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REGISTRATION RIGHTS AGREEMENT

Registration Rights Agreement

REGISTRATION RIGHTS AGREEMENT | Document Parties: AVERION INTERNATIONAL CORP. | Comvest II Partners LLC | COMVEST INVESTMENT PARTNERS II, LLC You are currently viewing:
This Registration Rights Agreement involves

AVERION INTERNATIONAL CORP. | Comvest II Partners LLC | COMVEST INVESTMENT PARTNERS II, LLC

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Title: REGISTRATION RIGHTS AGREEMENT
Governing Law: New York     Date: 11/14/2007
Industry: Biotechnology and Drugs     Law Firm: Akerman Senterfitt;Foley Lardner     Sector: Healthcare

REGISTRATION RIGHTS AGREEMENT, Parties: averion international corp. , comvest ii partners llc , comvest investment partners ii  llc
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Exhibit 10.51

 

REGISTRATION RIGHTS AGREEMENT

 

REGISTRATION RIGHTS AGREEMENT (this “ Agreement ”), dated as of October 31, 2007, by and among Averion International, Corp. a Delaware corporation, with principal offices located at 225 Turnpike Road, Southborough, Massachusetts 01772 (the “ Company ”), and the undersigned buyers (each, a “ Buyer ” and, collectively, the “ Buyers ”).

 

WHEREAS:

 

A.                                    In connection with the Securities Purchase Agreement by and among the parties hereto of even date herewith (the “ Securities Purchase Agreement ”), the Company has agreed, upon the terms and subject to the conditions of the Securities Purchase Agreement, to sell at the Initial Closing and the Additional Closing (as defined in the Securities Purchase Agreement) to the Buyers (i) the Notes and Shares to be issued to the Buyers on the Initial Closing Date, and (ii) the Notes and Shares to be issued to the Buyers on the Additional Closing Date (as defined in the Securities Purchase Agreement) and the other times set forth in the Securities Purchase Agreement;

 

B.                                      To induce the Buyers to execute and deliver the Securities Purchase Agreement, contemporaneously with the execution of the Securities Purchase Agreement, the Company has agreed to provide certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the “ 1933 Act ”), and applicable state securities laws.

 

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 each of the Buyers hereby agree as follows:

 

1.                                        DEFINITIONS .

 

As used in this Agreement, the following terms shall have the following meanings:

 

a.                                        “1934 Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations hereunder, or any similar successor statutes.

 

b.                                       “Business Day” means any day other than Saturday, Sunday or any other day on which commercial banks in the City of New York are authorized or required by law to remain closed.

 

c.                                        “Effectiveness Deadline” means the Initial Effectiveness Deadline (as defined in Section 2(a)  hereto).

 

d.                                       “Filing Deadline” means the Initial Filing Deadline (as defined in Section 2(a)  hereof).

 



 

e.                                        “Initial Registration Statement” means a registration statement or registration statements of the Company filed under the 1933 Act pursuant to Section 2(a)  hereof covering the Registrable Securities.

 

f.                                          “Investor” means a Buyer or any transferee or assignee thereof to whom a Buyer assigns its rights under this Agreement and who agrees to become bound by the provisions of this Agreement in accordance with Section 9 and such a transferee or assignee thereof to whom a transferee or assignee assigns its rights under this Agreement and who agrees to become bound by the provisions of this Agreement in accordance with Section 9 .

 

g.                                       “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, a Governmental Entity or any other legal entity.

 

h.                                       “Register,” “registered,” and “registration” refer to a registration effected by preparing and filing one or more Registration Statements in compliance with the 1933 Act and pursuant to Rule 415 and the declaration or ordering of effectiveness of such Registration Statement(s) by the SEC.

 

i.                                           “Registrable Securities” means (i) the Shares required to be issued on the Initial Closing Date and the Shares to be issued on the Additional Closing Date, and (ii) any shares of Capital Stock of the Company issued or issuable with respect to such Shares as a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise, without regard to any limitations on issuance of the Shares; provided , however , that any such securities shall cease to be Registrable Securities when (i) a Registration Statement with respect to the sale of such securities becomes effective under the 1933 Act and such securities are disposed of in accordance with such Registration Statement, (ii) such securities are sold in accordance with Rule 144 (as defined in Section 8 ) or (iii) such securities become transferable without any restrictions in accordance with Rule 144(k) (or any successor provision).

 

j.                                           “Registration Statement” means a registration statement or registration statements of the Company filed under the 1933 Act covering Registrable Securities.

