XcelMobility, Inc.: Exhibit 10.2 - Filed by newsfilecorp.com






REGISTRATION RIGHTS AGREEMENT 

          Registration
Rights Agreement (the “Agreement”), dated as of April 23, 2013, by and
between XCELMOBILITY, INC., a corporation organized under the laws of Nevada,
USA (the “Company”), and Dutchess Opportunity Fund, II, LP, a Delaware
Limited Partnership (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 $2,000,000 of shares of the
Company’s Common Stock, $.001 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.

          “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 or statements of the Company
filed under the 1933 Act covering the Registrable Securities.

          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.

Section
2.     
REGISTRATION.

          (a)     
Subject to Section 3(g), the Company shall, within sixty (60)
days after the date of this Agreement, file with the SEC a Registration
Statement on Form S-1 covering the resale of 6,000,000 shares of Common Stock,
except to the extent that the SEC requires the share amount to be reduced as a
condition of effectiveness, which Registration Statement 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.

          (b)     
If at any time all Registrable Securities are not covered by the
initial Registration Statement filed pursuant to Section 2(a), the
Company shall file with the SEC one or more additional Registration Statements
so as to cover all of the Registrable Securities not covered by such initial
Registration Statement, taking into account any SEC staff position with respect
to date on which the staff will permit such additional Registration Statement(s)
to be filed with the SEC. 

          (c)     
The Company agrees not to include any other securities in the
Registration Statement covering the Registrable Securities without the
Investor’s prior written consent which the 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 initial Registration Statement filed pursuant to Section 2(a) is declared
effective by the SEC.

Section
3.      RELATED
OBLIGATIONS.

          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 one hundred eighty (180) 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 twenty (20) 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 ten (10) 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.

2 




          (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 fifty (50) 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 fifty (50) 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; and (ii) upon the effectiveness of any Registration
Statement, the Company shall make available copies of the prospectus, via EDGAR,
included in such Registration Statement and all amendments and supplements
thereto.

          (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.

3 




          (e)     
As promptly as practicable after becoming aware of such event, the
Company shall notify the 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.

          (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.

4 




          (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)      Intentionally
Omitted. 

          (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.

          (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.

5 




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 the resale 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 Section 3(e), the Investor will
immediately discontinue disposition of Registrable Securities pursuant to any
Registration Statement(s) covering the resale of 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).

          (d)      The
Investor covenants and agrees that it will comply with the prospectus delivery
and other requirements of the Securities Act as applicable to it in connection
with sales of Registrable Securities pursuant to a Registration Statement. 

Section
5.      EXPENSES OF
REGISTRATION.

          All
reasonable 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
Section 2 and Section 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.

Section
6.     
INDEMNIFICATION.

          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, the
directors, officers, partners, employees, counsel, agents, representatives of,
and each Person, if any, who controls, the 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 for the offer of the Registrable
Securities (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 each Indemnified 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; (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; (C) 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; (D) 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 (E) 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; and (iii) shall not be
available to the extent the Claim arises out of the gross negligence or willful
misconduct of the Indemnified Person.

6 




          (b)      In
connection with any Registration Statement in which the 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, officers, employees, counsel, agents and
representatives and each Person, if any, who controls the Company within the
meaning of the 1933 Act or the 1934 Act (each, 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; (iv) the Investor’s gross
negligence or willful misconduct; or (v) 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. 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.

7 




          (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, as the case may be, 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.

8 




          (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 1933 Act) 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.

Section
8.      REPORTS UNDER THE 1934
ACT.

          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 which 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 applicable to the Company, (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.

9 




Section
9.      NO ASSIGNMENT OF
REGISTRATION RIGHTS.

          This
Agreement and the rights, agreements or obligations hereunder may not be
assigned, by operation of law, merger or otherwise, and without the prior
written consent of the other party hereto, and any purported assignment by a
party without prior written consent of the other party will be null and void and
not binding on such other party. Subject to the preceding sentence, all of the
terms, agreements, covenants, representations, warranties and conditions of this
Agreement are binding upon, and inure to the benefit of and are enforceable by,
the parties and their respective successors and assigns. 

Section 10.    AMENDMENT OF
REGISTRATION RIGHTS.

          No
provision of this Agreement may be amended or waived by the parties from and
after the date that is one Trading Day immediately preceding the filing of the
initial Registration Statement with the SEC. Subject to the immediately
preceding sentence, no provision of this Agreement may be (i) amended other than
by a written instrument signed by both parties hereto or (ii) waived other than
in a written instrument signed by the party against whom enforcement of such
waiver is sought.

Section 11.  
 MISCELLANEOUS.

          (a)      Any
notices or other communications required or permitted to be given under the
terms of this Agreement must be in writing and 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:

If to the Company:

XCELMOBILITY, INC.
303 Twin Dolphins
Drive, Suite 600 
Redwood City, CA 94065

  Telephone: (650) 632-4210 

If to the Investor:

Dutchess Opportunity Fund, II, LP
50
Commonwealth Ave, Suite 2
Boston, MA 02116

  Telephone: (617) 301-4700 

10 




          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.

          (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.

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Section 12.    DISPUTES SUBJECT TO
ARBITRATION GOVERNED BY NEVADA 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.

*.*.* 

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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.

DUTCHESS OPPORTUNITY FUND, II, LP,

	 	By: 	/s/ Douglas H. Leighton 
	 	  	Douglas H. Leighton 
	 	  	Managing Member of: 
	 	  	Dutchess Capital Management, II,
      LLC 
	 	  	General Partner to: 
	 	  	Dutchess Opportunity Fund, II, LP
    


XCELMOBILITY, INC. 

By: /s/ Ronald E.
Strauss                                                                   
Ronald
E. Strauss, Executive Chairman 

Signature Page to Registration Rights Agreement