EXHIBIT 10.67
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REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of
____________, by Performance Health Technologies, Inc., a Delaware corporation
(the "Company"), in favor of holders of Registrable Stock (as hereinafter
defined).
The Company hereby grants the following rights to every Holder of Registrable
Securities:
1. Definitions. As used herein, unless the context otherwise requires,
the following terms have the following respective meanings:
Commission: The Securities and Exchange Commission or any other Federal
agency at the time administering the Securities Act.
Common Stock: The shares of Common Stock, par value $0.01 per share, of
the Company as existing on the date hereof.
Company: As defined in the first paragraph of this Agreement.
Holder: Any Person who holds Registrable Securities and any holder of
Registrable Securities to whom the registration rights conferred by this
Agreement have been transferred in compliance with Section 7 hereof.
Initiating Holders: Any holder or holders of Registrable Securities
holding greater than or equal to 50% of the Registrable Securities (by number of
shares at the time issued and outstanding) and initiating a request pursuant to
Section 2.1 hereof for the registration of all or part of such holder's or
holders' Registrable Securities.
Other Stockholders: Persons other than Holders who, by virtue of
agreements with the Company, are entitled or permitted to include their
securities in certain registrations hereunder.
Person: A corporation, an association, a partnership, an organization,
business, an individual, a governmental or political subdivision thereof or a
governmental agency.
Registrable Securities: (a) any shares of Common Stock to be issued at
any Closing described in the Company's Confidential Private Placement Memorandum
dated ______________, and any shares of Common Stock to be issued either in
payment of interest or upon conversion of any Convertible Note issued at any
Closing described in such Confidential Private Placement Memorandum and (b)
securities issued or issuable with respect to any Common Stock referred to in
the foregoing subdivision (a) by way of stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization or otherwise. As to any particular Registrable
Securities, such securities shall cease to be Registrable Securities when (i) a
registration statement with respect to the sale
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of such securities shall have become effective under the Securities Act and such
securities shall have been disposed of in accordance with such registration
statement, (ii) they shall have been distributed to the public pursuant to Rule
144 (or any successor provision) under the Securities Act, (iii) they shall have
been otherwise transferred, new certificates for them not bearing a legend
restricting further transfer shall have been delivered by the Company and
subsequent disposition of them shall not require registration or qualification
of them under the Securities Act or any similar state law then in force, or (iv)
they shall have ceased to be outstanding.
register, registered and registration: These terms shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.
Registration Expenses: All expenses incident to the Company's
performance of or compliance with Section 2 hereof, including, without
limitation, all registration, filing and NASD fees, all fees and expenses of
complying with securities or blue sky laws, all word processing, duplicating and
printing expenses, messenger and delivery expenses, the fees and disbursements
of counsel for the Company and of its independent public accountants, including
the expenses of any special audits or "cold comfort" letters required by or
incident to such performance and compliance, and any fees and disbursements of
underwriters customarily paid by issuers or sellers of securities, but excluding
underwriting discounts, commissions, and non-accountable expense allowance and
transfer taxes, if any, provided that, in any case where Registration Expenses
are not to be borne by the Company, such expenses shall not include salaries of
the Company personnel or general overhead expenses of the Company, auditing
fees, premiums or other expenses relating to liability insurance required by
underwriters of the Company or other expenses for the preparation of financial
statements or other data normally prepared by the Company in the ordinary course
of its business or which the Company would have incurred in any event.
Securities Act: The Securities Act of 1933, or any similar Federal
statute, and the rules and regulations of the Commission thereunder, all as the
same shall be in effect at the time. References to a particular section of the
Securities Act shall include a reference to the comparable section, if any, of
any such similar Federal statute.
