Document:

WWW.EXFILE.COM -- PERFORMANCE HEALTH -- 16029 -- EXHIBIT 10-128 TO FORM 10-Q

    EXHIBIT 10.128

      

       

      AMENDMENT NO. 1 TO SELLING
AGREEMENT

       

      

      

      THIS
AMENDMENT NO. 1 TO SELLING AGREEMENT (this “Amendment”) is dated as of
June 25, 2008, and effective as of May 30, 2008, by and among Performance Health
Technologies, Inc., a Delaware corporation located at 427 River View Plaza,
Trenton, NJ  08611 (the “Seller”), and Dawson James
Securities, Inc., a Florida corporation located at 925 S. Federal Highway, 6th
Floor, Boca Raton, FL 33432 (the “Selling Agent”).

       

      WHEREAS,
the parties entered into that certain Selling Agreement, dated January 24, 2008,
by and among the Seller and Selling Agent, a copy of which is attached hereto as
Exhibit A (the
“Agreement”).

       

      WHEREAS,
the Seller and the Selling Agent wish to amend certain provisions of the
Agreement as set forth herein;

       

      NOW,
THEREFORE, for and in consideration of the mutual promises and covenants other
agreements contained in this Amendment, the Seller and the Selling Agent hereby
agree to amend the Agreement as follows:

       

      1.   Defined
Terms; Conflicting Documents.  All capitalized terms used but
not defined herein shall have the meaning set forth in the
Agreement.  In the event of any conflict between the Agreement and
this Amendment, this Amendment shall prevail and govern.

       

      2.
 Amendment
to the Introductory Paragraph.  The first sentence of the
Introductory Paragraph of the Agreement is hereby deleted in its entirety and
replaced with the following sentence:

       

      “PERFORMANCE
HEALTH TECHNOLOGIES, INC., a Delaware corporation (the “Seller”), proposes to
offer and sell (the “Offering”), to selected investors, upon the terms set forth
herein and in the Subscription Agreement and the Confidential Private Placement
Memorandum for the Offering (which collectively, together with the attachments
and exhibits thereto, is referred to as the “Offering Document”), up to
$3,000,000 worth of units (the “Units”), as such Units are described in the
Offering Document (the Units being offered, including the securities underlying
such Units, are sometimes referred to herein as the “Offered
Securities”).”

       

      3. 
Amendment
to Section 1.1.  Section 1.1 of the Agreement is hereby amended
to extend the term of the Agreement to September 30, 2008 by deleting the words
“May 31, 2008” therein and replacing them with the words “September 30,
2008.”

      
        
          
             

             

          

           

        

        
          1

          
            

          

        

        
           

        

      

      4. 
Amendment
to Section 1.8.  The first sentence of Section 1.8 of the
Agreement is hereby deleted in its entirety and replaced with the following
sentence:

       

      “1.8           Upon
the Closing of the sale of the Offered Securities, the Seller will issue to the
Selling Agent warrants to purchase that number of shares of common stock of the
Seller that is equal to ten percent (10%) of the number of shares of common
stock of the Seller issuable upon conversion of all of the Notes (as such term
is defined in Exhibit
A hereto) sold by Selling Agent, assuming all of the Notes are converted
into shares of common stock of the Seller as of the Closing date at a purchase
price equal to the Conversion Price (as that term is defined in the final
agreements relating to the Offered Securities) calculated as of such Closing
date (the “Warrant Price”).”

       

      5. 
Amendment
to Exhibit A.  Exhibit A of the
Agreement is hereby amended such that the term “Offering Size” is increased from
$2,500,000 to $3,000,000 and the number of Units set forth next to the section
entitled “Securities Offered” is increased from 2,500 to 3,000.  Exhibit A may be
changed from time to time by mutual agreement of Seller and Selling Agent until
such time as the final Offering Document is complete, at which time the Offering
Document shall govern the terms of the Offering.

       

      6. 
Ratification. Except as specifically
herein amended and modified, all terms and conditions of the Agreement remain
unchanged and in full force and effect.

       

      7.
 Incorporation
of Changes. The parties hereto
covenant and agree that the amendments contemplated in this Amendment shall be
deemed to be incorporated by reference into and made a part of the
Agreement.

