Exhibit 10.6


 


EXECUTION VERSION


 


REGISTRATION RIGHTS AGREEMENT


 


This Registration Rights Agreement (this “Agreement”),
dated November 9, 2005, is entered into by and between IT & E
INTERNATIONAL GROUP, a Nevada corporation (the “Company”) and COMVEST INVESTMENT
PARTNERS II LLC, a Delaware limited liability company (“ComVest”) and the
purchasers set forth on the signature pages attached hereto (each a “Purchaser”
and collectively with ComVest, the “Purchasers”), as a material inducement for the
Purchasers to purchase (i) senior secured notes (each a “Senior Secured
Note”) in an aggregate principal amount up to of $11,500,000 (ii) up to 11,500
of shares of convertible preferred stock, stated value $1,000 per share (the “Series D
Preferred Stock”), (iii) warrants (the “Warrant”) to purchase up to
81,142,788 shares of common stock, par value $0.001 per share (“Common Stock”)
and (iv) and the six month option to invest an additional $5,000,000 on
the same terms as (i), (ii) and (iii) (“the ComVest Option”) in accordance
with the terms of that certain Securities Purchase Agreement, dated on or about
the date hereof (the “Purchase Agreement”). 
All capitalized terms used but not defined herein shall have the
meanings ascribed thereto in the Purchase Agreement.


 


NOW, THEREFORE,
the Company and ComVest hereby agree as follows:


 


1.                                       Definitions.  In addition to those terms defined elsewhere
in this Agreement, the following terms shall have the following meanings
wherever used in this Agreement:


 


“Act” shall mean the Securities Act of 1933,
as amended, and any successor statute from time to time.


 


“Costs and Expenses” shall mean all of the
costs and expenses relating to any subject Registration Statement, including
but not limited to registration, filing and qualification fees, reasonable blue
sky expenses, costs of listing any shares of Common Stock on any national
securities exchange automated quotation system, printing expenses, fees and
disbursements of counsel and accountants to the Company, and reasonable fees
and disbursements of counsel to ComVest (such fees and disbursements not to
exceed $25,000 per Registration); provided, however, that
underwriting discounts and commissions attributable solely to the securities
registered for the benefit of ComVest, fees and disbursements of any additional
counsel to ComVest, and all other expenses attributable solely to ComVest shall
be borne by ComVest.


 


“Excluded Registration Statement” shall mean
a registration statement relating solely to the registration of the sale of
securities (i) other than for cash, (ii) to participants in a Company
stock plan or employee benefit plan, agreement or arrangement, and (iii) in
a transaction covered by Rule 145 under the Act or the resale of
securities issued in such a transaction.


 


“Existing Registration Rights Agreements”
shall mean: (i) the Registration Rights Agreement dated October 18,
2004 with Laurus Master Fund Ltd.; (ii) the Company’s agreement


 





















 


with Peter Sollenne, Kelly Alberts, Anthony Allocca and David Vandertie
to register the resale of their outstanding shares on the Registration
Statement, subject to the Lock-Up Agreement dated as of even date herewith; and
(iii) the piggy-back registration rights that have been granted to the
shareholders of Millennix, Inc., subject to the Lock-Up Agreement dated as
of even date herewith.


 


“Lock-Up Agreement” shall mean each of the
Lock-Up Agreements to be entered into by the Company and each of Peter
Sollenne, Kelly Alberts, Anthony Alloca, David Vandertie, Gene Resnick,
Margaret Barbetti, Russell Sobel, and John Garzio.


 


“Registrable Securities” shall mean all shares
of Common Stock underlying the Warrants, and the shares of Common Stock
underlying the Preferred Stock held from time to time by the Purchasers, and in
each case including the Optional Registerable Securities, if any; provided,
however, that such Registrable Securities shall cease to be Registrable
Securities at such time as all such Registrable Securities (i) are sold
pursuant to any registration statement filed by the Company with the SEC,
pursuant to Rule 144 promulgated under the Act or pursuant to any other
exemption from registration under the Act or (ii) may be sold, subject to
any applicable volume limitations, in open market transactions pursuant to any
applicable exemption from the registration requirements of the Act, including
without limitation Rule 144(k) promulgated thereunder (or any successor
thereto).