2. Registration under Securities Act, etc.
2.1 Demand Registration.
(a) Request. Upon the written request of one or more Initiating Holders
requesting that the Company effect the registration under the Securities Act of
all or part of such Initiating Holders' Registrable Securities and specifying
the intended method of disposition thereof, the Company will promptly give
written notice of such requested registration to all registered holders of
Registrable Securities, and thereupon the Company will use its best efforts to
effect the registration under the Securities Act of:
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(i) the Registrable Securities which the Company has been so
requested to register by such Initiating Holders for disposition in
accordance with the intended method of disposition stated in such
request;
(ii) all other Registrable Securities the holders of which
shall have made a written request to the Company for registration
thereof within 30 days after the giving of such written notice by the
Company (which request shall specify the intended method of disposition
of such Registrable Securities); and
(iii) all shares of Common Stock which the Company and any
Other Stockholders may elect to register in connection with the
offering of Registrable Securities pursuant to this Section 2.1, all to
the extent requisite to permit the disposition (in accordance with the
intended methods thereof as aforesaid) of the Registrable Securities
and the additional shares of Common Stock, if any, so to be registered;
provided that the Company shall not be required to effect (i) more than one
registration pursuant to this Section 2.1, (ii) the registration of Registrable
Securities pursuant to this Section 2.1 unless the aggregate number of shares of
Registrable Securities requested to be registered by all holders of Registrable
Securities is equal to or greater than 50% of the Registrable Securities
originally issuable under the Warrant Agreement or have a market value (based
upon the closing price of such Registrable Securities quoted on the securities
exchange or over-the-counter quotation system on which such Registrable
Securities are listed or quoted, as the case may be, on the trading day
immediately preceding any request pursuant to this Section 2.1) of at least $5
million at the close of the last trading day prior to such request, (iii) during
the period starting with the date thirty (30) days prior to the Company's good
faith estimate of the date of filing of, and ending on a date ninety (90) days
after the effective date of, a Company-initiated registration (provided that the
Company is actively employing in good faith all reasonable efforts to cause such
registration statement to become effective), and (iv) the registration of
Registrable Securities pursuant to this Section 2.1 if (x) in the good faith
judgment of the board of directors of the Company, such registration would be
seriously detrimental to the Company and the board of directors of the Company
concludes, as a result, that it is essential to defer the filing of such
registration statement at such time, and (y) the Company shall furnish to such
Holders a certificate signed by the president of the Company stating that in the
good faith judgment of the board of directors of the Company, it would be
seriously detrimental to the Company for such registration statement to be filed
in the near future and that it is, therefore, essential to defer the filing of
such registration statement, then the Company shall have the right to defer such
filing for the period during which such registration would be seriously
detrimental (provided that the Company may not defer the filing for a period of
more than one hundred eighty (180) days after receipt of the request of
Initiating Holders, and, provided further, that the Company shall not defer its
obligation in this manner more than once in any twelve-month period).
(b) Expenses. The Company will pay all Registration Expenses in
connection with each registration of Registrable Securities requested pursuant
to this Section 2.1.
(c) Effective Registration Statement. The registration requested
pursuant to this Section 2.1 shall not be deemed to have been effected (i)
unless a registration statement with respect
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thereto has become effective, provided that a registration which does not become
effective after the Company has filed a registration statement with respect
thereto solely by reason of the refusal to proceed of the Initiating Holders
(other than a refusal to proceed based upon the advice of counsel relating to a
matter with respect to the Company) shall be deemed to have been effected by the
Company at the request of such Initiating Holders unless the Initiating Holders
shall have elected to pay all Registration Expenses in connection with such
registration, (ii) if, after it has become effective, such registration is
interfered with by any stop order, injunction or other order or requirement of
the Commission or other governmental agency or court for any reason (other than
a stop order, injunction or other order or requirement resulting from some act
or omission by the Initiating Holders), or (iii) the conditions to closing
specified in the purchase agreement or underwriting agreement entered into in
connection with such registration are not satisfied, other than by reason of
some act or omission by such Initiating Holders.
(d) Underwritten Offering. If any offering of Registrable Shares
pursuant to this Section 2.1 involves an underwritten offering, the Company
shall (after first consulting with the Initiating Holders) select the investment
banking firm or firms to manage the underwritten offering.