 

k.                                        “Required Buyers” means Buyers that purchased at least two-thirds (2/3) of the aggregate original principal amount of the Notes on the Initial Closing Date.

 

l.                                           “Rule 415” means Rule 415 under the 1933 Act or any successor rule providing for offering securities on a continuous or delayed basis.

 

m.                                     “SEC” means the United States Securities and Exchange Commission.

 

n.                                      Trading Day ” means any day on which the Common Stock (or other security as applicable) is traded on the Over-the-Counter Bulletin Board (or securities exchange or trading market) (the “ Principal Market ;” provided, however, that, if after the date of this Agreement the Common Stock is listed on a national securities exchange, the “Principal Market” shall mean such national securities exchange); provided , however , that “Trading Day” shall not include any day on which the Common Stock (or other security, as applicable) is scheduled to

 

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trade, or actually trades on the Principal Market (or other securities exchange or trading market) for less than 4.5 hours.

 

o.                                      Weighted Average Price ” means, for the Common Stock or any other security as of any date, the volume-weighted average price for the Common Stock or other security on the Principal Market (or, for any security other than the Common Stock, the principal securities exchange or trading market for such security) during the period beginning at 9:30 a.m., New York City Time (or such other time as the Principal Market (or other securities exchange or trading market, as applicable) publicly announces is the official open of trading), and ending at 4:00 p.m., New York City Time (or such other time as the Principal Market (or other securities exchange or trading market, as applicable) publicly announces is the official close of trading), as reported by Bloomberg through its “Volume at Price” functions, or, if the foregoing does not apply, the dollar volume-weighted average price of the Common Stock or other security in the over-the-counter market on the electronic bulletin board for the Common Stock or other security during the period beginning at 9:30 a.m., New York City Time (or such other time as such over-the-counter market publicly announces is the official open of trading), and ending at 4:00 p.m., New York City Time (or such other time as such over-the-counter market publicly announces is the official close of trading), as reported by Bloomberg, or, if no volume-weighted average price is reported for the Common Stock or other security by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market makers for the Common Stock or other security as reported in the “pink sheets” by the National Quotation Bureau, Inc. If the Weighted Average Price cannot be calculated for the Common Stock or other security on such date on any of the foregoing bases, the Weighted Average Price of the Common Stock or other security on such date shall be the fair market value as mutually determined by the Company and the Buyers that purchased at least two-thirds (2/3) of the Notes. All determinations of Weighted Average Price are to be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during any period during which the Weighted Average Price is being determined.

 

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

 

2.                                        REGISTRATION .

 

a.                                        Initial Mandatory Registration . The Company shall prepare, and, as soon as practicable, but in no event later than 80 days after the Initial Closing Date (the “ Initial Filing Deadline ”), file with the SEC a Registration Statement on Form S-3 (subject to Section 2(d)  hereof) covering the resale of by each of the Investors of all of the Registrable Securities issued or issuable to such Investor. The Company shall use its best efforts to have the Initial Registration Statement declared effective by the SEC as soon as practicable, but in no event later than 140 days after the Initial Closing Date (the “ Initial Effectiveness Deadline ”).

 

b.                                       Allocation of Registrable Securities . In no event shall the Company include any securities other than Registrable Securities in any Registration Statement without the prior written consent of the Required Buyers; provided, however, that notwithstanding anything to the contrary herein, the Company shall be entitled to avail itself of Rule 429 under the Securities Act with respect to any currently effective registration statement.

 

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c.                                        Legal Counsel . Subject to Section 5 hereof, the Buyers shall have the right to select one legal counsel to review and oversee any registration pursuant to this Section 2 (“ Legal Counsel ”), which shall be Akerman Senterfitt or such other counsel as thereafter designated by the Required Buyers. The Company shall reasonably cooperate with Legal Counsel in performing the Company’s obligations under this Agreement.

 

d.                                       Ineligibility for Form S-3 . In the event that Form S-3 is not available for the registration of the resale of Registrable Securities hereunder, the Company shall (i) register the resale of the Registrable Securities on Form S-1, Form SB-2 or another appropriate form reasonably acceptable to the Required Buyers and (ii) undertake to register the Registrable Securities on Form S-3 (by post-effective amendment to the existing Registration Statement or otherwise) as soon as such form is available for such registration, provided that the Company shall maintain the effectiveness of the existing Registration Statement then in effect until such time as a Registration Statement (or post-effective amendment) on Form S-3 covering the Registrable Securities has been declared effective by the SEC.

