EXHIBIT 10.73
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NON-U.S. SUBSCRIPTION AGREEMENT AND INVESTOR QUESTIONNAIRE
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This Subscription Agreement and Investor Questionnaire (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 PHT's equity units up
to an aggregate amount of $300,000 (the "Units" or the "Securities"), in a
private offering (the "Offering") with each Unit, having a purchase price of
$1,000, consisting of (i) an unsecured convertible Note in the amount of $1,000
(collectively referred to herein as the "Notes") and (ii) 4,000 warrants to
purchase PHT common stock, 2000 of which shall have an exercise price of $0.75
per share and 2000 of which shall have an exercise price of $1.50 per share
(collectively referred to herein as the "Warrants"); and
WHEREAS, the Investor desires to purchase Units 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 NOTES
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, Units for the purchase price set forth on the signature page.
2. CLOSING
2.1 Date of Closing. The closing (the "Closing") of the purchase and sale
of the Units shall take place on any date subsequent to the date of this
Agreement up to and including January 31, 2007 as determined by 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;
(b) the Investor Questionnaire;
(c) the purchase price for the Units by wire transfer to the account
designated by PHT.
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2.3 Items to be Delivered to the Investor by PHT. The following shall be
delivered by PHT to the Investor on the Closing Date: the Notes and Warrants
included in the Units purchased by the Investor. A form of the Note has been
provided to the Investor.
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 and the Notes are 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 Notes. This Agreement has been, and the Notes 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 No Conflict. The execution, delivery and performance by PHT of this
Agreement, and the consummation of the transactions contemplated hereby,
including issuance of the Units, 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 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.
3.4 Notes and Shares. The Notes and Warrants included in the Units and
common stock issuable upon conversion of the Notes (the "Conversion Shares") and
upon exercise of the Warrants (the "Warrant Shares" and together with the
Conversion Shares, the "Common Shares"), when issued and delivered in accordance
with the terms of this Agreement (and the terms of the Notes or Warrants, as the
case may be) will be duly authorized, validly issued, fully paid, non-assessable
and free and clear of any lien or other limitation or restriction.
3.5 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
Notes 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 Notes and the Common Shares as contemplated by this
Agreement.
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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. Letter dated December 12, 2006, describing terms of the
Offering and certain risk factors.
2. Subscription Agreement.
(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.
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(c) The Investor acknowledges that the Notes and Warrants included in
the Units (and Common Shares) are speculative and involve 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 Notes and Warrants included in the Units (and Common Shares).
(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 Notes and Warrants included in the
Units (and Common Shares) for investment purposes only without
intent to distribute the same, and acknowledges that the Notes
and Warrants included in the Units (and Common Shares) have not
been registered under the Securities Act and applicable state
securities laws, and accordingly, constitute "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 Notes and Warrants included in the Units (and Common Shares)
except upon compliance with Regulation S, the registration
requirements of the Securities Act and applicable state
securities laws or exemptions therefrom.
(i) The certificates and/or instruments evidencing the Notes and
Warrants included in the Units (and Common Shares) 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."
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5. REGISTRATION RIGHTS
5.1 Registration of Common Shares.
(a) Registration. PHT agrees to include the Common Shares in a
pre-effective amendment to its registration statement which was
filed with the SEC on November 14, 2006. The Company shall use
its best efforts to have the registration statement declared
effective within 60 days of the date hereof. The registration
requested pursuant to this Section 5.1(a) is referred to herein
as the "Registration".
(b) Restrictions on Registration. PHT will not be obligated to effect
a Registration within one hundred twenty (120) days after the
effective date of a registration statement in which Common Shares
of the Investor are included in a registration statement pursuant
to Section 5.2 hereof. PHT may postpone for a period not
exceeding ninety (90) days the filing or the effectiveness of a
registration statement for a Registration if PHT provides
Investor with written notice that in PHT's good faith judgment
such Registration might have an adverse effect on any proposal or
plan by PHT to engage in any acquisition of assets (other than in
the ordinary course of business) or any merger, consolidation,
tender offer, public offering or similar transaction, provided
that, in such event, PHT will use its best efforts to effect a
Registration as promptly as practicable thereafter.
