Exhibit 4.11
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AMENDED AND RESTATED SECURITIES PURCHASE AGREEMENT
This Amended and Restated Securities Purchase Agreement (this "Amended
and Restated Agreement"), which amended and restates in its entirety the
Securities Purchase Agreement among the parties hereto (the "Agreement"), is
made and entered into as of February __, 2006, by and among Synova Healthcare
Group, Inc., a Nevada corporation (the "Company"), and the purchasers signatory
hereto (each such purchaser, a "Purchaser" and collectively, the "Purchasers").
BACKGROUND
WHEREAS, in accordance with Section 5.4 of the Securities Purchase
Agreement, the Company and the holders of a majority of the Shares purchased
under the Agreement desire to amend the Securities Purchase Agreement as set
forth herein.
NOW, THEREFORE, in consideration of the mutual promises of the parties
hereto and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound
hereby, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions, In addition to the terms defined elsewhere in this
Agreement, for all purposes of this Agreement, the following terms have the
meanings indicated in this Section 1.1:
"Affiliate" means, with respect to any Person, any Person that,
directly or indirectly through one or more intermediaries, controls or is
controlled by or is under common control with such Person as such terms are used
in and construed under Rule 144. With respect to a Purchaser, any investment
fund or managed account that is managed on a discretionary basis by the same
investment manager as such Purchaser will be deemed to be an Affiliate of such
Purchaser.
"Closing" means the consummation of the purchase and sale of the
Units pursuant to Section 2.1.
"Closing Date" means the Trading Day when all of the Transaction
Documents and other deliverables have been executed and delivered by the
applicable parties thereto.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the common stock of the Company, par value
$001 per share, and any securities into which such common stock may hereafter be
reclassified.
"Common Stock Equivalents" means any securities of the Company or
the Subsidiaries which would entitle the holder thereof to acquire at any time
Common Stock, including without limitation, any debt, preferred stock, rights,
options, warrants or other instrument that is at any time convertible into or
exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock.
"Exempt Issuance" means the issuance of (a) shares of Common Stock
or Common Stock Equivalents to employees, officers or directors of the Company
pursuant to any equity incentive plan in effect on the date hereof or duly
adopted by a majority of the non-employee members of the Board of Directors of
the Company or a majority of the members of a committee of non-employee
directors established for such purpose, (b) securities upon the exercise or
conversion of any securities issued
hereunder or convertible securities, options or warrants issued and outstanding
on the date of this Agreement, provided that such securities have not been
amended since the date of this Agreement to increase the number of such
securities, and (c) securities issued pursuant to acquisitions or strategic
transactions approved by the Board of Directors of the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Investor Questionnaire" means the investor questionnaire attached
hereto as Exhibit A.
"Liens" means a lien, charge, security interest, encumbrance,
right of first refusal, preemptive right or other similar restriction.
"Material Adverse Effect" shall have the meaning ascribed to such
term in Section 3.1(a).
"Person" means an individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof)
or other entity of any kind.
"Placement Agents" means G.M. Capital Partners, Ltd. and Oceana
Partners LLC.
"Proceeding" means an action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition).
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the date of this Agreement, among the Company and each
Purchaser, in substantially the form of Exhibit C hereto, as such agreement may
be amended from time to time.
"Registration Statement" means a registration statement meeting
the requirements set forth in the Registration Rights Agreement and covering the
resale by the Purchasers of the Shares and the Warrant Shares.
"Regulation S" means Regulation S promulgated under the Securities
Act.
"Rule 144" means Rule 144 promulgated by the Commission pursuant
to the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Securities" means the Shares, the Warrants and the Warrant
Shares.
"Securities Act" means the Securities Act of 1933, as amended.
"Subscription Amount" means, as to each Purchaser, the amounts set
forth below such Purchaser's signature block on the signature page hereto, in
United States dollars and in immediately available funds.
"Trading Day" means a day on which the Common Stock is traded on a
trading market. If the Common Stock is not listed or quoted for trading on any
trading market on the date in question, then Trading Day shall mean business
day.
"Trading Market" means the following markets or exchanges on which
the Common
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Stock is listed or quoted for trading on the date in question: the Nasdaq
SmallCap Market, the American Stock Exchange, the New York Stock Exchange, the
Nasdaq National Market or the OTC Bulletin Board.
