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Exhibit
10.123
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “
SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED OR DISPOSED OF EXCEPT PURSUANT TO (1) A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR (2) UPON
DELIVERY OF A LEGAL OPINION TO THE COMPANY, IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO THE COMPANY, THAT ANY SUCH TRANSACTION
IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND ANY APPLICABLE STATE SECURITIES LAWS.
Dated: April
15, 2008
WARRANT
To
Purchase 100,000 shares of
Common
Stock, $.01 par value
of
Performance Health Technologies, Inc.
Expiring
December 31, 2010
THIS
IS TO CERTIFY THAT, for value received, JACSON LONG, or
his registered assigns (hereinafter referred to as the
(“Holder”), is entitled to subscribe and purchase
from PERFORMANCE HEALTH
TECHNOLOGIES, INC., a Delaware
corporation (the “Company”), commencing on the
date hereof, 100,000 shares of Common Stock, $.01 par value,
of the Company (the “Shares”), at the place where
the Warrant Agency (as hereinafter defined) is located, at the
Exercise Price (as hereinafter defined), all subject to
adjustment and upon the terms and conditions as hereinafter
provided, and is entitled also to exercise the other
appurtenant rights, powers and privileges hereinafter
described; provided, however, that in no event shall the
Holder be entitled to exercise this Warrant for a number of
Shares in excess of that number of Shares which, upon giving
effect to such exercise, would cause the aggregate number of
shares of Company Common Stock beneficially owned by the
Holder and its affiliates to exceed 9.99% of the outstanding
shares of the Company Common Stock following such exercise,
except within sixty (60) days of the Expiration
Date. For purposes of the foregoing proviso, the
aggregate number of shares of Common Stock beneficially owned
by the Holder and its affiliates shall include the number of
shares of Common Stock issuable upon exercise of this Warrant
with respect to which the determination of such proviso is
being made, but shall exclude shares of Common Stock which
would be issuable upon (i) exercise of the remaining,
unexercised Warrants beneficially owned by the holder and its
affiliates and (ii) exercise or conversion of the unexercised
or unconverted portion of any other securities of the Company
beneficially owned by the holder and its affiliates
(including, without limitation, any convertible notes or
preferred stock) subject to a limitation on conversion or
exercise analogous to the limitation contained
herein. Except as set forth in the preceding
sentence, for purposes of this paragraph, beneficial ownership
shall be calculated in accordance with Section
13(d)
of the Securities Exchange Act of 1934, as
amended. For purposes of this Warrant, in
determining the number of outstanding shares of Common Stock a
Holder may rely on the number of outstanding shares of Common
Stock as reflected in (1) the Company’s most recent Form
10-QSB or Form 10-KSB, as the case may be, (2) a more recent
public announcement by the Company or (3) any other notice by
the Company or its transfer agent setting forth the number of
shares of Common Stock outstanding. Upon the
written request of any holder, the Company shall promptly, but
in no event later than one (1) Business Day following the
receipt of such notice, confirm in writing to any such holder
the number of shares of Common Stock then
outstanding. In any case, the number of outstanding
shares of Common Stock shall be determined after giving effect
to the exercise of Warrants (as defined below) by such holder
and its affiliates since the date as of which such number of
outstanding shares of Common Stock was reported.
Capitalized
terms used in this Warrant and not otherwise defined shall
have the meanings set forth in Article IV hereof.
ARTICLE I
EXERCISE OF WARRANTS
Section
1.01 Method of
Exercise . To exercise this Warrant in whole
or in part, the Holder shall deliver to the Company at the
Warrant Agency, (a) this Warrant, (b) a written notice, in
substantially the form of the Subscription Notice attached
hereto, of such Holder's election to exercise this Warrant,
which notice shall specify the number of Shares to be
purchased, the denominations of the share certificate or
certificates desired and the name or names in which such
certificates are to be registered and (c) the aggregate
Exercise Price for the Shares purchased (unless the Holder
chooses the “cashless exercise” option provided in
the third paragraph of this Section 1.01).
The
Company shall, as promptly as practicable and in any event
within seventy-two hours thereafter, execute and deliver or
cause to be executed and delivered, in accordance with such
notice, a certificate or certificates representing the
aggregate number of Shares specified in said
notice. The Share certificate or certificates so
delivered shall be in such denominations as determined by the
Company, or as may be specified in such notice, and shall be
issued in the name of the Holder or such other name or names
as shall be designated in such notice. Such
certificate or certificates shall be deemed to have been
issued, and such Holder or any other person so designated to
be named therein shall be deemed for all purposes to have
become holders of record of such Shares, as of the date the
aforementioned notice is received by the
Company. If this Warrant shall have been exercised
only in part, the Company shall, at the time of delivery of
the certificate or certificates, deliver to the Holder a new
Warrant evidencing the rights to purchase the remaining Shares
called for by this Warrant, which new Warrant shall in all
other respects be identical with this Warrant, or, at the
request of the Holder, appropriate notation may be made on
this Warrant which shall then be returned to the
Holder. The Company shall pay all expenses, payable
in connection with the preparation, issuance and delivery of
Share certificates and new Warrants as contemplated by Section
2.07 below (other than transfer, income or similar taxes in
connection with the transfer of securities), except that, if
Share certificates or new Warrants shall be registered in a
name or names other than the name of the Holder, funds
sufficient to pay all transfer taxes payable as a result of
such transfer shall be paid by the Holder at the time of
delivering the aforementioned notice of exercise or promptly
upon receipt of a written request of the Company for
payment.