The right of any Holder to registration pursuant to this Section 2.1
shall be conditioned upon such Holder's participation in such underwriting and
the inclusion of such Holder's Registrable Securities in the underwriting
(unless otherwise mutually agreed by a majority in interest of Initiating
Holders and such Holder with respect to such participation and inclusion) to the
extent provided herein. A Holder may elect to include in such underwriting all
or a part of the Registrable Securities held by such Holder.
If the Company shall request inclusion in any registration pursuant to
this Section 2.1 of securities being sold for its own account, or if an Other
Stockholder shall request inclusion in any registration pursuant to this Section
2.1, the Initiating Holders shall, on behalf of all Holders, offer to include
such securities in the underwriting and may condition such offer on their
acceptance of the further applicable provisions of this Agreement (including
without limitation Section 2.6 hereof). In such event, the Company shall
(together with all Holders and other persons proposing to distribute their
securities through such underwriting) enter into an underwriting agreement in
customary form with the representative of the underwriter or underwriters
selected for such underwriting by the Initiating Holders. If a person who has
requested inclusion in such registration as provided above does not agree to the
terms of any such underwriting, such person shall be excluded therefrom by
written notice from Company, the underwriter or Initiating Holders. The
securities so excluded shall also be withdrawn from registration. Any
Registrable Securities or other securities excluded shall also be withdrawn from
such registration.
(e) Priority in Demand Registrations. Notwithstanding any other
provision of this Section 2.1, if any financial advisor retained by the
Initiating Holders or the Company shall advise the Company in writing that, in
its opinion, the number of securities requested to be included in such
registration (including securities of the Company which are not Registrable
Securities) exceeds the number which can be sold in the contemplated offering
within a price range acceptable to the holders of a majority of the Registrable
Securities requested to be included in such registration, the Company will
include in such registration, to the extent of the
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number which the Company is so advised can be sold in such offering the
Registrable Securities requested to be included in such registration by the
holder or holders of Registrable Securities, the securities the Company proposes
to sell and other securities of the Company included in such registration by the
holders thereof, pro rata among such holders on the basis of the number of such
securities requested to be included by such holders and the Company.
2.2 Piggyback Registration.
(a) Right to Include Registrable Securities. If the Company at any time
proposes to register any of its securities under the Securities Act (other than
by a registration on Form ▇-▇, ▇-▇, ▇-▇▇ or S-15 or any successor or similar
forms), whether or not for sale for its own account, it will each such time give
prompt written notice to all holders of Registrable Securities of its intention
to do so and of such holders' rights under this Section 2.2. Upon the written
request of any such holder made within 10 days after the receipt of any such
notice (which request shall specify the Registrable Securities intended to be
disposed of by such holder and the intended method of disposition thereof), the
Company, subject to Section 2.2(d), will use its best efforts to effect the
registration under the Securities Act of all Registrable Securities which the
Company has been so requested to register by the holders thereof, to the extent
requisite to permit the disposition (in accordance with the intended methods
thereof as aforesaid) of the Registrable Securities so to be registered, by
inclusion of such Registrable Securities in the registration statement which
covers the securities which the Company proposes to register, provided that if,
at any time after giving written notice of its intention to register any
securities and prior to the effective date of the registration statement filed
in connection with such registration, the Company shall determine for any reason
either not to register or to delay registration of such securities, the Company
may, at its election, give written notice of such determination to each holder
of Registrable Securities and, thereupon, (i) in the case of a determination not
to register, shall be relieved of its obligation to register any Registrable
Securities in connection with such registration (but not from its obligation to
pay the Registration Expenses in connection therewith), without prejudice,
however, to the rights of any holder or holders of Registrable Securities
entitled to do so to request that such registration be effected as a
registration under Section 2.1 hereof, and (ii) in the case of a determination
to delay registering, shall be permitted to delay registering any Registrable
Securities, for the same period as the delay in registering such other
securities. No registration effected under this Section 2.2 shall relieve the
Company of its obligation to effect any registration upon request under Section
2.1 hereof. In no event shall the Company be required to effect more than two
registrations of Registrable Securities pursuant to this Section 2.2.
