Document:

Unassociated Document

Exhibit 10.2

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this "Agreement"), dated as of April 13, 2011, by and between Medisafe 1 Technologies Corp., a Delaware corporation (the "Company"), and Centurion Private Equity, LLC, a limited liability company organized under the laws of the state of Delaware (”Investor” or the “Holder”).

WHEREAS:

A.   The Company and the Investor have entered into that certain Investment Agreement, dated as of the date hereof (the “Investment Agreement”), pursuant to which the Company may issue, from time to time, to the Investor up to an aggregate of $5,000,000.00 of newly issued shares of the Company’s common stock, $0.0001 par value (“Common Stock”), subject to the Individual Put Limit for each Put (as each such term is defined in the Investment Agreement), as provided for therein.

B.   Pursuant to the terms of, and in consideration for the Investor entering into, the Investment Agreement, the Company has issued to the Investor the Commitment Shares and Fee Shares (as each is defined in the Investment Agreement) in accordance with the terms of the Investment Agreement.

C.     Pursuant to the terms of, and in consideration for the Investor entering into, the Investment Agreement, and to induce the Investor to execute and deliver the Investment Agreement, the Company has agreed to provide the Investor with 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 Registrable Securities (as defined herein) as set forth herein.

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.

As used in this Agreement, the following terms shall have the following meanings (each capitalized term not otherwise defined herein shall have the meaning ascribed to it in the Investment Agreement):

 “1934 Act” shall mean the Securities Exchange Act of 1934, as amended.

“Additional Registration Statement” shall have the meaning ascribed to it in Section 3(c) below.

“Additional Registration Effectiveness Deadline” shall have the meaning ascribed to it in Section 3(c) below.

  

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“Additional Registration Filing Deadline” shall have the meaning ascribed to it in Section 3(c) below.

“Allowed Extension” shall have the meaning ascribed to it in Section 3(e) below.

“Commission” shall mean the Securities and Exchange Commission.

“Commitment Shares” shall have the meaning ascribed to it in the Investment Agreement.

"Cutback Shares" means any of the Registrable Securities not included in any of the Registration Statements previously declared effective hereunder as a result of a limitation on the maximum number of shares of Common Stock of the Company permitted to be registered by the staff of the SEC pursuant to Rule 415.

“Effective Date” shall mean the date that the initial Registration Statement is first declared effective by the Commission.

“Effectiveness Deadline,” (a) with respect to the Initial Registration Statement, shall mean the one hundred fiftieth (150th) calendar day after the date hereof (or the one hundred eightieth (180th) calendar day after the date hereof in the event that such Registration Statement is subject to review by the SEC) and (b) with respect to any Additional Registration Statements which may be required pursuant to Section 3(c), shall mean the Additional Registration Effectiveness Deadline; provided, however, that in the event the Company is notified by the Commission that one or more of the above Registration Statements will not be reviewed or is no longer subject to further review and comments, the Effectiveness Deadline as to such Registration Statement shall be the fifth Trading Day following the date on which the Company is so notified if such date precedes the dates otherwise required above.

“Exclusion Period” shall have the meaning set forth in Section 3(q) below.

“Fee Shares” shall have the meaning ascribed to it in the Investment Agreement.

“Filing Deadline” shall mean the Initial Registration Filing Deadline, or any applicable Additional Registration Filing Deadline.

“FINRA” shall mean the Financial Industry Regulatory Authority (f/k/a the National Association of Securities Dealers, Inc.).

“Holder” shall mean the Holder of the Registrable Securities, which shall be Centurion Private Equity, LLC or any permitted assignee therefrom.

“Initial Registration Filing Deadline” shall mean, with respect to the Initial Registration Statement required hereunder, the date that is sixty (60) calendar days (plus any Allowed Extension) from the date of this Agreement.

  

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“Initial Registration Minimum” means a number of Registrable Securities equal to the lesser of (i) the total number of Registrable Securities and (ii) the maximum number of Registrable Securities which could be registered for resale by the Company without causing the Commission to prohibit the Company from conducting such offering in accordance with the provisions of Rule 415 as advised by counsel to the Company or the staff of the Commission (the “Staff”) in a written comment letter or otherwise (which number shall be no less than one-third (1/3) of the number of issued and outstanding shares of Common Stock that are held by non-affiliates of the Company on the day immediately prior to the filing date of the Initial Registration Statement, unless the staff of the Commission expressly requires otherwise).

“Investment Agreement” shall have the meaning set forth in Recital “A” above.

"Investor" means Centurion Private Equity, LLC or any permitted transferee or assignee thereof to whom Centurion Private Equity, LLC (or a prior assignee thereof) assigns its rights under this Agreement and who agrees to become bound by the provisions of this Agreement in accordance with Section 10 hereof.

“Prospectus” means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated by the Commission pursuant to the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.

"Register," "Registered," and "Registration" refer to a registration effected by preparing and filing a Registration Statement or 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 by the United States Securities and Exchange Commission (the "Commission").

"Registrable Securities," means (a) the Commitment Shares, (b) the Fee Shares, (c) any shares of Common Stock issued or issuable as Put Shares (as defined in the Investment Agreement), (d) any shares of capital stock issued or issuable as a dividend on or in exchange for or otherwise with respect to any of the foregoing, (e) any other shares of common stock issued or issuable to the Investor pursuant to the terms of the Investment Agreement, this Registration Rights Agreement or any other Transaction Document (as defined in the Investment Agreement), (f) shares of capital stock of a successor entity into which the shares of Common Stock are converted or exchanged and (g) any securities issued or issuable upon any stock split, dividend or other distribution, recapitalization or similar event with respect to the foregoing. Notwithstanding the above, the Commitment Shares and Fee Shares shall no longer be considered “Registrable Securities” after the first anniversary of the Investment Commitment Closing (as defined in the Investment Agreement) provided that such shares are unconditionally resellable under Rule 144 of the 1933 Act.

  

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“Registration Failure Liquidated Damages” shall have the meaning set forth in Section 4 below.

“Registration Period” shall have the meaning set forth in Section 3(a).

“Registration Shortfall” shall have the meaning set forth in Section 2(a) below.

"Registration Statement(s)" means a registration statement(s) of the Company under the 1933 Act.

“Registration Supplement” shall have the meanings set forth in Sections 3(b) and 3(g) below.

“Registration Supplement Deadline” shall have the meanings set forth in Section 3(g).

“Registration Trigger Date” shall have the meaning set forth in Section 3(c) below.

“Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.

“SEC” shall mean the Securities and Exchange Commission.

“SEC Guidance” means (i) the Securities Act, and (ii) any publicly-available written or oral guidance, comments, requirements or requests of the Commission staff.

“SEC Share Reduction” shall have the meaning ascribed to it in Section 2(b) below.

“SEC Staff” shall mean the staff of the SEC.

“Shares” shall mean the Commitment Shares, the Fee Shares and the Put Shares.

“Securities” shall mean the Common Stock of the Company issuable pursuant to the Investment Agreement, including but not limited to the Commitment Shares, the Fee Shares and the Put Shares.

“Transaction Documents” shall have the meaning ascribed to it in the Investment Agreement.

  

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2.  REGISTRATION.

a.  MANDATORY REGISTRATION. Following the Investment Commitment Closing pursuant to the Investment Agreement, the Company shall prepare, and, on or prior to the Initial Registration Filing Deadline (as defined above) file with the Commission a Registration Statement on Form S-1 (or, if Form S-1 is not then available, on such form of Registration Statement as is then available to effect a registration of the Registrable Securities, subject to the consent of the Holder, which consent will not be unreasonably withheld) (the “Initial Registration Statement”) covering the resale of the Registrable Securities which Registration Statement, to the extent allowable under the 1933 Act and the rules and regulations promulgated thereunder (including Rule 416), shall state that such Registration Statement also covers such indeterminate number of additional shares of Common Stock as may become issuable to prevent dilution resulting from stock splits, stock dividends or similar transactions and shall contain a plan of distribution reasonably acceptable to the Holder.  The number of shares of Common Stock initially included in such Initial Registration Statement shall be no less than the Initial Registration Minimum.  If any Registration Statement covers less than the total number of Registrable Securities, a “Registration Shortfall” shall be said to have occurred.

 

b.   SEC SHARE REDUCTION. Notwithstanding the foregoing, if the Company is advised by the staff of the Commission in a written comment letter or otherwise that the Staff or the SEC seeks to characterize any offering pursuant to a Registration Statement filed pursuant to this Agreement as constituting an offering of securities that does not permit such Registration Statement to become effective and be used for resales by the Investor on a delayed or continuous basis under Rule 415 at then-prevailing market prices (and not fixed prices)(or as otherwise may be acceptable to the Investor), because of the number of shares sought to be included in the Registration Statement, then the Company may reduce (an “SEC Share Reduction”) the number of shares covered by such Registration Statement to the maximum number which would still enable the Staff and the SEC to allow the Company to conduct such offering in accordance with the provisions of Rule 415 and to permit such Registration Statement to become effective and be used as aforesaid.  In the event of an SEC Share Reduction, (i) the inclusion of at least twenty five percent (25%) of the aggregate of the Commitment Shares and the Fee Shares in such initial Registration Statement shall take precedence over any Put Shares and shall not be cut back or removed from such Registration Statement until any Put Shares are cut back and removed from such Registration Statement.