In
lieu of a monetary payment of the aggregate Exercise Price,
the Holder may elect to receive, without the payment of any
additional consideration, Shares equal to the value of
this
Warrant
or portion thereof by the surrender of such Warrant to the
Company with the “cashless exercise” election
marked in the form of Subscription
Notice. Thereupon, the Company shall issue to the
Holder, such number of fully paid and non-assessable Shares as
is computed using the following formula:
X =
Y(A-B)
A
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Where
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X=
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the
number of Shares to be issued to the Holder pursuant to this
Section 1.01 upon such cashless exercise
election.
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Y=
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the
number of Shares covered by this Warrant in respect of which the
cashless exercise election is made.
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A=
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the
Fair Market Value (as defined in Article IV hereof) of one Share,
as at the time the cashless exercise election is made.
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B=
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the
Exercise Price in effect under this Warrant at the time the
cashless exercise election is made.
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Section
1.02 Shares To Be
Fully Paid and Non-assessable . All Shares
issued upon the exercise of this Warrant (the “Warrant
Shares”) pursuant to Section 1.01 above shall be validly
issued, fully paid and nonassessable and the Company shall at
all times reserve and keep available out of its authorized
shares of Common Stock a sufficient number of Shares for the
purpose of issuance of the Warrant Shares upon the exercise of
this Warrant.
Section
1.03 No Fractional
Shares To Be Issued . The Company shall not
be required to issue fractions of Shares upon exercise of this
Warrant. If any fraction of a Share would, but for
this Section, be issuable upon any exercise of this Warrant,
in lieu of such fractional Share the Company shall pay to the
Holder or Holders, as the case may be, in cash, an amount
equal to the same fraction of the Fair Market Value per share
of outstanding Shares on the Business Day immediately prior to
the date of such exercise.
Section
1.04 Share
Legend . Each certificate for Shares issued
upon exercise of this Warrant shall bear the legend set forth
below, unless Holder's Counsel (as defined below) shall render
an opinion in form and substance reasonably satisfactory to
the Company that such legend is not required or at the time of
exercise such Shares are registered under the Securities
Act:
THE
SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED OR DISPOSED OF EXCEPT
PURSUANT TO (1) A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, IN EACH CASE IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF
THE UNITED STATES OR (2) UPON DELIVERY OF A LEGAL OPINION TO
THE COMPANY, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO
THE COMPANY, THAT ANY SUCH TRANSACTION IS EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES LAWS.
Any
certificate issued at any time in exchange or substitution for
any certificate bearing such legend (except a new certificate
issued upon completion of a public distribution pursuant to a
registration statement under the Securities Act) shall also
bear such legend unless, in the opinion (in form and substance
reasonably satisfactory to the Company) of counsel selected by
the Holder of such certificate and who is reasonably
acceptable to the Company (“Holder's Counsel”),
the securities represented thereby need no longer be subject
to restrictions on resale under the Securities
Act.
ARTICLE II
WARRANT AGENCY; TRANSFER,
EXCHANGE AND REPLACEMENT OF WARRANTS
Section
2.01 Warrant
Agency . Until such time, if any, as an
independent agency shall be appointed by the Company to
perform services with respect to the Warrants described herein
(the “Warrant Agency”), the Company shall perform
the obligations of the Warrant Agency provided herein at its
principal office address or such other address as the Company
shall specify by prior written notice to all
Holders.
Section
2.02 Ownership of
Warrant . The Company may deem and treat the
person in whose name this Warrant is registered as the holder
and owner hereof (notwithstanding any notations of ownership
or writing hereon made by any person other than the Company)
for all purposes and shall not be affected by any notice to
the contrary, until presentation of this Warrant for
registration of transfer as provided in this Article
II.
Section
2.03 Transfer of
Warrant . The Company agrees to maintain at
the Warrant Agency books for the registration of transfers of
this Warrant and all rights hereunder shall be registered, in
whole or in part, on such books, upon surrender of this
Warrant at the Warrant Agency, together with a written
assignment of this Warrant duly executed by the Holder or its
duly authorized agent or attorney. Subject to
applicable law and regulation and Section 2.04 hereof, upon
surrender of this Warrant as provided for herein, the Company
shall execute and deliver a new Warrant or Warrants in the
name of the assignee or assignees and in the denominations
specified in the instrument of assignment, and this Warrant
shall promptly be canceled. Notwithstanding the
foregoing, a Warrant may be exercised by a new Holder which
has become the registered Holder of such Warrant without
having a new Warrant issued.