(b) Expenses. The Company will pay all Registration Expenses in
connection with each registration of Registrable Securities requested pursuant
to this Section 2.2
(c) Piggyback Underwritten Offerings. If the Company at any time
proposes to register any of its securities under the Securities Act as
contemplated by this Section 2.2 and such securities are to be distributed by or
through one or more underwriters, the Company will, if requested by any Holder
of Registrable Securities as provided in this Section 2.2 and subject to the
provisions of Section 2.2(d) hereof, use its reasonable best efforts to arrange
for such
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underwriters to include all the Registrable Securities to be offered and sold by
such holder among the securities to be distributed by such underwriters.
The holders of Registrable Securities to be distributed by such
underwriters shall be parties to the underwriting agreement between the Company
and such underwriters and may, at their option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters shall also be made to and
for the benefit of such holders of Registrable Securities and that any or all of
the conditions precedent to the obligations of such underwriters under such
underwriting agreement be conditions precedent to the obligations of such
holders of Registrable Securities. Any such holder of Registrable Securities
shall not be required to make any representations or warranties to or agreements
with the Company or the underwriters other than representations, warranties or
agreements regarding such holder, such holder's Registrable Securities and such
holder's intended method of distribution and any other representation required
by law.
(d) Priority in Piggyback Registrations. If (i) a registration pursuant
to this Section 2.2 involves an underwritten offering of the securities so being
registered, whether or not for sale for the account of the Company, to be
distributed (on a firm commitment, best efforts or other basis) by or through
one or more underwriters and (ii) the managing underwriter of such underwritten
offering shall inform the Company and holders of the Registrable Securities
requesting inclusion of their Registrable Securities in such registration by
letter of its belief that the distribution of all or a specified number of the
securities requested to be included in such registration concurrently with the
securities being distributed by such underwriters would interfere with the
successful marketing of the securities being distributed by such underwriters
(such writing to state the basis of such belief and the approximate number of
such securities which may be distributed without such effect), then the Company
will be obligated to include in such registration statement the Registrable
Securities of the Holders in sequence, in accordance with the following:
(x) in the case of an offering by the Company for its own
account, (A) first, any and all securities for sale by the Company, (B)
second, securities requested to be included in such registration
statement by Other Stockholders pursuant to any other registration
rights that may have been, or may hereafter be, granted by the Company,
with priority as to registration rights over the registration rights of
the Holders granted under this Agreement, and (C) third, Registrable
Securities requested to be included in such registration by the Holders
and securities requested to be included in such registration statement
by Other Stockholders (other than those described in (B)) pursuant to
any other registration rights that may have been, or may hereafter be,
granted by the Company, pro rata based on the number of such securities
requested to be included by such Holders and such Other Stockholders;
(y) in the case of an offering by the Company for the account
of any of its securityholders (other than the Holders), (A) first,
securities requested to be registered by any such securityholder
pursuant to the exercise of demand registration rights, (B) second,
securities for the account of the Company and securities requested to
be included in such registration statement by Other Stockholders
pursuant to any other registration rights that may have been, or may
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hereafter be, granted by the Company, with priority as to registration
rights over the registration rights of the Holders granted under this
Agreement, and (C) third, Registrable Securities requested to be
registered by the Holders and securities requested to be included in
such registration statement by Other Stockholders (other than those
described in (B)) pursuant to any other registration rights that may
have been, or may hereafter be, granted by the Company, pro rata based
on the number of such securities requested to be included by such
Holders, the Company and such Other Stockholders.
