REGISTRATION RIGHTS AGREEMENT
This AGREEMENT is made October 28, 2002, by and among, Exus Networks,
Inc., a Nevada corporation (hereinafter referred to as the "Issuer"), and New
Millennium Development Group Inc, a Corporation with an address at 000 XX 0xx
Xxxxxx Xxxxx 000, Xxxxxx Xxxxx, Xxxxxxx 00000 ("Holder").
RECITALS
Holder is acquiring shares of Common Stock of the Issuer pursuant to an
Asset Acquisition Agreement dated October 28, 2002 (the "Agreement"). It is a
condition of the purchase that Issuer enter into this Agreement with Holder. All
capitalized terms not defined herein shall have the meaning defined in the
Agreement. The shares received by Holder pursuant to the Agreement are referred
to in this Agreement as the "Shares."
1. Registration Rights.
(a) Definitions. For purposes of this Section 1:
(i) The term "Act" means the Securities Act of 1933, as amended,
or any other statute in effect from time to time corresponding to such act.
(ii) The terms "register", "registered", and "registration"
refer to a registration effected by preparing and filing a registration
statement in compliance with the Act and the declaration or ordering of
effectiveness of such registration statement.
(iii) The term "Registrable Securities" means (i) the Shares,
and (ii) any securities of the Issuer issued as a dividend or other distribution
with respect to, or in exchange or in replacement of, Registrable Securities.
Registrable Securities, if transferred pursuant to an exemption from
registration under the Act, will remain Registrable Securities.
(iv) The term "Holder" means (i) any holder holding Registrable
Securities originally acquired by such person, and (ii) any other person holding
Registrable Securities to whom these registration rights have been transferred.
(b) Obligations of the Issuer.
(A) Demand. The Issuer shall:
(i) At any time after the Issuer has closed a public
offering of its securities (or otherwise caused its securities to be publicly
traded) any Holder then holding in excess of fifty percent (50%) of the
Registrable Securities may request the Issuer, in writing, to effect the
registration of all or such portion of the Registrable Securities as such Holder
shall specify; provided, that only two (2) demands may be made
pursuant to this Section (A). The Issuer shall promptly give notice of such
request to the other holders of Registrable Securities, who may then request, in
writing, within ten (10) days after the giving of such notice by the Issuer to
have any or all of their Registrable Securities included in the Demand
Registration. The Issuer shall use its commercially reasonable best efforts to
file, as promptly as reasonably practicable, but in any event no later than
ninety (90) after receipt of such written request pursuant to this Section (A),
a Registration Statement on Form S-3 (or any successor form) or on such other
Form as may be required covering all Registrable Securities which the Issuer has
been so requested to register (the "Demand Registrations").
(ii) Prepare and file with SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Act with respect to the disposition of all securities covered
by such registration statement.
(iii)Furnish to the Holders and deliver as directed
such numbers of copies of the registration statement with the a prospectus,
including preliminary prospectus, in conformity with the requirements of the
Act, and such other documents as they may reasonably request in order to
facilitate the disposition of all securities covered by such registration
statement.
(iv) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdiction as shall be reasonably appropriate for the
distribution of the securities covered by the registration statement, provided
that the Issuer shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service of
process in any such states or jurisdictions, and further provided that (anything
in this Agreement to the contrary notwithstanding with respect to the bearing of
expenses) if any jurisdiction in which the securities shall be qualified shall
require that expenses incurred in connection with the qualification of the
securities in that jurisdiction be borne by the selling Holders, then such
expenses shall be payable by the selling Holders pro rata, to the extent
required by such jurisdiction.
(B) Piggyback Registration. If the Issuer at any time proposes
to file a registration statement with respect to its Common Stock, whether (i)
for its own account (other than a registration statement on Form S-4 or S-8 (or
any successor or substantially similar form), and other than in connection with
(A) an employee stock option, stock purchase or compensation plan or of
securities issued or issuable pursuant to any such plan or (B) a dividend
reinvestment plan, or (ii) for the account of Holder or other Holders that have
requested such registration (a "Requesting Securityholder"), then the Issuer
shall in each case give written notice of such proposed filing to the Holder at
least twenty (20) days before the anticipated filing date of any such
registration statement by the Issuer, and such notice shall offer to the Holder
the right to include Registrable Securities in such registration statement. If
the Holder desires to have its Registrable Securities registered under this
Section 1(B), he shall so advise the Issuer in writing within ten (10) days
after the receipt of such notice (which requests shall set forth the amount of
Registrable Securities for which registration is requested), and the Issuer
shall use its commercially reasonable best efforts to include in such
Registration Statement all such Registrable Securities so requested to be
included therein. Notwithstanding the foregoing, if the managing underwriter or
underwriters of any such proposed public offering that is an Underwritten
Offering is sufficiently large to adversely affect the success of such proposed
public offering, then the amount or kind of securities to be offered for the
accounts of the Holder and the other Holders (except the Requesting
Securityholder) shall be reduced pro rata, based upon the aggregate number of
securities to be offered for the accounts of the Holder and all other Holders
(except the Company and the Requesting Securityholder) of securities intended to
be included in such Underwritten Offering and the number or kind of securities
to be offered for the account of the Holder, to the extent necessary to reduce
the total amount or kind recommended by such managing underwriter or
underwriters before securities offered by the Issuer or any Requesting Holder
are so reduced. Such registration statement shall be subject to the applicable
provisions of subsections (i) through (iv) of Subparagraph (A) of this Section.
