EXHIBIT 10.63
-------------
SUBSCRIPTION AGREEMENT
This Subscription Agreement (the "Agreement") is made and entered into as
of the date set forth below by and between the person or entity set forth on the
signature page below (the "Investor") and Performance Health Technologies, Inc.
("PHT").
RECITALS
WHEREAS, PHT has authorized the issuance and sale of a note in the
principal amount of $300,000 (the "Note"); and
WHEREAS, the Investor desires to purchase the Note on the terms set forth
herein;
NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereby
agree as follows:
1. PURCHASE AND SALE OF NOTE
1.1 At the Closing (as defined below) the Investor shall purchase from PHT
and PHT shall sell to the Investor, subject to all of the terms and conditions
hereof, the Note.
2. CLOSING
2.1 Date of Closing. The closing (the "Closing") of the purchase and sale
of the Note shall take place on any date agreed to by the Investor and PHT (the
"Closing Date").
2.2 Items to be Delivered by the Investor to PHT. The following shall be
delivered by the Investor to PHT on the Closing Date:
(a) this Agreement executed by the Investor; and
(b) the purchase price for the Note by wire transfer to the following
account:
Bank:
Account Name:
ABA/ Routing #:
Account #:
2.3 Items to be Delivered to the Investor by PHT.
(a) The following shall be delivered by PHT to the Investor on the
Closing Date:
(i) the Note;
1
(ii) 1,500,000 warrants to purchase Common Stock of PHT (with
such warrants having an exercise price of $0.30 per share
and a five year term (the "Warrants");
(iii) an origination fee of $15,000; and
(iv) a Security Agreement granting Holder a security interest in
substantially all of the assets of the Company.
(b) In the event the Note is not repaid on the Maturity Date set forth
in the Note, PHT shall issue to the Investor an additional 50,000 warrant
to purchase shares of PHT common stock for each 45 days that the Note is
unpaid past the Maturity Date, with such warrants having substantially the
same terms as the warrants.
3. REPRESENTATIONS AND WARRANTIES OF PHT
PHT hereby represents and warrants to the Investor as follows:
3.1 Corporate Existence and Power. PHT is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Delaware.
PHT has all corporate power and all material governmental permits required to
carry on its business as now conducted.
3.2 Corporate Authorization; Enforceability. The execution, delivery and
performance by PHT of this Agreement, the Note and the Warrants is within PHT's
corporate powers and have been duly authorized by the Board of Directors of PHT
and no other corporate action on the part of PHT is necessary to authorize this
Agreement or issuance of the Note. This Agreement has been, and the Note and the
Warrants will be duly executed and delivered by PHT. This Agreement constitutes
the valid and binding agreement of PHT, enforceable against PHT in accordance
with its terms, except to the extent that its enforceability may be subject to
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity.
3.3 Capitalization. The authorized capital stock of PHT consists of
70,000,000 shares of Common Stock and 1,000,000 shares of Preferred Stock, $0.01
par value per share ("Preferred Stock"), of which 48,527,727 shares of Common
Stock and no shares of Preferred Stock are issued and outstanding. All of such
outstanding shares have been validly issued and are fully paid and
nonassessable.
3.4 No Conflict. The execution, delivery and performance by PHT of this
Agreement, and the consummation of the transactions contemplated hereby,
including issuance of the Note and the Warrants, do not and will not at the
Closing, (a) violate any provision of law, statute, rule or regulation, or any
ruling, writ, injunction, order, judgment or decree of any court, administrative
agency or other governmental body applicable to PHT, or any of its properties or
assets, (b) conflict with or result in any breach of any of the terms,
conditions or provisions of, or constitute (with due notice or lapse of time, or
both) a default (or give rise to any right of termination, cancellation or
acceleration) under, or result in the creation of any encumbrance
2
upon any of the properties or assets of PHT under any material contract to which
PHT is a party or (c) violate any organizational document of PHT.
3.5 Note and Warrants. The Note and Warrants, when issued and delivered in
accordance with the terms of this Agreement, will be duly authorized, validly
issued, fully paid, non-assessable and free and clear of any lien or other
limitation or restriction.