5.2 Participation in Registered Offerings. If PHT proposes or is required
to register any of its shares or other equity securities for public sale for
cash under the Securities Act (other than on Forms S-4 or S-8 or similar
registration forms), it will at each such time or times give written notice to
the Investor of its intention to do so. Upon the written request of the Investor
given within twenty (20) days after receipt of any such notice, PHT shall use
its best efforts to cause to be included in such registration any Common Shares
held by the Investor requested to be registered; provided, that if the managing
underwriter advises that less than all of the shares requested to be registered
should be offered for sale so as not materially and adversely to affect the
price or salability of such offering being registered by PHT, the Investor (but
not PHT to the extent it desires to include shares for its own account) shall
reduce the number of its Common Shares to be included in the registration
statement as required by the underwriter to the extent requisite of all
prospective sellers of the securities proposed to be registered (other than PHT)
on a pro rata basis according to the amounts of securities proposed to be
registered by all prospective sellers to permit the sale or other disposition
(in accordance with the intended method of disposition thereof as aforesaid) by
the prospective seller or sellers of the securities so registered. The
registration requested pursuant to this Section 5.2 is referred to herein as the
"Piggyback Registration".
5.3 Obligations of Investor. It shall be a condition precedent to the
obligation of PHT to register any Common Shares pursuant to this Section 5 that
the Investor shall furnish to PHT such information regarding the Common Shares
held and the intended method of disposition thereof and other information
concerning the Investor as PHT shall reasonably request and as
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shall be required in connection with the registration statement to be filed by
PHT. If after a registration statement becomes effective PHT advises the
Investor that PHT considers it appropriate to amend or supplement the applicable
registration statement, the Investor shall suspend further sales of the Common
Shares until PHT advises the Investor that such registration statement has been
amended or supplemented.
5.4 Registration Proceedings. Whenever PHT is required by the provisions of
this Section 5 to effect the registration of the Common Shares under the
Securities Act, PHT shall:
(i) Prepare and promptly file with the SEC a registration statement
with respect to such securities and use its best efforts to cause
such registration statement to become effective within 60 days of
filing and remain effective;
(ii) Prepare and file with the SEC such amendments to such
registration statement and supplements to the prospectus
contained therein as may be necessary to keep such registration
statement effective;
(iii) Furnish to the Investor and to the underwriters of the
securities being registered such reasonable number of copies of
the registration statement, preliminary prospectus, final
prospectus and such other documents as such underwriters may
reasonably request in order to facilitate the public offering of
such securities;
(iv) Use its best efforts to register or qualify the securities
covered by such registration statement under such state
securities or Blue Sky Laws of such jurisdictions as the Investor
may reasonably request within twenty (20) days following the
original filing of such registration statement, except that PHT
shall not for any purpose be required to execute a general
consent to service of process or to qualify to do business as a
foreign corporation in any jurisdiction wherein it is not so
qualified;
(v) Notify the Investor, promptly after it shall receive notice
thereof, of the time when such registration statement has become
effective or a supplement to any prospectus forming a part of
such registration statement has been filed;
(vi) Notify the Investor promptly of any request by the SEC for the
amending or supplementing of such registration statement or
prospectus or for additional information; and
(vii) Prepare and promptly file with the SEC and promptly notify the
Investor of the filing of such amendment or supplement to such
registration statement or prospectus as may be necessary to
correct any statements or omissions if, at the time when a
prospectus relating to such securities is required to be
delivered under the Securities Act, any event shall have
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occurred as the result of which any such prospectus or any other
prospectus as then in effect would include an untrue statement of
a material fact or omit to state any material fact necessary to
make the statements therein, in light of the circumstances in
which they were made, not misleading. Notwithstanding any
provision herein to the contrary, PHT shall not be required to
amend, supplement, or update a prospectus contained in any
registration statement if to do so would result in an unduly
burdensome expense to PHT.