 

c.   MISC.   The Company shall, as early as practicable on the Trading Day after the effective date of such Registration Statement, file a final Prospectus with the Commission as required by Rule 424.  The Company acknowledges that the number of shares initially included in each Registration Statement represents a good faith estimate of the maximum number of Put Shares to be issued in addition to the Commitment Shares and Fee Shares, and shall be amended if not sufficient.  Each Registration Statement (and each amendment or supplement thereto, and each request for acceleration of effectiveness thereof) shall be provided to (and subject to the approval of) the Investor and its counsel prior to its filing or other submission.

d.   PIGGY-BACK REGISTRATIONS.  If at any time prior to the expiration of the Registration Period (as hereinafter defined) the Company shall determine to file with the Commission a Registration Statement relating to an offering for its own account or the account of others under the 1933 Act of any of its equity securities (other than on Form S-4 or Form S-8 or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans), the Company shall send to Investor written notice of such determination and, if within fifteen (15) days after the effective date of such notice, the Investor shall so request in writing, the Company shall include in such Registration Statement all or any part of the Registrable Securities which are not then registered for resale pursuant to a current and effective Registration Statement, and which the Investor requests to be registered, except that if, (i) inclusion of such shares would result in the offering not being Rule 415 Eligible, or (ii) in connection with any underwritten public offering for the account of the Company, the managing underwriter(s) thereof shall impose a limitation on the number of shares of Common Stock which may be included in the Registration Statement because, in such underwriter(s)' judgment, marketing or other factors dictate such limitation is necessary to facilitate public distribution, then the Company shall be obligated to include in such Registration Statement only such limited portion of the Registrable Securities with respect to which the Investor has requested inclusion hereunder (i) as would enable the offering to be Rule 415 Eligible or (ii) as the underwriter shall permit;

  

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PROVIDED, HOWEVER, that the Company shall not exclude any Registrable Securities unless the Company has first excluded all outstanding securities, the holders of which are not entitled by contract to inclusion of such securities in such Registration Statement or are not entitled to pro rata inclusion with the Registrable Securities; and

PROVIDED, FURTHER, HOWEVER, that, after giving effect to the immediately preceding proviso, any exclusion of Registrable Securities shall be made pro rata with holders of other securities having the contractual right to include such securities in the Registration Statement other than holders of securities entitled to inclusion of their securities in such Registration Statement by reason of demand registration rights. No right to registration of Registrable Securities under this Section 2(d) shall be construed to limit any registration required under Sections 2(a) or 3 hereof.  If an offering in connection with which the Investor is entitled to registration under this Section 2(d) is an underwritten offering, then the Investor shall, unless otherwise agreed by the Company, offer and sell such Registrable Securities in an underwritten offering using the same underwriter or underwriters and, subject to the provisions of this Agreement, on the same terms and conditions as other shares of Common Stock included in such underwritten offering. Notwithstanding anything to the contrary set forth herein, the registration rights of the Investor pursuant to this Section 2(d) shall only be available in the event the Company fails to timely file, obtain effectiveness or maintain effectiveness of any Registration Statement to be filed pursuant to Section 2(a) in accordance with the terms of this Agreement and shall terminate and be of no further force and effect once the Company satisfies its obligations under this Agreement.

For any piggyback registration into which the Investor’s shares are to be included, the Investor shall provide the underwriter with any information about the Investor that is reasonably requested by the underwriter.

e.  ALLOWED EXTENSION OF FILING DEADLINE.

 

A.            Allowed Extension.   Notwithstanding the foregoing, the Company may delay the initial registration of Registrable Securities pursuant to Section 2(a) hereof for the time periods described in this Section 2(e) hereof to the extent reasonably necessary due to the occurrence of any of the following (each an “Allowed Extension”):

 

(i)            The Company shall have previously entered into an agreement or letter of intent contemplating an underwritten public offering on a firm commitment basis of Common Stock or securities convertible into or exchangeable for Common Stock and the managing underwriter of such proposed public offering advises the Company in writing that in its opinion such proposed underwritten offering would be materially and adversely affected by a concurrent registered offering of Registrable Securities (such opinion to state the reasons therefore);

  

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(ii)           During the two (2) month period immediately preceding such request, the Company shall have entered into an agreement or letter of intent, which has not expired or otherwise terminated, contemplating a material business acquisition by the Company or its subsidiaries whether by way of merger, consolidation, acquisition of assets, acquisition of securities or otherwise;

 

(iii)          The Company is in possession of material nonpublic information that the Company would be required to disclose in the Registration Statement and that is not, but for the registration, otherwise required to be disclosed at the time of such registration, the disclosure of which, in its good faith judgment, would have a material adverse effect on the business, operations, prospects or competitive position of the Company;

 

(iv)         The Company shall receive the written opinion of the managing underwriter of the underwritten public offering pursuant to which Common Stock has been registered within the three (3) month period prior to the receipt of a registration request that the registration of additional Common Stock will materially and adversely affect the market for the Common Stock (such opinion to state the reasons therefore); or

 

(v)          At the time of receipt of a registration request, the Company is engaged, or its board of directors has adopted by resolution a plan to engage, in any program for the purchase of Common Stock or securities convertible into or exchangeable for Common Stock and, in the opinion of counsel, reasonably satisfactory to the requesting Holders, the distribution of the Common Stock to be registered would cause such purchase to be in violation of Regulation M promulgated under the Exchange Act.

 

B.         Period of Delay.  If an event described in clauses (i) through (iv) of Section 2(e) shall occur, the Company may, by written notice to the Holders, delay the filing of a Registration Statement with respect to the Registrable Securities to be covered thereby for a period of time not exceeding an aggregate of sixty (60) days.  If an event described in clause (v) of this Section 2(e) shall occur, the filing of a Registration Statement with respect to the Registrable Securities to be covered thereby shall be delayed until the first date that the Registrable Securities to be covered thereby can be sold without violation of Regulation M of the Exchange Act.  Notwithstanding the above, (i) no Allowable Extension shall be allowed (and any Allowable Extension that is then in progress shall be terminated) if a Legend Removal Condition (as defined in the Investment Agreement) has been met and the Company has failed or refused to remove restrictive legends from common stock of the Investor pursuant to the terms of the Investment Agreement and  (ii) the Allowable Extension shall apply only to registrations of new or additional securities and shall expressly not apply to any supplement or amendment to an existing registration statement that the Company is required to file in order to keep such existing registration statement current and effective.

  

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3.  OBLIGATIONS OF THE COMPANY.  In connection with the registration of the Registrable Securities, the Company shall have the following obligations:

         a.   The Company shall prepare promptly, and file with the Commission as soon as practicable after the date of the Closing under the Investment Agreement (the "Closing Date") (but no later than the Filing Deadline), Registration Statements with respect to the number of Registrable Securities provided in Section 2(a), and thereafter use its best efforts to cause each such Registration Statement relating to Registrable Securities to become effective as soon as possible after such filing, but in any event shall cause each such Registration Statement relating to Registrable Securities to become effective no later than the Effectiveness Deadline, and, subject to any Allowed Delay, the Company shall keep the Registration Statement current and effective (and the prospectus contained therein available for use) pursuant to Rule 415 for resales by the Investor on a delayed or continuous basis at then-prevailing market prices (and not fixed prices) at all times until such date as is the earlier of (i) the date on which all of the Registrable Securities for such Registration Statement have been sold and (ii) the date on which all of the Registrable Securities for such Registration Statement (as determined by the counsel to the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the Company's transfer agent and the affected Holder) may be immediately sold to the public without registration or restriction (including without limitation as to volume by each holder thereof), pursuant to Rule 144 and without the need for current public information as required by Rule 144(c)(1) (or Rule 144(i)(2), if applicable) (the "Registration Period").  Notwithstanding anything to the contrary contained in this Agreement, the Company shall ensure that, when filed and at all times while effective, each Registration Statement (including, without limitation, all amendments and supplements thereto) and the prospectus (including, without limitation, all amendments and supplements thereto) used in connection with such Registration Statement (1) 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 case of prospectuses, in the light of the circumstances in which they were made) not misleading and (2) will disclose (whether directly or through incorporation by reference to other SEC filings to the extent permitted) all material information regarding the Company and its securities.

b.  The Company shall prepare and file with the Commission such amendments (including post-effective amendments) and supplements (collectively, “Registration Supplements”) to each Registration Statement and the prospectus used in connection with the Registration Statements, which prospectus is to be filed pursuant to Rule 424 promulgated under the Securities Act, as may be necessary to keep the Registration Statements current and effective at all times during the Registration Period and as required by applicable securities regulations, 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 the Registration Statements until such time as all of such Registrable Securities have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof as set forth in the Registration Statements. In the case of amendments and supplements to any Registration Statement which are required to be filed pursuant to this Agreement (including, without limitation, pursuant to this Section 3(b)) by reason of the Company filing a report on Form 10-Q or Form 10-K or any analogous report under the 1934 Act, the Company shall have incorporated such report by reference into such Registration Statement, if applicable, or shall file such amendments or supplements with the SEC on the same day on which the 1934 Act report is filed which created the requirement for the Company to amend or supplement such Registration Statement. The Company consents to the use of the prospectus (including, without limitation, any supplement thereto) included in each Registration Statement in accordance with the provisions of the Securities Act and with the securities or “blue sky” laws of the jurisdictions in which the Registrable Securities may be sold by the Investor, in connection with the resale of the Registrable Securities and for such period of time thereafter as such prospectus (including, without limitation, any supplement thereto) (or in lieu thereof, the notice referred to in Rule 173(a) under the Securities Act) is required by the Securities Act to be delivered in connection with resales of Registrable Securities.

  

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c.  In the event that, whether due to a Registration Shortfall or an SEC Share Reduction or otherwise, the Initial Registration Statement or any Additional Registration does not initially cover, or at any time does not cover, the resale of all Registrable Securities  (the date of each of which is referred to as a “Registration Trigger Date”), or in the event that on any Trading Day (as defined in the Investment Agreement) (each such Trading Day is also referred to as a  "Registration Trigger Date") the number of shares available under a Registration Statement filed pursuant to this Agreement is otherwise insufficient to cover all of the Registrable Securities issued or issuable pursuant to the Transaction Documents, the Company shall amend the Registration Statement, or file a new Registration Statement (on the short form available therefore, if applicable), or both (each, an “Additional Registration Statement”), so as to cover at least 100% of the total number of Registrable Securities so issued or issuable as of the Registration Trigger Date (subject to an SEC Share Reduction, if applicable).  The Company shall prepare and file each Additional Registration Statement as soon as practicable following any Registration Trigger Date, but not later than the date that is sixty (60) days following the applicable Registration Trigger Date (the “Additional Registration Filing Deadline”) until such time as all Registrable Securities have been included in Registration Statements that have been declared effective and the prospectus contained therein is available for use by the Investor, provided that, if Cutback Shares are required to be included in the Additional Registration Statement, the “Additional Registration Filing Deadline” shall mean the later of (i) the date that is sixty (60) days after the date substantially all (as such term is then interpreted by the Commission) of the Registrable Securities registered under the immediately preceding Registration Statement are sold and (ii) the date that is six (6) months following the date of effectiveness of the most recently effective Registration Statement or Additional Registration Statement filed hereunder.  The Company shall use its best efforts to cause such amendment and/or new Registration Statement to become effective as soon as practicable following the filing thereof, but in any event the Company shall cause such amendment and/or new Registration Statement to become effective by the 120th calendar day following the date on which an additional Registration Statement is required to be filed hereunder (or the 150th calendar day after such date in the event that such Registration Statement is subject to review by the SEC) (the “Additional Registration Effectiveness Deadline”) or as promptly as practicable in the event the Company is required to increase its authorized shares.