2.3 Registration Procedures. Notwithstanding any other provision of
this Agreement, the Company will have no obligation to effect the registration
of any Registrable Securities under the Securities Act as provided in Section
2.1 hereof unless and until such Registrable Securities shall have been issued
by the Company, and the Company agrees to immediately issue the Registrable
Securities when required to do so under the Convertible Notes. If and whenever
the Company is required to use its best efforts to effect the registration of
any Registrable Securities under the Securities Act as provided in Section 2.1
hereof, the Company shall, as expeditiously as possible:
(i) prepare and (within 90 days after the end of the period
within which requests for registration may be given to the Company, or
in any event as soon thereafter as possible) file with the Commission
the requisite registration statement to effect such registration
(including such audited financial statements as may be required by the
Securities Act or the rules and regulations promulgated thereunder) and
thereafter use its best efforts to cause such registration statement to
become and remain effective, provided, however, that the Company may
discontinue any registration of its securities including Registrable
Securities at any time prior to the effective date of the registration
statement relating thereto, and further provided that before filing
such registration statement or any amendments thereto, the Company will
furnish to one counsel selected by the Holders of Registrable
Securities which are to be included in such registration copies of all
such documents proposed to be filed, which documents will be subject to
the review of such counsel, at the expense of the Holders;
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary and to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement, and use best efforts
to keep such registration statement effective until the earlier of such
time as all of such securities have been disposed of in accordance with
the intended methods of disposition by the seller or sellers thereof
set forth in such registration statement or the expiration of 180 days
after such registration statement becomes effective (provided, however,
that such 180-day period shall be extended for a period of time equal
to the period Holder refrains from selling any securities included in
such registration at the request of an underwriter of common stock (or
other securities) of the Company);
(iii) furnish to each seller of Registrable Securities covered
by such registration statement and each underwriter, if any, of the
securities being sold by
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such seller such number of conformed copies of such registration
statement and of each such amendment and supplement thereto (in each
case including all exhibits), such number of copies of the prospectus
contained in such registration statement (including each preliminary
prospectus and any summary prospectus) and any other prospectus filed
under Rule 424 under the Securities Act, in conformity with the
requirements of the Securities Act, and such other documents, as such
seller may reasonably request in order to facilitate the public sale or
other disposition of the Registrable Securities owned by such Seller;
(iv) use its best efforts (A) to register or qualify all
Registrable Securities and other securities covered by such
registration statement under such other securities laws or blue sky
laws of such jurisdictions as shall reasonably be requested by such
seller, (B) to keep such registrations or qualifications in effect for
so long as such registration statement remains in effect, and (C) take
any other action which may be reasonably necessary or advisable to
enable each seller to consummate the disposition in such jurisdictions
of the securities owned by such seller, except that the Company shall
not for any such purpose be required to qualify generally to do
business as a foreign corporation in any jurisdiction wherein it would
not, but for the requirements of this subdivision (iv), be obligated to
be so qualified, to subject itself to taxation in any such jurisdiction
or to consent to general service of process in any such jurisdiction;
(v) use its best efforts to cause all Registrable Securities
covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be
necessary to enable the seller or sellers thereof to consummate the
disposition of such Registrable Securities;
(vi) cause the Registrable Securities included in any
registration statement to be (i) listed on each securities exchange, if
any, on which similar securities issued by the Company are then listed,
or (ii) authorized to be quoted and/or listed (to the extent
applicable) on the National Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ") or the National Market System of NASDAQ
if the Registrable Securities so qualify;
(vii) provide a CUSIP number for the Registrable Securities
included in any registration statement not later than the effective
date of such registration statement;
(viii) furnish to each Holder selling securities in such
registration and underwriter a signed counterpart of (i) an opinion or
opinions of counsel to the Company, and (ii) a comfort letter or
comfort letters from the Company's independent public accountants, each
in customary form and covering such matters of the type customarily
covered by opinions or comfort letters, as the case may be, as the
Holders selling securities in such registration or managing underwriter
reasonably requests;
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(ix) notify each seller of Registrable Securities covered by
such registration statement, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, upon the
discovery that, or upon the happening of any event as a result of
which, the prospectus included in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the
circumstances under which they were made, and at the request of any
such seller promptly prepare and furnish to such seller (and each
underwriter, if any) a reasonable number of copies of a supplement to
or an amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such securities, such
prospectus shall not include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of
the circumstances under which they were made;
(x) otherwise use its best efforts to comply with all
applicable rules and regulations of the Commission, and make available
to its security holders, as soon as reasonably practicable, an earnings
statement covering the period of at least twelve months, but not more
than eighteen months, beginning with the first day of the full calendar
month after the effective date of such registration statement, if such
earnings statement is necessary to satisfy the provisions of Section
11(a) of the Securities Act, and will furnish to each such seller at
least five business days (or such shorter reasonable time period as
given circumstances shall dictate) prior to the filing thereof a copy
of any amendment or supplement to such registration statement or
prospectus and shall not file any thereof to which any such seller
shall have reasonably objected on the grounds that such amendment or
supplement does not comply in all material respects with the
requirements of the Securities Act or of the rules or regulations
thereunder; and
(xi) enter into such agreements and take such other actions as
sellers of such Registrable Securities holding more than 50% of the
shares so to be sold shall reasonably request in order to expedite or
facilitate the disposition of such Registrable Securities.