5.5 Expenses. With respect to the inclusion of the Common Shares in a
registration statement pursuant to this Section 5, all registration expenses,
fees, costs and expenses of and incidental to such registration, shall be borne
by PHT; provided, however, that Investor shall bear its own professional fees
and pro rata share of the underwriting discounts and commissions. The fees,
costs and expenses of registration to be borne by PHT shall include, without
limitation, all registration, filing, and printing expenses, fees and
disbursements of counsel and accountants for PHT, fees and disbursements of
counsel for the underwriter or underwriters of such securities (if PHT and/or
selling security holders are required to bear such fees and disbursements), and
all legal fees and disbursements and other expenses of complying with state
securities or Blue Sky laws of any jurisdiction in which the securities to be
offered are to be registered or qualified.
5.6 Indemnification of the Investor. Subject to the conditions set forth
below, in connection with any registration of the Common Shares pursuant to this
Section 5, PHT agrees to indemnify and hold harmless the Investor, any
underwriter for the offering and each of their officers and directors and agents
and each other person, if any, who controls Investor or their underwriter (each,
an "Investor Indemnified Party"), within the meaning of Section 15 of the
Securities Act, as follows:
(i) Against any and all loss, claim, damage and expense whatsoever
arising out of or based upon (including, but not limited to, any
and all expense whatsoever reasonably incurred in investigating,
preparing or defending any litigation, commenced or threatened,
or any claim whatsoever based upon) any untrue or alleged untrue
statement of a material fact contained in any preliminary
prospectus (if used prior to the effective date of the
registration statement), the registration statement or the
prospectus (as from time to time amended and supplemented), or in
any application or other document executed by PHT or based upon
written information furnished by PHT filed in any jurisdiction in
order to qualify PHT's securities under the securities laws
thereof, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make
the statements therein not misleading, or any other violation of
applicable federal or state statutory or regulatory requirements
or limitations relating to action or inaction by PHT in the
course of preparing, filing, or implementing such registered
offering; provided, however, that the indemnity agreement
contained in this section shall not apply to any loss, claim,
damage, liability or action arising out of or based upon any
untrue or alleged untrue statement or omission made in reliance
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upon and in conformity with any information furnished in writing
to PHT by or on behalf of the Investor expressly for use in
connection therewith or arising out of any action or inaction of
the Investor;
(ii) Subject to the proviso contained in Subsection (i) above, against
any and all loss, liability, claim, damage and expense whatsoever
to the extent of the aggregate amount paid in settlement of any
litigation, commenced or threatened, or of any claim whatsoever
based upon any untrue statement or omission (including, but not
limited to, any and all expense whatsoever reasonably incurred in
investigating, preparing or defending against any such litigation
or claim) if such settlement is effected with the written consent
of PHT; and
(iii) In no case shall PHT be liable under this indemnity agreement
with respect to any claim made against any Investor Indemnified
Party unless PHT shall be notified, by letter or by facsimile
confirmed by letter, of any action commenced against such
Investor Indemnified Party, promptly after such person shall have
been served with the summons or other legal process giving
information as to the nature and basis of the claim. The failure
to so notify PHT, if prejudicial in any material respect to PHT's
ability to defend such claim, shall relieve PHT from its
liability to the indemnified person under this Section 5.6, but
only to the extent that PHT was prejudiced. The failure to so
notify PHT shall not relieve PHT from any liability which it may
have otherwise than on account of this indemnity agreement. PHT
shall be entitled to participate at its own expense in the
defense of any suit brought to enforce any such claim, but if PHT
elects to assume the defense, such defense shall be conducted by
counsel chosen by it, provided such counsel is reasonably
satisfactory to the Investor Indemnified Party in any suit so
brought. In the event PHT elects to assume the defense of any
such suit and retain such counsel, the Investor Indemnified Party
in the suit shall, after the date they are notified of such
election, bear the fees and expenses of any counsel thereafter
retained by them, as well as any other expenses thereafter
incurred by them in connection with the defense thereof;
provided, however, that if the Investor Indemnified Party
reasonably believes that there may be available to it any defense
or counterclaim different than those available to PHT or that
representation of the Investor Indemnified Party by counsel for
PHT presents a conflict of interest for such counsel, then the
Investor Indemnified Party shall be entitled to defend such suit
with counsel of its own choosing and PHT shall bear the fees,
expenses and other costs of such separate counsel.