 


“Optional Registrable Securities” shall mean
the shares underlying the Warrants and Preferred Stock issued in connection
with the ComVest Option.


 


“Registration” shall mean any registration or
proposed registration of Registrable Securities pursuant to a Registration
Statement in respect to the sale of any Registrable Securities.


 


“Registration Period” shall mean the period (i) beginning
upon the earlier of declaration of effectiveness of the Registration Statements
provided for in Section 2 hereof or declaration of effectiveness of any
Registration Statement provided for in Section 3 hereof that includes
Registrable Securities and (ii) ending on the earlier of the date that all
Registrable Securities have ceased to be Registrable Securities and the second
anniversary of the date of this Agreement.


 


“Registration Statement” shall mean any
registration statement filed or to be filed by the Company with the SEC.


 


“SEC” shall mean the United States Securities
and Exchange Commission, or any successor agency or agencies performing the
functions thereof.


 


“Warrant Registrable Securities” shall mean
the shares of Common Stock issuable upon exercise of the Warrants or any shares
issued in exchange for or replacement thereof, from time to time.


 


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2.                                       Registration.


 


(a)                                  Mandatory
Registration.  The Company shall
prepare, and, within fifteen (15) calendar days from the earlier to occur of: (i) the
exercise in full of the ComVest Option, or (ii) the expiration of the
ComVest Option (the “Filing Date”), file with the SEC a Registration Statement
on Form S-3 (or, if Form S-3 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 ComVest, which consent will
not be unreasonably withheld) 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 upon
conversion of or otherwise pursuant to the Preferred Stock and exercise of the
Warrants to prevent dilution resulting from stock splits, stock dividends or
similar transactions.  The number of
shares of Common Stock initially included in such Registration Statement shall
be no less than an amount equal to the sum of the number of shares of Common
Stock that are then issuable upon conversion of the Preferred Stock (based on
the Conversion Price), and the number of shares of Common Stock that are then
issuable upon exercise of the Warrants, without regard to any limitation on
ComVest’s ability to convert the Preferred Stock or exercise the Warrants but
in each case that relates to Registrable Securities.  The Company acknowledges that the number of
shares initially included in the Registration Statement represents a good faith
estimate of the maximum number of shares issuable upon conversion of the
Preferred Stock and upon exercise of the Warrants but in each case that relates
to Registrable Securities.  ComVest
acknowledges and agrees that such initial Registration Statement to be filed on
or prior to the Filing Date shall include shares in accordance with the
registration rights set forth in subsection (ii) and (iii) of
the definition of Existing Registration Rights Agreements, subject to the
Lock-Up Agreements being entered into by such parties.


 


(b)                                 Payments
by the Company.  The Company shall
use its best efforts to obtain effectiveness of the Registration Statement as
soon as practicable.  If (i) the
Registration Statement(s) covering the Registrable Securities required to be
filed by the Company pursuant to Section 2(a) hereof is not filed by
the Filing Date or declared effective by the SEC within three months from the
Filing Date, or (ii) after the Registration Statement has been declared
effective by the SEC, sales of all of the Registrable Securities cannot be made
pursuant to the Registration Statement, subject to Section 2(d) below,
then the Company will make payments to ComVest in such amounts and at such
times as shall be determined pursuant to this Section 2(c) as partial
relief for the damages to ComVest by reason of any such delay in or reduction
of their ability to sell the Registrable Securities (which remedy shall not be
exclusive of any other remedies available at law or in equity).  The Company shall pay to ComVest a cash fee
of $100,000 per month, or part thereof, until such time as the Registration
Statement is declared effective by the SEC, or the suspension is lifted by the
SEC.  Such amounts shall be paid in cash.