  

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d.   The Company shall furnish to the Investor and its legal counsel (i) promptly after the same is prepared and publicly distributed, filed with the Commission, or received by the Company, one copy of each Registration Statement and any amendment thereto, each preliminary prospectus and prospectus and each amendment or supplement thereto, and, in the case of the Registration Statement referred to in Section 2(a), each letter written by or on behalf of the Company to the Commission or the staff of the Commission, and each item of correspondence from the Commission or the staff of the Commission, in each case relating to such Registration Statement (other than any portion of any thereof which contains information for which the Company has sought confidential treatment), 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. The Company will immediately notify the Investor in writing of the effectiveness of each Registration Statement or any post-effective amendment. The Company will promptly respond to any and all comments received from the Commission, with a view towards causing each Registration Statement or any amendment thereto to be declared effective by the Commission as soon as practicable and shall file an acceleration request as soon as practicable, but no later than five (5) business days (the "Acceleration Request Deadline") following the resolution or clearance of all Commission comments or, if applicable, following notification by the Commission that any such Registration Statement or any amendment thereto will not be subject to review.

e.  The Company shall use reasonable best efforts to (i) register and qualify the Registrable Securities covered by the Registration Statements under such other securities or "blue sky" laws of such jurisdictions in the United States as the Investor shall reasonably request, (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;

f.    Within one (1) Business Day after each Registration Statement which covers Registrable Securities is declared effective by the SEC, the Company shall deliver, and shall cause legal counsel for the Company to deliver, to the transfer agent for such Registrable Securities (with copies to the Investor) confirmation that such Registration Statement has been declared effective by the SEC in the form (“Notice of Effectiveness of Registration Statement”) attached hereto as Exhibit A.

g.   As promptly as practicable after becoming aware of such event, the Company shall notify the Investor of the happening of any event, of which the Company has knowledge, as a result of which the prospectus included in any Registration Statement, as then in effect, includes an 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 not misleading, and use its best efforts to promptly, but in any event within two (2) business days of its knowledge of such event (the “Registration Supplement Deadline”), prepare and file a supplement or amendment to any Registration Statement (also, a “Registration Supplement”) to correct such untrue statement or omission, and deliver such number of copies of such supplement or amendment and the related prospectus supplement to the Investor as the Investor may reasonably request; provided that, for not more than ten (10) consecutive days (or a total of not more than twenty (20) days in any twelve (12) month period), the Company may delay the disclosure of material non-public information concerning the Company (as well as prospectus or Registration Statement updating) the disclosure of which at the time is not, in the good faith opinion of the Company, in the best interests of the Company (an "Allowed Delay"); provided, further, that the Company shall promptly (i) notify the Investor in writing of the existence of (but in no event, without the prior written consent of the Investor, shall the Company disclose to the Investor any of the facts or circumstances regarding) material non-public information giving rise to an Allowed Delay and (ii) advise the Investor in writing to cease all sales under such Registration Statement until the end of the Allowed Delay, provided the above actions are consistent with the requirements of the 1933 Act and/or 1934 Act or other applicable law. Upon expiration of the Allowed Delay (and the Investor shall cease all such sales under the Registration Statement upon receipt of such notification from the Company until the end of the Allowed Delay, but the Investor shall not be required to cease any sales allowed under Rule 144), the Company shall again be bound by the first sentence of this Section 3(g) with respect to the information giving rise thereto.

  

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h.   The Company shall use its best efforts to prevent the issuance of any stop order or other suspension of effectiveness of any Registration Statement, and, if such an order is issued, to obtain the withdrawal of such order at the earliest possible moment and to notify the Investor who holds Registrable Securities being sold (or, in the event of an underwritten offering, the managing underwriters) of the issuance of such order and the resolution thereof.

i.   The Company shall permit a single firm of counsel designated by the Investor to review such Registration Statement and all amendments and supplements thereto (as well as all requests for acceleration or effectiveness thereof), at Investor’s own cost, a reasonable period of time prior to their filing with the Commission (not less than two (2) business days but not more than ten (10) business days) and not file any document in a form to which such counsel reasonably objects and will not request acceleration of such Registration Statement without prior notice to such counsel.

j.    The Company shall hold in confidence and not make any disclosure of information concerning the Investor provided to the Company 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 order from a court or governmental body of competent jurisdiction, or (iv) such information has been made generally available to the public other than by disclosure in violation of this or any other agreement. 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 notice to the Investor prior to making such disclosure, and allow the Investor, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information.

k.   If the Company becomes eligible for listing on a national securities exchange, the Company shall use its best efforts to (i) cause all the Registrable Securities covered by the Registration Statement to be listed on each 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) to the extent the securities of the same class or series are not then listed on a national securities exchange, secure the designation and quotation, of all the Registrable Securities covered by the Registration Statement on the Nasdaq Global Select Market or, if not eligible for the Nasdaq Global Select Market on the Nasdaq Global Market or, if not eligible for the Nasdaq Global Market, on the Over the Counter electronic 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.

  

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l.   The Company shall provide a transfer agent and registrar, which may be a single entity, for the Registrable Securities not later than the effective date of the Registration Statement.

m.   The Company shall cooperate with the Investor who holds Registrable Securities being offered and the managing underwriter or underwriters, if any, to facilitate the timely preparation and delivery of certificates (not bearing any restrictive legends) representing Registrable Securities to be offered pursuant to such Registration Statement and enable such certificates to be in such denominations or amounts, as the case may be, as the managing underwriter or underwriters, if any, or the Investor may reasonably request and registered in such names as the managing underwriter or underwriters, if any, or the Investor may request, and, within five (5) business days after a Registration Statement which includes Registrable Securities is ordered effective by the Commission, 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 an opinion of such counsel in the form required by the transfer agent in order to issue the Registrable Securities free of restrictive legends.

n.  At the request of the Holder, the Company shall prepare and file with the Commission such amendments (including post-effective amendments) and supplements to a Registration Statement and any prospectus used in connection with the Registration Statement as may be necessary in order to change the plan of distribution set forth in such Registration Statement, provided that if such change is not legally necessary in order for the Investors to timely sell their Registrable Securities, the Company shall not be required to effect such amendments if they will  impose any additional requirements, including costs, on the Company.

o.  The Company shall take all other reasonable actions necessary to expedite and facilitate disposition by the Investor of Registrable Securities pursuant to a Registration Statement.

p.  The Company shall comply with all applicable laws related to a Registration Statement and offering and sale of securities and all applicable rules and regulations of governmental authorities in connection therewith (including without limitation the 1933 Act and the 1934 Act and the rules and regulations promulgated by the Commission).

q.    Further Registration Statements. Except for a registration statement filed on behalf of the Investor pursuant to Section 2 or Section 3 of this Agreement, and except for an underwritten public offering, the Company will not file any registration statements or amend (in such a manner as to increase the number of shares registered) any already filed registration statement with the Commission or with state regulatory authorities without the consent of the Investor until the expiration of the "Exclusion Period," which shall be defined as the sooner of (i) the date that the Registration Statement shall have been current and available for use in connection with the resale of the Registrable Securities for a period of 180 days, or (ii) until all the Shares have been resold or transferred by the Subscribers pursuant to the Registration Statement or are eligible for immediate unrestricted resale pursuant to Rule 144, without volume limitations.

  

12

  

r.  No Piggyback On Registrations.  Except for legally required amendments or supplements to the existing registration statement, neither the Company nor any of its security holders (other than the Holder in such capacity pursuant hereto) may include securities of the Company in a Registration Statement (including but not limited to any Registration Statement under Section 2(a) hereof or any amendment or supplement thereto under Section 3(b) or 3(g) hereof) or an Additional Registration Statement, other than the Registrable Securities, and the Company shall not during the Registration Period enter into any agreement providing any such right to any of its security holders.  In addition, the Company shall not offer any securities for its own account or the account of others in any Registration Statement under Section 2(a) hereof or any amendment or supplement thereto under Section 3(b) hereof without the consent of the Holder.

4.  REGISTRATION FAILURE.   If, while any Put Shares are outstanding:

 (i) after the effective date of a Registration Statement, such Registration Statement ceases for any reason to remain continuously effective as to all Registrable Securities included in such Registration Statement, or the Holder is otherwise not permitted to utilize the Prospectus therein to resell such Registrable Securities, for more than 10 consecutive calendar days or more than an aggregate of 20 calendar days (which need not be consecutive calendar days) during any 12-month period unless such Registrable Securities can be sold without registration under Rule 144, or

(ii) any Additional Registration Statement required to be filed hereunder is not filed by the applicable Additional Registration Filing Deadline or it is not declared effective by the applicable Additional Registration Effectiveness Deadline, or

(iii) any Registration Supplement required to be filed hereunder is not filed by the applicable Registration Supplement Deadline,

(any such failure or breach in (i) – (iii) above being referred to as a “Registration Failure,” and the date of each such failure being referred to as a “Registration Failure Date”), then, in addition to any other rights the Holder may have hereunder or under applicable law, on each such Registration Failure Date and on each monthly anniversary of each such Registration Failure Date (if the applicable Registration Failure shall not have been cured by such date) until the applicable Registration Failure is cured, the Company shall pay to each Holder an amount (“Registration Failure Liquidated Damages”) in cash, as liquidated damages and not as a penalty, equal to 1% of the aggregate purchase price paid by such Holder pursuant to the Investment Agreement for any unregistered Put Shares that are Registrable Securities then held by such Holder, until such time as the Registrable Securities either become registered for resale or become immediately resellable under Rule 144 without conditions or restrictions.

  

13

  

Notwithstanding (i) – (vii) above, the Company shall not be liable for Registration Failure Liquidated Damages if (1) the Company makes all filings as and when required by this Agreement, (2) the Company responds to any comments from the SEC regarding a Registration Statement within ten (10) days of the date of receipt of such comments, and (3) uses its best efforts to have the subject Registration Statement declared effective for the number of shares required hereunder as quickly as reasonably possible.  Registration Failure Liquidated Damages shall be due and payable by the fifth (5th) day of the calendar month in which they accrue.  If the Company fails to pay any liquidated damages pursuant to this Section in full within five (5) days after the date payable, the Company will pay interest thereon at a rate of 18% per annum (or such lesser maximum amount that is permitted to be paid by applicable law) to the Holder, accruing daily from the date such liquidated damages are due until such amounts, plus all such interest thereon, are paid in full. The liquidated damages pursuant to the terms hereof shall apply on a daily pro rata basis for any portion of a month prior to the cure of a Registration Failure.