"Transaction Documents" means this Agreement, the Warrants, the
Registration Rights Agreement and any other documents or agreements executed in
connection with the transactions contemplated hereunder.
"Warrants" means the Common Stock Purchase Warrants described in
Section 2.2(a)(iii) and in substantially the form attached hereto as Exhibit B.
"Warrant Shares" means the shares of Common Stock issuable upon
exercise of the Warrants.
ARTICLE II
PURCHASE AND SALE
2.1 Closing. On the Closing Date, each Purchaser shall purchase from
the Company, severally and not jointly with the other Purchasers, and the
Company shall issue and sell to each Purchaser, the Units set forth under each
Purchaser's name on the signature pages hereto. The aggregate Subscription
Amounts for Units sold hereunder shall be up to $7,000,000. Upon execution of
this Agreement by the parties, the Closing shall occur at the offices of the
Company or such other location as the parties shall mutually agree. Investments
are not binding on the Company until accepted and the Company may reject
Purchaser's subscriptions, in whole or in part, in its sole discretion and for
any reason (or no reason).
2.2 Deliveries.
(a) On the Closing Date, the Company shall deliver or cause to be
delivered to each Purchaser the following:
(i) this Agreement duly executed by the Company;
(ii) a certificate, registered in the name of such Purchaser,
evidencing the Shares purchased;
(iii) a Warrant, registered in the name of such Purchaser,
exercisable immediately upon issuance for a term of 2 years after issuance,
pursuant to which such Purchaser shall have the right to acquire, for each Unit
purchased by such Purchaser, 12,500 shares of Common Stock at an exercise price
of three dollars ($3.00) per share, subject to adjustment as provided therein;
and
(iv) the Registration Rights Agreement duly executed by the
Company.
(b) On the Closing Date, each Purchaser shall deliver, or cause to
be delivered to the Company the following:
(i) this Agreement duly executed by such Purchaser;
(ii) such Purchaser's Subscription Amount by wire transfer to
the account of the escrow agent designated in writing by the Company to the
Purchasers; and
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(iii) the Registration Rights Agreement duly executed by such
Purchaser.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Company. The Company hereby
makes the representations and warranties set forth below to each Purchaser.
(a) Organization and Qualification. The Company is an entity duly
incorporated, validly existing and in good standing under the laws of its state
of incorporation, with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently conducted. The
Company is not in violation or default of any of the provisions of its articles
of incorporation or bylaws. The Company is duly qualified to conduct its
business and is in good standing as a foreign corporation in each jurisdiction
in which the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, could not reasonably be expected to result in (i)
a material adverse effect on the legality, validity or enforceability of any
Transaction Document, (ii) a material adverse effect on the results of
operations, assets, business or financial condition of the Company, or (iii) a
material adverse effect on the Company's ability to perform in any material
respect on a timely basis its obligations under any Transaction Document (any of
(i), (ii) or (iii), a "Material Adverse Effect"), and no Proceeding has been
instituted in any such jurisdiction revoking, limiting or curtailing or seeking
to revoke, limit or curtail such power and authority or qualification.
(b) Authorization: Enforcement. The Company has the requisite
corporate power and authority to enter into and to consummate the transactions
contemplated by each of the Transaction Documents and otherwise to carry out its
obligations thereunder. The execution and delivery of each of the Transaction
Documents by the Company and the consummation by it of the transactions
contemplated thereby have been duly authorized by all necessary action on the
part of the Company and no further corporate authorization is required by the
Company in connection therewith, other than in connection with the required
approval noted in Section 3.1(d) below. Each Transaction Document has been (or
upon delivery will have been) duly executed by the Company and, when delivered
in accordance with the terms hereof, will constitute the valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors' rights generally and (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or other
equitable remedies,
(c) No Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company, the issuance and sale of the Units and the
consummation by the Company of the other transactions contemplated thereby do
not and will not (i) conflict with or violate any provision of the Company's
certificate of incorporation or bylaws, or (ii) conflict with, or constitute a
default (or an event that with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of,
any material agreement, credit facility, debt or other instrument (evidencing a
Company debt or otherwise) or other agreement to which the Company is a party or
by which any material property or material asset of the Company is bound, or
(iii) subject to the required approval noted in Section 3.1(d), conflict with or
result in a violation of any law, rule, regulation, order, judgment, injunction,
decree or other restriction of any court or governmental authority to which the
Company is subject, or by which any material property or material asset of the
Company is bound, except, in each case, as could not reasonably be expected to
result in a Material Adverse Effect.