5.7 Indemnification of PHT. The Investor agrees to indemnify and hold
harmless PHT, each underwriter for the offering, and each of their officers and
directors and agents and each other person, if any, who controls PHT and the
underwriter within the meaning of Section 15 of the Securities Act and any other
stockholder selling securities against any and all such
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losses, liabilities, claims, damages and expenses as are indemnified against by
PHT under Section 5.6 (i), (ii) and (iii) above; provided, however, that such
indemnification by Investor hereunder shall be limited to any losses,
liabilities, claims, damages, or expenses to the extent caused by any untrue
statement of a material fact or omission of a material fact (required to be
stated therein or necessary to make statements therein not misleading), if any
made (or in settlement of any litigation effected with the written consent of
such Investors, alleged to have been made) in any preliminary prospectus, the
registration statement or prospectus or any amendment or supplement thereof or
in any application or other document in reliance upon, and in conformity with,
written information furnished in respect of such Investor by or on behalf of
such Investor expressly for use in any preliminary prospectus, the registration
statement or prospectus or any amendment or supplement thereof or in any such
application or other document or arising out of any action or inaction of such
Investor in implementing such registered offering. Notwithstanding the
foregoing, the indemnification obligation of Investor shall not exceed the
purchase price of the Units paid by Investor. In case any action shall be
brought against PHT, or any other person so indemnified, in respect of which
indemnity may be sought against any Investor, such Investor shall have the
rights and duties given to PHT, and each other person so indemnified shall have
the rights and duties given to Investor, by the provisions of Section 5.6. The
person indemnified agrees to notify the Investor promptly after the assertion of
any claim against the person indemnified in connection with the sale of
securities.
5.8 Contribution. If the indemnification provided for in Sections 5.6 and
5.7 above are unavailable or insufficient to hold harmless an indemnified party
in respect of any losses, claims, damages or liabilities (or actions in respect
thereof) referred to therein, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative fault of the indemnified
party, on one hand, and such indemnifying party, on the other hand, in
connection with the statements or omissions which resulted in such losses,
claims, damages, or liabilities (or actions in respect thereof). The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
indemnified party, on one hand, or such indemnifying party, on the other hand,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. No person who has
committed fraudulent misrepresentation (within the meaning of the Securities
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The amount paid or payable by an indemnified
party as a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this Section shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
5.9 Assignment of Registration Rights. The right to have PHT register
Common Shares pursuant to this Agreement shall be automatically assignable to
any transferee of all or any portion of the Notes, Warrants or Common Shares if:
(a) the Investor agrees in writing with the transferee or assignee to assign
such rights, and a copy of such agreement is furnished to PHT within a
reasonable time after such assignment, (b) PHT is, within a reasonable time
after
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such transfer or assignment, furnished with written notice of (i) the name and
address of such transferee or assignee, and (ii) the securities with respect to
which such registration rights are being transferred or assigned, (c) following
such transfer or assignment, the further disposition of such securities by the
transferee or assignee is restricted under the 1933 Act and applicable state
securities laws and, (d) at or before the time PHT receives the written notice
contemplated by clause (b) of this sentence, the transferee or assignee agrees
in writing with PHT to be bound by all of the provisions contained herein (the
foregoing a "Permitted Transferee").