5.  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 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 execute such documents in connection with such registration as the Company may reasonably request. At least three (3) business days prior to the first anticipated filing date of the Registration Statement, the Company shall notify the Investor of the information the Company requires from each Investor.

b. The Investor, by the 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 Statements hereunder, unless the Investor has notified the Company in writing of the Investor's election to exclude all of the Investor's Registrable Securities from the Registration Statements.

c. In the event of an underwritten offering pursuant to Section 2(d) in which any Registrable Securities are to be included, the Investor agrees to enter into and perform the Investor's obligations under an underwriting agreement, in usual and customary form, including, without limitation, customary indemnification and contribution obligations, with the managing underwriter of such offering and take such other actions as are reasonably required in order to expedite or facilitate the disposition of the Registrable Securities, unless the Investor has notified the Company in writing of the Investor's election to exclude all of the Investor's Registrable Securities from such Registration Statement.

d. 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), the Investor will immediately discontinue disposition of Registrable Securities pursuant to the Registration Statement covering such Registrable Securities until the Investor's receipt of the copies of the supplemented or amended prospectus contemplated by Section 3(g) 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.

  

14

  

e.  No Investor may participate in any underwritten registration hereunder unless the Investor (i) agrees to sell the Investor's Registrable Securities on the basis provided in any underwriting arrangements in usual and customary form entered into by the Company, (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements, and (iii) agrees to pay its pro rata share of all underwriting discounts and commissions and any expenses in excess of those payable by the Company pursuant to Section 6 below.

f.  If so requested by the Company, Holder agrees to furnish to the Company a completed questionnaire in substantially the form attached to this Agreement as Exhibit B (a “Selling Shareholder Questionnaire”) by the end of the third (3rd) Trading Day following the date on which such Holder receives draft materials in accordance with this Section.

6.  EXPENSES OF REGISTRATION.  All reasonable expenses, other than underwriting discounts and commissions, incurred in connection with registrations, filings or qualifications pursuant to Sections 2 and 3, including, without limitation, all registration, listing and qualification fees, printers and accounting fees, the fees and disbursements of counsel for the Company shall be borne by the Company.

7.  INDEMNIFICATION.  In the event any Registrable Securities are included in a Registration Statement under this Agreement:

a.  To the extent permitted by law, the Company will indemnify, hold harmless and defend (i) the Investor, (ii) the directors, officers, partners, managers, members, employees, agents and each person who controls any Investor within the meaning of the 1933 Act or the 1934 Act, if any, (iii) any underwriter (as defined in the 1933 Act) for the Investor in connection with an underwritten offering pursuant to Section 2(d) hereof, and (iv) the directors, officers, partners, employees and each person who controls any such underwriter within the meaning of the 1933 Act or the 1934 Act, if any (each, an "Indemnified Person"), against any joint or several losses, claims, damages, liabilities or expenses (collectively, together with actions, proceedings or inquiries by any regulatory or self-regulatory organization, whether commenced or threatened, in respect thereof, "Claims") to which any of them may become subject insofar as such Claims arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact in a Registration Statement or the omission or alleged omission to state therein a material fact required to be stated 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 if used prior to the effective date of such Registration Statement, or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the Commission) 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 (the matters in the foregoing clauses (i) through (iii) being, collectively, "Violations"). The Company shall reimburse the 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 7(a): (i) shall not apply to a Claim arising out of or based upon a Violation to the extent that it occurs solely due to the inclusion by the Company in a Registration Statement of false or misleading information about the Investor, where such information was furnished in writing to the Company by the Investor for the purpose of inclusion in such Registration Statement or any such amendment thereof or supplement thereto; (ii) shall not 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; and (iii) with respect to any preliminary prospectus, shall not inure to the benefit of any Indemnified Person if the untrue statement or omission of material fact contained in the preliminary prospectus was corrected on a timely basis in the prospectus, as then amended or supplemented, such corrected prospectus was timely made available by the Company pursuant to Section 3 hereof, and the Indemnified Person was promptly advised in writing not to use the incorrect prospectus prior to the use giving rise to a Violation and such Indemnified Person, notwithstanding such advice, used it. 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 transfer of the Registrable Securities by the Investor pursuant to Section 10.

  

15

  

b.  Promptly after receipt by an Indemnified Person under this Section 7 of notice of the commencement of any action (including any governmental action), such Indemnified Person shall, if Claim in respect thereof is to be made against any the Company under this Section 7, deliver to the Company a written notice of the commencement thereof, and the Company shall have the right to participate in, and, to the extent the Company so desires, to assume control of the defense thereof with counsel mutually satisfactory to the Company 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 fees and expenses to be paid by the Company, if, in the reasonable opinion of counsel retained by the Company, the representation by such counsel of the Indemnified Person and the Company 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. The Company shall pay for only one separate legal counsel for the Indemnified Persons, and such legal counsel shall be selected by Investor and shall be reasonably acceptable to the Company, if the Investor is entitled to indemnification hereunder.  The failure to deliver written notice to the Company within a reasonable time of the commencement of any such action shall not relieve the Company of any liability to the Indemnified Person under this Section 7, except to the extent that the Company is actually prejudiced in its ability to defend such action. The indemnification required by this Section 7 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.

c. To the extent permitted by law, but in an aggregate amount not to exceed the Investor’s Subscription Amount (as defined in the Investment Agreement) the Investor will indemnify, hold harmless and defend (i) the Company, and (ii) the directors, officers, partners, managers, members, employees, or agents of the Company, if any (each, a  "Company Indemnified Person"), against any joint or several losses, claims, damages, liabilities or expenses (collectively, together with actions, proceedings or inquiries by any regulatory or self-regulatory organization, whether commenced or threatened, in respect thereof, "Claims") to which any of them may become subject insofar as such Claims arise out of or are based upon a Claim arising out of or based upon 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, which occurs due to the inclusion by the Company in a Registration Statement of false or misleading information about the Investor, where such information was furnished in writing to the Company by the Investor for the purpose of inclusion in such Registration Statement.

  

16

  

8.  CONTRIBUTION.  To the extent any indemnification by the Company is prohibited or limited by law, the Company agrees to make the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 7 to the fullest extent permitted by law, based upon a comparative fault standard.

9.  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 Commission 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:

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

b. file with the Commission 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 4(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 so long as the Investor owns Registrable Securities, promptly upon written 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 Investors to sell such securities pursuant to Rule 144 without registration.

10.  INTENTIONALLY OMITTED.

11.  AMENDMENT OF REGISTRATION RIGHTS.  Provisions 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 written consent of the Company, and the Holder. Any amendment or waiver effected in accordance with this Section 11 shall be binding upon the Investor and the Company.

12.   MISCELLANEOUS.

a.  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.

  

17

  

b.  Any notices required or permitted to be given under the terms hereof shall be sent by certified or registered mail (return receipt requested) or delivered personally or by courier (including a recognized overnight delivery service) or by facsimile and shall be effective five days after being placed in the mail, if mailed by regular United States mail, or upon receipt, if delivered personally or by courier (including a recognized overnight delivery service) or by facsimile, in each case addressed to a party.  The addresses for such communications shall be:

        If to the Company: To the address set forth immediately below such

        Company’s name on the signature pages hereto.

  With copy to:

Medisafe 1 Technologies Corp.

c/o Jacob Elhadad

216 Jaffa Street (Second Floor)

Jerusalem, Israel  96926

Phone:  972-50-21322

Facsimile:  972-50-21321

         If to a Investor: To the address set forth immediately below such Investor's name on the signature pages hereto.

Each party shall provide notice to the other party of any change in address.

c.  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.

d.  Governing Law.  All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Georgia, without regard to the principles of conflicts of law thereof.  Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of Atlanta, Georgia.  Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of Atlanta, Georgia, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding.  Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.  The parties hereby waive all rights to a trial by jury.  If either party shall commence an action or proceeding to enforce any provisions of the this Agreement, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

  

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e.  This Agreement and the Investment Agreement (including all schedules and exhibits thereto) 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. 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.

f.  Subject to the requirements of Section 10 hereof, this Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties hereto.

g.  The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

h.  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 facsimile transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement.

i.  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.

j.  The Company acknowledges that a breach by it of its obligations hereunder could cause irreparable harm to the Investor by vitiating the intent and purpose of the transactions contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for breach of its obligations hereunder could be inadequate and agrees, in the event of a breach or threatened breach by the Company of any of the provisions hereunder, that the Investor could be entitled, in addition to all other available remedies in law or in equity, to seek an injunction or injunctions to prevent or cure breaches of the provisions of this Agreement and to seek to enforce specifically the terms and provisions hereof, without the necessity of showing economic loss and without any bond or other security being required.

k.  The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

  

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l.  In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision hereof.

m.  There shall be no oral modifications or amendments to this Agreement.  This Agreement may be modified or amended only in writing.

 

IN WITNESS WHEREOF, the undersigned Investors and the Company have caused this Amended and Restated Registration Rights to be duly executed as of the 13th day of April, 2011.

	
COMPANY:

	  	
INVESTOR:

	
MEDISAFE 1 TECHNOLOGIES CORP.

	  	
CENTURION PRIVATE EQUITY, LLC

	  	  	  	  	  
	
By:  

	/s/ Jacob Elhadad  	  	
By:  

	/s/ Eric S. Swartz  
	  	
Jacob Elhadad, President & CEO

	  	  	
Eric S. Swartz, Manager

	  	  	  	  
	
ADDRESS:

	  	
ADDRESS:

	  	  	  
	
Medisafe 1 Technologies Corp.

	  	
Centurion Private Equity, LLC

	
216 Jaffa Street (Second Floor)

	  	
1120 Sanctuary Parkway

	
Jerusalem, Israel  96926

	  	
Suite 325

	
Phone:  972-50-21322

	  	
Alpharetta, GA 30009

	
Facsimile:  972-50-21321

	  	
Phone:  770-640-8130

	  	  	  	
Facsimile:  770-777-5844

  

20

  

EXHIBIT A

 

FORM OF NOTICE OF EFFECTIVENESS

OF REGISTRATION STATEMENT

 

	  	  
	  	  
	  	  
	
Attention:

	  	  
	  	  	  

 

Date: ___________

Re:          [                                   ]

 

Ladies and Gentlemen:

 

[We are][I am] counsel to Medisafe 1 Technologies Corp., a Delaware corporation (the “Company”), and have represented the Company in connection with that certain Investment Agreement, dated ) April 13, 2011 (the “ Investment Agreement ”), entered into by and among the Company and the Investor named therein (the “Holder ”) pursuant to which the Company (i) will issue to the Holder from time to time shares of the Company’s common stock, $0.001 par value per share (the “Common Stock”), and (ii) has issued [                          ] shares of its Common Stock (the “Commitment Shares”) and  [                          ] shares of its Common Stock (the “Fee Shares”) and. Pursuant to the Investment Agreement, the Company also has entered into a Registration Rights Agreement with the Holder (the “Registration Rights Agreement”) pursuant to which the Company agreed, among other things, to register the Registrable Securities (as defined in the Registration Rights Agreement), including the Commitment Shares and the Fee Shares, under the Securities Act of 1933, as amended (the “Securities Act”). In connection with the Company’s obligations under the Registration Rights Agreement, on April 13, 2011, the Company filed a Registration Statement on Form S-1     (File No. 333-                          ) (the “ Registration Statement ”) with the Securities and Exchange Commission (the “ SEC ”) relating to the Registrable Securities which names the Holder as an underwriter and a selling stockholder thereunder.