 


(c)                                  Eligibility
for Form S-3, SB-2 or S-1; Conversion to Form S-3.  The Company represents and warrants that it
meets the requirements for the use of Form S-3, SB-2 or S-1 for registration
of the resale by the Purchasers.  The
Company agrees to file all reports required to be filed by the Company with the
SEC in a timely manner so as to remain eligible or become eligible, as the case
may be, and thereafter to maintain its eligibility, for the use of Form S-3.  If the Company is not currently eligible to
use Form S-3, not later than five (5) business


 


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days after the Company first meets the registration eligibility and
transaction requirements for the use of Form S-3 (or any successor form)
for registration of the offer and sale by the Purchasers, the Company shall
file a Registration Statement on Form S-3 (or such successor form) with
respect to the Registrable Securities covered by the Registration Statement on Form SB-2
or Form S-1, whichever is applicable, filed pursuant to Section 2(a) (and
include in such Registration Statement on Form S-3 the information
required by Rule 429 under the 1933 Act) or convert the Registration
Statement on Form SB-2 or Form S-1, whichever is applicable, filed
pursuant to Section 2(a) to a Form S-3 pursuant to Rule 429
under the 1933 Act and cause such Registration Statement (or such amendment) to
be declared effective no later than six (6) months after the Filing
Date.  In the event of a breach by the
Company of the provisions of this Section 2(c), the Company will be
required to make payments pursuant to Section 2(b) hereof.


 


(d)                                 Allowed
Delay.  If (i) there is material
non-public information regarding the Company which the Company’s Board of
Directors (the “Board”) reasonably determines not to be in the Company’s best
interest to disclose and which the Company is not otherwise required to
disclose, or (ii) there is a significant business opportunity (including,
but not limited to, the acquisition or disposition of assets (other than in the
ordinary course of business) or any merger, consolidation, tender offer or
other similar transaction) available to the Company which the Board reasonably
determines not to be in the Company’s best interest to disclose and which the
Company would be required to disclose under a Registration Statement, then the
Company may postpone or suspend filing or effectiveness of such Registration
Statement for a period not to exceed thirty (30) consecutive days, provided
that the Company may not postpone or suspend its obligation under this Section 2(d) for
more than sixty (60) days in the aggregate during any twelve (12) month period
(each, an “Allowed Delay”).


 


3.                                       Registration
Procedures.  In the case of each
Registration effected by the Company in which Registrable Securities or
Optional Registrable Securities are to be sold for the account of ComVest, the
Company will use its good faith reasonable efforts to:


 


(a)                                  furnish
to Greenberg Traurig LLP (counsel to ComVest) copies of all Registration
Statements or prospectuses or any amendments or supplements thereto proposed to
be filed with the SEC, which documents will be subject to review by such
counsel before filing solely with regard to any information contained therein
which pertains to ComVest;


 


(b)                                 prepare
and file with the SEC such amendments and supplements to such Registration
Statement and the prospectus used in connection therewith as may be necessary
to keep such Registration Statement effective during the Registration Period
(or, with respect to Registration Statement filed in accordance with Section 3
hereof, for such shorter or longer period covered thereby) and to comply with
the provisions of the Act with respect to the disposition of all securities
covered by such Registration Statement during such period;


 


(c)                                  furnish
to ComVest electronic copies of such Registration Statement, each amendment and
supplement thereto, the prospectus included in such Registration Statement
(including each preliminary prospectus) and such other documents as the
Purchasers may reasonably require in order to facilitate the disposition of the
Registrable Securities held by the Purchasers;


 


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(d)                                 register
or qualify such Registrable Securities or Optional Registrable Securities under
such other securities or blue sky laws of such states as may be reasonably
required and do any and all other acts and things which may be reasonably
necessary or advisable to enable the Purchasers to consummate the disposition
of the Registrable Securities in such jurisdictions (provided that the Company
will not be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
subparagraph, (ii) subject itself to taxation in any such jurisdiction, or
(iii) consent to general service of process in any such jurisdiction);