       

      [Signature Page
Follows]

      
        
          
             

             

          

           

        

        
          2

          
            

          

        

        
           

        

      

      SIGNATURE PAGE TO AMENDMENT
NO. 1 TO SELLING AGREEMENT

      

      

      Please
acknowledge your acceptance of the foregoing Amendment by signing and returning
a copy to the undersigned whereupon it shall become a binding agreement between
us.

      

      

      

      
        	
                PERFORMANCE
      HEALTH TECHNOLOGIES, INC.

              
	 
	
                By:

              	 
      
	 
      	
                Name:

              
	 
      	
                Title:

              
	 
	
                DAWSON
      JAMES SECURITIES, INC.

              
	 
	
                By:

              	 
      
	 
      	
                Name:

              
	 
      	
                Title:

              

      

      
        
          
             

             

          

           

        

        
          3

          
            

          

        

        
           

        

      

      Exhibit
A

      

      Selling
AgreementWWW.EXFILE.COM -- PERFORMANCE HEALTH -- 16029 -- EXHIBIT 10-129 TO FORM 10-Q

    EXHIBIT
10.129

     

    
 

    SUBSCRIPTION AGREEMENT AND
INVESTOR QUESTIONNAIRE

    

    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 units up to an aggregate amount of $350,000 (the
"Units"), in a private offering (the “Offering”) with each Unit, having a
purchase price of $1,000, consisting of (i) an unsecured non-convertible
promissory note in the principal amount of $1,000 (collectively referred to
herein as the “Notes”) and (ii) 3,000 warrants each to purchase one share of PHT
common stock with an exercise price of $0.30 per share (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 July 31, 2008 as determined by PHT unless extended
by PHT and Dawson James Securities for up to two additional 30-day periods (the
"Closing Date").

    

    2.2           Items to be Delivered by the
Investor to PHT.  The following shall be delivered by the
Investor to PHT on the Closing Date:

    

    
      	
               
      

            	
              (a)

            	
              this
      Agreement executed by the Investor;
and

            

    

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    
      	
              (b)  

            	
              the
      purchase price for the Units by wire transfer to the following
      account:

            

    

    

    Performance
Health Technologies, Inc.

    Atlantic
Central Bankers Bank:  Camp Hill, PA

    ABA#
031301752

    Account#
220146

    Further Credit
To:

    Hopewell
Valley Community Bank

    ABA#
031207827

    Final Credit
To:

    Performance
Health Technologies, Inc.

    Account#
2000024758

    

    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 in the form attached hereto as Exhibits A
and B.

    

    
      3.  Representations and
Warranties of PHT

    

    

               PHT
hereby represents and warrants to the Investor as follows:

     

    3.1           Corporate Existence and
Power.  PHT is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Delaware.  PHT has all corporate power and all material governmental
permits required to carry on its business as now conducted.

    

    3.2           Corporate Authorization;
Enforceability.  The execution, delivery and performance by PHT
of this Agreement, the Notes and the Warrants 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 or the Warrants.  This Agreement has been, and
the Notes and Warrants will be, duly executed and delivered by
PHT.  This Agreement constitutes the valid and binding agreement of
PHT, enforceable against PHT in accordance with its terms, except to the extent
that its enforceability may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity.

    

                   
3.3           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
Warrants.  The Notes and Warrants included in the Units and
common stock issuable upon exercise of the Warrants (the “Warrant Shares”), when
issued and delivered in accordance with the terms of this Agreement (and the
terms of the Notes or Warrants, as the case 

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    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 Units 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 Units as contemplated by
this Agreement.

    

    4. 
Representations
and Warranties of the Investor

    

               The
Investor hereby represents and warrants to PHT as follows:

     

    4.1           Organization and Good
Standing; Power and Authority. Any Investor that is not a natural person
(a) is an organization that is duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization, and (b) has all
requisite 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 Investor that is not a natural
person.

     

    4.4           Investment
Representation.

     

    
      	
               
      

            	
              (a)

            	
              The
      Investor has received and reviewed the following (the “PHT
      Documents”):

            

    

    

    
      	
              1.  

            	
              Letter
      dated May 19, 2008, describing terms of the Offering and certain risk
      factors;

            

    

    

    
      	
              2.  

            	
              This
      Agreement and the form of Note and Warrants attached hereto;
      and

            

    

    

    
      	
              3.  

            	
              PHT’s
      Form 10-KSB for the year ended December 31,
  2007.