(d) Filings, Consents and Approvals. The Company is not required
to obtain any
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consent, waiver, authorization or order of, give any notice to, or make any
filing or registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of the Transaction Documents, other than
the filing of Form D with the Commission and such filings as are required to be
made under applicable state securities laws.
(e) Issuance of the Securities. The Warrants are duly authorized
and, when issued and paid for in accordance with the Transaction Documents, will
be validly issued, fully paid and nonassessable, free and clear of all Liens,
other than restrictions provided for in the Transaction Documents and applicable
securities laws. The Warrant Shares, when issued in accordance with the terms of
the Transaction Documents, will be validly issued, fully paid and nonassessable,
free and clear of all Liens imposed by the Company other than restrictions
provided for in the Transaction Documents and applicable securities laws. The
Company has reserved from its duly authorized capital stock the maximum number
of shares of Common Stock issuable pursuant to this Agreement and the Warrants.
(f) Certain Fees. Except for fees payable to the Placement Agents,
no brokerage or finder's fees or commissions are or will be payable by the
Company to any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the transactions
contemplated by this Agreement. The Purchasers shall have no direct obligation
with respect to any fees or with respect to any claims made by or on behalf of
other Persons for fees of a type contemplated in this Section that may be due in
connection with the transactions contemplated by this Agreement.
3.2 Representations and Warranties of the Purchasers Each Purchaser
hereby, for itself and for no other Purchaser, represents and warrants as of the
date hereof and as of the Closing Date to the Company as follows:
(a) Organization: Authority. Such Purchaser, if not a natural
person, is an entity duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization with full right, corporate or
partnership power and authority to enter into and to consummate the transactions
contemplated by the Transaction Documents and otherwise to carry out its
obligations thereunder. The execution, delivery and performance by such
Purchaser of the transactions contemplated by this Agreement have been duly
authorized by all necessary corporate or similar action on the part of such
Purchaser. Each Transaction Document to which a Purchaser is a party has been
duly executed by such Purchaser, and, subject to Section 2.4, when delivered by
such Purchaser in accordance with the terms hereof, will constitute the valid
and legally binding obligation of such Purchaser, enforceable against such
Purchaser in accordance with its terms, except (i) as limited by general
equitable principles and applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of
creditors' rights generally and (ii) as limited by laws relating to the
availability of specific performance, injunctive relief or other equitable
remedies.
(b) Purchaser Representation. Such Purchaser understands that the
Securities are "restricted securities" and have not been registered under the
Securities Act or any applicable state securities law and is acquiring the
Securities as an investment as principal for its own account and not with a view
to or for distributing or reselling such Securities or any part thereof, has no
present intention of distributing any of such Securities and has no arrangement
or understanding with any other Persons regarding the distribution of such
Securities (this representation and warranty not limiting such Purchaser's right
to sell the Securities pursuant to the Registration Statement or otherwise in
compliance with applicable federal and state securities laws). Such Purchaser is
acquiring the Securities hereunder in the ordinary course of its business. Such
Purchaser does not have any agreement or understanding, directly or indirectly,
with any Person to distribute any of the Securities.
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(c) Purchaser Status. At the time such Purchaser was offered the
Securities, it was, and at the date hereof it is, and on each date on which it
exercises any Warrants, it will be either: (i) an "accredited investor" as
defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities
Act, or (ii) a "qualified institutional buyer" as defined in Rule 144A(a) under
the Securities Act. Such Purchaser is not required to be registered as a
broker-dealer under Section 15 of the Exchange Act, Each Person who is
purchasing pursuant to Regulation S promulgated by the Commission under the
Securities Act represents that he, she or it is not a "U.S. Person" as that term
is defined in Regulation S and agrees to be bound by all of the terms and
conditions of Regulation S.
(d) Experience of Purchaser. Purchaser, either alone or together
with its representatives, has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the merits and
risks of the prospective investment in the Securities, and has so evaluated the
merits and risks of such investment. Such Purchaser is able to bear the economic
risk of an investment in the Securities and, at the present time, is able to
afford a complete loss of such investment.
(e) General Solicitation. Such Purchaser is not purchasing the
Securities as a result of any advertisement, article, notice or other
communication regarding the Securities published in any newspaper, magazine or
similar media or broadcast over television or radio or presented at any seminar
or any other general solicitation or general advertisement.
