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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