Exhibit 10.3
  
REGISTRATION RIGHTS AGREEMENT
 
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made effective as of
November 19, 2009, by and between Patient Safety Technologies, Inc., a Delaware
corporation (the "Company") and Cardinal Health, Inc. (the “Investor").
 
WHEREAS, the Company has agreed to issue to the Investor, and the Investor has
agreed to acquire from the Company, Warrants to purchase Common Stock of the
Company (the "Warrant Shares"), all upon the terms and conditions set forth in
that certain Warrant Purchase Agreement, dated on even date herewith, between
the Company and the Investor (the "Warrant Purchase Agreement"); and
 
WHEREAS, the terms of the Warrant Purchase Agreement provide that it shall be a
condition precedent to the closing of the transactions thereunder, for the
Company and the Investor to execute and deliver this Agreement.
 
NOW, THEREFORE, in consideration of the premises and mutual covenants contained
herein, the parties hereto hereby agree as follows:
 
1.           DEFINITIONS.  The following terms shall have the meanings provided
therefor below or elsewhere in this Agreement as described below:
 
"Board" shall mean the board of directors of the Company.
 
"Closing" and "Closing Date" shall have the meanings ascribed to such terms in
the Warrant Purchase Agreement.
 
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, and
all of the rules and regulations promulgated thereunder.
 
"Qualifying Holder" shall have the meaning ascribed thereto in Section 12
hereof.
 
"Registrable Shares" shall mean the Warrant Shares, provided, however, such term
shall not, after the Mandatory Registration Termination Date, include any of the
Warrant Shares that become or have become eligible for resale without
restriction (including without any requirement concerning the availability of
adequate current public information concerning the Company) pursuant to Rule
144.
 
"Rule 144" shall mean Rule 144 promulgated under the Securities Act and any
successor or substitute rule, law or provision.
 
"SEC" shall mean the Securities and Exchange Commission.
 
"Securities Act" shall mean the Securities Act of 1933, as amended, and all of
the rules and regulations promulgated thereunder.

 

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2.           EFFECTIVENESS; TERMINATION.  This Agreement shall become effective
and legally binding only if the Closing occurs.
 
3.           MANDATORY REGISTRATION.
 
(a)           If the Company is late in filing any SEC periodic report (after
taking into consideration any permitted extensions) for more than thirty (30)
days during the first twelve months following the Closing Date, then within
twenty (20) business days thereafter, the Company will prepare and file with the
SEC a registration statement on Form S-3, or if the Company is ineligible to use
Form S-3, then within thirty (30) business days thereafter, the Company will
prepare and file with the SEC a registration statement on Form S-1 (or successor
forms), for the purpose of registering under the Securities Act all of the
Registrable Shares for resale by, and for the account of, the Investor as the
selling stockholder thereunder (the "Registration Statement").  The Registration
Statement shall permit the Investor to offer and sell, on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act, any or all of
the Registrable Shares.  The Company agrees to use its commercially reasonable
efforts to cause the Registration Statement to become effective as soon as
practicable.
 
(b)           The Company shall be required to keep the Registration Statement
effective until such date that is the earlier of (such date is referred to
herein as the "Mandatory Registration Termination Date") (i) the date as of
which the Investor may sell all of the Registrable Shares without restriction
(including without any requirement concerning the availability of adequate
current public information concerning the Company) pursuant to Rule 144 assuming
a cashless exercise of the Warrant or (ii) the date when all of the Registrable
Shares registered thereunder shall have been sold.  Thereafter, the Company
shall be entitled to withdraw the Registration Statement and the Investor shall
have no further right to offer or sell any of the Registrable Shares pursuant to
the Registration Statement (or any prospectus relating thereto).
 
4.           "PIGGYBACK" REGISTRATION RIGHTS.
 
(a)           If, at any time prior to the Mandatory Registration Termination
Date, the Company proposes to register any of its Common Stock under the
Securities Act, whether as a result of a primary or secondary offering of Common
Stock or pursuant to registration rights granted to holders of other securities
of the Company (but excluding in all cases any registrations to be effected on
Forms S-4 or S-8 or other applicable successor forms), the Company shall, each
such time, give to the Investor holding Registrable Shares written notice of its
intent to do so.  Upon the written request of Investor given within ten (10)
days of such notice, the Company shall use its commercially reasonable efforts
to cause to be included in such registration the Registrable Shares of Investor,
to the extent requested to be registered; provided that (i) Investor agrees to
sell those of its Registrable Shares to be included in such registration in the
same manner and on the same terms and conditions as the other shares of Common
Stock which the Company proposes to register and (ii) if the registration is to
include shares of Common Stock to be sold for the account of the Company or any
party exercising demand registration rights pursuant to any other agreement with
the Company, the proposed managing underwriter does not advise the Company that
in its opinion the inclusion of Investor's Registrable Shares (without any
reduction in the number of shares to be sold for the account of the Company or
such party exercising demand registration rights) is likely to affect materially
and adversely the success of the offering or the price that would be received
for any shares of Common Stock offered, in which case the rights of Investor
shall be as provided in Section 4(b) hereof.