(f) Relationship to Company; Access to Information. The Purchaser
either has a preexisting personal or business relationship with the Company or
its officers, directors or controlling persons, or, by reason of Purchaser's
business or financial experience, the Purchaser has the capacity and has taken
all steps necessary to protect the Purchaser's own interests in connection with
an investment in the Securities. The Purchaser has received and read or reviewed
with his purchaser representative, if any, and represents that he is familiar
with this Agreement, the other Transaction Documents and the other documents
delivered to the Purchaser as part of the offering of the Securities. The
Company has made available to the Purchaser such information and documents
regarding the Company as Purchaser deems necessary to enable it to make an
informed decision concerning the purchase of the Securities and the Company has
provided answers to all of Purchaser's questions relating to this investment in
the Securities. The Purchaser acknowledges that no federal or state agency has
made any finding or determination as to the fairness of the offering for
investment or any recommendation or endorsement of the Securities.
(g) Purchaser's Liquidity. The Purchaser has adequate means of
providing for the Purchaser's current needs and personal contingencies and has
no need for liquidity in connection with the investment in the Securities. The
Purchaser acknowledges that the Purchaser must bear the economic risk of
investment in the Securities for an indefinite period of time, and that the
Purchaser could sustain a loss of the Purchaser's entire investment in the
Securities without materially impairing the Purchaser's financial wherewithal.
The Purchaser's overall commitment to investments which are not readily
marketable is not disproportionate to the net worth of the Purchaser, and the
Purchaser's investment in the Securities will not cause such overall commitment
to become excessive.
(h) Special Representations for Regulation S Purchasers. Each
Purchaser who is purchasing Securities hereunder pursuant to Regulation S
promulgated by the Commission under the Securities Act hereby makes the
following additional representations and warranties to the Company:
(i) It understands and acknowledges that the Securities have
not been registered under the Securities Act or any other applicable securities
laws, and the Securities may not be sold or otherwise transferred except in
compliance with the registration requirements of the Securities Act and
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any other applicable securities law or pursuant to an exemption therefrom and in
each case in compliance with the conditions for transfer set forth in (ii)
below.
(ii) It is a person that, at the time the buy order for the
Securities was originated, was outside the United States and was not a U.S.
person (and was not purchasing for the account or benefit of a U.S. person)
within the meaning of Regulation S.
(iii) It acknowledges that it will offer, sell or otherwise
transfer the Securities, prior to the date which is two years after the later of
the original issue date hereof and the last date on which the Company or any
affiliate of the Company was the owner of any of the Securities (or any
predecessor of the Securities), only (A) to the Company, (B) pursuant to a
registration statement that has been declared effective under the Securities
Act, (C) pursuant to offers and sales that occur outside the United States
within the meaning of Regulation S under the Securities Act in a transaction
meeting the Requirements of Rule 904 under the Securities Act, or (D) pursuant
to another available exemption from the registration requirements of the
Securities Act, subject to the Company's right prior to any offer, sale or
transfer pursuant to clause (C) or (D) to require the delivery of an opinion of
counsel, certificates and/or other information reasonably satisfactory to the
Company.
(iv) It agrees that it will not engage in hedging transactions
involving the Securities unless such transactions are in compliance with the
Securities Act.
(v) If it is a "dealer" or a person "receiving a selling
concession fee or other remuneration" within the meaning of Regulation S under
the Securities Act, it acknowledges that until the expiration of the one-year
"restricted period" within the meaning of Rule 903 of Regulation Xxxxxx the
Securities Act, any offer or sale of the Securities shall not be made by it to a
U.S. person or for the account or benefit of a U.S. person within the meaning of
Rule 902(k) of the Securities Act.
(vi) It acknowledges that the Company and others will rely
upon the truth and accuracy of the foregoing representations, warranties and
agreements and agrees that, if any of the representations, warranties and
agreements made by Purchaser of the Securities are no longer accurate, it shall
promptly notify the Company.
(i) Indemnification Representations of Purchaser. Each Purchaser
represents and warrants that none of the representations or warranties made by
the Purchaser herein ("Purchaser Statements") contain any false or misleading
statement or omit to state a material fact. The Purchaser shall indemnify the
Company to the extent the Company incurs or suffers any damage, expenses, loss,
claim, judgment or liability resulting from the Company's reliance upon any
Purchaser Statement that is false or misleading.