3.6 Securities Matters. Subject to the accuracy of the representations of
the Investor set forth in Section 4.4 hereof the offer, sale and issuance of the
Note and Warrants as contemplated by this Agreement are exempt from the
registration requirements of the Securities Act. PHT has complied and will
comply with all applicable state "blue sky" or securities laws in connection
with the offer, sale and issuance of the Note and Warrants as contemplated by
this Agreement.
4. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR
The Investor hereby represents and warrants to PHT as follows:
4.1 Organization and Good Standing; Power and Authority. Any Investor that
is a corporation (a) is a corporation duly organized, validly existing and in
good standing under the laws of its organization, and (b) has all requisite
corporate power and authority and all authorizations, licenses and material
permits necessary to own, lease and operate its properties, to carry on its
business as presently conducted and as proposed to be conducted and to enter
into and carry out the transactions contemplated by this Agreement.
4.2 Authorization of the Agreement. This Agreement constitutes a valid and
legally binding obligation of the Investor except to the extent that
enforceability may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally or by general principles of equity.
4.3 No Conflict. The execution, delivery and performance by the Investor of
this Agreement and the consummation by the Investor of the transactions
contemplated hereby do not and will not at the Closing (a) violate any provision
of law, statute, rule or regulation, or any ruling, writ, injunction, order,
judgment or decree of any court, administrative agency or other governmental
body applicable to the Investor, or any of its properties or assets, (b)
conflict with or result in any breach of any of the terms, conditions or
provisions of, or constitute (with due notice or lapse of time, or both) a
default (or give rise to any right of termination, cancellation or acceleration)
under, or result in the creation of any encumbrance upon any of the properties
or assets of the Investor under any material contract to which the Investor is a
party or (c) violate any organizational document of any corporate Investor.
4.4 Investment Representation.
(a) The Investor has received and reviewed the following (the
"PHT Documents"):
1. Subscription Agreement
2. The Note
3
3. The Warrants
(b) The Investor or Investor's designated representatives have
concluded a satisfactory due diligence investigation of PHT
and have had an opportunity to review the PHT Documents and
to have all of their questions related thereto
satisfactorily answered.
(c) The Investor acknowledges that the Note is speculative and
involves a high degree of risk and the Investor represents
that it is able to sustain the loss of the entire amount of
its investment.
(d) The Investor (or its members and/or officers) has previously
invested in unregistered securities and has sufficient
financial and investing expertise to evaluate and understand
the risks of the Note and the Warrants.
(e) The Investor has received from PHT, and is relying on, no
representations or projections with respect to PHT's
business and prospects except as set forth in this Agreement
and the PHT Documents.
(f) The Investor is an "accredited investor" within the meaning
of Regulation D under the Securities Act.
(g) The Investor is acquiring the Note and the Warrants for
investment purposes only without intent to distribute the
same, and acknowledges that the Note has not been registered
under the Securities Act and applicable state securities
laws, and accordingly, constitutes "restricted securities"
for purposes of the Securities Act and such state securities
laws.
(h) The Investor acknowledges that it will not be able to
transfer the Note and the Warrants except upon compliance
with the registration requirements of the Securities Act and
applicable state securities laws or exemptions therefrom.
(i) The certificates and/or instruments evidencing the Note and
the Warrants will contain the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED, ASSIGNED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, OR AN EXEMPTION
FROM REGISTRATION AND OTHERWISE IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT
BETWEEN THE ISSUER AND THE ORIGINAL OWNER OF THE SECURITIES, A COPY OF WHICH IS
ON FILE AT THE PRINCIPAL EXECUTIVE OFFICE OF THE ISSUER."
4
5. REGISTRATION RIGHTS
5.1 Definitions. As used in this Agreement, the following terms shall have
the following meanings:
(a) "Person" means a corporation, a limited liability company,
an association, a partnership, an organization, a business,
an individual, a governmental or political subdivision
thereof or a governmental agency.
(b) "Register," "registered," and "registration" refer to a
registration effected by preparing and filing one or more
Registration Statements (as defined below) in compliance
with the 1933 Act and pursuant to Rule 415 under the 1933
Act or any successor rule providing for offering securities
on a continuous or delayed basis ("Rule 415"), and the
declaration or ordering of effectiveness of such
Registration Statement(s) by the United States Securities
and Exchange SEC (the "SEC").
(c) "Registrable Securities" means the PHT common shares
underlying the Note and Warrants.
(d) "Registration Statement" means a registration statement
under the 1933 Act which covers the Registrable Securities.