The Company may require each seller of Registrable Securities as to
which any registration is being effected to furnish the Company such information
regarding such seller and the distribution of such securities as the Company may
from time to time reasonably request in writing and as shall be required by
applicable law or the Commission in connection therewith. Each holder of
Registrable Securities agrees by acquisition of such Registrable Securities
that, upon receipt of any notice from the Company of the occurrence of any event
of the kind described in subdivision (ix) of this Section 2.3, such holder will
forthwith discontinue such holder's disposition of Registrable Securities
pursuant to the registration statement relating to such Registrable Securities
until such holder's receipt of the copies of the supplemented or amended
prospectus contemplated by subdivision (ix) of this Section 2.3 and, if so
directed by the Company, will deliver to the Company (at the Company's expense)
all copies, other than
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permanent file copies, then in such holder's possession of the prospectus
relating to such Registrable Securities current at the time of receipt of such
notice.
2.4 Preparation; Reasonable Investigation. (a) In connection with the
preparation and filing of each registration statement under the Securities Act
pursuant to this Agreement, the Company will give the holders of Registrable
Securities registered under such registration statement, their underwriters, if
any, and their respective counsel and accountants, the opportunity, at the
expense of the holders, to participate in the preparation of such registration
statement, each prospectus included therein or filed with the Commission, and
each amendment thereof or supplement thereto, and will give each of them such
reasonable access to its books and records and such opportunities to discuss the
business of the Company with its officers and the independent public accountants
who have certified its financial statements as shall be reasonably necessary, in
the opinion of such holders' and such underwriters' respective counsel, to
conduct a reasonable investigation within the meaning of the Securities Act.
(b) Certain Information. The Company agrees to include in any
registration statement that includes Registrable Securities filed under Section
2.1 hereof, all information which holders of Registrable Securities being
registered shall reasonably request (after giving due regard to the
confidentiality of such information).
2.5 Indemnification.
(a) Indemnification by the Company. In the event of any registration of
any securities of the Company under the Securities Act, the Company will, and
hereby does, indemnify and hold harmless, in the case of any registration
statement covering Registrable Securities, the holder of any Registrable
Securities covered by such registration statement, its directors and officers,
each other Person who participates as an underwriter in the offering or sale of
such securities and each other Person, if any, who controls such holder or any
such underwriter within the meaning of the Securities Act, against any losses,
claims, damages or liabilities, joint or several, to which such holder or any
such director or officer or underwriter or controlling Person may become subject
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon, any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such securities were registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the Company will
reimburse such holder, and each such director, officer, underwriter and
controlling Person for any legal or any other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
liability, action or proceeding; provided that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in such registration statement, any such preliminary prospectus,
final prospectus, summary prospectus, amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by any
Holder for use in the preparation thereof and, provided further that the Company
shall not be liable to any Person who participates as an underwriter, in the
offering or
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sale of Registrable Securities or to any other Person, if any, who controls such
underwriter within the meaning of the Securities Act, in any such case to the
extent that any such loss, claim, damage, liability (or action or proceeding in
respect thereof) or expense arises out of such Person's failure to send or give
a copy of the final prospectus, as the same may be then supplemented or amended,
to the Person asserting an untrue statement or alleged untrue statement or
omission or alleged omission at or prior to the written confirmation of the sale
of Registrable Securities to such Person if such statement or omission was
corrected in such final prospectus. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of such holder
or any such director, officer, underwriter or controlling person and shall
survive the transfer of such securities by such holder.