 

In connection with the foregoing, based solely upon oral advice from the staff of the SEC, the Registration Statement was declared effective under the Securities Act on [ENTER DATE OF EFFECTIVENESS], and no stop order suspending its effectiveness has been issued and no proceedings for that purpose have been instituted or overtly threatened.

 

This letter shall serve as our standing opinion to you that the shares of Common Stock are freely transferable by the Holder pursuant to the Registration Statement, provided the Registration Statement remains effective.

 

	  	
Very truly yours,

	  	  
	  	
 

	  	  
	  	
By:

	 
	 	 	 

 

CC:    Centurion Private Equity, LLC

  

21

  

EXHIBIT B

MEDISAFE 1 TECHNOLOGIES CORP.

Selling Securityholder Notice and Questionnaire

The undersigned beneficial owner of common stock (the “Registrable Securities”) of MEDISAFE 1 TECHNOLOGIES CORP., a Delaware corporation (the “Company”), understands that the Company has filed or intends to file with the Securities and Exchange Commission (the “Commission”) a registration statement (the “Registration Statement”) for the registration and resale under Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”), of the Registrable Securities, in accordance with the terms of the Registration Rights Agreement (the “Registration Rights Agreement”) to which this document is annexed.  A copy of the Registration Rights Agreement is available from the Company upon request at the address set forth below.  All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Registration Rights Agreement.

Certain legal consequences arise from being named as a selling securityholder in the Registration Statement and the related prospectus.  Accordingly, holders and beneficial owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences of being named or not being named as a selling securityholder in the Registration Statement and the related prospectus.

NOTICE

The undersigned beneficial owner (the “Selling Securityholder”) of Registrable Securities hereby elects to include the Registrable Securities owned by it in the Registration Statement.

 

The undersigned hereby provides the following information to the Company and represents and warrants that such information is accurate:

1.              Name.

(a)              Full Legal Name of Selling Securityholder

(b)              Full Legal Name of Registered Holder (if not the same as (a) above) through which Registrable Securities are held:

(c)              Full Legal Name of Natural Control Person (which means a natural person who directly or indirectly alone or with others has power to vote or dispose of the securities covered by this Questionnaire):

  

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2.  Address for Notices to Selling Securityholder:

Telephone:

Fax:

Contact Person:

3.  Broker-Dealer Status:

(a)              Are you a broker-dealer?

Yes    ̈     No    ̈

(b)              If “yes” to Section 3(a), did you receive your Registrable Securities as compensation for investment banking services to the Company?

Yes   o      No   o

Note:          If “no” to Section 3(b), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.

(c)              Are you an affiliate of a broker-dealer?

Yes    ̈     No    ̈

(d)              If you are an affiliate of a broker-dealer, do you certify that you purchased the Registrable Securities in the ordinary course of business, and at the time of the purchase of the Registrable Securities to be resold, you had no agreements or understandings, directly or indirectly, with any person to distribute the Registrable Securities?

Yes   o      No   o

Note:          If “no” to Section 3(d), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.

4.  Beneficial Ownership of Securities of the Company Owned by the Selling Securityholder.

Except as set forth below in this Item 4, the undersigned is not the beneficial or registered owner of any securities of the Company other than the securities issuable pursuant to the Investment Agreement.

(a)                  Type and Amount of other securities beneficially owned by the Selling Securityholder:

	
 

	  
	
 

 

  

23

  

5.  Relationships with the Company:

Except as set forth below, neither the undersigned nor any of its affiliates, officers, directors or principal equity holders (owners of 5% of more of the equity securities of the undersigned) has held any position or office or has had any other material relationship with the Company (or its predecessors or affiliates) during the past three years.

	
State any exceptions here:

	
 

	  
	
 

The undersigned agrees to promptly notify the Company of any inaccuracies or changes in the information provided herein that may occur subsequent to the date hereof at any time while the Registration Statement remains effective.

By signing below, the undersigned consents to the disclosure of the information contained herein in its answers to Items 1 through 5 and the inclusion of such information in the Registration Statement and the related prospectus and any amendments or supplements thereto.  The undersigned understands that such information will be relied upon by the Company in connection with the preparation or amendment of the Registration Statement and the related prospectus.

IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person or by its duly authorized agent.

	
Date:

	  	
Beneficial Owner:

	  	  	  	  	  
	  	  	
By:

	  	  
	  	  	  	
Name:

	
 

	  	  	  	
Title

	
 

PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:

[_________________________________________________________ ]

  

24Unassociated Document

WARRANT AGREEMENT, dated as of       , 2011, (the “Agreement”), by and between Universal Business Payment Solutions Acquisition Corporation, a Delaware corporation, with offices located at Radnor Financial Center, 150 North Radnor-Chester Road, Suite F-200, Radnor, Pennsylvania 19087 (the “Company”), and Continental Stock Transfer & Trust Company, a New York corporation, with offices at 17 Battery Place, New York, New York 10004 (the “Warrant Agent”).

INTRODUCTION

 

WHEREAS, the Company is engaged in a public offering (“Public Offering”) of securities and, in connection therewith, has determined to issue and sell up to 13,800,000 Warrants to the public investors (“Public Warrants”), each of such Warrants evidencing the right of the holder thereof to purchase one share of the Company’s common stock, par value $0.001 per share (“Common Stock”), for $6.90, subject to adjustment as described herein;

 

WHEREAS, the Company has filed with the Securities and Exchange Commission a Registration Statement on Form S-1, No. 333-171359 (the “Registration Statement”), for the registration, under the Securities Act of 1933, as amended (the “Act”), of, among other securities, the Public Warrants and the Common Stock issuable upon exercise of the Public Warrants;

 

WHEREAS, the Company has received a binding commitment from EarlyBirdCapital, Inc. or its designees (“EBC”), to purchase an aggregate of 720,000 warrants (the “EBC Warrants”), which will be identical to the Public Warrants with certain exceptions set forth herein, in a private placement to take place simultaneously with the consummation of the Public Offering;

 

WHEREAS, the Company has received binding commitments from certain individuals (collectively “Insiders”) to purchase an aggregate of 6,240,000 warrants (collectively, the “Insider Warrants” and, together with the Public Warrants and the EBC Warrants, the “Warrants”), which will be identical to the Public Warrants with certain exceptions set forth herein, in a private placement to take place simultaneously with the consummation of the Public Offering;

 

WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing to so act, in connection with the issuance, registration, transfer, exchange, redemption and exercise of the Warrants;

 

WHEREAS, the Company desires to provide for the form and provisions of the Warrants, the terms upon which they shall be issued and exercised, and the respective rights, limitation of rights and immunities of the Company, the Warrant Agent and the holders of the Warrants; and

 

WHEREAS, all acts and things have been done and performed which are necessary to make the Warrants, when executed on behalf of the Company and countersigned by or on behalf of the Warrant Agent, as provided herein, the valid, binding and legal obligations of the Company, and to authorize the execution and delivery of this Agreement.

  

 

  

NOW, THEREFORE, in consideration of the mutual agreements contained herein, the Warrant Agent and the Company agree as follows:

 

1.           Appointment of Warrant Agent.  The Company hereby appoints the Warrant Agent to act as agent for the Company for the Warrants and the Warrant Agent hereby accepts such appointment and agrees to perform the same in accordance with the terms and conditions set forth in this Agreement.

 

2.           Warrants.

 

2.1.        Form of Warrant. Each Public Warrant shall be issued in registered form only, shall be in substantially the form of Exhibit A hereto, the provisions of which are incorporated herein, and shall be signed by, or bear the facsimile signature of, the Chairman of the Board or Chief Executive Officer and Chief Financial Officer, Treasurer or Secretary of the Company. Each Insider Warrant shall be issued in registered form only, shall be in substantially the form of Exhibit B hereto, the provisions of which are incorporated herein, and shall be signed by, or bear the facsimile signature of, the Chairman of the Board or Chief Executive Officer and Chief Financial Officer, Treasurer or Secretary of the Company.  Each EBC Warrant shall be issued in registered form only, shall be in substantially the form of Exhibit C hereto, the provisions of which are incorporated herein, and shall be signed by, or bear the facsimile signature of, the Chairman of the Board or Chief Executive Officer and Chief Financial Officer, Treasurer or Secretary of the Company.  In the event the person whose facsimile signature has been placed upon any Warrant shall have ceased to serve in the capacity in which such person signed the Warrant before such Warrant is issued, it may be issued with the same effect as if he or she had not ceased to be such at the date of issuance.

 

2.2.        Effect of Countersignature. Unless and until countersigned by the Warrant Agent pursuant to this Agreement, a Warrant shall be invalid and of no effect and may not be exercised by the holder thereof.

 

2.3.        Registration.

 

2.3.1.      Warrant Register. The Warrant Agent shall maintain books (the “Warrant Register”) for the registration of original issuance and the registration of transfer of the Warrants.  Upon the initial issuance of the Warrants, the Warrant Agent shall issue and register the Warrants in the names of the respective holders thereof in such denominations and otherwise in accordance with instructions delivered to the Warrant Agent by the Company.

 

2.3.2.      Registered Holder. Prior to due presentment for registration of transfer of any Warrant, the Company and the Warrant Agent may deem and treat the person in whose name such Warrant shall be registered upon the Warrant Register (the “Registered Holder”), as the absolute owner of such Warrant and of each Warrant represented thereby (notwithstanding any notation of ownership or other writing on the Warrant Certificate made by anyone other than the Company or the Warrant Agent), for the purpose of any exercise thereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary.

  

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2.4.        Detachability of Public Warrants.  Each Public Warrant shall initially be issued together with one share of Common Stock as a unit (a “Unit”).  The shares of Common Stock and the Public Warrants comprising the Units shall not be separately transferable until 90 days after the date of the prospectus relating to the Public Offering filed with the U.S. Securities and Exchange Commission (the “SEC”) pursuant to Rule 424 under the Act unless, EBC, as representative of the underwriters, informs the other parties hereto of its decision to allow earlier separate trading, but in no event will EBC, as representative of the underwriters, allow separate trading of the securities comprising the Units until the Company files a Current Report on Form 8-K with the SEC, including an audited balance sheet that will reflect our receipt of the proceeds of this offering, including the proceeds from the exercise, if any, of the over-allotment option if it is exercised prior to the filing of the Form 8-K and (b) the Company issues a press release announcing when such separate trading will begin.  The date on which the securities comprising the Units become separately transferable is referred to herein as the “Detachment Date.”  Prior to the Detachment Date, Public Warrants may be transferred or exchanged only together with the Unit in which such Public Warrant is included, and only for the purpose of effecting, or in conjunction with, a transfer or exchange of such Unit.