5.2 Piggyback Registration. If at any time prior to the second anniversary
of the Closing Date, PHT shall determine to file with the SEC a Registration
Statement relating to an offering for its own account or the account of others
under the 1933 Act of any of its equity securities (other than on Form S-4 or
Form S-8 or their then equivalents relating to equity securities to be issued
solely in connection with any acquisition of any entity or business or equity
securities issuable in connection with stock option or other bona fide employee
benefit plans) PHT shall use its best efforts to include in such Registration
Statement the Registrable Securities.
5.3 Registration Period. PHT shall keep the Registration Statement
effective pursuant to Rule 415 at all times through the earlier of (i) the
Registrable Securities have been sold, or (ii) the date the Registrable
Securities become eligible for sale without restriction under Rule 144(k)
promulgated under the Securities Act of 1933 (the "Registration Period").
5.4 Expenses. All expenses incurred in connection with registrations,
filings or qualifications pursuant to this Section 5 shall be paid by PHT. The
Investor shall pay his own legal fees, if any.
5.5 Indemnification. With respect to Registrable Securities which are
included in a Registration Statement under this Agreement:
(a) To the fullest extent permitted by law, PHT will, and hereby
does, indemnify, hold harmless and defend the Investor, the
directors, officers, partners, employees, agents,
representatives of, and each Person, if any, who controls
any Investor within the meaning of the 1933 Act or the 1934
5
Act (each, an "Indemnified Person"), against any losses,
claims, damages, liabilities, judgments, fines, penalties,
charges, costs, reasonable attorneys' fees, amounts paid in
settlement or expenses, joint or several (collectively,
"Claims") incurred in investigating, preparing or defending
any action, claim, suit, inquiry, proceeding, investigation
or appeal taken from the foregoing by or before any court or
governmental, administrative or other regulatory agency,
body or the SEC, whether pending or threatened, whether or
not an indemnified party is or may be a party thereto
("Indemnified Damages"), to which any of them may become
subject insofar as such Claims (or actions or proceedings,
whether commenced or threatened, in respect thereof) arise
out of or are based upon: (i) any untrue statement or
alleged untrue statement of a material fact in a
Registration Statement or any post-effective amendment
thereto or in any filing made in connection with the
qualification of the offering under the securities or other
"blue sky" laws of any jurisdiction in which Registrable
Securities are offered ("Blue Sky Filing"), or the omission
or alleged omission to state a material fact required to be
stated therein or necessary to make the statements therein
not misleading; (ii) any untrue statement or alleged untrue
statement of a material fact contained in any final
prospectus (as amended or supplemented, if PHT files any
amendment thereof or supplement thereto with the SEC) or the
omission or alleged omission to state therein any material
fact necessary to make the statements made therein, in light
of the circumstances under which the statements therein were
made, not misleading; or (iii) any violation or alleged
violation by PHT of the 1933 Act, the 1934 Act, any other
law, including, without limitation, any state securities
law, or any rule or regulation there under relating to the
offer or sale of the Registrable Securities pursuant to a
Registration Statement (the matters in the foregoing clauses
(i) through (iii) being, collectively, "Violations"). PHT
shall reimburse the Investor and each such controlling
person promptly as such expenses are incurred and are due
and payable, for any reasonable legal fees or disbursements
or other reasonable expenses incurred by them in connection
with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein,
the indemnification agreement contained in this Section
5.5(a): (x) shall not apply to a Claim by an Indemnified
Person arising out of or based upon a Violation which occurs
in reliance upon and in conformity with information
furnished in writing to PHT by such Indemnified Person
expressly for use in connection with the preparation of the
Registration Statement or any such amendment thereof or
supplement thereto; (y) shall not be available to the extent
such Claim is based on a failure of the Investor to deliver
or to cause to be delivered the prospectus made available by
PHT, if such prospectus was timely made available by PHT;
and (z) shall not apply to amounts paid in settlement of any
Claim if such settlement is effected without the prior
written consent of PHT, which consent shall not be
unreasonably withheld. Notwithstanding anything to the
contrary herein or in any other
6
agreement entered into between PHT and the Investor, PHT
acknowledges and agrees that it is solely responsible and
shall indemnify each Indemnified Person for the contents of
any registration statement, prospectus or other filing made
with the SEC or otherwise used in the offering of PHT's
securities (except as such disclosure relates solely to the
Investor and then only to the extent that such disclosure
conforms with information furnished in writing by the
Investor to PHT), even if the Investor or its agents as an
accommodation to PHT participate or assist in the
preparation of such registration statement, prospectus or
other SEC filing. PHT shall retain its own legal counsel to
review, edit, confirm and do all things such counsel deems
necessary or desirable to such registration statement,
prospectus or other SEC filing to ensure that it does not
contain an untrue statement or alleged untrue statement of
material fact or omit or alleged to omit a material fact
necessary to make the statements made therein, in light of
the circumstances under which the statements were made, not
misleading. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf
of the Indemnified Person and shall survive the transfer of
the Registrable Securities by the Investor.