Section
2.04 Restrictions on
Transfer . The Holder, by its acceptance
hereof, represents that this Warrant is being acquired for its
own account, as an investment and not with a view towards the
further resale or the distribution thereof in violation of the
Securities Act, and agrees that this Warrant may not be
transferred, sold, assigned, hypothecated or otherwise
disposed of, in whole or in part, except as provided in the
legend on the first page hereof and provided that the Holder
shall have furnished to the Company an opinion of Holder's
Counsel, in form and substance reasonably satisfactory to the
Company, to the effect that such transfer is exempt from the
registration requirements of the Securities Act and any
applicable state securities laws.
Section
2.05 Division or
Combination of Warrants . This Warrant may
be divided or combined with other Warrants upon surrender
hereof and of any Warrant or Warrants with which this Warrant
is to be combined at the Warrant Agency, together with a
written notice specifying the names and denominations in which
the new Warrant or Warrants are to be issued, signed by the
holders hereof and thereof or their respective duly authorized
agents or attorneys. Subject to compliance with
Section 2.04 as to any transfer which may be involved in the
division or
combination,
the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided
or combined in accordance with such notice.
Section
2.06 Loss, Theft,
Destruction of Warrant Certificates . Upon
receipt by the Company of a written notice (or other evidence
reasonably satisfactory to the Company) of the loss, theft,
destruction or mutilation of any Warrant and, in the case of
any such loss, theft or destruction, upon receipt of indemnity
or security reasonably satisfactory to the Company or, in the
case of any such mutilation, upon surrender and cancellation
of such Warrant, the Company will make and deliver, in lieu of
such lost, stolen, destroyed or mutilated Warrant, a new
Warrant of like tenor and representing the right to purchase
the same aggregate number of Shares.
Section
2.07 Expenses of
Delivery of Warrants . The Company shall pay
all expenses (other than transfer taxes) and other charges
payable in connection with the preparation, issuance and
delivery of Warrants and Warrant Shares
hereunder.
ARTICLE III
COMPANY COVENANTS AND REPRESENTATIONS
Section
3.01 Company
Covenants . In case at any time the Company
shall (a) declare any dividend or distribution on its Shares,
whether payable in cash, stock or other property, (b) offer to
all holders of Shares any additional shares of Common Stock,
or any option, right or warrant to subscribe therefore, or (c)
declare a dissolution, liquidation or winding up of the
Company (other than in connection with a consolidation or
merger) or propose a sale of substantially all of its
property, assets and business as an entirety, then the Company
shall give written notice to the Holder of the date on which
the books of the Company shall close or a record shall be
taken for such action. Such notice shall also
specify the date as of which the holders of Shares of record
shall participate in such dividend or
distribution. Such written notice shall be given at
least 30 days and not more than 90 days prior to the action in
question, and not less than 15 days prior to the relevant
record date or the date fixed for determining stockholders
entitled to participate therein, as the case may
be.
Section
3.02 Authority,
Execution and Delivery . The Company hereby
represents and warrants that the Company has full corporate
power and authority to enter into this Warrant and to issue
Shares in accordance with the terms hereof. The
execution, delivery and performance of this Warrant by the
Company have been duly and effectively authorized by the
Company. This Warrant has been duly executed and
delivered by the Company and constitutes the legal, valid and
binding obligation of the Company enforceable against the
Company in accordance with its terms.
Section
3.03 Information
Requirements . To the extent applicable, the
Company shall promptly furnish the Holder with copies of all
reports, proxy statements and similar materials that it mails
to holders of its Common Stock.
ARTICLE IV
CERTAIN DEFINITIONS
The
following terms, as used in this Warrant, have the following
respective meanings:
“Business
Days” means each day in which banking institutions in
New York are not required or authorized by law or executive
order to close.
“Exercise
Price” means $0.30 per share, subject to adjustment
pursuant to Article V.
“Fair
Market Value” means the value of a share of Common Stock
on a particular date, determined as follows: (i) if the Common
Stock is not listed on such date on any national securities
exchange but is traded in the over-the-counter market, the
closing “bid” quotations of a share of Common
Stock on such date (or if none, on the most recent date on
which there were bid quotations of a share of Common Stock),
as reported on the National Association of Securities Dealers,
Inc. Automated Quotation System, or, if not so reported, as
reported by the National Quotation Bureau, Incorporated, or
any other similar service selected by the Board; or (ii) if
the Common Stock is listed on such date on one or more
national securities exchanges, the last reported sale price of
a share of Common Stock on such date as recorded on the
composite tape system, or, if such system does not cover the
Common Stock, the last reported sale price of a share of
Common Stock on such date on the principal national securities
exchange on which the Common Stock is listed, or if no sale of
Common Stock took place on such date, the last
reported
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