 
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(b)           If a registration pursuant to Section 4(a) hereof involves an
underwritten offering and the managing underwriter shall advise the Company in
writing that, in its opinion, the number of shares of Common Stock requested by
the Investor to be included in such registration is likely to affect materially
and adversely the success of the offering or the price that would be received
for any shares of Common Stock offered in such offering, then, notwithstanding
anything in Section 4(a) to the contrary, the Company shall be required to
include in such registration only the number of shares of Common Stock which the
Company is so advised can be sold in such offering as follows:  (i) first, the
number of shares of Common Stock proposed to be included in such registration
for the account of the Company and/or any stockholders of the Company (other
than the Investor) that have exercised demand registration rights, in accordance
with the priorities, if any, then existing among the Company and/or such
stockholders of the Company with registration rights (other than the Investor),
and (ii) second, the shares of Common Stock requested to be included in such
registration by all other stockholders of the Company who have piggyback
registration rights (including, without limitation, the Investor), pro rata
among such other stockholders (including, without limitation, the Investor) on
the basis of the number of shares of Common Stock that each requested to include
in such registration.
 
(c)           In connection with any registration triggering piggyback rights
hereunder, the Company shall not be required under Section 4 hereof or otherwise
to include the Registrable Shares of Investor unless Investor accepts and agrees
to the terms of such registration.
 
5.           OBLIGATIONS OF THE COMPANY.  In connection with the Company's
obligation under Sections 3 and 4 hereof (unless limited to one Section or the
other as indicated below) to file a Registration Statement with the SEC and to
use its commercially reasonable efforts to cause the Registration Statement to
become effective, the Company shall:
 
(a)           Prepare and file with the SEC the Registration Statement for the
resale of the Registrable Shares by, and for the account of, the Investor in
accordance with the intended methods of distribution thereof set forth in the
Registration Statement, and use its commercially reasonable efforts to cause the
Registration Statement to become effective as soon as practicable and remain
effective in accordance with Section 3 hereof if filed pursuant to Section 3;
provided that before filing with the SEC a Registration Statement or prospectus
or any amendments or supplements thereto under Section 3, the Company will
furnish to one counsel selected by the Investor copies of all such documents
proposed to be filed, which documents will be subject to the timely review and
comments of such counsel;
 
(b)           Subject to Section 11 hereof, if filed pursuant to Section 3,
prepare and file with the SEC such amendments and post-effective amendments to
the Registration Statement as may be necessary to keep the Registration
Statement continuously effective for the period specified in Section 3(b); cause
the related prospectus to be supplemented by any required prospectus supplement,
and as so supplemented to be filed pursuant to Rule 424 (or any successor rule)
under the Securities Act; and use its commercially reasonable efforts to comply
with the provisions of the Securities Act applicable to it with respect to the
disposition of all Registrable Shares covered by the Registration Statement
prior to the Mandatory Registration Termination Date in accordance with the
intended methods of distribution set forth in the Registration Statement;

 
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(c)           Give notice to the Investor (i) as promptly as practicable, when
any prospectus, prospectus supplement, Registration Statement or post-effective
amendment to the Registration Statement has been filed with the SEC (other than
any amendments or supplements solely to update the selling stockholder
information in the prospectus or any amendments caused by the filing of a report
under the Exchange Act) and, with respect to the Registration Statement or any
post-effective amendment, when the same has been declared effective, and (ii)
immediately, of the occurrence of any event described in Section 11 hereof in
accordance with the provisions thereof;
 
(d)           As promptly as practicable, deliver to Investor, without charge,
as many copies of the prospectus and any amendment or supplement thereto as
Investor may reasonably request; and the Company hereby consents (except during
any Suspension Period (as defined in Section 11 hereof)) to the use of such
prospectus and any amendment or supplement thereto by Investor in connection
with any offering and sale of the Registrable Shares covered by such prospectus
or any amendment or supplement thereto in the manner set forth therein;
 