(b) In connection with a Registration Statement, the Investor
agrees to indemnify, hold harmless and defend, to the same
extent and in the same manner as is set forth in Section
5.5(a), PHT, each of its directors, each of its officers,
employees, representatives, or agents and each Person, if
any, who controls PHT within the meaning of the 1933 Act or
the 1934 Act (each an "Indemnified Party"), against any
Claim or Indemnified Damages to which any of them may become
subject, under the 1933 Act, the 1934 Act or otherwise,
insofar as such Claim or Indemnified Damages arise out of or
is based upon any Violation, in each case to the extent, and
only to the extent, that such Violation occurs in reliance
upon and in conformity with written information furnished to
PHT by such Investor expressly for use in connection with
such Registration Statement; and, subject to Section 5i,
such Investor will reimburse any legal or other expenses
reasonably incurred by them in connection with investigating
or defending any such Claim; provided, however, that the
indemnity agreement contained in this Section 5.5(b) and the
agreement with respect to contribution contained below shall
not apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of
such Investor, which consent shall not be unreasonably
withheld; provided, further, however, that the Investor
shall be liable under this Section 5.5(b) for only that
amount of a Claim or Indemnified Damages as does not exceed
the net proceeds to such Investor as a result of the sale of
Registrable Securities pursuant to such Registration
Statement. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf
of such Indemnified Party and shall survive the transfer of
the Registrable Securities by the Investor. Notwithstanding
anything to the contrary contained herein, the
8
indemnification agreement contained in this Section 5h(2)
with respect to any prospectus shall not inure to the
benefit of any Indemnified Party if the untrue statement or
omission of material fact contained in the prospectus was
corrected and such new prospectus was delivered to each
Investor prior to such Investor's use of the prospectus to
which the Claim relates.
(c) Promptly after receipt by an Indemnified Person or
Indemnified Party under this Section of notice of the
commencement of any action or proceeding (including any
governmental action or proceeding) involving a Claim, such
Indemnified Person or Indemnified Party shall, if a Claim in
respect thereof is to be made against any indemnifying party
under this Section 5, deliver to the indemnifying party a
written notice of the commencement thereof, and the
indemnifying party shall have the right to participate in,
and, to the extent the indemnifying party so desires,
jointly with any other indemnifying party similarly noticed,
to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the
Indemnified Person or the Indemnified Party, as the case may
be; provided, however, that an Indemnified Person or
Indemnified Party shall have the right to retain its own
counsel with the fees and expenses of not more than one (1)
counsel for such Indemnified Person or Indemnified Party to
be paid by the indemnifying party, if, in the reasonable
opinion of counsel retained by the indemnifying party, the
representation by such counsel of the Indemnified Person or
Indemnified Party and the indemnifying party would be
inappropriate due to actual or potential differing interests
between such Indemnified Person or Indemnified Party and any
other party represented by such counsel in such proceeding.
The Indemnified Party or Indemnified Person shall cooperate
fully with the indemnifying party in connection with any
negotiation or defense of any such action or claim by the
indemnifying party and shall furnish to the indemnifying
party all information reasonably available to the
Indemnified Party or Indemnified Person which relates to
such action or claim. The indemnifying party shall keep the
Indemnified Party or Indemnified Person fully apprised at
all times as to the status of the defense or any settlement
negotiations with respect thereto. No indemnifying party
shall be liable for any settlement of any action, claim or
proceeding effected without its prior written consent;
provided, however, that the indemnifying party shall not
unreasonably withhold, delay or condition its consent. No
indemnifying party shall, without the prior written consent
of the Indemnified Party or Indemnified Person, consent to
entry of any judgment or enter into any settlement or other
compromise which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such
Indemnified Party or Indemnified Person of a release from
all liability in respect to such claim or litigation.
