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...
EXHIBIT
10.91
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:
August 15, 2007
WARRANT
To
Purchase 250,000 shares of
Common
Stock, $.01 par value
of
Performance
Health Technologies, Inc.
Expiring
August 15, 2012
THIS
IS
TO CERTIFY THAT, for value received, XXXXXX XXXXX SECURITIES, INC.,
or its 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, 250,000 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.
This
Warrant is issued pursuant to the Financial Advisory and Consulting Agreement
dated July 2, 2007 between the Company and Xxxxxx Xxxxx Securities, Inc.
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
2
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
|
Where
|
X=
|
the
number of Shares to be issued to the Holder pursuant to this Section
1.01 upon such cashless exercise
election.
|
|
|
Y=
|
the
number of Shares covered by this Warrant in respect of which the
cashless
exercise election is made.
|
|
|
A=
|
the
Fair Market Value (as defined in Article IV hereof) of one Share,
as at
the time the cashless exercise election is
made.
|
|
|
B=
|
the
Exercise Price in effect under this Warrant at the time the cashless
exercise election is made.
|
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.
3
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
4
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
5
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 $0.50 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 sale price of a share of Common Stock on the most recent
day on which a sale of a share of Common Stock took place as recorded by such
system or on such exchange, as the case may be; or (iii) if the Common Stock
is
neither listed on such date on a national securities exchange nor traded in
the
over-the-counter market, as determined by the Company.
6
ARTICLE
V
ADJUSTMENTS
Section
5.01 Adjustment of Warrant Exercise Price upon Subdivision or Combination of
Common Stock. If the Company at any time after the date of
issuance of this Warrant subdivides (by any stock split, stock dividend,
recapitalization or otherwise) one or more classes of its outstanding shares
of
Common Stock into a greater number of shares, any Warrant Exercise Price in
effect immediately prior to such subdivision will be proportionately reduced
and
the number of shares of Common Stock obtainable upon exercise of this Warrant
will be proportionately increased. If the Company at any time after
the date of issuance of this Warrant combines (by combination, reverse stock
split or otherwise) one or more classes of its outstanding shares of Common
Stock into a smaller number of shares, any Warrant Exercise Price in effect
immediately prior to such combination will be proportionately increased and
the
number of Warrant Shares issuable upon exercise of this Warrant will be
proportionately decreased. Any adjustment under this Section 5.01
shall become effective at the close of business on the date the subdivision
or
combination becomes effective.
Section
5.02 Notices. Immediately upon any adjustment of the Warrant
Exercise Price, the Company will give written notice thereof to the holder
of
this Warrant, setting forth in reasonable detail, and certifying, the
calculation of such adjustment.
ARTICLE
VI
MISCELLANEOUS
Section
6.01 Notices. Any notice or other communication to be given
hereunder shall be in writing and shall be delivered by recognized courier,
telecopy or certified mail, return receipt requested, and shall be conclusively
deemed to have been received by a party hereto and to be effective on the day
on
which delivered or telecopied to such party at its address set forth below
(or
at such other address as such party shall specify to the other parties hereto
in
writing), or, if sent by certified mail, on the third business day after the
day
on which mailed, addressed to such party at such address. In the case
of the Holder, such notices and communications shall be addressed to its address
as shown on the books maintained by the Warrant Agency, unless the Holder shall
notify the Company and the Warrant Agency that notices and communications should
be sent to a different address, in which case such notices and communications
shall be sent to the address specified by the Holder. In the case of the
Company, such notices and communications shall be addressed as follows (until
notice of a change is given as provided herein): Performance Health
Technologies, Inc., 000 Xxxxx Xxxx Xxxxx, Xxxxxxx, Xxx Xxxxxx 00000,
Attention: Xxxxxx Xxxxxxxx, Fax: (000)
000-0000.
Section
6.02 Waivers; Amendments. No failure or delay of the Holder in
exercising any power or right hereunder shall operate as a waiver thereof,
nor
shall any single or partial exercise of such right or power, or any abandonment
or discontinuance of steps to enforce such a right or power, preclude any other
or further exercise thereof or the exercise of any other right or
power. The rights and remedies of the Holder are cumulative and not
exclusive of any rights or remedies which it would otherwise
have. The provisions of this Warrant may be amended, modified or
waived with (and only with) the written consent of the Company and Holders
holding a majority of Warrants at the time outstanding (or any permitted
transferee of all of the Warrant). In the
7
event
of
any such amendment, modification or waiver the Company shall give prompt notice
thereof to all Holders of Warrants and, if appropriate, notation thereof shall
be made on all Warrants thereafter surrendered for registration of transfer
or
exchange. No notice or demand on the Company in any case shall
entitle the Company to any other or further notice or demand in similar or
other
circumstances.