(e)           Following the occurrence of an event described in Section 11(iv)
hereof, if filed pursuant to Section 3, promptly prepare an amendment to the
Registration Statement or amendment or supplement to the prospectus (and, when
completed, give notice (as provided in Section 5(c) hereof and provide a copy
thereof (as provided in Section 5(d) hereof to Investor) so that, as thereafter
delivered to the purchasers of such Registrable Shares, such prospectus will not
contain an untrue statement of a material fact or omit to state any fact
necessary to make the statements therein not misleading; provided that upon
notification by the Company of the occurrence of an event described in Section
11(iv) hereof, the Investor will not offer or sell Registrable Shares until the
Company has notified the Investor that it has prepared an amendment or
supplement to the Registration Statement or prospectus and delivered copies of
such amendment or supplement to the Investor (it being understood and agreed by
the Company that the foregoing proviso shall in no way diminish or otherwise
impair the Company's obligation to promptly prepare an amendment or supplement
as above provided in this Section 5(d) and deliver copies of same as above
provided in Section 5(b) hereof);
 
(f)           If filed pursuant to Section 3, use its commercially reasonable
efforts to register and qualify the Registrable Shares covered by the
Registration Statement under such other securities or Blue Sky laws of such
states as the Investor or the managing underwriters, if any, shall reasonably
request; provided that the Company shall not be required in connection therewith
or as a condition thereto to qualify to do business or to file a general consent
to service of process in any such states or jurisdictions;
 
(g)           Cause all Registrable Shares to be quoted on the Nasdaq Stock
Market Over-the-Counter Bulletin Board (the "OTCBB"), or such other securities
exchange on which similar securities issued by the Company are then listed, and
comply with all requirements of the OTCBB or such other securities exchange, as
applicable, with regard to the issuance of the Registrable Shares and the
listing thereof;

 
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(h)           Comply with all applicable rules and regulations of the SEC; and
 
(i)           Use its  commercially reasonable efforts to avoid the issuance of,
or, if issued, obtain the withdrawal of (i) any order stopping or suspending the
effectiveness of a Registration Statement, or (ii) any suspension of the
qualification (or exemption from qualification) of any of the Registrable Shares
for sale in any jurisdiction, at the earliest practicable moment.
 
6.           FURNISH INFORMATION.  It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Agreement that
the Investor shall furnish to the Company such information regarding it and the
securities held by it as the Company shall reasonably request and as shall be
required in order to effect any registration by the Company pursuant to this
Agreement.  Investor shall promptly notify the Company of any changes in the
information furnished to the Company.
 
7.           EXPENSES OF REGISTRATION.  All expenses incurred in connection with
the registration of the Registrable Shares pursuant to this Agreement (excluding
underwriting, brokerage and other selling commissions and discounts relating to
disposition of Registrable Shares by Investor, and stock transfer fees and, if
registration is pursuant to Section 4, fees and disbursements of Investor’s
counsel relating to dispositions of Registrable Shares by Investor), including
without limitation all registration and qualification and filing fees, printing
fees, fees and disbursements of counsel for the Company and, if registration is
pursuant to Section 3, fees and disbursements of Investor’s counsel not to
exceed $25,000, shall be borne by the Company.
 
8.           DELAY OF REGISTRATION.  The Investor shall not take any action to
restrain, enjoin or otherwise delay any registration as the result of any
controversy which might arise with respect to the interpretation or
implementation of this Agreement.
 

 
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9.           INDEMNIFICATION.
 
(a)           To the fullest extent permitted by law, the Company will,
notwithstanding any termination of this Agreement, indemnify and hold harmless
the Investor, any investment banking firm acting as an underwriter for the
Investor, any broker/dealer acting on behalf of the Investor and each officer
and director of  Investor, such underwriter, such broker/dealer and each person,
if any, who controls the Investor, such underwriter or broker/dealer within the
meaning of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which they may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon (i)
any untrue or alleged untrue statement of any material fact contained in the
Registration Statement, in any preliminary prospectus or final prospectus
relating thereto or in any amendments or supplements to the Registration
Statement or any such preliminary prospectus or final prospectus, (ii) the
omission or alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein not misleading, or
(iii) any violation or alleged violation by the Company of the Securities Act,
the Exchange Act or any state securities laws, or any rule or regulation
thereunder, in connection with the performance of its obligations hereunder; and
will reimburse Investor, such underwriter, broker/dealer or such officer,
director or controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the indemnity
agreement contained in this Section 9(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company (which consent shall
not be unreasonably withheld), nor shall the Company be liable in any such case
for any such loss, damage, liability or action to the extent, but only to the
extent, that it arises out of or is based upon (i) an untrue statement or
alleged untrue statement or omission of material fact contained in the
Registration Statement, any preliminary prospectus or final prospectus relating
thereto or any amendments or supplements to the Registration Statement or any
such preliminary prospectus or final prospectus, in reliance upon and in
conformity with written information regarding Investor furnished by Investor
expressly for use in the Registration Statement or any such preliminary
prospectus or final prospectus or (ii) an untrue statement or alleged untrue
statement or omission in the Registration Statement or any prospectus that is
corrected in any subsequent amendment or supplement to the Registration
Statement or prospectus that was delivered to the Investor before the pertinent
sale or sales by the Investor, if such losses or damages would not have arisen
had the Investor delivered such subsequent document.
 
