EXHIBIT 10.104
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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: ______________, 2007
WARRANT
To Purchase __________ shares of
Common Stock, $.01 par value
of
PERFORMANCE HEALTH TECHNOLOGIES, INC.
Expiring _________, 2012
THIS IS TO CERTIFY THAT, for value received, NORTH COAST SECURITIES
CORPORATION, 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, ____________ 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 Placement Agent 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 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
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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.
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:
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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
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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
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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 $________ 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.
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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
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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.
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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:______________________________________
Xxxxxx X. Xxxxxxxx
President and Chief Executive Officer
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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.
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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: ______________________________
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