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.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"SEC" means the Securities and Exchange Commission.
"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 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
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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 No Payment of Dividends. PHT shall not pay any cash dividends on its
Common Stock so long as any of the Notes are outstanding.
6.5 Survival. All agreements, covenants, representations and warranties
made by PHT or by the Investor herein shall survive the execution and delivery
of this Agreement.
6.6 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 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, XX 00000
Attn.: Xxxxxx Xxxxxxxx, President and CEO
Fax: (000) 000-0000
To the Investor at the Address Set Forth on the Investor Questionnaire.
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6.7 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.
6.8 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.
6.9 Assignments. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
6.10 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.
6.11 Headings. Headings in this Agreement are for convenience of reference
only and are not part of the substance hereof or thereof.
6.12 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.
6.13 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.
6.14 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
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.
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6.15 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.
6.16 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.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
set forth below.
IF INVESTOR IS AN INDIVIDUAL:
__________________________________ ____________________________________
Signature of Investor Print Name of Investor
$________________ of Units to be Purchased Under this Agreement
Date:______________________, 2006
IF INVESTOR IS AN ENTITY:
___________________________________
Print Name of Entity
_________________________________ ___________________________________
Signature of Officer, Print Name of Officer,
Trustee or Partner, as applicable Trustee or Partner, as applicable
$________________ of Units to be Purchased Under this Agreement
Date:______________________, 2006
ACCEPTED:
Date: June 30, 2006 PERFORMANCE HEALTH TECHNOLOGIES, INC.
By: ________________________
Name:
Title:
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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.
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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. REGULATION S ACKNOWLEDGEMENTS AND REPRESENTATIONS
Investor represents and warrant to, and agrees with, PHT as follows:
______ 1. The undersigned was outside of the "United States" (as defined
below) at both the time the offer to purchase the Units was
received and at the time an agreement to purchase the Units was
signed or otherwise entered into.
______ 2. The undersigned is not a "U.S. person" (as defined below) and is
not acquiring the Units for the account or benefit of a U.S.
person within the meaning of Regulation S under the Securities
Act.
______ 3. The undersigned is not a "distributor" (as defined below).
______ 4. The undersigned agrees that any resale of the Securities shall
be made in accordance with the provisions of Regulation S of the
Securities Act, pursuant to registration under the Securities
Act, or pursuant to an available exemption from registration
which requires a one year restriction on resale of the
Securities from the date of your purchase.
______ 5. The undersigned agrees that it will not transfer any Securities
without complying with each of the restrictions set forth
herein. As a further condition to any transfer of the
Securities, except if the transfer is made pursuant to an
effective registration statement under the Securities Act, if in
the reasonable opinion of counsel to PHT transfer of the
Securities by the undersigned would not be exempt from the
registration and prospectus delivery requirements of the
Securities Act, PHT may require the contemplated transferee to
furnish PHT with an investment letter setting forth such
information and agreements as may be reasonably requested by PHT
to ensure compliance by the transferee with the Securities Act.
______ 6. Furthermore, the undersigned will not resell the Securities to
U.S. Persons or within the United States until after the end of
the applicable restricted period under Regulation S or any the
applicable restricted period under the Securities
17
Act (the "Restricted Period") other than pursuant to registration
of the Securities under the Securities Act or pursuant to an
exemption from such registration.
______ 7. The undersigned agrees not to engage in hedging transactions
with regard to the Securities except in compliance with the
Securities Act.
D. ACKNOWLEDGEMENTS AND REPRESENTATIONS TO BE MADE BY ALL INVESTORS (EVERY
INVESTOR MUST COMPLETE THIS PART D)
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 Units are 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 purchase the
Units from PHT.
____ (c) The investment 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 Units
and PHT and has made such independent investigation into
PHT as Investor has deemed necessary.
____ (e) The Securities are being purchased 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
18
Securities or any interest therein. There are substantial
restrictions on the transferability of the Securities.