 

e.                                        Effect of Failure to File and Obtain and Maintain Effectiveness of Registration Statement .

 

i.                                           Subject to Section 2(f)  below, if (i) the Initial Registration Statement is not (A) filed with the SEC on or before the Initial Filing Deadline or (B) declared effective by the SEC on or before the Initial Effectiveness Deadline or (ii) on any day after the Initial Registration Statement has been declared effective by the SEC, sales of all the Registrable Securities required to be included on the Initial Registration Statement cannot be made  (other than during an Allowable Grace Period (as defined in Section 3(q) hereof) pursuant to the Initial Registration Statement (including because of a failure to keep the Initial Registration Statement effective, to disclose such information as is necessary for sales to be made pursuant to the Initial Registration Statement or to register sufficient Registrable Securities), then, in each case, as liquidated damages to any holder of Registrable Securities by reason of any such delay in or reduction of its ability to sell such Registrable Securities, the Company shall pay to such holder an amount in cash equal to the product of (I) the number of Registrable Securities then held by such holder, multiplied by (II) the arithmetic average of the Weighted Average Price of the Common Stock on each of the five (5) consecutive Trading Days immediately preceding the Initial Closing Date, and multiplied by (III) the product of (x) 0.000667 multiplied by (y) the sum (without duplication) of (1) the number of days after the Initial Filing Deadline that the Initial Registration Statement is not filed with the SEC, plus (2) the number of days after the Initial Effectiveness Deadline that the Initial Registration Statement is not declared effective by the SEC, plus (3) the number of days after the Initial Registration Statement has been declared effective by the SEC that the Initial Registration Statement is not available (other than during an Allowable Grace Period) for the sale of all the Registrable Securities required to be included on the Initial Registration Statement.

 

ii.                                        The liquidated damages to which a holder shall be entitled pursuant to Section 2(e)(i)  hereof are referred to herein as “ Registration Delay Payments .”  Registration Delay Payments shall be paid on the earlier of (I) the second Business Day of the calendar month following the month during which the Registration Delay Payments are incurred

 

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and (II) the second Business Day after the event or failure giving rise to the Registration Delay Payments is cured.

 

iii.                                     In the event the Company fails to make Registration Delay Payments in a timely manner, such Registration Delay Payments shall bear interest at the rate of the lesser of 2.0% per month (prorated for partial months) and the highest lawful interest rate, in each case until paid in full.

 

 

f.                                          Notwithstanding anything to the contrary contained in this Agreement, the Company shall not be required under this Agreement to file or amend a Registration Statement for any offering that would be deemed by the SEC to constitute a primary offering of securities by the Company. In the event that, as a result of the operation of the preceding sentence, the Company cannot include all of the Registrable Securities in any Registration Statement, then the Company shall include in the applicable Registration Statement the maximum number of Registrable Securities that can be included therein without causing the Registration Statement to be deemed to register a primary offering by the Company, with the number of Registrable Securities included in such Registration Statement to be allocated among the Investors in proportion to the total Registrable Securities held by each Investor on the date that the applicable Registration Statement is filed; provided, however, that Cumulus Investors, LLC and Dr. Philip T. Lavin may, at their election, take priority over ComVest Investment Partners II LLC until all of their Registrable Securities have been included in a Registration Statement. With respect to any Registrable Securities that are not included in the applicable Registration Statement (the “ Excluded Securities ”), the Company shall include the Excluded Securities in a subsequently filed Registration Statement (an “ Additional Registration Statement ”) that is filed on the earliest possible date on which Excluded Securities can be included in the Additional Registration Statement without the Additional Registration Statement being deemed to register a primary offering of securities by the Company (an “ Additional Filing Dat e”); provided that if the Company is advised by the SEC that the inclusion of all Excluded Securities in the Additional Registration Statement would cause the Additional Registration Statement to be deemed a registration of a primary offering by the Company, then such Additional Registration Statement shall include only the maximum number of Excluded Securities that could be included in such Registration Statement without it being deemed to be a registration for a primary offering by the Company. If all Excluded Securities cannot be registered on such Additional Registration Statement, then the Company will be obligated to continue filing Additional Registration Statements as soon as is permitted by the SEC to cover as many additional Excluded Securities as possible. The Company’s obligations under this Agreement with respect to all Additional Registration Statements shall be the same as its obligations for the original Registration Statement, provided that the “ Filing Date ” for each such Additional Registration Statement shall be the Additional Filing Date, and the “ Initial Effectiveness Deadline ” for each such Additional Registration Statement shall be delayed by the number of days that elapses between the Filing Date and Additional Filing Date; and provided further that the “ Filing Date ” for each Additional Registration Statement (if applicable) shall be the earliest possible date on which Excluded Securities can be included in such Additional Registration Statement without such Additional Registration Statement being deemed to register a primary offering of securities by the Company (the “ Additional Filing Date ”), and the “ Initial Effectiveness Deadline ” for such Additional Registration Statement shall be delayed by the number of days that elapses between the Filing Date for the original Registration Statement and such Additional Filing Date. In the event that