(b) Indemnification by the Holders. The Company may require, as a
condition to including any Registrable Securities in any registration statement
filed pursuant to Section 2.2 hereof, that the Company shall have received an
undertaking satisfactory to it from the prospective seller of such Registrable
Securities, to indemnify and hold harmless (in the same manner and to the same
extent as set forth in subdivision (a) of this Section 2.4) the Company, each
director of the Company, each officer of the Company and each other Person, if
any, who controls the Company within the meaning of the Securities Act, with
respect to any statement or alleged statement in or omission or alleged omission
from such registration statement, any preliminary prospectus, final prospectus
or summary prospectus contained therein, or any amendment or supplement thereto,
if such statement or alleged statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company through an instrument duly executed by such seller specifically stating
that it is for use in the preparation of such registration statement,
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement. Such indemnity shall be limited to the extent required by applicable
law and shall remain in full force and effect, regardless of any investigation
made by or on behalf of the Company or any such director, officer or controlling
person and shall survive the transfer of such securities by such seller.
(c) Notices of Claims, etc. Promptly after receipt by an indemnified
party of notice of the commencement of any action or proceeding involving a
claim referred to in the preceding subdivisions of this Section 2.5, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to the latter of the commencement of
such action, provided that the failure of any indemnified party to give notice
as provided herein shall not relieve the indemnifying party of its obligations
under the preceding subdivisions of this Section 2.5, except to the extent that
the indemnifying party is actually prejudiced by such failure to give notice. In
case any such action is brought against an indemnified party, unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist in respect of such claim, the
indemnifying party shall be entitled to participate in and to assume the defense
thereof, jointly with any other indemnifying party similarly notified, to the
extent that the indemnifying party may wish, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified party
for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the consent of the
indemnified party,
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consent to entry of any judgment or enter into any settlement of any such action
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such indemnified party of a release from all liability,
or a covenant not to ▇▇▇, in respect to such claim or litigation. No indemnified
party shall consent to entry of any judgment or enter into any settlement of any
such action the defense of which has been assumed by an indemnifying party
without the consent of such indemnifying party.
(d) Other Indemnification. Indemnification similar to that specified in
the preceding subdivisions of this Section 2.5 (with appropriate modifications)
shall be given by the Company and each seller of Registrable Securities with
respect to any required registration or other qualification of securities under
any Federal or state law or regulation of any governmental authority, other than
the Securities Act.
(e) Indemnification Payments. The indemnification required by this
Section 2.4 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
expense, loss, damage or liability is incurred.
(f) Contribution. If the indemnification provided for in the preceding
subdivisions of this Section 2.5 is unavailable to an indemnified party in
respect of any expense, loss, damage or liability referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such expense, loss, damage or liability (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the holder or underwriter, as the case may be, on the other from the
distribution of the Registrable Securities or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and of the
holder or underwriter, as the case may be, on the other in connection with the
statements or omissions which resulted in such expense, loss, damage or
liability, as well as any other relevant equitable considerations. The relative
fault of the Company on the one hand and of the holder or underwriter, as the
case may be, on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
omission to state a material fact relates to information supplied by the
Company, by the holder or by the underwriter and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission; provided, that the foregoing contribution agreement shall
not inure to the benefit of any indemnified Person if indemnification would be
unavailable to such indemnified Person by reason of the proviso contained in the
first sentence of subdivision (a) of this Section 2.4, and in no event shall the
obligation of any indemnifying party to contribute under this subdivision (f)
exceed the amount that such indemnifying party would have been obligated to pay
by way of indemnification if the indemnification provided for under subdivisions
(a) or (b) of this Section 2.4 had been available under the circumstances.