(c) Furnish Information. It shall be a condition precedent to the
obligations of the Issuer to take any action pursuant to Section 1 that the
Holders shall furnish to the Issuer such information regarding them, the
Registrable Securities held by them, and the intended method of disposition of
such securities as the Issuer shall reasonably request and as shall be required
in connection with the action to be taken by the Issuer.
(d) Registration Expenses. In case of any registration effected
pursuant to Section 1(A) or 1(B), the Holder shall bear all registration and
qualification fees and (excluding underwriter's discounts and commissions),
including any additional costs and disbursements of counsel for the Issuer that
result from the inclusion of securities held by the Holders in such
registration. Each selling Holder shall bear the fees and costs of its own
counsel in connection with any registration affected pursuant to such Sections.
(e) Indemnification and Contribution. Subject to Section 1(f) in the
event any Registrable Securities are included in a registration statement under
Section 1:
(i) To the extent permitted by law, the Issuer will
indemnify and hold harmless each Holder requesting or joining in a registration,
any underwriter (as defined in the Act) for it, and each person, if any, who
controls such Holder or underwriter within the meaning of the Act or the
Securities Exchange Act of 1934, as amended (the "1934 Act") against any losses,
claims, damages or liabilities, joint or several, to which they may become
subject under the Act, the 1934 Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based on any untrue or alleged untrue statement of any material fact
contained in such registration statement, including any preliminary prospectus
or final prospectus, or any amendments or supplements thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein, or necessary to make the statements therein
not misleading, or arise out of any violation by the Issuer and relating to
action or inaction required of the Issuer in connection with any such
registration; and will reimburse each such Holder, such underwriter, or such
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however that the indemnity agreement contained in
this Section shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected without the
consent of the Issuer (which consent shall not be unreasonably withheld) nor
shall the Issuer be liable in any such case for any such loss, claim, damage,
liability or action to the extent that it arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in amendments or supplements thereto, in reliance upon and in conformity
with written information furnished expressly for use in connection with such
registration by any such Holder, underwriter or controlling person.
(ii) To the extent permitted by law, each Holder
requesting or joining in a registration will severally indemnify and hold
harmless the Issuer, each of its directors, each of its officers who have signed
the registration statement, each person, if any, who controls the Issuer (within
the meaning of the Act or the 0000 Xxx) and each agent and any underwriter for
the Issuer (within the meaning of the Act or the 0000 Xxx) against any losses,
claims, damages or liabilities, joint or several, to which the Issuer or any
such director, officer, controlling person, agent or underwriter may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities ( or actions in respect thereto) arise out of or are based upon any
untrue statement or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in such
registration statement, preliminary or final prospectus, or amendments or
supplements thereto, in reliance upon and in conformity with written information
furnished by such Holder expressly for use in connection with such registration;
and each such Holder will reimburse any legal or other expenses reasonably
incurred by the Issuer or any such director, officer, controlling person, agent
or underwriter in connection with investigating or defending any such loss,
claim, damage, liability or action, provided, however, that the indemnity
agreement contained in this Section shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of such Holder (which consent shall
not be unreasonably withheld).
(iii)Promptly after receipt by an indemnified party under
this Section of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against any indemnifying
party under this Section, notify the indemnifying party in writing of the
commencement thereof and (unless the interest of the indemnifying party
conflicts with that of the indemnified party) the indemnifying party shall have
the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel mutually satisfactory to the parties. The
failure to notify an indemnifying party promptly of the commencement of any such
action, if prejudicial to his ability to defend such action, shall relieve such
indemnifying party, to the extent that he is prejudiced thereby, of any
liability to the indemnified party under this Section, but the omission so to
notify the indemnifying party will not relieve him of any liability that he may
have to any indemnified party otherwise than under this Section.