            

    

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (b)

            	
              The
      Investor or Investor's designated representatives have concluded a
      satisfactory due diligence investigation of PHT and have had an
      opportunity to review the PHT Documents and to have all of their questions
      related thereto satisfactorily
answered.

            

    

    

    
      	
               
      

            	
              (c)

            	
              The
      Investor acknowledges that the Notes and Warrants included in the Units
      (and Warrant 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 Warrant
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 Units (and Warrant Shares) for investment
      purposes only without intent to distribute the same, and acknowledges that
      the Units (and Warrant Shares) have not been registered under the
      Securities Act and applicable state or other securities laws, and
      accordingly, constitute "restricted securities" for purposes of the
      Securities Act and such state or other securities
  laws.

            

    

     

    
      
        	
                 
      

              	
                (h

              	The Investor acknowledges that it will not be
      able to transfer the Units (and Warrant Shares) except upon compliance
      with the registration requirements of the Securities Act and applicable
      state or other securities laws or exemptions
  therefrom.

      

       

    

    
      	
               
      

            	
              (i)

            	
              RELEASE
      OF DAWSON JAMES SECURITIES LIABILITY.  In order to induce Dawson
      James Securities to make the introduction of the Investor to PHT and in
      view of the investment by the Investor, the Investor does hereby
      IRREVOCABLY AND UNCONDITIONALLY RELEASE, REMISE AND FOREVER DISCHARGE
      Dawson James Securities and its affiliates and each and any 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, claims and demands
      of any kind whatsoever, in law or equity, whether known or unknown,
      suspected or unsuspected, fixed or contingent, apparent or concealed
      (collectively a “Claim”), which the Investor, the Investor’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 or thing whatsoever existing, arising or occurring, directly or
      indirectly, out of the Offering or the Investor’s
    investment.

            

    

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (j)

            	
              The
      certificates and/or instruments evidencing the Notes and Warrants included
      in the Units (and Warrant Shares) will contain the following
      legend:

            

    

    

    “THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”).  THE SECURITIES MAY
NOT BE SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR AN OPINION OF COUNSEL IN FORM,
SUBSTANCE AND SCOPE CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE TRANSACTIONS
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR UNLESS SOLD PURSUANT TO RULE
144 UNDER SAID ACT.”

     

    
      	
               
      

            	
              (k)

            	
              All
      of the written information pertaining to the Investor which the Investor
      has heretofore furnished to PHT, and all information pertaining to the
      Investor which is set forth in this Agreement and the Investor
      Questionnaire attached hereto, is correct and complete as of the date
      hereof and, if there should be any material change in such information
      prior to PHT's acceptance of this Agreement, the Investor shall promptly
      furnish such revised or corrected information to PHT. Investor otherwise
      meets any special suitability standards applicable to the Investor's state
      of residence.

            

    

    

    
      	
               
      

            	
              (l)

            	
              The
      Investor acknowledges that it has received a subscription package, a copy
      of which is attached hereto, containing information describing the
      Offering, setting forth the Risk Factors the Investor must consider prior
      to making an investment decision, use of proceeds and other matters
      relevant to the Offering.

            

    

    

    5.  Registration
Rights

    

    5.1           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 Warrant Shares
held by the Investor requested to be registered (the “Registrable Securities”);
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 to
materially and adversely 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 Warrant 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 5.1
is referred to herein as the "Piggyback Registration".

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    

    5.2          
Obligations of
Investor.  It shall be a condition precedent to the obligation
of PHT to register any Warrant Shares pursuant to this Section 5 that the
Investor shall furnish to PHT such information regarding the Warrant Shares held
and the intended method of disposition thereof and other information concerning
the Investor as PHT shall reasonably request and as 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 Registrable
Securities until PHT advises the Investor that such registration statement has
been amended or supplemented.

    

    5.3           Registration
Proceedings.  Whenever PHT is required by the provisions of
this Section 5 to effect the registration of the Registrable Securities 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
      Investor and 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 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.

            

    

    

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    5.4           Expenses.  With
respect to the inclusion of the Registrable Securities 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.

    

    5.5           Indemnification of the
Investor.  Subject to the conditions set forth below, in
connection with any registration of the Warrant 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 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

            

    

    

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    
      	
               
      

            	
               (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 5.5, 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.