The Company and the holders of Registrable Securities agree that it
would not be just and equitable if contribution pursuant to this subdivision (f)
were determined by pro rata allocation (even if the holders and any underwriters
were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations referred
to
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in the immediately preceding paragraph. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages and liabilities
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth in the preceding sentence and subdivisions
(c) of this Section 2.5, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim.
Notwithstanding the provisions of this subdivision (f), no holder of
Registrable Securities or underwriter shall be required to contribute any amount
in excess of the amount by which (i) in the case of any such holder, the net
proceeds received by such holder from the sale of Registrable Securities or (ii)
in the case of an underwriter, the total price at which the Registrable
Securities purchased by it and distributed to the public were offered to the
public exceeds, in any such case, the amount of any damages that such holder or
underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
3. Other Registration Rights. Nothing in this Agreement shall be deemed
to prevent the Company from granting any rights or entering into any agreement
with any holder or prospective holder of any securities of the Company giving
such holder or prospective holder any registration rights the terms of which are
more favorable than the registration rights granted to the Holders hereunder.
4. Amendments and Waivers. This Agreement may be amended and the
Company may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if the Company shall have obtained the
written consent to such amendment, action or omission to act, of the holder or
holders of more than 50% of the shares of Registrable Securities. Each holder of
any Registrable Securities at the time or thereafter outstanding shall be bound
by any consent authorized by this Section 4, whether or not such Registrable
Securities shall have been marked to indicate such consent.
5. Nominees for Beneficial Owners. In the event that any Registrable
Securities are held by a nominee for the beneficial owner thereof, the
beneficial owner thereof may, at its election, be treated as the holder of such
Registrable Securities for purposes of any request or other action by any holder
or holders of Registrable Securities pursuant to this Agreement or any
determination of any number or percentage of shares of Registrable Securities
held by any holder or holders of Registrable Securities contemplated by this
Agreement. If the beneficial owner of any Registrable Securities so elects, the
Company may require assurances reasonably satisfactory to it of such owner's
beneficial ownership of such Registrable Securities.
6. Notices. Except as otherwise provided in this Agreement, all
communications provided for hereunder shall be in writing and either hand
delivered or sent by prepaid commercial courier, telecopy or first-class
registered or certified mail, postage prepaid, and addressed
if to a Holder: To the Address of the Holder then reflected on the
books of the Company
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if to the Company: Performance Health Technologies, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address the Holder or the Company shall have given notice to
other. Notices sent by commercial courier services for next day delivery shall
be deemed given and received the day after they are sent, notices sent by
telecopy shall be deemed given and received the day they are sent, and notices
sent by mail shall be deemed given and received five (5) days after being mailed
as aforesaid.
7. Assignment. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the Holders and the Company and their
respective successors and permitted assigns. In addition, and whether or not any
express assignment shall have been made, the provisions of this Agreement which
are for the benefit of the Holders shall also be for the benefit of and
enforceable by any subsequent holder of any Registrable Securities, provided,
that the transferee or assignee of such rights assumes the obligations of such
Holder under this Agreement by a written agreement reasonably acceptable to the
Company.
8. Descriptive Headings. The descriptive headings of the several
sections and paragraphs of this Agreement are inserted for reference only and
shall not limit or otherwise affect the meaning hereof.
9. Governing Law. This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws of
the State of New York without reference to the principles of conflicts of laws.
IN WITNESS WHEREOF, the Company has executed this Agreement effective
as of the day and year first written above.
THE COMPANY:
PERFORMANCE HEALTH TECHNOLOGIES, INC.
By:______________________________________
Marc. ▇. ▇▇▇▇▇▇▇▇▇
President & CEO
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