 

2.5.        Restrictions on Transfer of Insider Warrants and EBC Warrants.

 

2.5.1.      Except for transfers (i) to the Company’s officers and directors, (ii) to an entity’s members upon its liquidation, (iii) by bona fide gift to a member of an initial stockholder’s (as the term in defined in the Registration Statement) immediate family or to a trust, the beneficiary of which is an initial stockholder or a member of an initial stockholder’s immediate family for estate planning purposes, (iv) in the case of EBC, to an underwriter or a selected dealer in connection with the Public Offering, or (v) in the case of EBC, to a bona fide officer or partner of EBC or of any such underwriter or selected dealer (collectively, “Permitted Transferees”), no Insider Warrant or EBC Warrant will be transferable unless and until (a) there is then in effect a registration statement under the Securities Act covering such transfer and such transfer is made in accordance with such registration statement or (b) if reasonably requested by the Company, (i) the holder of such Insider Warrant shall have furnished to the Company an opinion of counsel reasonably satisfactory to the Company that such disposition does not require registration under the Act and (ii) the transferee shall have agreed in writing to be bound by the restrictions set forth in this Section 2.5.2.

 

2.5.2.      The holders of the Insider Warrants or EBC Warrants shall give the Company prior written notice of any proposed transfer (other than a proposed transfer pursuant to an effective registration statement) of Insider Warrants or EBC Warrants expressing its desire to effect such transfer and describing briefly the proposed transfer.

 

2.5.3.    No EBC Warrant shall be Transferred for a period of 180 days immediately following the date of the prospectus unless transferred in compliance with FINRA Rule 5110(g)(2).

 

3.           Terms and Exercise of Warrants.

 

3.1.         Warrant Price. Each Warrant shall, when countersigned by the Warrant Agent, entitle the registered holder thereof, subject to the provisions of such Warrant and of this Agreement, to purchase from the Company the number of shares of Common Stock stated therein, at the price of $6.90 per whole share, subject to the adjustments provided in Section 4 hereof and in the last sentence of this Section 3.1.  The term “Warrant Price” as used in this Agreement refers to the exercise price per share at which Common Stock may be purchased at the time a Warrant is exercised.  The Company in its sole discretion may lower the Warrant Price at any time prior to the Expiration Date (as defined below) for a period of not less than 10 business days; provided, however, that any such reduction shall be identical in percentage terms among all of the Warrants.

  

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3.2.        Duration of Warrants. A Warrant may be exercised only during the period (“Exercise Period”) commencing on the later of (i) the consummation by the Company of a merger, share exchange, asset acquisition, plan of arrangement, recapitalization, reorganization or other similar business combination with a target business and (ii)       , 2012 [one year from the date of the prospectus] and terminating at 5:00 p.m., New York City time on the earliest of (i)                , 2016 [five years from the date of the prospectus], (ii) the liquidation of the trust account managed by Morgan Stanley (the “Trust Account”) established on or about the date hereof and (iii) other than with respect to the Insider Warrants and EBC Warrants, the date fixed for redemption of the Warrants as provided in Section 6 of this Agreement (“Expiration Date”).   Except with respect to the right to receive the Redemption Price (as set forth in Section 6 hereunder), each Warrant not exercised on or before the Expiration Date shall become void, and all rights thereunder and all rights in respect thereof under this Agreement, shall cease at the close of business on the Expiration Date. The Company in its sole discretion may extend the duration of the Warrants, except for the EBC Warrants, by delaying the Expiration Date; provided, however, that the Company will provide notice to registered holders of the Warrants of such extension of not less than 20 days, provided that any extension of the duration of the Warrants must apply equally to all of the Warrants, excluding the EBC Warrants.

 

3.3.        Exercise of Warrants.

 

3.3.1.      Payment. Subject to the provisions of the relevant Warrant and this Agreement, including Section 3.3.5 below, a Warrant, when countersigned by the Warrant Agent, may be exercised by the registered holder thereof by surrendering it, at the office of the Warrant Agent, or, if applicable, at the office of its successor as Warrant Agent, in the Borough of Manhattan, City and State of New York, with the subscription form, as set forth in the Warrant, duly executed, and by paying in full the Warrant Price for each full share of Common Stock as to which the Warrant is exercised and any and all applicable taxes due in connection with the exercise of the Warrant, the exchange of the Warrant for shares of Common Stock and the issuance of Common Stock, as follows:

 

(a)          by certified or official bank check payable to the order of the Company;

 

(b)          with respect to the Insider Warrants held by an Insider or a Permitted Transferee and the EBC Warrants held by EBC or a Permitted Transferee, by surrendering such Insider Warrants or EBC Warrants for that number of shares of Common Stock equal to the quotient obtained by dividing (x) the product of the number of shares of Common Stock underlying such Insider Warrants or EBC Warrants, multiplied by the difference between the exercise price of such Insider Warrants or EBC Warrants and the Fair Market Value (as defined below), by (y) the Fair Market Value. Solely for purposes of this Section 3.3.1(b), “Fair Market Value” means the average reported last sale price of the shares of Common Stock for the 5 trading days ending on the third trading day prior to the date of exercise; or

 

(c)   with respect to any Public Warrants, in the event that the Company has not filed with the SEC a registration statement covering the ordinary shares issuable upon exercise of the Public Warrants by the 6-month anniversary of the consummation of the Company’s initial business combination, as described in the Registration Statement, commencing on that date, holders of Public Warrants may, until such time as there is an effective registration statement and during any period thereafter when the Company has failed to maintain an effective registration statement, exercise the Public Warrants on a “cashless basis,” by surrendering the Warrants for that number of shares of Common Stock equal to the quotient obtained by dividing (x) the product of the number of shares of Common Stock underlying the Public Warrants, multiplied by the difference between the Warrant Price and the Fair Market Value (as defined below in Section 3.3.1(d)) by (y) the Fair Market Value.

 

  

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3.3.2.      Issuance of Certificates.  As soon as practicable after the proper exercise of any Warrant and the clearance of the funds in payment of the Warrant Price (if cash is paid), the Company shall issue to the registered holder of such Warrant a certificate or certificates for the number of full shares of Common Stock to which he, she or it is entitled, registered in such name or names as may be directed by him, her or it, and if such Warrant shall not have been exercised in full, a new countersigned Warrant for the number of shares as to which such Warrant shall not have been exercised.

 

3.3.3.      Valid Issuance. All shares of Common Stock issued upon the proper exercise of a Warrant in conformity with this Agreement shall be validly issued, fully paid and nonassessable.

 

3.3.4.      Date of Issuance. Each person in whose name any such certificate for shares of Common Stock is issued shall for all purposes be deemed to have become the holder of record of such shares on the date on which the Warrant was surrendered and payment of the Warrant Price was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open.

 

3.3.5.      Restrictions on Exercise. The Company shall have no obligation to deliver any securities pursuant to the exercise of a Public Warrant and shall have no obligation to settle such Public Warrant exercise unless there is an effective and current registration statement covering the shares issuable upon exercise of the Public Warrants and a current registration statement, including a prospectus, relating to such shares of Common Stock.  In the event that a registration statement with respect to the Common Stock underlying a Public Warrant is not effective under the Act or a current prospectus is not available, the holder of such Warrant shall not be entitled to exercise such Warrant, such Warrant may have no value and expire worthless and the purchaser of the Unit containing such Warrant will have paid the full purchase price for the Unit solely for the share of Common Stock included in such Unit.

 

3.3.6.      Net Cash Settlement. In no event will the Company be required to “net cash settle” any such Warrant exercise.  The Company, however, is subject to its obligations under Section 7.4. Notwithstanding the foregoing, the shares of Common Stock issuable upon exercise of the Insider Warrants and EBC Warrants shall be unregistered shares, unless, at the time of exercise, the Company has in place an effective and current Registration Statement with respect to such underlying Insider Warrants and EBC Warrants and the shares of Common Stock.

  

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4.           Adjustments.

 

 

    4.1.           Stock Dividends; Split Ups.  If after the date hereof, and subject to the provisions of Section 4.5 below, the number of outstanding shares of Common Stock is increased by a stock dividend payable in shares of Common Stock, or by a split-up of shares of Common Stock, or other similar event, then, on the effective date of such stock dividend, split-up or similar event, the number of shares of Common Stock issuable on exercise of each Warrant shall be increased in proportion to such increase in outstanding shares of Common Stock. A rights offering to all holders of the shares of Common Stock entitling holders to purchase shares of Common Stock at a price less than the “Fair Market Value” (as defined below) shall be deemed a share dividend of a number of shares of Common Stock equal to the product of (i) the number of shares of Common Stock actually sold in such rights offering (or issuable under any other equity securities actually sold in such rights offering that are convertible into or exercisable for the shares of Common Stock) multiplied by (ii) the quotient of (x) the Fair Market Value less the price per share of the shares of Common Stock paid in such rights offering divided by (y) the Fair Market Value. Solely for the purpose of this Section 4.1, “Fair Market Value” means the average reported last sale price of the shares of Common Stock for the 5 trading days ending on the third trading day prior to the date of such rights offering.

    4.2.           Aggregation of Shares.  If after the date hereof, and subject to the provisions of Section 4.5, the number of outstanding shares of Common Stock is decreased by a consolidation, combination, reverse stock split or reclassification of shares of Common Stock or other similar event, then, on the effective date of such consolidation, combination, reverse stock split, reclassification or similar event, the number of shares of Common Stock issuable on exercise of each Warrant shall be decreased in proportion to such decrease in outstanding shares of Common Stock.

    4.3.           Adjustments in Warrant Price and Redemption Threshold.  Whenever the number of shares of Common Stock purchasable upon the exercise of the Warrants is adjusted, as provided in Sections 4.1 and 4.2 above, the Warrant Price shall be adjusted (to the nearest cent, but in no case below the par value of the shares) by multiplying such Warrant Price immediately prior to such adjustment by a fraction (x) the numerator of which shall be the number of shares of Common Stock purchasable upon the exercise of the Warrants immediately prior to such adjustment, and (y) the denominator of which shall be the number of shares of Common Stock so purchasable immediately thereafter.  Whenever the Warrant Price is adjusted, the redemption threshold (e.g., the minimum price at which the Common Stock must trade in order for the Company to have the right to redeem the Public Warrants) shall be adjusted to equal 138% of the Warrant Price, as contemplated by Section 6.1 below.