Following indemnification as provided for hereunder, the
indemnifying party shall be subrogated to all rights of the
Indemnified Party or Indemnified Person with respect to all
third parties, firms or
8
corporations relating to the matter for which
indemnification has been made. The failure to deliver
written notice to the indemnifying party within a reasonable
time of the commencement of any such action shall not
relieve such indemnifying party of any liability to the
Indemnified Person or Indemnified Party under this Section
5, except to the extent that the indemnifying party is
prejudiced in its ability to defend such action.
(d) The indemnification required by this Section 5 shall be made
by periodic payments of the amount thereof during the course
of the investigation or defense, as and when bills are
received or Indemnified Damages are incurred.
(e) The indemnity agreements contained herein shall be in
addition to (i) any cause of action or similar right of the
Indemnified Party or Indemnified Person against the
indemnifying party or others, and (ii) any liabilities the
indemnifying party may be subject to pursuant to the law.
5.6 Contribution. To the extent any indemnification by an indemnifying
party is prohibited or limited by law, the indemnifying party agrees to make the
maximum contribution with respect to any amounts for which it would otherwise be
liable under Section 5.5 to the fullest extent permitted by law; provided,
however, that: (i) no seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) shall be
entitled to contribution from any seller of Registrable Securities who was not
guilty of fraudulent misrepresentation; and (ii) contribution by any seller of
Registrable Securities shall be limited in amount to $300,000.
6. MISCELLANEOUS
6.1 Definitions.
"Business Day" means a day that is not a Saturday, Sunday or a day on which
commercial banking institutions located in New York City, New York are
authorized or required to close.
"Securities Act" means the Securities Act of 1933, as amended.
6.2 Confidentiality.
(a) The Investor agrees to keep confidential any and all
non-public information delivered or made available to the
Investor by PHT except for disclosures, as necessary, made
by the Investor to the Investor's officers, directors,
employees, agents, counsel and accountants each of whom
shall be notified by the Investor of this confidentiality
covenant and for whom the Investor shall be liable in the
event of any breach of this covenant by any such individual
or individuals; provided, however, that nothing herein shall
prevent the Investor from disclosing such information (i)
upon the order of any court or administrative agency, (ii)
upon the request or
9
demand of any regulatory agency or authority having
jurisdiction over the Investor, (iii) which has been
publicly disclosed or (iv) to any of its members provided
that any such members agree in writing (with a copy provided
to PHT) to be bound by confidentiality provisions in form
and substance substantially as are contained herein. In the
event of a mandatory disclosure as described in clause (i)
and/or (ii) of the preceding sentence, the Investor shall
promptly notify PHT in writing of any applicable order,
request or demand for such information, cooperate with PHT
if and to the extent that PHT elects to seek an appropriate
protective order or other relief from such order, request,
or demand, and disclose only the minimal amount of
information ultimately required to be disclosed. No Investor
shall use for its own benefit, nor permit any other person
to use for such person's benefit, any of PHT's non-public
information including, without limitation, in connection
with the purchase and/or sale of PHT's securities.
(b) PHT shall in no event disclose non-public information to the
Investor, advisors to or representatives of the Investor
unless prior to disclosure of such information PHT marks
such information as "Non-Public Information - Confidential"
and provides the Investor, such advisors and representatives
with the opportunity to accept or refuse to accept such
non-public information for review. PHT may, as a condition
to disclosing any non-public information hereunder, require
the Investor's advisors and representatives to enter into a
confidentiality agreement in form reasonably satisfactory to
PHT and the Investor.
(c) Nothing herein shall require PHT to disclose non-public
information to the Investor or its advisors or
representatives, and PHT represents that it does not
disseminate non-public information to any Investors who
purchase stock in PHT in a public offering, to money
managers or to securities analysts.
6.3 Costs and Expenses. PHT and the Investor shall bear their own costs and
expenses in connection with this transaction.
6.4 Survival. All agreements, covenants, representations and warranties
made by PHT or by the Investor herein shall survive the execution and delivery
of this Agreement.