(j) Additional Representations and Warranties of Purchasers.
Each Purchaser represents and warrants that:
(i) Purchaser had the opportunity to review the Private
Placement Memorandum dated October 10, 2005 and all exhibits thereto;
(ii) Purchaser has been furnished with all additional
documents and information which Purchaser has requested;
(iii) Purchaser has had the opportunity to ask questions of,
and received answers from, the Company concerning the Company and the Securities
and to obtain any additional
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information necessary to verify the accuracy of the information furnished;
(iv) Purchaser has relied only on the foregoing information
and documents in determining to make an investment in the Securities;
(v) The documents and information furnished by the Company to
the Purchasers in connection with the offering of the Securities do not
constitute investment, accounting, legal or tax advice, and Purchaser is relying
on its own professional advisers for such advice;
(vi) All documents, records and books pertaining to
Purchaser's investment have been made available for inspection by Purchaser and
by Purchaser's attorney, and/or Purchaser's accountant and/or Purchaser's
purchaser representative;
(vii) Purchaser understands, acknowledges and agrees that the
Company is relying solely upon the representations and warranties of the
Purchasers made herein in determining to sell Purchaser the Securities;
(viii) The Purchaser has not paid or given any commission or
other remuneration in connection with the purchase of the Securities;
(ix) The Purchaser understands the meaning and legal
consequences of the foregoing representations and warranties, The Purchaser
certifies that each of the foregoing representations and warranties is true and
correct as of the date hereof and shall survive the execution hereof and the
purchase of the Securities;
(x) The Purchaser has not traded in securities of the Company
in violation of Rule lob-S under the Exchange Act or any other federal or state
xxxxxxx xxxxxxx or anti-fraud securities law.
ARTICLE IV
OTHER AGREEMENTS OF THE PARTIES
4.1 Transfer Restrictions.
(a) The Purchasers acknowledge and agree that the Securities may
only be disposed of in compliance with state and federal securities laws. In
connection with any transfer of Securities, the Company may require the
transferor thereof to provide to the Company an opinion of counsel selected by
the transferor and reasonably acceptable to the Company, the form and substance
of which opinion shall be reasonably satisfactory to the Company, to the effect
that such transfer does not require registration of such transferred Securities
under the Securities Act.
(b) The Purchasers agree to the imprinting, so long as is required
by this Section 4.1(b), of a legend on any of the Securities in substantially
the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION
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STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL
OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE
OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
(c) Certificates evidencing the Shares or Warrant Shares shall not
contain any legend (including the legend set forth in Section 4.1(b)), (i)
following any sale of such Shares or Warrant Shares pursuant to Rule 144, (ii)
if such Shares or Warrant Shares are eligible for sale under Rule 144(k), (iii)
if such legend is not required under applicable requirements of the Securities
Act (including judicial interpretations and pronouncements issued by the Staff
of the Commission) and (iv) in the case of (i) and (ii) above, if the registered
owner of such certificate delivers an appropriate representation letter to the
Company and its counsel. The Company agrees that at such time as such legend is
no longer required under this Section 4.1(c), it will, no later than three
Trading Days following the delivery by a Purchaser to the Company or the
Company's transfer agent of a certificate representing Shares or Warrant Shares,
issued with a restrictive legend, deliver or cause to be delivered to such
Purchaser a replacement certificate representing such Securities that is free
from such legends.
(d) Each Purchaser, severally and not jointly with the other
Purchasers, agrees that the removal of the restrictive legend from certificates
representing Securities as set forth in this Section 4.1 is predicated upon the
Company's reliance that the Purchaser will sell any Securities pursuant to the
registration requirements of the Securities Act, including any applicable
prospectus delivery requirements, or an exemption therefrom.