            

    

    

    5.6           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 losses, liabilities, claims, damages
and expenses as are indemnified against by PHT under Section 5.5 (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 5.5.  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.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    5.7           Contribution.  If
the indemnification provided for in Sections 5.5 and 5.6 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.

    

    5.8           Assignment of Registration
Rights.  The right to have PHT register Registrable Securities
pursuant to this Agreement shall be automatically assignable to any transferee
of all or any portion of the Registrable Securities 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 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.

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    “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 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.

            

    

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    6.3           Costs and
Expenses.  PHT and the Investor shall bear their own costs and
expenses in connection with this transaction.

    

    6.4           Survival.  All
agreements, covenants, representations and warranties made by PHT or by the
Investor herein shall survive the execution and delivery of this
Agreement.

    

    6.5           Notices.  Except
as otherwise provided herein, all notices, requests, demands, consents,
instructions or other communications to or upon PHT, or the Investor under this
Agreement shall be in writing and facsimiled, mailed or delivered to each party
at the facsimile number or its address as provided below (or to such other
facsimile number or address as the recipient of any notice shall have notified
the other in writing).  All such notices and communications shall be
effective (a) when sent by Federal Express or other overnight service of
recognized standing, on the Business Day following the deposit with such
service; (b) when mailed, by registered or certified mail, first class postage
prepaid and addressed as aforesaid 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.

    427 River
View Plaza

    Trenton,
NJ  08611

    Attn.:  Robert
Prunetti, President and CEO

    Fax:  (609)
656-0869

    

    To the
Investor at the Address Set Forth on the Investor Questionnaire.

     

    

    6.6           Nonwaiver.  No
failure or delay on any party in exercising any right hereunder shall operate as
a waiver thereof or of any other right nor shall any single or partial exercise
of any such right preclude any other further exercise thereof or of any other
right.

    

    6.7           Amendments and
Waivers.  This Agreement may not be amended or modified, nor
may any of its terms be waived, except by written instruments signed by all of
the parties.  Such waiver or consent under any provision hereof shall
be effective only in the specific instances for the purpose for which
given.

    

    6.8           Assignments.  This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.

    

    6.9           Partial
Invalidity.  If at any time any provision of this Agreement is
or becomes illegal, invalid or unenforceable in any respect under the law of any
jurisdiction, neither the legality, validity or enforceability of the remaining
provisions of this Agreement nor the legality, validity or enforceability of
such provision under the law of any other jurisdiction shall in any way be
affected or impaired thereby.

    

    6.10         Headings.  Headings
in this Agreement are for convenience of reference only and are not part of the
substance hereof or thereof.

    

    6.11         Entire
Agreement.  This Agreement constitutes and contains the entire
agreement of the parties hereto and supersedes any and all prior agreements,
negotiations, correspondence, understandings and communications among the
parties, whether written or oral, respecting the subject matter
hereof.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    6.12         Governing
Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without reference to conflicts
of law rules.

    

    6.13       
Jurisdiction.  Any
suit, action or proceeding seeking to enforce any provision of, or based on any
matter arising out of or in connection with, this Agreement or the transactions
contemplated hereby may be brought in the courts of the State of New York
located in the County of New York and the federal courts of the United States of
America located in such State and County.  Each of the parties (a)
consents to the exclusive jurisdiction of such courts (and of the appropriate
appellate courts therefrom) in any such suit, action or proceeding, (b)
irrevocably waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of the venue of any such suit, action
or proceeding in any such court or that any such suit, action or proceeding
which is brought in any such court has been brought in an 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 6.5 will be deemed effective service of process on such
party.

    

    6.14         JURY
TRIAL.  EACH
PARTY HERETO, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY AS TO ANY
ISSUE.

     

    6.15         Counterparts.  This
Agreement may be executed in several counterparts, each of which shall be deemed
an original, but such counterparts shall together constitute but one and the
same agreement.

    

    

    

    [The
remainder of this page is intentionally left blank.]

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    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:______________________,
2008

     

    

     

    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:_____________________,
2008

    

    Accepted:

     

    
      
        	 	PERFORMANCE
      HEALTH TECHNOLOGIES, INC.	 
	 	 	 	 
	
                Date
      ______________________2008

              	
                By:
      

              	/s/ 	 
	 	 	Name 	 
	 	 	Title 	 
	 	 	 	 

      

    

     

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    ACCREDITED
INVESTOR QUESTIONNAIRE

    

    The
Investor understands that:

    

     •  In
making a decision to invest in the Offering, the Investor must rely on its own
examination of PHT and the terms of the Offering, including the merits and risks
involved.