6.5 Notices. Except as otherwise provided herein, all notices, requests,
demands, consents, instructions or other communications to or upon PHT, or the
Investor under this Agreement shall be in writing and facsimiled, mailed or
delivered to each party at the facsimile number or its address as provided below
(or to such other facsimile number or address as the recipient of any notice
shall have notified the other in writing). All such notices and communications
shall be effective (a) when sent by Federal Express or other overnight service
of recognized standing, on the Business Day following the deposit with such
service; (b) when mailed, by registered or certified mail, first class postage
prepaid and addressed as aforesaid
10
through the United States Postal Service, upon receipt; (c) when delivered by
hand, upon delivery; and (d) when facsimiled, upon confirmation of receipt to
the following:
Performance Health Technologies, Inc.
000 Xxxxx Xxxx Xxxxx
Xxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx Xxxxxxxx
Fax: (000) 000-0000
To the Investor at the Address Set Forth on the Investor Questionnaire.
6.6 Nonwaiver. No failure or delay on any party in exercising any right
hereunder shall operate as a waiver thereof or of any other right nor shall any
single or partial exercise of any such right preclude any other further exercise
thereof or of any other right.
6.7 Amendments and Waivers. This Agreement may not be amended or modified,
nor may any of its terms be waived, except by written instruments signed by all
of the parties. Such waiver or consent under any provision hereof shall be
effective only in the specific instances for the purpose for which given.
6.8 Assignments. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
6.9 Partial Invalidity. If at any time any provision of this Agreement is
or becomes illegal, invalid or unenforceable in any respect under the law of any
jurisdiction, neither the legality, validity or enforceability of the remaining
provisions of this Agreement nor the legality, validity or enforceability of
such provision under the law of any other jurisdiction shall in any way be
affected or impaired thereby.
6.10 Headings. Headings in this Agreement are for convenience of reference
only and are not part of the substance hereof or thereof.
6.11 Entire Agreement. This Agreement constitutes and contains the entire
agreement of the parties hereto and supersedes any and all prior agreements,
negotiations, correspondence, understandings and communications among the
parties, whether written or oral, respecting the subject matter hereof.
6.12 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without reference to conflicts
of law rules.
6.13 Jurisdiction. Any suit, action or proceeding seeking to enforce any
provision of, or based on any matter arising out of or in connection with, this
Agreement or the transactions contemplated hereby may be brought in the courts
of the State of New York located in the County of New York and the federal
courts of the United States of America located in such State and County. Each of
the parties (a) consents to the exclusive jurisdiction of such courts (and of
the appropriate appellate courts therefrom) in any such suit, action or
proceeding, (b) irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding in any such court or that any such suit, action
or proceeding which is brought in any such court has been brought in an
11
inconvenient forum, (c) will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court, and (d)
will not bring any action relating to this Agreement or any of the transactions
contemplated by this Agreement in any other court. Process in any such suit,
action or proceeding may be served on any party anywhere in the world, whether
within or without the jurisdiction of any such court. Without limiting the
foregoing, each party agrees that service of process on such party as provided
in Section 6.6 will be deemed effective service of process on such party.
6.14 JURY TRIAL. EACH PARTY HERETO, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY AS TO ANY
ISSUE.
6.15 Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed an original, but such counterparts shall together
constitute but one and the same agreement.
12
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
set forth below.
By: _________________________
PERFORMANCE HEALTH TECHNOLOGIES, INC.
By: _________________________
Xxxxxx X. Xxxxxxxx
President and Chief Executive Officer
13
A. INDIVIDUALS (IF INVESTOR IS AN INDIVIDUAL, COMPLETE THIS PART A)
1. Name of Investor(s)(1)______________________________________________
Address (including Zip Code)__________________________________
______________________________________________________________
Telephone No. ( )__________________________________________
Telecopy No. ( )__________________________________________
2. Indicate type of ownership subscribed for:
____ Individual
____ Joint Tenants with Rights of Survivorship
____ Tenant in Common
____ Tenants by the Entirety
3. Social Security Number(s)
4. Each Investor must initial at least one of the following statements:
____ (a) Investor certifies that he/she is a director or executive
officer of PHT.
____ (b) Investor certifies that he/she is a natural person whose
individual net worth, or joint net worth with his/her
spouse, at the time of his/her Loan to PHT exceed
$1,000,000 (inclusive of the value of his/her home, home
furnishings and automobiles).