 

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an Investor sells or otherwise transfers any of such Investor’s Registrable Securities, each transferee shall be allocated a pro rata portion of the then-remaining number of Registrable Securities included in any Registration Statement for such transferor. To the extent permitted under applicable SEC rules, procedures, or practices, any shares of Common Stock included in a Registration Statement and which remain allocated to any Person which ceases to hold any Registrable Securities covered by such Registration Statement shall be allocated to the remaining Investors pro rata based on the number of Registrable Securities then held by such Investors which are covered by such Registration Statement.

 

g.                                       No Piggyback on Registrations . Subject to Section 2(b)  above, neither the Company nor any of its security holders (other than the Buyers in such capacity pursuant hereto) may include securities of the Company in a Registration Statement other than the Registrable Securities. The Company shall not file any other resale registration statements until the Registration Statements with respect to all Registrable Securities have been declared effective by the SEC, provided, that this Section 2(g) shall not prohibit the Company from filing amendments to Registration Statements already filed.

 

3.                                        RELATED OBLIGATIONS .

 

At such time as the Company is obligated to file a Registration Statement with the SEC pursuant to Section 2(a)  hereof, the Company will use its best efforts to effect the registration of the Registrable Securities in accordance with the intended method of disposition thereof and, pursuant thereto, the Company shall have the following obligations:

 

a.                                        Subject to Section 2(f) , the Company shall promptly prepare and file with the SEC a Registration Statement with respect to the applicable Registrable Securities (but in no event later than the applicable Filing Deadline) and use its best efforts to cause such Registration Statement relating to the Registrable Securities to become effective as soon as practicable after such filing (but in no event later than the applicable Effectiveness Deadline). No later than the first Business Day after such Registration Statement becomes effective, the Company will file with the SEC the final prospectus included therein pursuant to Rule 424 (or successor thereto) promulgated under the 1933 Act. Subject to the provisions of this Agreement, the Company shall keep each Registration Statement effective pursuant to Rule 415 at all times until the earlier of (i) the date as of which the Investors may sell all of the Registrable Securities covered by such Registration Statement without restriction pursuant to Rule 144(k) (or successor thereto) promulgated under the 1933 Act, as such rule may be amended from time to time, (ii) the date as of which the Investors may sell all of such Registrable Securities without restriction pursuant to Rule 144 without the requirement for compliance with Rule 144(e), (f) or (h) (or successor thereto), as such rules may be amended from time to time or (iii) the date on which the Investors have informed the Company that the Investors shall have sold all the Registrable Securities covered by such Registration Statement (the “ Registration Period ”). Such Registration Statement (including any amendments or supplements thereto) and any prospectuses (preliminary, final, summary or free writing) contained therein or related thereto shall not at any time contain any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading. The term “best efforts” shall mean, among other things, that the Company shall submit to the SEC, within two Business Days after the Company learns that no

 

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review of a particular Registration Statement will be made by the staff of the SEC or that the staff of the SEC has no further comments on the Registration Statement, as the case may be, a request for acceleration of effectiveness of such Registration Statement to a time and date not later than 48 hours after the submission of such request.

 

b.                                       The Company shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to a Registration Statement and the prospectus used in connection with such Registration Statement, as may be necessary to keep such Registration Statement effective at all times during the Registration Period, and, during such period, comply with the provisions of the 1933 Act with respect to the disposition of all Registrable Securities of the Company covered by such Registration Statement until such time as all of such Registrable Securities shall have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof as set forth in such Registration Statement. In the case of amendments and supplements to a Registration Statement which are required to be filed pursuant to this Agreement (including pursuant to this Section 3(b) ) by reason of the Company filing a report on Form 10-QSB, Form 10-KSB 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 within one Business Day after the 1934 Act report is filed which created the requirement for the Company to amend or supplement such Registration Statement.