     

     •  The
Offering has not been recommended or approved by any federal or state securities
commission or regulatory authority.

     

     •  The
Investor should consult its own competent counsel, including, without
limitation, legal counsel, accountant, or business advisor as to legal, tax,
financial, and related matters concerning a purchase of the Units.

    

    An
investment in the Units involves a high degree of risk.  Among other
factors, Investors should consider the following risk factors, which are
included in the PHT Documents.  Investors should carefully review the
entire PHT Documents, however, for a more complete description of PHT and the
risks involved in an investment in our Units.

    

    Risks Concerning the Units
and the Offering

    

    AN
INVESTMENT IN PHT INVOLVES AN EXTREMELY HIGH DEGREE OF RISK AND SHOULD ONLY BE
MADE IF THE INVESTOR CAN AFFORD A COMPLETE LOSS OF INVESTMENT.  EACH
INVESTOR UNDERSTANDS THAT:

    

    This is an illiquid investment and
there is no current trading market for our securities.  There
is no established trading market for the Notes or our common stock or any of our
securities and no assumption should be made that one will ever
exist.  The Company has been a public reporting company under the 1934
Act since July 13, 2007.  The Company’s common stock is presently not
traded on any market or securities exchange. The Company is in the process of
filing, through a market maker, an information statement pursuant to SEC Rule
15c211 with the Financial Industry Regulatory Authority (“FINRA”) in order to
obtain approval for quotation of the Company’s common stock on the
Over-the-Counter Bulletin Board.  There is no assurance that FINRA
will approve our application.  Even if a trading market is
established, there can be no assurance that it will be active. Since our common
stock has not traded on any public market before, we cannot predict the extent
to which an active public market for our common stock may develop. Absence of an active
trading market could adversely affect our stockholders’ ability to sell our
common stock in short time periods, or possibly at all. Our common stock is
likely to experience in the future, significant price and volume fluctuations
that could adversely affect the market price of our common stock without regard
to our operating performance. In addition, we believe that factors such as
fluctuations in our financial results and changes in the overall economy or the
condition of the financial markets could cause the price of our common stock to
fluctuate substantially.  For these and other reasons, there is
substantial risk of non-payment of the Notes. The common stock
issuable upon exercise of the Warrants will be “restricted
securities.”  As restricted securities they may be sold only upon
registration under the Securities Act and applicable state or other
jurisdictions’ securities laws, or upon reliance on an exemption from the
registration requirements.  Offerees should consider purchasing the
Units only as a long-term investment.  Offerees may not be able to
promptly liquidate their investment at a reasonable price, or for any price, in
the event of a personal financial emergency or otherwise.

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    We may not be able to obtain the
significant financing that we need to continue to operate and any additional
financing may be on terms adverse to your interests.  We have
recently entered into a number of financing transactions. We are continuing to
seek other financing initiatives. We need to raise additional capital to meet
our working capital needs, for the repayment of debt and for capital
expenditures. Such capital is expected to come from the sale of our debt and/or
equity securities through private placement offerings and/or the sale of common
stock.

    

    We
believe that if we raise approximately $7.7 million in debt and equity
financings we would have sufficient funds to meet our needs for working capital
($1.0 million), repayment of debt (approximately $5.2 million expected to mature
from January 1, 2008 to December 31, 2008), accounts payable and accrued
expenses (approximately $1.0 million) and marketing and development
(approximately $0.5 million) over the next 12 months.  As of December
31, 2007, we had cash balances of approximately $36,000.

    

    No
assurance can be given that we will be successful in completing any financings
at the minimum level necessary to fund our working capital, debt repayment or
other expenses, or at all. If we are unsuccessful in completing financings, we
will not be able to meet our working capital, debt repayment or other capital
needs or execute our business plan. In such case we will assess all available
alternatives including a sale of our assets or merger, the suspension of
operations and possibly liquidation, auction, bankruptcy, or other
measures.  For these and other reasons, there is
substantial risk of non-payment of the Notes.