____ (c) Investor certifies that he/she is a natural person who
has an individual income(2) in excess of $200,000 in each
of the two most recent years or joint income with his/her
spouse in excess of $300,000 in each of those years, and
has a reasonable expectation of reaching the same income
level in the current year.
_________________
(1) If there is more than one Investor other than husband and wife, a
separate Investor Questionnaire must be completed for each such
Investor and attached to this Investor Questionnaire. If Investors are
husband and wife, please include both names, be certain to complete
item 2 and include both social security numbers (indicating to which
individual each social security number belongs) in item 3.
(2) In determining income, a Investor should add to his or her adjusted
gross income any amounts attributable to tax-exempt income received,
losses claimed as a limited partner in any limited partnership,
deductions claimed for depletion, contributions to XXX or Xxxxx
retirement plans, alimony payments and any amount by which income from
long-term capital gains has been reduced in arriving at adjusted gross
income.
14
B. ENTITIES (IF INVESTOR IS AN ENTITY, COMPLETE THIS PART B)
1. Name of Investor
Address (including Zip Code)_________________________
_____________________________________________________
Telephone No. ( )_________________________________
Telecopy No. ( )_________________________________
2. Indicate type of entity:
____ Corporation ____ Trust ____ Limited Partnership
____ General Partnership ____ XXX ____ Pension Plan or Trust
Other: ____________________________________
3. Date of formation or incorporation: ______________________
4. State of formation or incorporation: _____________________
5. Indicate whether Investor was organized for the specific purpose of acquiring
Common Stock of PHT.
Yes ____ No ____
6. Indicate the individual(s) authorized to execute documents on behalf of the
Entity Investor in connection with this investment:
Name: ______________________________
Title: _____________________________
Taxpayer Identification Number: ________________________________
7. Each Investor must initial at least one of the following statements:
____ (a) Investor certifies that it is a bank as defined in
Section 3(a)(2) of the Securities Act of 1933, as amended
(the "Act"), or any savings and loan association or other
institution as defined in Section 3(a)(5)(A) of the Act,
whether acting in its individual or fiduciary capacity.
____ (b) Investor certifies that it is an insurance company as
defined in Section 2(13) of the Act.
____ (c) Investor certifies that it is a broker/dealer registered
pursuant to the Securities Exchange Act of 1934, as
amended.
15
____ (d) Investor certifies that it is an investment company
registered under the Investment Company Act of 1940, as
amended, or business development company as defined in
Section 2(a)(48) of such Act.
____ (e) Investor certifies that it is a Small Business Investment
Company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958.
____ (f) Investor certifies that it is an employee benefit plan
within the meaning of Title I of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), and
either (i) the investment decision is made by a plan
fiduciary, as defined in Section 3(21) of ERISA, which is
either a bank, savings and loan association, insurance
company or registered investment adviser, (ii) the
employee benefit plan has total assets in excess of
$5,000,000, or (iii) if a self-directed plan, investment
decisions are made solely by persons that are "accredited
investors" as defined in Rule 501(a) of Regulation D
promulgated under the Act.
____ (g) Investor certifies that it is a private business
development company as defined in Section 202(a)(22) of
the Investment Advisers Act of 1940, as amended.
____ (h) Investor certifies that it is a corporation, partnership,
a Massachusetts or similar business trust or other trust
(if the trust's purchase of securities is directed by a
sophisticated person as described in Rule 506(b)(2)(ii)
of Regulation D under the Act) or other organization
described in Section 501(c)(3) of the Internal Revenue
Code of 1986, as amended, not formed for the specific
purpose of acquiring the Common Stock, with total assets
in excess of $5,000,000.
____ (i) Investor certifies that it is an entity in which all of
the equity owners are "accredited investors" as defined
in Rule 501(a) of Regulation D promulgated under the Act.
____ (j) None of the statements in clauses (a) through (i) are
applicable to the Entity Investor and the Entity Investor
is otherwise not an "accredited investor" as defined in
Rule 501(a) of Regulation D promulgated under the Act.
8. Investor agrees to provide, upon request by PHT, the following information:
(A) Corporations will provide the articles of incorporation,
by-laws and corporate resolution authorizing the Loan and
authorizing the person(s) signing this Investor Questionnaire.