(e) Notwithstanding anything contained herein to the contrary, and
in addition to any other legends required by law or hereunder, Securities
purchased hereunder in reliance on Regulation S promulgated by the Commission
under the Securities Act shall be imprinted with a legend in substantially the
following form:
THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS AND ARE BEING OFFERED AND SOLD ONLY PURSUANT TO
OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE
MEANING OF REGULATION S UNDER THE SECURITIES ACT. THESE SECURITIES
MAY NOT BE RE-OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS THE TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION. THE HOLDER OF THIS SECURITY BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS
SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE LATER OF
THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE
COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS
SECURITY (OR ANY PREDECESSOR OF THIS SECURITY), ONLY (A) TO THE
COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT
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THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C)
PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER
THE SECURITIES ACT IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 904 UNDER THE SECURITIES ACT, OR (D) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE COMPANY'S RIGHT PRIOR TO ANY OFFER,
SALE OR TRANSFER PURSUANT TO CLAUSE (C) OR (D) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATES AND/OR OTHER
INFORMATION REASONABLY SATISFACTORY TO THE COMPANY. THE HOLDER OF
THIS SECURITY BY ITS ACCEPTANCE HEREOF FURTHER AGREES NOT TO
ENGAGE IN HEDGING TRANSACTIONS INVOLVING THESE SECURITIES UNLESS
SUCH TRANSACTIONS MEET THE REQUIREMENTS AND COMPLY WITH THE
SECURITIES ACT.
Notwithstanding anything contained herein to the contrary, the Company
will not, and is not permitted to, register the transfer of any Securities sold
hereunder on the Company's books or records, unless such Securities have been
transferred in accordance with or pursuant to (A) the provisions of Regulation
S, (B) a registration statement declared effective by the Commission or (C)
another available exemption from registration under the Securities Act.
4.2 Reservation of Common Stock. As of the date hereof, the Company has
reserved and the Company shall continue to reserve and keep available at all
times, free of preemptive rights, a sufficient number of shares of Common Stock
for the purpose of enabling the Company to issue Warrant Shares pursuant to any
exercise of the Warrants.
4.3 Equal Treatment of Purchasers. No consideration shall be offered or
paid to any person to amend or consent to a waiver or modification of any
provision of any of the Transaction Documents unless the same consideration is
also offered to all of the parties to the Transaction Documents. For
clarification purposes, this provision constitutes a separate right granted to
each Purchaser by the Company and negotiated separately by each Purchaser, and
is intended to treat the Company and the Purchasers as a class and shall not in
any way be construed as the Purchasers acting in concert or as a group with
respect to the purchase, disposition or voting of Securities or otherwise.
4.4 Participation in Future Financing. From the Closing Date until six
(6) months after the Effective Date, upon any equity financing by the Company of
its Common Stock or Common Stock Equivalents (a "Subsequent Financing"), each
Purchaser shall have the right to participate, on a pro rata basis, in up to 50%
of such Subsequent Financing (the "Participation Maximum"). At least five (5)
Trading Days prior to the closing of the Subsequent Financing, the Company shall
deliver to each Purchaser, subject to the Purchaser's agreement to keep such
information confidential, a written notice of its intention to effect a
Subsequent Financing (a "Subsequent Financing Notice"), which Subsequent
Financing Notice shall provide a summary of the details of such financing,
including, the amount of proceeds intended to be raised thereunder and a general
description of the Person(s) with whom such Subsequent Financing is proposed to
be effected. If a Purchaser desires to exercise its rights under this section
and to participate in such Subsequent Financing, it shall deliver notice to such
effect to the Company within three (3) Trading Days after the date the
Subsequent Financing Notice is delivered. If by 6:30 p.m. (New York City time)
on the third Trading Day after delivery of the Subsequent Financing
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Notice to each of the Purchasers, notifications by the Purchasers of their
willingness to participate in the Subsequent Financing is, in the aggregate,
less than the Participation Maximum, then the Company may effect the remaining
portion of such Participation Maximum (as well as the remaining portion of the
Subsequent Financing) on the terms and to the Persons set forth in the
Subsequent Financing Notice. If the Company receives no notice from a Purchaser
as of such third Trading Day, such Purchaser shall be deemed to have notified
the Company that it does not elect to participate. The Company must provide the
Purchasers with a second Subsequent Financing Notice, and the Purchasers will
again have the right of participation set forth above in this Section 4.4, if
the Subsequent Financing subject to the initial Subsequent Financing Notice is
not consummated for any reason on the terms set forth in such Subsequent
Financing Notice within 90 Trading Days after the date of the initial Subsequent
Financing Notice. Notwithstanding the foregoing, this Section 4.4 shall not
apply in respect of an Exempt Issuance.