(b)           To the fullest extent permitted by law, the Investor will
indemnify and hold harmless the Company, each of its directors, each of its
officers who have signed the Registration Statement, each person, if any, who
controls the Company within the meaning of the Securities Act, any investment
banking firm acting as underwriter for the Company, or any broker/dealer acting
on behalf of the Company, against any losses, claims, damages or liabilities to
which the Company or any such director, officer, controlling person,
underwriter, or broker/dealer may become subject to, under the Securities Act or
otherwise, to the extent, but only to the extent, such losses, claims, damages
or liabilities (or actions in respect thereto) arise out of or are based upon
(i) an untrue or alleged untrue statement or omission of any material fact
contained in the Registration Statement, or any preliminary prospectus or final
prospectus relating thereto or in any amendments or supplements to the
Registration Statement or any such preliminary prospectus in reliance upon and
in conformity with written information regarding the Investor furnished by the
Investor expressly for use in the Registration Statement, or any preliminary
prospectus or final prospectus or (ii) an untrue statement or alleged untrue
statement or omission in the Registration Statement or any prospectus that was
corrected in any subsequent amendment or supplement to the Registration
Statement or prospectus that was delivered to the Investor before the pertinent
sale or sales by the Investor, if such losses or damages would not have arisen
had the Investor delivered such subsequent document; and Investor will reimburse
any legal or other expenses reasonably incurred by the Company or any such
director, officer, controlling person, underwriter, broker/dealer in connection
with investigating or defending any such loss, claim, damage, liability or
action, provided, however, that the liability of Investor hereunder shall be
limited to the proceeds (net of underwriting discounts and commissions, if any)
actually received by Investor from the sale of Registrable Shares covered by the
Registration Statement, and provided further, however, that the indemnity
agreement contained in this Section 9(b) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of Investor  (which consent shall not
be unreasonably withheld).

 
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(c)           Promptly after receipt by an indemnified party under this Section
9 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party under this
Section 9, notify the indemnifying party in writing of the commencement thereof
and the indemnifying party shall have the right to participate in and, to the
extent the indemnifying party desires, jointly with any other indemnifying party
similarly noticed, to assume at its expense the defense thereof with counsel
reasonably satisfactory to the indemnified party; provided, that the failure of
any indemnified party to give such notice shall not relieve the indemnifying
party of its obligations or liabilities pursuant to this Agreement, except (and
only) to the extent that it shall be finally determined by a court of competent
jurisdiction (which determination is not subject to appeal or further review)
that such failure shall have materially prejudiced the indemnifying party.
 
An indemnified party shall have the right to employ separate counsel in any such
action and to participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of such indemnified party or unless:  (i)
the indemnifying party has agreed in writing to pay such fees and expenses; (ii)
the indemnifying party shall have failed promptly to assume the defense of such
action and to employ counsel reasonably satisfactory to such indemnified party
in any such action; or (iii) the named parties to any such action (including any
impleaded parties) include both such indemnified party and the indemnifying
party, and counsel to the indemnifying  party shall reasonably believe that a
material conflict of interest is likely to exist if the same counsel were to
represent the indemnified party and the indemnifying party (in which case, the
indemnifying party shall not have the right to assume the defense thereof and
the reasonable fees and expenses of no more than one separate counsel shall be
at the expense of the indemnifying party).  Subject to the terms of this
Agreement, all reasonable fees and expenses of the indemnified party (including
reasonable fees and expenses to the extent incurred in connection with
investigating or preparing to defend such action in a manner not inconsistent
with this Section) shall be paid to the indemnified party, as incurred, within
ten business days of written notice thereof to the indemnifying party; provided,
that the indemnified party shall promptly reimburse the indemnifying party for
that portion of such fees and expenses applicable to such actions for which such
indemnified party is judicially determined to be not entitled to indemnification
hereunder.