Section
6.03 Governing Law. This Warrant shall be construed in
accordance with and governed by the laws of the State of Delaware without regard
to choice of law doctrine.
Section
6.04 Covenants To Bind Successor and Assigns. All covenants,
stipulations, promises and agreements in this Warrant contained by or on behalf
of the Company shall bind its successors and assigns, whether so expressed
or
not.
Section
6.05 Severability. In case any one or more of the provisions
contained in this Warrant shall be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein and therein shall not in any way be affected or impaired
thereby. The parties shall endeavor in good faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid provisions
the economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
Section
6.06 Section Headings. The section headings used herein are
for convenience of reference only, are not part of this Warrant and are not
to
affect the construction of or be taken into consideration in interpreting this
Warrant.
Section
6.07 No Rights as Stockholder. This Warrant shall not entitle
the Holder to any rights as a stockholder of the Company.
Section
6.08 No Requirement to Exercise. Nothing contained in this
Warrant shall be construed as requiring the Holder to exercise this
Warrant.
IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed in its
corporate name by one of its officers thereunto duly authorized, and attested
by
its Secretary or an Assistant Secretary, all as of the day and year first above
written.
| PERFORMANCE HEALTH TECHNOLOGIES, INC. | |||
|
|
By:
|
/s/ | |
| Xxxxxx X. Xxxxxxxx | |||
| President and Chief Executive Officer | |||
8
SUBSCRIPTION
NOTICE
(To
be
executed upon exercise of Warrant)
To: Performance
Health Technologies, Inc. (the “Company”)
The
undersigned hereby irrevocably elects:
(i)
to
exercise the right of purchase represented by the attached Warrant for, and
to
purchase thereunder, __________ Shares, as provided for therein, and tenders
herewith payment of the Exercise Price in full in the form of certified or
bank
cashier’s check or wire transfer; or
(ii)
the
“cashless exercise” of its rights under the Section 1.01 of the attached Warrant
with respect to ___________ Shares otherwise available for purchase to it under
the Warrant and receive such number of Shares as provided in the formula set
forth in such Section 1.01.
Please
issue a certificate or certificates for such Shares in the following name or
names and denominations:
In
connection with the exercise of the Warrant, the undersigned hereby represents
and warrants that:
(i)
it
recognizes that the Shares issuable pursuant to the attached Warrant have not
been registered under the Securities Act and may not be sold, pledged or
otherwise transferred except pursuant to the exceptions set forth on the legend
on such Shares which is also set forth in Section 1.04 of the attached
Warrant;
(ii)
it
has received all material information with respect to the Company which it
deems
necessary with its decision to exercise the attached Warrant and it has been
given an opportunity to ask questions and receive answers from representatives
of the Company;
(iii)
it
is purchasing the Shares for its own account, for the purpose of investment
only, and not with a view towards the further resale or distribution thereof;
and
(iv)
it
is an “Accredited Investor” within the meaning of Rule 501 of Regulation D under
the Securities Act of 1933, as amended.
If
said
number of Shares shall not be all the Shares issuable upon exercise of the
attached Warrant, a new Warrant is to be issued in the name of the undersigned
for the balance remaining of such Shares less any fraction of a Share paid
in
cash.
By:
_____________________________
Name:
___________________________
Its:
_____________________________
Dated:
__________________________
NOTE: The
above signatory should correspond exactly with the name on the face of the
attached Warrant or with the name of the assignee appearing in the assignment
form below.
9
ASSIGNMENT
(To
be
executed upon assignment of Warrant)
For
value
received and in accordance with Section 2.03 of the attached Warrant,
____________________ hereby sells, assigns and transfers unto
___________________________ the attached Warrant, together with all right,
title
and interest therein, and does hereby irrevocably constitute and appoint
__________________ attorney to transfer said Warrant on the books of Performance
Health Technologies, Inc. with full power of substitution in the
premises.
|
By:
____________________________
Name:
__________________________
Its:
_____________________________ |
|
|
Dated:____________________ |
|
|
NOTE: The
above signatory should correspond exactly with the name on the face
of the
attached Warrant.
|
|
|
|
Consented
to and approved in accordance with
Section
2.03 of the attached Warrant
PERFORMANCE
HEALTH TECHNOLOGIES, INC.
By: _________________________________
Name:
___________________________
Its:
______________________________
10