 


(e)                                  notify
the Purchasers , at any time when a prospectus relating to a Registration
Statement is required to be delivered under the Act, of the happening of any
event as a result of which the prospectus included in a Registration Statement
contains an untrue statement of a material fact or omits to state any fact
necessary to make the statements therein not materially misleading, and prepare
a supplement or amendment to such prospectus so that, as thereafter delivered
to the purchaser(s) of Registrable Securities, such prospectus will not contain
an untrue statement of a material fact or omit to state any fact necessary to
make the statements therein not materially misleading; and


 


(f)                                    effective
not later than the effectiveness of the subject Registration Statement, cause
all subject Registrable Securities to be listed for trading on each national
securities exchange or automated quotation system on which the Common Stock is
then listed, if any.


 


4.                                       Indemnification
by the Company.


 


(a)                                  In
the event that the Company has failed to use its reasonable best efforts and
has otherwise failed to act in good faith to effect the registration of the
Registrable Securities or Optional Registrable Securities in accordance with Section 2(a) and
(b) hereof and the SEC has failed to declare effective any such
Registration Statement by the Effective Date, then the Company shall pay
ComVest a cash payment in accordance with Section 2(b).  In the event the Company otherwise materially
breaches or materially fails to perform, as applicable, any representation,
warranty or covenant contained in this Agreement, the Company shall indemnify
the Purchasers from and against any expenses, claims, losses, costs, charges or
liabilities of any kind, including amounts paid in settlement and reasonable
attorneys’ fees (collectively, the “Losses”), which may be incurred by the
Purchasers as a result of any such failure or breach, with such indemnification
to be made within thirty (30) days of receipt of written request therefor.


 


(b)                                 The
Company shall indemnify and hold harmless each Purchaser and, each of their
respective directors, legal counsel and accountants for ComVest, and any
underwriter (as defined in the Act) for any Losses to which any Purchaser or
any other such indemnified person becomes subject, under the Act or any rule or
regulation thereunder, insofar as such Losses (i) are caused by any untrue
statement or alleged untrue statement of any material fact contained in any
preliminary prospectus (if used prior to the Effective Date of the Registration
Statement), or contained, on the Effective Date thereof, in any Registration
Statement of which Registrable Securities were the subject, the prospectus
contained therein, any amendment or supplement thereto, or (ii) arise out
of or are based upon the omission or alleged


 


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omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, or (iii) arise
out of any violation by the Company of the Act or any rule or regulation
thereunder applicable to the Company and relating to actions or omissions
otherwise required of the Company in connection with such Registration
Statement.  The Company shall reimburse
the Purchasers and any such other indemnified person for any legal or other
expenses reasonably incurred by the Purchasers or such other indemnified person
in connection with investigating, defending or settling any such Loss; provided,
however, that the Company shall not be liable to any such Persons in any
such case to the extent that any such Loss arises out of or is based upon (i) any
untrue statement or alleged untrue statement or omission or alleged omission
made in reliance upon and in conformity with information furnished to the
Company in writing by such person expressly for inclusion in any of the
foregoing documents or (ii) the use by the Purchasers of an outdated or
defective prospectus after the delivery to the Purchasers of written notice
from the Company that the prospectus is outdated or defective.  This indemnity shall not apply to amounts
paid in settlement of any such Loss if such settlement is effected without the
consent of the Company.


