Xxxxxxx Xxxxxx
|
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Title:
Chief Financial Officer and Principal
|
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11