  

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        4.4.            Replacement of Securities upon Reorganization, etc. In the event of the exercise of any Warrant for shares of Common Stock after any reclassification or reorganization of the outstanding shares of Common Stock (other than a change covered by Section 4.1 or 4.2 hereof or that solely affects the par value of such shares of Common Stock), or any merger or consolidation of the Company with or into another corporation (other than a consolidation or merger in which the Company is the continuing corporation and that does not result in any reclassification or reorganization of the outstanding shares of Common Stock), or any sale or conveyance to another corporation or entity of the assets or other property of the Company as an entirety or substantially as an entirety in connection with which the Company is dissolved, the Warrant holders shall thereafter have the right to receive in lieu of the shares of Common Stock of the Company receivable upon the exercise of the rights represented hereby, the kind and amount of shares of stock or other securities or property (including cash) (the "Reorganization Consideration") receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the Warrant holder would have received if such Warrant holder had exercised his, her or its Warrant(s) immediately prior to such event; and if any reclassification also results in a change in shares of Common Stock covered by Section 4.1 or 4.2, then such adjustment shall be made pursuant to Sections 4.1, 4.2, 4.3 and this Section 4.4. The provisions of this Section 4.4 shall similarly apply to successive reclassifications, reorganizations, mergers or consolidations, sales or other transfers. For the purposes of clarity, a Warrant holder must exercise the Warrant to receive the Reorganization Consideration, and the Warrants may not be net cash settled.

 

 

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    4.5.           Extraordinary Dividends.  If the Company, at any time while the Warrants are outstanding and unexpired, shall pay a dividend or make a distribution in cash, securities or other assets to the holders of the shares of Common Stock on account of such shares of Common Stock (or other shares of the Company’s capital stock into which the Warrants are convertible), other than (a) as described in subsection 4.1 above, (b) Ordinary Cash Dividends (as defined below), (c) to satisfy the redemption rights of the holders of the shares of Common Stock in connection with a proposed initial Business Combination, (d) as a result of the repurchase of shares of Common Stock by the Company in connection with an initial Business Combination (as defined in the Registration Statement) or (e) in connection with the redemption of the Company’s shareholders or liquidation and the distribution of its assets upon its failure to consummate a Business Combination (any such non-excluded event being referred to herein as an “Extraordinary Dividend”), then the Warrant Price shall be decreased, effective immediately after the effective date of such Extraordinary Dividend, by the amount of cash and the fair market value (as determined by the Company’s board of directors, in good faith) of any securities or other assets paid on each share of the shares of Common Stock in respect of such Extraordinary Dividend. For purposes of this subsection 4.5, “Ordinary Cash Dividends” means any cash dividend or cash distribution which, when combined on a per share of the shares of Common Stock basis, with the per share amounts of all other cash dividends and cash distributions paid on the shares of Common Stock during the 365-day period ending on the date of declaration of such dividend or distribution (as adjusted to appropriately reflect any of the events referred to in other subsections of this Section 4 and excluding cash dividends or cash distributions that resulted in an adjustment to the Warrant Price or to the number of shares of Common Stock issuable on exercise of each Warrant) does not exceed $0.30 (being 5% of the offering price of the Units in the Public Offering).

 

        4.6.           [Intentionally Omitted.]

 

 

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4.7.           [Intentionally Omitted.]

   4.8.           Notices of Changes in Warrant.  Upon every adjustment of the Warrant Price or the number of shares issuable upon exercise of a Warrant, the Company shall give written notice thereof to the Warrant Agent, which notice shall state the Warrant Price resulting from such adjustment and the increase or decrease, if any, in the number of shares purchasable at such price upon the exercise of a Warrant, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based.  Upon the occurrence of any event specified in Sections 4.1, 4.2, 4.3 or 4.4, then, in any such event, the Company shall give written notice to each Warrant holder, at the last address set forth for such holder in the warrant register, of the record date or the effective date of the event.  Failure to give such notice, or any defect therein, shall not affect the legality or validity of such event.

   4.9.           No Fractional Shares.  Notwithstanding any provision contained in this Agreement to the contrary, the Company shall not issue fractional shares upon exercise of Warrants.  If, by reason of any adjustment made pursuant to this Section 4, the holder of any Warrant would be entitled, upon the exercise of such Warrant, to receive a fractional interest in a share, the Company shall, upon such exercise, round down to the nearest whole number the number of the shares of Common Stock to be issued to the Warrant holder.

 

 

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   4.10.                      Form of Warrant.  The form of Warrant need not be changed because of any adjustment pursuant to this Section 4, and Warrants issued after such adjustment may state the same Warrant Price and the same number of shares as is stated in the Warrants initially issued pursuant to this Agreement.  However, the Company may at any time in its sole discretion make any change in the form of Warrant that the Company may deem appropriate and that does not affect the substance thereof, and any Warrant thereafter issued or countersigned, whether in exchange or substitution for an outstanding Warrant or otherwise, may be in the form as so changed.

   4.11.                      Other Events.  In case any event shall occur affecting the Company as to which none of the provisions of preceding subsections of this Section 4 are strictly applicable, but which would require an adjustment to the terms of the Warrants in order to effectuate the intent and purpose of this Section 4, then, in each such case, the Company shall appoint a firm of independent public accountants, investment banking or other appraisal firm of recognized national standing which shall give their opinion as to whether or not any adjustment to the rights represented by the Warrants is necessary to effectuate the intent and purpose of this Section 4 and, if they determine that an adjustment is necessary, the terms of such adjustment.  The Company shall adjust the terms of the Warrants in a manner that is consistent with any adjustment recommended in such opinion.  Without limiting any other remedies provided by this Agreement, at law or in equity, a Warrant holder shall have the right to bring an action for specific performance to enforce the provisions of this Section 4.

  

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5.           Transfer and Exchange of Warrants.

 

5.1.        Registration of Transfer. The Warrant Agent shall register the transfer, from time to time, of any outstanding Warrant upon the Warrant Register, upon surrender of such Warrant for transfer, properly endorsed with signatures properly guaranteed and accompanied by appropriate instructions for transfer and, with respect to any Insider Warrant or EBC Warrant, subject to the terms and limitations imposed by Section 2.5 above; provided, however, that in the event that a Warrant surrendered for transfer bears a restrictive legend, the Warrant Agent shall not cancel such Warrant and issue new Warrants in exchange therefor until the Warrant Agent has received an opinion of counsel for the Company stating that such transfer may be made and indicating whether the new Warrants must also bear a restrictive legend.  Upon any such transfer, a new Warrant representing an equal aggregate number of Warrants shall be issued and registered and the old Warrant shall be cancelled by the Warrant Agent. The Warrants so cancelled shall be delivered by the Warrant Agent to the Company from time to time upon request.

 

5.2.        Procedure for Surrender of Warrants. Warrants may be surrendered to the Warrant Agent, together with a written request for exchange , and thereupon the Warrant Agent shall issue in exchange therefor one or more new Warrants as requested by the registered holder of the Warrants so surrendered, representing an equal aggregate number of Warrants; provided, however, that in the event that a Warrant surrendered for exchange bears a restrictive legend, the Warrant Agent shall not cancel such Warrant and issue new Warrants in exchange therefor until the Warrant Agent has received an opinion of counsel for the Company stating that such exchange may be made and indicating whether the new Warrants must also bear a restrictive legend.

 

5.3.        Fractional Warrants. The Warrant Agent shall not be required to effect any registration of transfer or exchange which will result in the issuance of a warrant certificate for a fraction of a warrant.

 

5.4.        Service Charges. No service charge shall be made for any exchange or registration of transfer of Warrants.

 

5.5.        Warrant Execution and Countersignature. The Warrant Agent is hereby authorized to countersign and to deliver, in accordance with the terms of this Agreement, the Warrants required to be issued pursuant to the provisions of this Section 5, and the Company, whenever required by the Warrant Agent, will supply the Warrant Agent with Warrants duly executed on behalf of the Company for such purpose.

 

6.           Redemption.

 

6.1.        Redemption. Subject to Section 6.4 hereof, not less than all of the outstanding Public Warrants and any Insider Warrants or EBC Warrants not then held by the original purchaser or a Permitted Transferee (collectively, the “Redeemable Warrants”) may be redeemed, at the option of the Company, at any time while they are exercisable and prior to their expiration, provided that the last sales price of the Common Stock has been at least $9.50 per share (appropriately adjusted for any stock split, reverse stock split, stock dividend or other reclassification or combination of the Common Stock occurring after the date hereof), on each of twenty (20) trading days within any thirty (30) trading day period ending on the third business day prior to the date on which notice is given in accordance with Section 6.2, if and only if an effective registration statement with respect to the Redeemable Warrants has been filed with the Commission and declared effective at least five business days prior to the 30-day trading period and continuing in effect each day thereafter until the date of redemption, at the office of the Warrant Agent, upon the notice referred to in Section 6.2, at the price of $0.01 per Public Warrant (“Redemption Price”).  The Company shall also have the option, upon written notice to the Warrant Agent, to require that each Redeemable Warrant be exchanged for that number of shares of Common Stock equal to the quotient obtained by dividing (x) the product of the number of shares of Common Stock underlying Redeemable Warrants, multiplied by the difference between the exercise price of Redeemable Warrants and the Fair Market Value (as defined below), by (y) the Fair Market Value. Solely for purposes of this Section 6.1, “Fair Market Value” means the average reported last sale price of the shares for the 5 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of Warrants.  For the avoidance of doubt, no Insider Warrant or EBC Warrant may be redeemed to the extent held by the original purchaser or a Permitted Transferee.

  

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6.2.        Date Fixed for, and Notice of, Redemption. In the event the Company shall elect to redeem all of the Redeemable Warrants, the Company shall fix a date for the redemption. Notice of redemption shall be mailed by first class mail, postage prepaid, by the Company not less than 30 days prior to the date fixed for redemption to the registered holders of the Redeemable Warrants to be redeemed at their last addresses as they shall appear on the registration books. Any notice mailed in the manner herein provided shall be conclusively presumed to have been duly given whether or not the registered holder received such notice.

 

6.3.        Exercise After Notice of Redemption. The Redeemable Warrants may be exercised in accordance with Section 3 of this Agreement at any time after notice of redemption shall have been given by the Company pursuant to Section 6.2 hereof and prior to the time and date fixed for redemption. On and after the redemption date, the record holder of the Redeemable Warrants shall have no further rights except to receive, upon surrender of the Redeemable Warrants, the Redemption Price.