4.5 Subsequent Equity Sales.
(a) Anti-Dilution. If at any time that a Purchaser is still
holding shares of Common Stock purchased hereunder, the Company shall issue
(other than Exempt Issuances) any Common Stock or Common Stock Equivalents to
any other person or entity at a price per share less than $2.00 (taking into
account both the initial price and any exercise price in the case of a
convertible security), without the consent of each Purchaser then holding Common
Stock purchased hereunder, then the Company shall issue, for each such occasion,
additional shares of Common Stock to each Purchaser then-holding shares of
Common Stock purchased hereunder so that the weighted average per share purchase
price of the shares of Common Stock issued to the Purchaser hereunder (of only
the Common Stock purchased hereunder and still owned by the Purchaser) is equal
to such other lower price per share, but not less than the par value of the
Common Stock. The delivery to the Purchaser of the additional shares of Common
Stock pursuant to this Section shall be promptly after the closing date of the
transaction giving rise to the requirement to issue additional shares of Common
Stock under this Section. For purposes of the issuance and adjustment described
in this paragraph, the issuance of any Common Stock Equivalents shall result in
the issuance of the additional shares of Common Stock upon the issuance of such
Common Stock Equivalents. If the Company issues additional shares of Common
Stock to a Purchaser under this Section, such Purchaser shall be entitled to
"piggy-back" registration rights with respect to such shares of Common Stock
pursuant to, and in accordance with, Section 6(d) of the Registration Rights
Agreement; provided, however, that such "piggy-back" registration rights shall
not apply with respect to the Registration Statement. Notwithstanding anything
contained herein to the contrary, this Section only applies to issuances made by
the Company during the six (6) month period following the Effective Date. The
rights of the Purchasers set forth in this Section are in addition to any other
rights the Purchasers have pursuant to this Agreement and any other agreement
referred to or entered into in connection herewith.
(b) No Variable Rate Transactions. In addition to the limitations
set forth herein, from the Closing Date until one (1) year after the Effective
Date, the Company shall be prohibited from effecting or enter into an agreement
to effect any Subsequent Financing involving a "Variable Rate Transaction" (as
defined below). The term "Variable Rate Transaction" shall mean a transaction in
which the Company issues or sells any debt or equity securities that are
convertible into, exchangeable or exercisable for, or include the right to
receive additional shares of Common Stock at a conversion, exercise or exchange
rate or other price that is based upon and/or varies with the trading prices of
or quotations for the shares of Common Stock at any time after the initial
issuance of such debt or equity securities.
(c) Subsequent Financing Block. If the Purchasers invest an
aggregate of at least $5,000,000 in connection with their Unit purchases
hereunder, then from the Closing Date until the date that is six (6) months
after the Effective Date, without the consent of Purchasers who hold in the
aggregate more than fifty (50%) percent of Shares purchased under this Agreement
and then outstanding,
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the Company shall not issue shares of Common Stock or Common Stock Equivalents,
other than Exempt Issuances; provided however, the six (6) months period shall
be extended for the number of Trading Days during such period in which (a)
trading in the Common Stock is suspended by any Trading Market, or (b) following
the Effective Date, the Registration Statement is not effective or the
prospectus included in the Registration Statement may not be used by the
Purchasers for the resale of the Shares and Warrant Shares.
ARTICLE V
MISCELLANEOUS
5.1 Fees and Expenses. Each party shall pay the fees and expenses of
its advisers, counsel, accountants and other experts, if any, and all other
expenses incurred by such party incident to the negotiation, preparation,
execution, delivery and performance of this Agreement. The Company shall pay all
stamp and other taxes and duties levied in connection with the sale of the
Securities.
5.2 Entire Agreement. The Transaction Documents, together with the
exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules.
5.3 Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile number
set forth on the signature pages attached hereto or email (if provided by the
Purchaser) to the email address set forth on the signature pages hereto, in each
case, prior to 6:30 p.m. (New York City time) on a Trading Day, (b) the next
Trading Day after the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number set forth on the signature pages
attached hereto or email (if provided by the Purchaser) to the email address set
forth on the signature pages hereto, in each case, on a day that is not a
Trading Day or later than 6:30 p.m. (New York City time) on any Trading Day, (c)
the second Trading Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service, or (d) upon actual receipt by the party to
whom such notice is required to be given. The address for such notices and
communications shall be as set forth on the signature pages attached hereto.
5.4 Amendments: Waivers. No provision of this Agreement may be waived
or amended except in a written instrument signed by the Company and Purchasers
holding a majority of the securities purchased hereunder and then outstanding.