    

    We have had limited product sales, a
history of operating losses and have been unprofitable since
inception.  We have had limited sales of our products to date.
We incurred net losses of approximately $5.3 million during the year ended
December 31, 2006 and approximately $5.4 million for the year ended December 31,
2007. We expect to incur substantial additional operating losses in the future.
During the year ended December 31, 2006 and year ended December 31, 2007, we
generated revenues from product sales in the amounts of $5,278 and $5,309,
respectively. We cannot assure you that we will continue to generate revenues
from operations or achieve profitability in the near future or at
all.  For these and other reasons, there is
substantial risk of non-payment of the Notes.

    

    We have a working capital loss, which
means that our current assts were not sufficient to satisfy our current
liabilities on December 31, 2007.  We had a working capital
deficit of $8,398,048 at December 31, 2007, which means that our current
liabilities exceeded our current assets on December 31, 2007 by
$8,398,048.  Current assets are assets that are expected to be
converted to cash or otherwise utilized within one year and, therefore, may be
used to pay current liabilities as they become due.  Or working
capital deficit means that our current assets on December 31, 2007 were not
sufficient to satisfy all of our current liabilities on that
date.  For these and other reasons, there is
substantial risk of non-payment of the Notes.

    

    There is no minimum amount of Units;
consummation of the Offering is in multiple closings.  There is
no minimum amount of Units that must be subscribed for in order for us to close
on any Units.  We intend to use the proceeds we receive from any Unit
subscriptions we accept, when and if received, irrespective of the amount of
Unit subscriptions we receive.  This offering of Units will be subject
to multiple closings, if and when we receive any subscriptions.  All
subscriptions we receive and accept will be treated exactly the same,
irrespective of whether we receive certain subscriptions earlier and a closing
was effectuated with respect thereto in advance of our receipt of other
subscriptions in this Offering.  Accordingly, investors who purchase
Units prior to other investors

    
      
         

      

      
        15

        
          

        

      

      
         

    

    may be
more at risk, depending in part, on the aggregate amount of Units ultimately
subscribed for.  Once we accept a subscription, irrespective of the
ultimate amount of proceeds raised in this Offering, the investor may not ask
for a return of such investment.  For these and other reasons, there is
substantial risk of non-payment of the Notes.

    

    The Notes are unsecured.  We will not
pledge any assets to secure the payment of the Notes.  The Notes are
general unsecured obligations of PHT.  The terms of the Notes allow us
to incur indebtedness and obligations that may be secured by our
assets.  Any such secured indebtedness or other obligation will have a
claim to our assets prior to the claims of any holder of a Note.  All
general unsecured claims against us will be equal to the claims of any holder of
a Note.

    

    There may be no remaining proceeds
for stockholders in the event of the dissolution of PHT.  In
the event of our dissolution, the proceeds from the liquidation of our assets,
if any, will be first used to satisfy the claims of creditors.  Only
after all outstanding debts are satisfied will the remaining proceeds, if any,
be distributed to our stockholders.  Accordingly, the ability of any
investor to recover all or any portion of an investment in our equity securities
under such circumstances will depend on the amount of funds so realized and
claims to be satisfied therefrom.

    

    No advice is given as to the tax
aspects of the Units.  Offerees are advised that we are giving
no advice as to the tax implications of an investment in the
Units.  Offerees should obtain their own tax advice prior to making a
decision to purchase a Unit.

    

    The interest rate of the Notes and
the exercise price of the Warrants have been arbitrarily set by the Board of
Directors.  The interest rate of the Notes and the exercise
price of the Warrants have been determined by our Board of Directors, based, in
part, on the cost of the Offering, our prospects in the industry, an assessment
of our financial condition and other factors deemed relevant by the
Board.  The interest rate of the Notes and the exercise price of the
Warrants, however, are not based on our historical earnings, the book value of
our common stock, or any other objective criteria and should not be deemed to be
an indication of the value of our common stock

    

    THE
INVESTOR HAS BEEN ADVISED BY PHT THAT AN INVESTMENT IN PHT WILL INVOLVE AN
EXTREMELY HIGH DEGREE OF RISK AND SHOULD ONLY BE MADE IF INVESTOR CAN AFFORD A
COMPLETE LOSS OF ITS INVESTMENT.

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    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.  

            	
              Date(s)
      of
      Birth                                                                                                                                

            

    

    

    
      	
              5.  

            	
              Employment
      Position(s)

            

    

    

    
      	
              6.  

            	
              State(s)
      from which driver’s license(s)
issued

            

    

    

    
      	
              7.  