 

c.                                        The Company shall (A) permit Legal Counsel to review and comment upon (i) any Registration Statement at least five Business Days prior to its filing with the SEC, and (ii) all prospectuses and all amendments and supplements to all Registration Statements and prospectuses (except for Annual Reports on Form 10-K or 10-KSB, Quarterly Reports on Form 10-Q or 10-QSB, and Current Reports on Form 8-K, and any similar or successor reports) at least a reasonable number of days prior to their filing with the SEC, and (B) not file any Registration Statement, prospectus, amendment or supplement described in the foregoing clause (A) in a form to which Legal Counsel reasonably objects. The Company shall not submit a request for acceleration of the effectiveness of a Registration Statement or any amendment or supplement thereto without providing prior written notice thereof to Legal Counsel and each Investor. The Company shall furnish to Legal Counsel, upon request and without charge, (i) promptly after the same is prepared and filed with the SEC, one copy of any Registration Statement and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference, and all exhibits and (ii) upon the effectiveness of any Registration Statement, one copy of the prospectus included in such Registration Statement and all amendments and supplements thereto. The Company shall reasonably cooperate with Legal Counsel in performing the Company’s obligations pursuant to this Section 3 .

 

d.                                       The Company shall furnish to each Investor whose Registrable Securities are included in any Registration Statement, upon request and without charge, (i) promptly after the same is prepared and filed with the SEC, at least one copy of such Registration Statement and any amendment(s) thereto, including financial statements and schedules, all documents incorporated therein by reference that have not been filed via EDGAR, all exhibits and each preliminary prospectus, (ii) upon the effectiveness of any Registration Statement, at least one copy of the prospectus included in such Registration Statement and all amendments and supplements thereto and (iii) such other documents, including copies of any prospectus

 

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(preliminary, final, summary or free writing), as such Investor may reasonably request from time to time in order to facilitate the disposition of the Registrable Securities owned by such Investor.

 

e.                                        The Company shall with respect to the jurisdictions where each Investor is located as set forth on the Schedule of Buyers , and with respect to any other jurisdiction upon request from an Investor, use its best efforts to (i) register and qualify, unless an exemption from registration and qualification applies, the resale by the Investors of the Registrable Securities covered by a Registration Statement under the securities or “blue sky” laws of all the states of the United States, (ii) prepare and file in those jurisdictions, such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain the effectiveness thereof during the Registration Period, (iii) take such other actions as may be necessary to maintain such registrations and qualifications in effect at all times during the Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Registrable Securities for sale in such jurisdictions; provided , however , that the Company shall not be required in connection therewith or as a condition thereto to (x) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(e)  or (y) subject itself to general taxation in any such jurisdiction or (z) consent to the service of process in any such jurisdiction. The Company shall promptly notify Legal Counsel and each Investor who holds Registrable Securities of the receipt by the Company of any notification with respect to the suspension of the registration or qualification of any of the Registrable Securities for sale under the securities or “blue sky” laws of any jurisdiction in the United States or its receipt of actual notice of the initiation or threatening of any proceeding for such purpose.

 

f.                                          The Company shall notify Legal Counsel and each Investor in writing of the happening of any event, as promptly as practicable after becoming aware of such event, as a result of which the prospectus included in, or relating to, a Registration Statement, as then in effect, includes an untrue statement of a material fact or omission to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (provided that in no event shall such notice contain any material, nonpublic information), and promptly prepare and file with the SEC a supplement or amendment to such Registration Statement to correct such untrue statement or omission, and deliver at least one copy of such supplement or amendment to Legal Counsel and each Investor. The Company shall also promptly notify Legal Counsel and each Investor in writing (i) when a prospectus or any prospectus supplement or post-effective amendment has been filed, and when a Registration Statement or any post-effective amendment has become effective (notification of such effectiveness shall be delivered to Legal Counsel and each Investor by facsimile on the same day of such effectiveness and by overnight mail), (ii) of any request by the SEC for amendments or supplements to a Registration Statement or related prospectus or related information, and (iii) of the Company’s reasonable determination that a post-effective amendment to a Registration Statement would be appropriate.

 

g.                                       The Company shall use its best efforts to prevent the issuance of any stop order or other suspension of effectiveness of a Registration Statement, or the suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction and, if such an order or suspension is issued, to obtain the withdrawal of such order or suspension at the earliest possible moment and to notify Legal Counsel and each Investor who holds Registrable Securities

 

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being sold of the issuance of such order and the resolution thereof or its receipt of actual notice of the initiation or threat o
















 
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