No waiver of any default with respect to any provision, condition or requirement
of this Agreement shall be deemed to be a continuing waiver in the future or a
waiver of any subsequent default or a waiver of any other provision, condition
or requirement hereof, nor shall any delay or omission of either party to
exercise any right hereunder in any manner impair the exercise of any such
right.
5.5 Construction. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.
5.6 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted assigns.
The Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of each Purchaser.
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5.7 No Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person,
5.8 Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of the State of
Nevada, without regard to the principles of conflicts of law thereof Each party
hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in the State of Nevada for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein (including with respect to the enforcement of any of
the Transaction Documents), and hereby irrevocably waives, and agrees not to
assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action or
proceeding is improper or inconvenient venue for such proceeding. Each party
hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing a copy thereof
via registered or certified mail or overnight delivery (with evidence of
delivery) to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
The parties hereby waive all rights to a trial by jury. If either party shall
commence an action or proceeding to enforce any provisions of the Transaction
Documents, then the prevailing party in such action or proceeding shall be
reimbursed by the other party for its attorneys' fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such
action or proceeding.
5.9 Survival. The representations and warranties of the Company herein
shall survive for a period of twelve (12) months after the Closing.
5.10 Execution. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement, and subject to Section 2.4, 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 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
5.11 Severability. If any provision of this Agreement is held to be
invalid or unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.
5.12 Rescission and Withdrawal Right, Notwithstanding anything to the
contrary contained in (and without limiting any similar provisions of the
Transaction Documents, whenever any Purchaser exercises a right, election,
demand or option under a Transaction Document and the Company does not timely
perform its related obligations within the periods therein provided, then such
Purchaser may rescind or withdraw, in its sole discretion from time to time upon
timely written notice to the Company, any relevant notice, demand or election in
whole or in part without prejudice to its future actions and rights.
5.13 Replacement of Securities. If any certificate or instrument
evidencing any Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and
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substitution for and upon cancellation thereof, or in lieu of and substitution
therefor, a new certificate or instrument, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction and
customary and reasonable indemnity, if requested by the Company. The applicants
for a new certificate or instrument under such circumstances shall also pay any
reasonable third-party costs associated with the issuance of such replacement
Securities.
5.14 Remedies. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, each of the
Purchasers and the Company will be entitled to specific performance under the
Transaction Documents. The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations described in the foregoing sentence and hereby agrees to waive in
any action for specific performance of any such obligation the defense that a
remedy at law would be adequate.
5.15 Independent Nature of Purchasers' Obligations and Rights. The
obligations of each Purchaser under any Transaction Document are several and not
joint with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser under any Transaction Document, Nothing contained herein or in any
Transaction Document, and no action taken by any Purchaser pursuant thereto,
shall be deemed to constitute the Purchasers as a partnership, an association, a
joint venture or any other kind of entity, or create a presumption that the
Purchasers are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by the Transaction Document. Each
Purchaser shall be entitled to independently protect and enforce its rights,
including without limitation, the rights arising out of this Agreement or out of
the other Transaction Documents, and it shall not be necessary for any other
Purchaser to be joined as an additional party in any proceeding for such
purpose. Each Purchaser has been represented by its own separate legal counsel
in their review and negotiation of the Transaction Documents.
-SIGNATURE ON NEXT PAGE-
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IN WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
Address for Notice:
-------------------
SYNOVA HEALTHCARE GROUP, INC. SYNOVA HEALTHCARE
GROUP, INC.
Rose Tree Corporate Center
0000 X. Xxxxxxxxxx Xxxx
By:____________________________________ Suite 6010, Building II
Name: Xxxxxxx Xxxx Media, PA 19063
Title: Chief Executive Officer
With a copy to (which shall not constitute notice)
BLANK ROME LLP
Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxx, Esquire
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES FOR PURCHASERS FOLLOW
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[PURCHASER SIGNATURE PAGE TO
SYNOVA SECURITIES PURCHASE AGREEMENT]
IN WITNESS WHEREOF, the undersigned have caused this Securities
Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
Name of Investing Entity:______________________________________________________
Signature of Authorized Signatory of Investing Entity:_________________________
Name of Authorized Signatory:__________________________________________________
Title of Authorized Signatory:_________________________________________________
Email Address of Authorized Entity:____________________________________________
Address for Notice of Investing Entity:________________________________________
Address for Delivery of Securities for Investing Entity (if not same as above):
Subscription Amount:___________________________
Units:___________________________________________
EIN Number:__________________________________
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