            	
              State(s)
      in which registered to vote

            

    

    

    
      	
              8.  

            	
              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 investment in
      PHT exceeds $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
      income2 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 IRA or Keogh retirement plans,
      alimony payments and any amount by which income from long-term capital
      gains has been reduced in arriving at adjusted gross
    income.

                

        

      

    

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    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     ___      IRA    ___   
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
      securities 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:

            	 	 

    

    

    
      	
              7.

            	
              Taxpayer
      Identification Number:

            	 	 

    

    

    
      	
              8.

            	
              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, 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.

            

    

    

    
      	
               
      

            	
               ____
      (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.

            

    

    

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    
      	
               
      

            	
               ____
      (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 PHT’s
      securities, 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.

            

    

    

    
      	
              9.

            	
              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 purchase of Units and authorizing the person(s)
      signing this Investor Questionnaire.  All the documents must be
      certified by the Secretary or Assistant 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.

            

    

    

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    
       C.         
ACKNOWLEDGEMENTS AND REPRESENTATIONS
TO BE MADE BY ALL INVESTORS (Every Investor must complete this Part
C)

    

    

               Investor
understands that PHT will be relying on the accuracy and completeness of the
representations made above as well as Investor’s responses to the questions
contained in this Investor Questionnaire.  Investor understands that a
false representation may constitute a violation of law, and that any person who
suffers damage as a result of a false representation may have a claim for
damages as a result of such false representation.

    

               ALL
INFORMATION CONTAINED IN THIS QUESTIONNAIRE WILL BE TREATED
CONFIDENTIALLY.  However, Investor agrees that PHT may present this
Investor Questionnaire to such parties as PHT deems appropriate if called upon
to establish that the purchase of Units by the Investor is exempt from
registration under the Securities Act or meets the requirements of applicable
state or other securities laws.

    

               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 subscribe for and purchase the
      Units.

               

            
	
              _______

            	
              c)

            	
              The
      Investor Questionnaire has been duly and validly authorized, executed, and
      delivered by Investor and constitutes the valid, binding, and enforceable
      agreement of Investor.

               

            
	
              _______

            	
              d)

            	
              Investor
      has reviewed the PHT Documents and has received all information Investor
      has deemed relevant and has had all of Investor’s questions answered with
      respect to the purchase of the Units and PHT and has made such independent
      investigation into PHT as Investor has deemed necessary.

               

            
	
              _______

            	
              e)

            	
              The
      purchase of the Units is made solely for the account of Investor with a
      view to and for investment and not with a view to or for distribution,
      assignment, participation, or resale.  Investor has no contract,
      undertaking, agreement, or arrangement with any person to sell, transfer,
      or pledge the Units, or any interest therein.  There are
      substantial restrictions on the transferability of the
      Units.  Investor is prepared to bear the economic risk involved
      in the purchase of the Units for an indefinite term.

               

            
	
              _______

            	
              f)

            	
              Investor
      acknowledges there is a substantial economic risk with respect to
      Investor’s investment in the Units 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 to purchase the Units.

               

            

    

     

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    
      	
              _______

            	
              g)

            	
              Investor
      did not learn about the offer to purchase 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 affiliates and each and any of
      their respective officers, directors, shareholders, “controlling persons”,
      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 the
      Subscription Agreement or 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 sale of the Units.

               

            
	
              _______

            	
              j)

            	
              Investor
      will provide such further information as may be requested by PHT or its
      counsel to verify the information contained herein.

               

            
	
              _______

            	
              k)

            	
              In
      evaluating the suitability of Investor’s decision to purchase the Units,
      Investor has relied solely upon the information provided in the PHT
      Documents and the exhibits and schedules attached hereto and Investor’s
      own independent investigation of PHT, and acknowledges that no
      representations (oral or written) have been made to the Investor with
      respect thereto.

               

            
	
              _______

            	
              l)

            	
              In
      making a decision to invest in the Offering, the Investor must rely on its
      own examination of PHT and the terms of the Offering, including the merits
      and risks involved.

               

            
	
              _______

            	
              m)

            	
              The
      Offering has not been recommended or approved by any federal, state or
      other securities commission or regulatory authority.

               

            
	
              _______

            	
              n)

            	
              The
      Investor should consult its own competent counsel, including, without
      limitation, legal counsel, accountant, or business advisor as to legal,
      tax, financial, and related matters concerning a purchase of the
      Units.