All the documents must be certified by the Secretary or
Assistant
16
Secretary of the corporation as being true and correct copies
thereof and in full force and effect.
(B) Partnerships and limited liability companies will provide a
copy of the partnership agreement, articles of organization,
and/or operating agreement showing the date of formation and
giving evidence of the authority of the person(s) signing this
Investor Questionnaire.
(C) Trusts will provide a copy of the trust agreement showing the
date of formation and giving evidence of the authority of the
person(s) signing this Investor Questionnaire.
C. ACKNOWLEDGEMENTS AND REPRESENTATIONS TO BE MADE BY ALL INVESTORS (EVERY
INVESTOR MUST COMPLETE THIS PART C)
Investor understands that PHT will be relying on the accuracy and
completeness of the representations made above as well as Investor's responses
to the questions contained in this Investor Questionnaire. Investor understands
that a false representation may constitute a violation of law, and that any
person who suffers damage as a result of a false representation may have a claim
for damages as a result of such false representation.
ALL INFORMATION CONTAINED IN THIS QUESTIONNAIRE WILL BE TREATED
CONFIDENTIALLY. However, Investor agrees that PHT may present this Investor
Questionnaire to such parties as PHT deems appropriate if called upon to
establish that the Loan is exempt from registration under the Securities Act of
1933, as amended, or meets the requirements of applicable state securities law.
Investor represents and warrants to PHT as follows (each Investor must
initial all of the following):
____ (a) The representations and the answers to the questions in
this Investor Questionnaire are complete and correct and
may be relied upon by PHT and its counsel.
____ (b) Investor has full power and authority to make the Loan to
PHT.
____ (c) The Loan and this Investor Questionnaire have been duly
and validly authorized, executed, and delivered by
Investor and constitute the valid, binding, and
enforceable agreement of Investor.
____ (d) Investor has reviewed this Questionnaire, including, but
not limited to the information set forth on pages 1-2,
the Cover Letter accompanying this Subscription
Agreement, the Note and has received all information
Investor has deemed relevant and has had all of
Investor's questions answered with respect to the Loan
and PHT and has made such independent investigation into
PHT as Investor has deemed necessary.
17
____ (e) The Loan is made solely for the account of Investor with
a view to and for investment and not with a view to or
for distribution, assignment, participation, or resale.
Investor has no contract, undertaking, agreement, or
arrangement with any person to sell, transfer, or pledge
the Note, the Loan, or any interest therein. There are
substantial restrictions on the transferability of the
Note. There will be no public market for the Note and
Investor must bear the economic risk involved in the Loan
and the Common Stock for an indefinite term.
____ (f) Investor acknowledges there is a substantial economic
risk with respect to the repayment of the Loan or any
interest therein and that Investor has such knowledge and
experience in financial and business matters that
Investor is able to evaluate the risks and merits of the
Loan and is making an informed decision to make the Loan.
____ (g) Investor did not learn about the Loan through any
advertisement, article, notice, or other communication
published in any newspaper, magazine, or similar media or
broadcast over television, radio, or the internet or at
any seminar or meeting to which Investor was invited by a
general solicitation or advertising.
____ (h) Investor hereby agrees to indemnify PHT and its officers,
directors, shareholders, agents, and employees and to
hold each of such entities and persons harmless from and
against any and all liabilities, loss, damages, costs, or
expenses (including reasonable attorneys' fees) to which
they, or any of them, may be put or which they, or any of
them, may incur by reason of any breach of the
representations and warranties made by Investor in this
Investor Questionnaire.
____ (i) Investor will notify PHT immediately of any material
change in any representation made above or any statement
made herein that occurs prior to the closing of the Loan.
IF INVESTOR IS AN INDIVIDUAL:
____________________________ ________________________________
Signature of Investor Print Name of Investor
____________________________ ________________________________
Signature of Spouse, if applicable Print Name of Spouse, if applicable
Date: _____________________________
18
IF INVESTOR IS AN ENTITY:
____________________________ ________________________________
Signature of Officer, Print Name of Officer,
Trustee or Partner, as applicable Trustee, or Partner, as applicable
Date: _____________________________
PHT HEREBY ACCEPTS THE LOAN FROM
INVESTOR AS OF MAY 14, 2007
Performance Health Technologies, Inc.
By: _______________________________
Xxxxxx X. Xxxxxxxx
19
