Exhibit 4.4
-----------
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this "Agreement") is dated as of
August ___, 2005, among Synova Healthcare Group, Inc., a Nevada corporation (the
"Company"), and each purchaser identified on the signature pages hereto (each,
including its successors and assigns, a "Purchaser" and collectively the
"Purchasers").
BACKGROUND
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, in the aggregate, up to twenty
(20) units (the "Units") at a price of $50,000 per Unit. Each Unit consists of
(i) a promissory note in the principal amount of $50,000 and (ii) a Warrant to
purchase 20,000 shares of Common Stock for $2.50 per share.
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and each Purchaser agrees
as follows with the intent to be legally bound:
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.
"Disclosure Schedules" means the Disclosure Schedules of the
Company attached hereto as Exhibit A.
"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.
"Proceeding" means an action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition).
"Promissory Notes" mean the promissory notes described in
Section 2.2(a)(ii) attached hereto in the form of Exhibit B attached hereto.
"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.
"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 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 Promissory Notes, 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.
"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.
2
"Warrants" means the Common Stock Purchase Warrants described
in Section 2.2(a)(iii) and in substantially the form attached hereto as Exhibit
D.
"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 $1,000,000. 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.
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 Promissory Note executed by the Company in the
principal amount of $50,000 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 2 years
after issuance, pursuant to which such Purchaser shall have the right to
acquire, for each Unit purchased by such Purchaser, 20,000 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 to the account of the Company as designated in writing by the
Company to the Purchasers; and
(iii) the Registration Rights Agreement duly executed by
such Purchaser.
3
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Company. Except as set forth
under the corresponding section of the Disclosure Schedules, which Disclosure
Schedules shall be deemed a part hereof, 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 certificate 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
4
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 to the Persons set forth on Schedule
3.1(f), 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,
5
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)(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 Such Purchaser. Such 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, the Disclosure Schedules 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
6
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 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 (iii)
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
7
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.
(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 Company's
Prospectus included in its registration statement filed on Form SB-2, as
amended;
(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;
8
(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.
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 TO SUCH EFFECT, THE SUBSTANCE
OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
(c) Certificates evidencing the Warrant Shares shall not
contain any legend (including the legend set forth in Section 4.1(b)),
(i) following any sale of such Warrant Shares pursuant to Rule 144, (ii)
if such 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
9
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 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
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
10
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 Indemnification of Purchasers. Subject to the provisions of this
Section 4.4, the Company will indemnify and hold the Purchasers and their
directors, officers, shareholders, partners, employees and agents (each, a
"Purchaser Party") harmless from any and all losses, liabilities, obligations,
claims, damages, costs and expenses, including all judgments, amounts paid in
settlements (subject to the provisions below), court costs and reasonable
attorneys' fees and costs of investigation that any such Purchaser Party may
suffer or incur as a result of or relating to (a) any breach of any of the
representations, warranties, covenants or agreements made by the Company in this
Agreement or (b) any action instituted against a Purchaser, or any of their
respective Affiliates, by any stockholder of the Company who is not an Affiliate
of such Purchaser or any other Purchaser, with respect to any of the
transactions contemplated by the Transaction Documents (unless such action is
based upon a breach of such Purchaser's representation, warranties or covenants
under the Transaction Documents or any agreements or understandings such
Purchaser may have with any such stockholder or any violations by the Purchaser
of state or federal securities laws or any conduct by such Purchaser which
constitutes fraud, gross negligence, willful misconduct or malfeasance). If any
action shall be brought
11
against any Purchaser Party in respect of which indemnity may be sought pursuant
to this Agreement, such Purchaser Party shall promptly notify the Company in
writing, and the Company shall have the right to assume the defense thereof with
counsel of its own choosing. Any Purchaser Party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such Purchaser
Party except to the extent that (i) the employment thereof has been specifically
authorized by the Company in writing, (ii) the Company has failed after a
reasonable period of time to assume such defense and to employ counsel (assuming
an obligation to so assume the defense) or (iii) in such action there is, in the
reasonable opinion of such separate counsel, a material conflict on any material
issue between the position of the Company and the position of such Purchaser
Party. The Company will not be liable to any Purchaser Party under this
Agreement (i) for any settlement by an Purchaser Party effected without the
Company's prior written consent, which shall not be unreasonably withheld or
delayed, or (ii) to the extent, but only to the extent that a loss, claim,
damage, judgment or liability is attributable to any Purchaser Party's breach of
any of the representations, warranties, covenants or agreements made by the
Purchasers in this Agreement or in the other Transaction Documents.
ARTICLE V
MISCELLANEOUS
5.1 Fees and Expenses. The Company shall pay for the legal fees
incurred in connection with the preparation of the Transaction Documents. Except
as set forth in the preceding sentence, 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.
12
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.
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
13
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 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
14
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.
15
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]
16
[PURCHASER SIGNATURE PAGES 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:
[SIGNATURE PAGES CONTINUE]
17