 


5.                                       Indemnification
by the Purchasers.  The Purchasers
shall indemnify and hold harmless the Company, each of its directors, each of
its officers who has signed a Registration Statement, legal counsel and
accountants for the Company, each person (if any) who controls the Company
within the meaning of the Act and any underwriter (as defined in the Act) for
the Company, against any Losses to which the Company or any other such
indemnified person may become subject under the Act or any rule or
regulation thereunder or otherwise to the extent that such Losses (or related
actions) (i) are caused solely by any untrue statement or alleged untrue
statement of any material fact contained in any preliminary prospectus (if used
prior to the effective date of the Registration Statement), or contained, on
the Effective Date thereof, in any Registration Statement of which such
Purchaser’s Registrable Securities were the subject, the prospectus contained
therein, any amendment or supplement thereto, or (ii) arise out of or are
based solely 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, 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 reliance upon and in conformity with information furnished to the
Company by the respective Purchaser, in writing, expressly for inclusion in any
of the foregoing documents; provided, however, that the aggregate
liability of any Purchaser shall not be greater than the net proceeds received
by such Purchaser upon the sale of the Registrable Securities giving rise to
such indemnification obligation.  This
indemnity shall not apply to amounts paid in settlement of any such Loss or
related Action if such settlement is effected without the consent of such
Purchaser.


 


6.                                       Additional
Provisions.


 


(a)                                  Each
Purchaser and each other person indemnified pursuant to Section 5 above
shall, in the event that it receives notice of the commencement of any Action
against it which is based upon an alleged act or omission which, if proven,
would result in the Company’s having to indemnify it pursuant to Section 5
above, promptly notify the Company, in writing, of the commencement of such
Action and permit the Company, if the Company so notifies such Purchaser or
other indemnified person within thirty (30) days after receipt by the Company
of notice of the commencement of the Action, to assume the defense of such
Action with counsel


 


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reasonably satisfactory to such Purchaser; provided, however,
that such Purchaser or other indemnified person shall be entitled to retain its
own counsel at its own expense.  The
omission to notify the Company promptly of the commencement of any such Action
shall not relieve the Company of any liability to indemnify such Purchaser or
such other indemnified person, as the case may be, under Section 6 above,
from and after the Company’s receipt of such notice, except to the extent that
the Company shall suffer any Losses by reason of such failure to give notice,
and shall not relieve the Company of any other liabilities which it may have
under this or any other agreement.


 


(b)                                 The
Company and each other person indemnified pursuant to Section 6 above
shall, in the event that it receives notice of the commencement of any Action
against it which is based upon an alleged act or omission which, if proven,
would result in any Purchaser having to indemnify it pursuant to Section 6
above, promptly notify each Purchaser or other indemnified person, in writing,
of the commencement of such Action and permit each Purchaser, if such Purchaser
so notifies the Company within thirty (30) days after receipt by such Purchaser
of notice of the commencement of the Action, to assume the defense of such
Action with counsel reasonably satisfactory to the Company; provided, however,
that the Company or other indemnified person shall be entitled to retain its
own counsel at the Company’s expense. 
The omission to notify any Purchaser promptly of the commencement of any
such Action shall not relieve the Purchasers of liability to indemnify the
Company or such other indemnified person, as the case may be, under Section 6
above, from and after such Purchaser’s receipt of such notice, except to the
extent that the subject Holder shall suffer any Losses by reason of such
failure to give notice, and shall not relieve such Purchaser of any other
liabilities which it may have under this or any other agreement.


 


(c)                                  No
indemnifying party, in the defense of any such Action, shall, except with the
consent of each indemnified party, consent to entry of any judgment or enter
into any settlement that does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability in respect to such Action. 
Each indemnified party shall furnish such information regarding itself
or the Action in question as an indemnifying party may reasonably request in
writing and as shall be reasonably required in connection with defense of such
Action resulting therefrom.


 


(d)                                 If
a court of competent jurisdiction determines that the foregoing indemnity
provided under Sections 5 and 6 above is unavailable, or is insufficient to
hold harmless an indemnified party, then the indemnifying party shall
contribute to the amount paid or payable by the indemnified party as a result
of such Losses (A) in such proportion as is appropriate to reflect the
relative benefits received by the indemnifying party on the one hand and the
indemnified party on the other, or (B) if the allocation provided by
clause (A) above is not permitted by applicable law, or provides a lesser
sum to the indemnified party than the amount hereinafter calculated, in such
proportion as is appropriate to reflect not only the relative benefits received
by the indemnifying party on the one hand and the indemnified party on the
other, but also the relative fault of the indemnifying party and the
indemnified party, as well as any other relevant equitable considerations.  No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.