There will be no public market for the Securities and
Investor must bear the economic risk involved in the
Securities and the Common Stock for an indefinite term.
____ (f) Investor acknowledges there is a substantial economic
risk with respect to the repayment of the Note 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
investment in the Units and is making an informed
decision.
____ (g) Investor did not learn about the Units 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
purchase of the Units.
_____ (j) Investor understands that none of the Securities have
been registered for resale and that there is no assurance
that the Registration will be declared effective.
_____ (k) Investor understands that there is no trading market for
any of the Securities or the Common Stock and there can
be no assurance that a trading market will develop.
_____ (l) WAIVER OF NORTH COAST SECURITIES CORPORATION LIABILITY.
In order to induce North Coast to make the introduction
of the subscriber to the Company, the undersigned does
hereby IRREVOCABLY AND UNCONDITIONALLY RELEASE, REMISE,
AND FOREVER DISCHARGE North Coast Securities Corporation
and its affiliates and each of their respective
shareholders, officers, directors, "controlling persons",
employees, registered representatives, independent
contractors, heirs, executors, administrators, successors
in interest and assigns from and against any and all
agreements, promises, liabilities,
19
claims and demands of any kind whatsoever, at law or in
equity, whether known or unknown, suspected or
unsuspected, fixed or contingent, apparent or concealed
(collectively a "Claim"), which the undersigned, the
undersigned's heirs, executors, administrators,
successors or assigns ever had, now have or hereafter
can, shall or may have for, upon, or by reason of any
matter, cause of thing whatsoever existing, arising or
occurring, directly or indirectly out of the
undersigned's investment.
IF INVESTOR IS AN INDIVIDUAL:
_________________________________ ___________________________________
Signature of Investor Print Name of Investor
_________________________________ ___________________________________
Signature of Spouse, if applicable Print Name of Spouse, if applicable
Date: _______________________
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 ______________, 2006
Performance Health Technologies, Inc.
By: _______________________________
Xxxxxx Xxxxxxxx
20
EXHIBIT A
NOTICE OF CONVERSION
(To be Executed by the Registered Holder
in order to Convert the Notes)
The undersigned hereby irrevocably elects to convert $__________ principal
amount of the Note (defined below) into shares of common stock, par value $.01
per share ("Common Stock"), of Performance Health Technologies, Inc., a Delaware
corporation (the "Borrower") according to the conditions of the convertible
Notes of the Borrower dated as of ______, 2006 (the "Notes"), as of the date
written below. If securities are to be issued in the name of a person other than
the undersigned, the undersigned will pay all transfer taxes payable with
respect thereto and is delivering herewith such certificates. No fee will be
charged to the Holder for any conversion, except for transfer taxes, if any. A
copy of each Note is attached hereto (or evidence of loss, theft or destruction
thereof).
The undersigned represents and warrants that all offers and sales by the
undersigned of the securities issuable to the undersigned upon conversion of the
Notes shall be made pursuant to registration of the securities under the
Securities Act of 1933, as amended (the "ACT"), or pursuant to an exemption from
registration under the Act.
The undersigned hereby certifies that it is not a "U.S. Person" and that no
portion of the Warrant being exercised hereby is being exercised on behalf of a
"U.S. Person". For purposes hereof, "U.S. Person" has the meaning provided in
Rule 901 of Regulation S under the U.S Securities Act of 1933, as amended.
Date of Conversion:_____________________________
Applicable Conversion Price:____________________
Number of Shares of Common Stock to be Issued Pursuant to
Conversion of the Notes:________________________
Signature:______________________________________
Name:___________________________________________
Address:________________________________________
The Borrower shall issue and deliver shares of Common Stock to an overnight
courier not later than three (3) business days following receipt of the original
Note(s) to be converted, and shall make any applicable payments pursuant to the
Notes for the number of business days such issuance and delivery is late.
21