(iv) In order to provide for just and equitable
contribution to joint liability under the Act in any case in which either
(i) any Holder exercising rights under this Agreement, or any controlling person
of any such Holder, makes a claim for indemnification pursuant to this Section
but it is judicially determined (by entry of a final judgment or decree by a
court of competent jurisdiction and the expiration of time to appeal or the
denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section provides for
indemnification in such case, or (ii) contribution under the Act may be required
on the part of any such selling Holder or any such controlling person in
circumstances for which indemnification is provided under this Section; then,
and in each such case, the Issuer and such Holder will contribute to the
aggregate losses, claims, damages or liabilities to which they may be subject
(after contribution from others) in such proportion so that such Holder is
responsible for the portion represented by the percentage that the public
offering price of its Registrable Securities offered by the registration
statement bears to the public offering price of all securities offered by such
registration statement, and the Issuer is responsible for the remaining portion;
provided, however that, in any such case, (A) no such Holder will be required to
contribute any amount in excess of the public offering price of all such
Registrable Securities offered by it pursuant to such registration statement;
and (B) no person or entity guilty of fraudulent misrepresentation (within the
meaning of Section 1(f) of the Act) will be entitled to contribution from any
person or entity who was not guilty of such fraudulent misrepresentation.
2. Reports Under Securities Exchange Act of 1934. With a view to making
available to the Holders the benefits of Rule 144 promulgated under the Act and
any other rule or regulation of the SEC that may at any time permit a Holder to
sell securities of the Issuer to the public without registration, the Issuer
agrees to use its best efforts to:
(a) make and keep public information available, as those terms are
understood and defined in Rule 144, at all times subsequent to ninety (90) days
after the effective date of the first registration statement covering an
underwritten public offering filed by the Issuer;
(b) file with the SEC in a timely manner all reports and other documents
required of the Issuer under the 1934 Act, and
(c) furnish to any Holder so long as such Holder owns any of the
Registrable Securities forthwith upon request a written statement by the Issuer
that it has complied with the reporting requirements of Rule 144 (at any time
after ninety (90) days after the effective date of said first registration
statement filed by the Issuer), and of the Act and the 1934 Act (at any time
after it has become subject to such reporting requirements), a copy of the most
recent annual or quarterly report of the Issuer, and such other reports and
documents so filed by the Issuer as may be reasonably requested in availing any
Holder of any rule or regulation of the SEC permitting the selling of any such
securities without registration.
3. Transfer of Registration Rights. The registration rights of a Holder under
Section 1(b) may be transferred to a transferee who acquired at least 20% of the
Registrable Securities originally issued to the Holder, or to a partner or
affiliated partnership of such Holder without restriction as to minimum transfer
amount. The Issuer shall be given written notice by the Holder at the time of
such transfer stating the name and address of the transferee and identifying the
securities with respect to which the rights under Section 1 are being assigned.
4. Notices. Any notice required or permitted to be given pursuant to this
Agreement shall be in writing and shall be deemed to have been properly given
when delivered by hand or mailed by registered or certified mail, return receipt
requested, with postage prepaid, to the party or parties to whom such notice is
intended to be given at the address of such party first above written or such
other address as such party may designate by notice given hereunder.
5. Miscellaneous.
(a) This Agreement shall be governed by the laws of the State of New
York. If any provision or provisions of this Agreement is found to be void or
unenforceable, the remaining provisions or this Agreement shall remain binding
and in full force and effect.
(b) Wherever appropriate, the singular shall be deemed also to mean the
plural, and visa versa, and the male gender shall comprehend the female and
neuter. The captions in this Agreement are for convenience only, and shall not
affect the construction of the provisions hereof.
(c) This Agreement may be terminated, waived or modified only by a
written agreement executed by the party against which enforcement of such
termination, waiver or modification is sought. This Agreement merges all prior
understandings of the parties with respect to the subject matter hereof.
(d) This agreement may be executed in several counterparts, each of
which shall constitute an original, but all counterparts shall constitute but
one and the same Agreement.
(e) This Agreement shall be binding upon and shall inure to the benefit
of the parties and their respective heirs, executors, administrators, legal
representatives, successors and permitted assigns.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written.
EXUS NETWORKS, INC.
By: ______________________________
Xxxxx X. Xxxxxx, President
New Millennium Development Group Inc
By: ______________________________
Xxxx Xxxxxxx, President