 


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7.                                       Notices.  All notices, requests, demands and other communications
required or permitted under this Agreement shall be given in accordance with Section 5.5
of the Purchase Agreement.


 


8.                                       Waiver
and Amendment.  No waiver, amendment
or modification of this Agreement or of any provision hereof shall be valid unless
evidenced by a writing duly executed by the Company and each Purchaser.  No waiver of any default hereunder shall be
deemed a waiver of any other, prior or subsequent default hereunder.


 


9.                                       Governing
Law.  This Agreement shall be
governed by, construed under and interpreted and enforced in accordance with
the laws of the State of New York, without giving effect to principles of
choice of law.  Any Action arising out of
or relating to this Agreement shall be commenced in a federal or state court
having competent jurisdiction in the State of New York, and for the purpose of
any such Action, each of the parties and any assignees thereof submits to the
personal jurisdiction of the State of New York. 
The parties hereby irrevocably consent to the exclusive personal
jurisdiction of any state or federal court for New York County in the State of
New York or the Southern District of New York. 
The parties hereby waive any objection to venue and any objection based
on a more convenient form in any Action instituted under this Agreement.


 


10.                                 Captions.  The captions and Section headings used
in this Agreement are for convenience only, and shall not affect the
construction or interpretation of this Agreement or any of the provisions
hereof.


 


11.                                 Entire
Agreement.  This Agreement
constitutes the sole and entire agreement and understanding between the parties
hereto as to the subject matter hereof, and supersedes all prior discussions,
agreements and understandings of every kind and nature between them as to such
subject matter.


 


12.                                 No
Third Party Beneficiaries.  Except as
expressly provided herein, this Agreement is not intended to confer upon any
person any rights or remedies hereunder.


 


13.                                 Successors
and Assigns.         The Company may not sell,
assign, transfer or otherwise convey any of its rights or delegate any of its
duties under this Agreement, except to a corporation which has succeeded to
substantially all of the business and assets of the Company and has assumed in
writing its obligations under this Agreement, and this Agreement shall be
binding on the Company and such successor. This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the Purchasers and their
respective successors and assigns. Without limiting the generality of the foregoing,
any transferee of Registrable Securities shall have the rights set forth in
this Agreement, and such rights shall be enforceable against the Company by
such transferees as third-party beneficiaries.


 


14.                                 Execution.  This Agreement may be executed in two (2) or
more counterparts, all of which when taken together shall be considered one and
the same agreement and shall become effective when counterparts have been
signed by each party and delivered to the other party, it being understood that
both parties need not sign the same counterpart.  In the event that any signature is delivered
by facsimile transmission, such signature shall create a valid and binding


 


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obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile signature page were
an original thereof.


 


15.                                 Term.                  This
Agreement shall terminate upon the expiration of the Registration Period; provided,
however, that the parties’ rights and obligations under Sections 5 and 6
shall survive any termination of this Agreement.


 


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IN WITNESS WHEREOF,
the parties have executed this Agreement as of the 9th day of November 2005.


 


 


	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  IT & E INTERNATIONAL GROUP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Peter Sollenne

  	
   

  
	
   

  	
   

  	
  Name:  Peter Sollenne

  
	
   

  	
   

  	
  Title:  CEO

  



 





















 


	
   

  	
  PURCHASER:

  
	
   

  	
   

  
	
   

  	
  COMVEST INVESTMENT PARTNERS II

  LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael Falk

  	
   

  
	
   

  	
   

  	
  Name:  Michael Falk

  
	
   

  	
   

  	
  Title:  Managing Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Charles McCall

  	
   

  
	
   

  	
   

  	
  Name:  Charles McCall

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name: Matthew Dontzin

  
	
   

  	
   

  	
  Title: