Exhibit 4.20
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SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this Agreement"), is made and
entered into as of April __, 2006, by and among Synova Healthcare Group, Inc., a
Nevada corporation (the "Company"), and the purchaser or purchasers signatory
hereto (each such purchaser, a "Purchaser" and collectively, the "Purchasers").
BACKGROUND
WHEREAS, subject to the terms and conditions set forth in this
Agreement, and pursuant to Section 4(2) of the Securities Act (as defined
below), Rule 506 promulgated thereunder, and/or Regulation S (defined below),
the Company desires to issue and sell to each Purchaser, and each Purchaser,
severally and not jointly, desires to purchase from the Company units (the
"Units") at a price of $50,000 per Unit. Each Unit consists of (i) 33,333 shares
of Common Stock and (ii) a Warrant to purchase 16,666 shares of Common Stock at
an exercise price of $2.50 per share.
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, which for investors purchasing securities in
this offering shall be no later than April 28, 2006.
"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.
"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,
or on the omnibus signature page provided by Section 2.4 hereof, 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.
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"Trading Market" means the following markets or exchanges on
which the Common 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
A.
"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. 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, evidencing 33,333 Shares of Common
Stock registered in the name of such Purchaser, for each Unit purchased by such
Purchaser;
(iii) a Warrant, registered in the name of such
Purchaser, exercisable immediately upon issuance for a term of 5 years after
issuance, pursuant to which such Purchaser shall have the right to acquire, for
each Unit purchased by such Purchaser, 16,666 shares of Common Stock at an
exercise price of two dollars and fifty cents ($2.50) 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; and
(iii) the Registration Rights Agreement duly executed
by such Purchaser.
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2.3 Irrevocable Commitments. Prior to the Closing Date, the
Purchasers may deliver (i) executed signature pages to this Agreement and the
other Transaction Documents to the Placement Agents (who will deliver such
signature pages to the Company) and (ii) their respective Subscription Amounts,
by wire transfer to the account provided below, to the Company. Each Purchaser
acknowledges and agrees that, subject to applicable law, their commitments to
purchase Units hereunder will be irrevocable upon delivery of their Subscription
Amounts (and signature pages to the Transaction Documents) as provided above.
Unless an alternative payment method is agreed to by the Company, all
Subscription Amounts should be delivered by the Purchasers to the Company by
wire transfer of immediately available funds to the following account:
Wachovia Bank, N.A.
ABA#: 000000000
SWIFT #: XXXXXX00
Credit: Synova Healthcare, Inc.
Account: #2000012967304
2.4 Omnibus Signature Page. The execution and delivery by the
parties of an omnibus signature page specifically provided by the Company for
such purpose shall be deemed to satisfy all requirements to execute and deliver
this Agreement as set forth in Section 2.2 hereof.
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.
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(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 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 any fees that may be 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:
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(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 2.3, 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.
(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) 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 has a preexisting personal or business relationship with the Company
or its officers, directors or controlling persons, and, 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.
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(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 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, and this Agreement was executed, 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 S under 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.
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(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 has received and has had the opportunity to
review the Company's Form 10-KSB for the year ended December 31, 2005, filed
with the Commission on April 17, 2006, attached hereto as Exhibit B;
(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 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 10b-5 under the Exchange Act or any other federal
or state xxxxxxx xxxxxxx or anti-fraud securities law.
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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 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
REASONABLY ACCEPTABLE TO THE COMPANY, BOTH AS TO SUCH COUNSEL
AND THE SUBSTANCE OF SUCH OPINION.
(c) Certificates evidencing the Shares and 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,
as the case may be, 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:
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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 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 BOTH AS TO SUCH COUNSEL
AND THE SUBSTANCE OF SUCH OPINION. 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.
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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, as such term is defined in the
Registration Rights Agreement, 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 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 $1.50 (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
11
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 in this
offering have invested 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, 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.
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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.
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.
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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 2.3, 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 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 PAGE FOR PURCHASER FOLLOWS]
15
[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:__________________________________
16