 

6.4.        Outstanding Warrants; Insider Warrants. Notwithstanding anything to the contrary herein, the redemption rights provided in this Section 6 apply only to outstanding Warrants.

 

7.           Other Provisions Relating to Rights of Holders of Warrants.

 

7.1.        No Rights as Stockholder. A Warrant does not entitle the registered holder thereof to any of the rights of a stockholder of the Company, including, without limitation, the right to receive dividends, or other distributions, exercise any preemptive rights to vote or to consent or to receive notice as stockholders in respect of the meetings of stockholders or the election of directors of the Company or any other matter.

 

7.2.        Lost, Stolen, Mutilated or Destroyed Warrants. If any Warrant is lost, stolen, mutilated or destroyed, the Company and the Warrant Agent may on such terms as to indemnity or otherwise as they may in their discretion impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination, tenor and date as the Warrant so lost, stolen, mutilated or destroyed.  Any such new Warrant shall constitute a substitute contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated or destroyed Warrant shall be at any time enforceable by anyone.

 

7.3.        Reservation of Common Stock. The Company shall at all times reserve and keep available a number of its authorized but unissued shares of Common Stock that will be sufficient to permit the exercise in full of all outstanding Warrants issued pursuant to this Agreement.

  

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7.4.        Registration of Common Stock. The Company will use its best efforts to cause the registration statement to become effective from the date the Warrants become exercisable and to maintain a current prospectus with respect to the Common Stock, until the Warrants expire or are redeemed in accordance with this Agreement.

 

8.           Concerning the Warrant Agent and Other Matters.

 

8.1.        Payment of Taxes. The Company will from time to time promptly pay all taxes and charges that may be imposed upon the Company or the Warrant Agent in respect of the issuance or delivery of shares of Common Stock upon the exercise of Warrants, but the Company shall not be obligated to pay any transfer taxes in respect of the Warrants or such shares.

 

8.2.        Resignation, Consolidation, or Merger of Warrant Agent.

 

8.2.1.      Appointment of Successor Warrant Agent. The Warrant Agent, or any successor to it hereafter appointed, may resign its duties and be discharged from all further duties and liabilities hereunder after giving 60 days’ notice in writing to the Company.  If the office of the Warrant Agent becomes vacant by resignation or incapacity to act or otherwise, the Company shall appoint in writing a successor Warrant Agent in place of the Warrant Agent.  If the Company shall fail to make such appointment within a period of 30 days after it has been notified in writing of such resignation or incapacity by the Warrant Agent or by the holder of the Warrant (who shall, with such notice, submit his or her Warrant for inspection by the Company), then the holder of any Warrant may apply to the Supreme Court of the State of New York for the County of New York for the appointment of a successor Warrant Agent at the Company’s cost.  Any successor Warrant Agent, whether appointed by the Company or by such court, shall be a corporation organized and existing under the laws of the State of New York, in good standing and having its principal office in the Borough of Manhattan, City and State of New York, and authorized under such laws to exercise corporate trust powers and subject to supervision or examination by federal or state authority.  After appointment, any successor Warrant Agent shall be vested with all the authority, powers, rights, immunities, duties and obligations of its predecessor Warrant Agent with like effect as if originally named as Warrant Agent hereunder, without any further act or deed; but if for any reason it becomes necessary or appropriate, the predecessor Warrant Agent shall execute and deliver, at the expense of the Company, an instrument transferring to such successor Warrant Agent all the authority, powers and rights of such predecessor Warrant Agent hereunder; and upon request of any successor Warrant Agent the Company shall make, execute, acknowledge and deliver any and all instruments in writing for more fully and effectually vesting in and confirming to such successor Warrant Agent all such authority, powers, rights, immunities, duties and obligations.

 

8.2.2.      Notice of Successor Warrant Agent. In the event a successor Warrant Agent shall be appointed, the Company shall give notice thereof to the predecessor Warrant Agent and the transfer agent for the Common Stock not later than the effective date of any such appointment.

  

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8.2.3.      Merger or Consolidation of Warrant Agent. Any corporation into which the Warrant Agent may be merged or with which it may be consolidated or any corporation resulting from any merger or consolidation to which the Warrant Agent shall be a party shall be the successor Warrant Agent under this Agreement without any further act.

 

8.3.        Fees and Expenses of Warrant Agent.

 

8.3.1.      Remuneration. The Company agrees to pay the Warrant Agent reasonable remuneration for its services as such Warrant Agent hereunder as the Company and the Warrant Agent shall agree in writing and will reimburse the Warrant Agent upon demand for all expenditures that the Warrant Agent may reasonably incur in the execution of its duties hereunder.

 

8.3.2.      Further Assurances. The Company agrees to perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the Warrant Agent for the carrying out or performing of the provisions of this Agreement.

 

8.4.        Liability of Warrant Agent.

 

8.4.1.      Reliance on Company Statement. Whenever in the performance of its duties under this Agreement, the Warrant Agent shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a statement signed by the Chief Executive Officer or Chairman of the Board of the Company and delivered to the Warrant Agent.  The Warrant Agent may rely upon such statement for any action taken or suffered in good faith by it pursuant to the provisions of this Agreement.

 

8.4.2.      Indemnity. The Warrant Agent shall be liable hereunder only for its own negligence, willful misconduct or bad faith.  The Company agrees to indemnify the Warrant Agent and save it harmless against any and all liabilities, including judgments, costs and reasonable counsel fees, for anything done or omitted by the Warrant Agent in the execution of this Agreement except as a result of the Warrant Agent’s negligence, willful misconduct or bad faith.

 

8.4.3.      Exclusions. The Warrant Agent shall have no responsibility with respect to the validity of this Agreement or with respect to the validity or execution of any Warrant (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Warrant; nor shall it be responsible to make any adjustments required under the provisions of Section 4 hereof or responsible for the manner, method or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment; nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of Common Stock to be issued pursuant to this Agreement or any Warrant or as to whether any shares of Common Stock will when issued be valid and fully paid and nonassessable.

  

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8.5.        Acceptance of Agency. The Warrant Agent hereby accepts the agency established by this Agreement and agrees to perform the same upon the terms and conditions herein set forth and among other things, shall account promptly to the Company with respect to Warrants exercised and concurrently account for, and pay to the Company, all moneys received by the Warrant Agent for the purchase of shares of Common Stock through the exercise of Warrants.

 

8.6.        Waiver. The Warrant Agent hereby waives any right, title, interest or claim of any kind (a “Claim”) or to any monies in the Trust Account, and hereby agrees not to seek recourse, reimbursement, payment or satisfaction for any claim against the funds in the Trust Account for any reason whatsoever.

 

9.           Miscellaneous Provisions.

 

9.1.        Successors. All the covenants and provisions of this Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure to the benefit of their respective successors and assigns.

 

9.2.        Notices. Any notice, statement or demand authorized by this Agreement to be given or made by the Warrant Agent or by the holder of any Warrant to or on the Company shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five days after deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the Company with the Warrant Agent), as follows: 

 

Universal Business Payment Solutions Acquisition Corporation

c/o UBPS Services, LLC

Radnor Financial Center

150 North Radnor-Chester Road, Suite F-200

Radnor, Pennsylvania 19087

 

Any notice, statement or demand authorized by this Agreement to be given or made by the Company or by the holder of any Warrant to or on the Warrant Agent shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five days after deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the Company with the Warrant Agent), as follows:

 

Continental Stock Transfer & Trust Company

17 Battery Place

New York, New York 10004

Attn: Compliance Department

in each case with a copy to:

  

15

  

Dechert LLP

1775 I Street, N.W.

Washington, D.C. 20006

Attn: Thomas J. Friedmann

and:

Greenberg Traurig LLP

200 Park Avenue

New York, New York  10166

Attn: Robert H. Cohen

 

9.3.        Applicable Law. This Agreement and the Warrants shall be governed by, and construed in accordance with, the laws of the State of New York.  Each of the parties hereto (a) consents to submit itself to the personal jurisdiction of the United States District Court for the Southern District of New York or the Supreme Court of The State of New York, New York County in the event any dispute arises out of this Agreement or any of the transactions contemplated hereby, (b) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court and (c) agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated hereby in any court other than the United States District Court for the Southern District of New York or the Supreme Court of the State of New York, New York County.

 

9.4.        Persons Having Rights under this Agreement. Nothing in this Agreement expressed and nothing that may be implied from any of the provisions hereof is intended, or shall be construed, to confer upon, or give to, any person or corporation other than the parties hereto and the registered holders of the Warrants any right, remedy or claim under or by reason of this Agreement or of any covenant, condition, stipulation, promise or agreement hereof.  All covenants, conditions, stipulations, promises and agreements contained in this Agreement shall be for the sole and exclusive benefit of the parties hereto and their successors and assigns and of the registered holders of the Warrants.

 

9.5.        Examination of the Warrant Agreement. A copy of this Agreement shall be available at all reasonable times at the office of the Warrant Agent in the Borough of Manhattan, City and State of New York, for inspection by the registered holder of any Warrant.  The Warrant Agent may require any such holder to submit his Warrant for inspection by it.

 

9.6.        Counterparts. This Agreement may be executed in any number of original or facsimile counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

 

9.7.        Effect of Headings. The Section headings herein are for convenience only and are not part of this Agreement and shall not affect the interpretation thereof.

  

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9.8.        Amendments. This Agreement may be amended by the parties hereto without the consent of any registered holder for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained herein or adding or changing any other provisions with respect to matters or questions arising under this Agreement as the parties may deem necessary or desirable and that the parties deem shall not adversely affect the interest of the registered holders. All other modifications or amendments, including any amendment to increase the Warrant Price or shorten the Exercise Period, shall require the written consent of the registered holders of a majority of the then outstanding Warrants; Notwithstanding the foregoing, the Company may lower the Warrant Price or extend the duration of the Exercise Period pursuant to Sections 3.1 and 3.2, respectively, without the consent of the registered holders.

  

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IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto as of the date first above written.

 

	  	
UNIVERSAL BUSINESS PAYMENT SOLUTIONS

ACQUISITION CORPORATION

	  	  
	  	
By:______________________________

	  	
Name:     Bipin C. Shah

	  	
Title:       Chief Executive Officer

	  	  
	  	
CONTINENTAL STOCK TRANSFER & TRUST

COMPANY

	  	  
	  	
By:______________________________

	  	
Name:

	  	
Title:

  

18

  

Exhibit A

 

Form of Public Warrant

  

19

  

Exhibit B

 

Form of Insider Warrant

  

20

  

 

Exhibit C

 

Form of EBC Warrant

  

21

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