               

            
	
              _______

            	
              o)

            	
              The
      Investor acknowledges that there is no public market for PHT’s common
      stock and no assumption should be made that one will ever exist; the
      common stock underlying the warrants are and will be “restricted
      securities”; as restricted securities, they may be sold only upon
      registration under the Securities Act and applicable state or other
      securities laws, or upon reliance on an exemption from such registration
      requirements.  Investors should consider purchasing the Units
      only as a long-term investment.  Investors may not be able to
      promptly liquidate at a reasonable price, or for any price, in the event
      of a personal financial emergency or otherwise.

               

            

    

     

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    
      	
              _______

            	
              p)

            	
              The
      Investor acknowledges that:  In the future, PHT’s financial
      needs may be such that it is forced to offer for sale its securities on
      terms more favorable than the terms offered to investors in this
      Offering.  If such an event were to occur, investors purchasing
      Units in this Offering would have the right to participate in such future
      offering on the terms and conditions of such future
      offering.  The ownership interest percentages of Investors who
      do not wish to participate in such future offering will be diluted to the
      extent of the securities sold by us in the future offering.

               

            
	
              _______

            	
              q)

            	
              The
      Investor acknowledges that:  If the Investor purchases in this
      Offering, the Investor will pay a price that was not established in a
      competitive market but which has been determined by PHT’s management,
      based, in part, on the price paid by our prior investors, our prospects in
      our industry, an assessment of our financial condition and other factors
      deemed relevant by our Board of Directors.  The price, however,
      is not based on our historical earnings, the book value of PHT, or any
      other objective criteria.  The offering price should not be
      deemed an indication of our value.  An Investor should consider
      in making an investment in our securities that we have insufficient assets
      to meet our obligations and we have a working capital
deficit.

               

            
	
               ______

            	
              r)

            	
              WAIVER
      OF DAWSON JAMES SECURITIES LIABILITY.  In order to induce Dawson
      James Securities to make the introduction of the Investor to PHT and in
      view of the investment by the Investor, the Investor does hereby
      IRREVOCABLY AND UNCONDITIONALLY RELEASE, REMISE AND FOREVER DISCHARGE
      Dawson James Securities and its affiliates and each and any 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, claims and demands
      of any kind whatsoever, in law or equity, whether known or unknown,
      suspected or unsuspected, fixed or contingent, apparent or concealed
      (collectively a “Claim”), which the Investor, the Investor’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 or thing whatsoever existing, arising or occurring, directly or
      indirectly, out of the Investor’s investment.

               

            
	
              _______

            	
              s)

            	
              The
      Investor acknowledges that the Units are being sold on a “best efforts”
      basis and no assurance can be given that all of the Units being offered
      will be sold.  PHT is continuing to seek other financing
      initiatives to meet its working capital needs.  PHT’s operating
      plan seeks to minimize its capital requirements, but further
      commercialization of its products will require additional capital. PHT
      expects that product development and operating and production expenses
      will increase significantly as it continues to develop, produce and sell
      products. The Investor further acknowledges that no assurance can be given
      that PHT will be successful in completing this Offering or any other
      financings at the minimum level necessary to fund its capital
      requirements, current operations or at all. If PHT is unsuccessful in
      completing these financings at such minimum level, PHT will not be able to
      fund its capital requirements or current expenses. If PHT is unsuccessful
      in completing these financings at or near the maximum level or an
      additional financing, PHT will not be able to pursue its business
      strategy.  Additional financing may not be available on terms
      favorable to PHT or at all.

            

    

    

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    

    If
Investor is an individual:

    

    

    ________________________________                                    _________________________________

    Signature
of
Investor                                                                        Print
Name of Investor

    

    

    ________________________________                                    _________________________________

    Signature
of Spouse, if
applicable                                                   Print
Name of Spouse, if applicable

     

    
 

    Date:
_________________, 2008

    

    

    If
Investor is an entity:

    

    

    ________________________________                                    _________________________________

    Signature
of
Officer,                                                                           Print
Name and Title of Officer,

    Trustee
or Partner, as
applicable                                                     Trustee,
or Partner, as applicable

     

    
 

    Date:
_________________, 2008

    

    

    

    

    
      
         

      

      
        23

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00146-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00146-of-00352.parquet"}]]