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Exhibit
10.125
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:
May 1, 2008
WARRANT
To
Purchase 150,000 shares of
Common
Stock, $.01 par value
of
Performance Health Technologies, Inc.
Expiring
______________, 2013
THIS
IS TO CERTIFY THAT, for value received, PORTFOLIO LENDERS II,
LLC, 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, 150,000 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 Warrant Shares in excess of that number of
Warrant Shares which, upon giving effect to such exercise,
would cause the aggregate number of shares of Common Stock
beneficially owned by the holder and its affiliates to exceed
9.99% of the outstanding shares of the 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:
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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 V 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.
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