(d)           Notwithstanding anything to the contrary herein, the indemnifying
party shall not be entitled to settle any claim, suit or proceeding unless in
connection with such settlement the indemnified party receives an unconditional
release with respect to the subject matter of such claim, suit or proceeding and
such settlement does not contain any admission of fault by the indemnified
party.

 
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(e)           If the indemnification provided for in this Section 9 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings 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 Company on the one hand and the Investor on
the other in connection with the statements or omissions or other matters which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations.  The relative
fault shall be determined by reference to, among other things, in the case of an
untrue statement, whether the untrue statement relates to information supplied
by the Company on the one hand or an Investor on the other and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement. The Company and the Investor agree that it would
not be just and equitable if contribution pursuant to this subsection (e) were
determined by pro rata allocation (even if the Investor were treated as one
entity for such purpose) or by any other method of allocation which does not
take into account the equitable considerations referred to above in this
subsection (e).  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 subsection (e) 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.  Notwithstanding the
provisions of this Section 9(e), the Investor shall not be required to
contribute, in the aggregate, any amount in excess of the amount by which the
proceeds (net of underwriting discounts and commissions, if any) actually
received by the Investor from the sale of the Registrable Shares covered by the
Registration Statement subject to the action exceeds the amount of any damages
that the Investor 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.
 
(f)           The parties to this Agreement hereby acknowledge that they are
sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof including, without limitation, the
provisions of this Section 9, and are fully informed regarding said provisions.
 
10.         REPORTS UNDER THE EXCHANGE ACT.  With a view to making available to
the Investor the benefits of Rule 144 and any other rule or regulation of the
SEC that may at any time permit the Investor to sell the Warrant Shares to the
public without registration, for a period of one year after the Closing Date
(unless the Company or its stockholders have consummated a “Reorganization” (as
defined in the Warrants) prior to such one year period) and thereafter only so
long as the Company elects in its sole discretion to remain a reporting issuer
with the SEC,  the Company agrees to use its  commercially reasonable efforts:
(i) to make and keep public information available as those terms are understood
in Rule 144, (ii) to file with the SEC in a timely manner all reports and other
documents required to be filed by an issuer of securities registered under the
Securities Act or the Exchange Act, (iii) as long as Investor owns any Warrant
Shares, to furnish in writing upon Investor's request a written statement by the
Company that it has complied with the reporting requirements of Rule 144 and of
the Securities Act and the Exchange Act, and to furnish to Investor a copy of
the most recent annual or quarterly report of the Company, and such other
reports and documents so filed by the Company as may be reasonably requested in
availing Investor of any rule or regulation of the SEC permitting the selling of
any such Warrant Shares without registration and (iv) undertake any additional
actions reasonably necessary to maintain the availability of the Registration
Statement or the use of Rule 144.

 
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11.         DEFERRAL.  Notwithstanding anything in this Agreement to the
contrary, in the event (i) of any request by the SEC or any other federal or
state governmental authority during the period of effectiveness of the
Registration Statement for amendments or supplements to a Registration Statement
or prospectus or for additional information; (ii) of the issuance by the SEC or
any other federal or state governmental authority of any stop order suspending
the effectiveness of a Registration Statement or the initiation of any
proceedings for that purpose; (iii) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Shares for sale in any jurisdiction
or the initiation of any proceeding for such purpose; (iv) of any event or
circumstance which necessitates the making of any changes in the Registration
Statement or prospectus, or any document incorporated or deemed to be
incorporated therein by reference, so that, in the case of the Registration
Statement, it will not contain any untrue statement of a material fact or any
omission to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and that in the case of the
prospectus, it will not contain any untrue statement of a material fact or any
omission to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; or (v) that the Board has made the good faith
determination (A) that continued use by the Investor of the Registration
Statement for purposes of effecting offers or sales of Registrable Shares
pursuant thereto would require, under the Securities Act, premature disclosure
in the Registration Statement or prospectus of material, nonpublic information
concerning the Company, its business or prospects or any proposed material
transaction involving the Company, (B) that such premature disclosure would be
materially adverse to the Company, its business or prospects or any such
proposed material transaction or would make the successful consummation by the
Company of any such material transaction significantly less likely and (C) that
it is therefore essential to suspend the use by the Investor of such
Registration Statement and prospectus for purposes of effecting offers or sales
of Registrable Shares pursuant thereto, then the Company shall promptly furnish
to the Investor a certificate signed by the Chief Executive Officer or Chief
Financial Officer of the Company setting forth one or more of the above
described circumstances, and the right of the Investor to use the Registration
Statement (and the prospectus relating thereto) shall be suspended for a period
(the "Suspension Period") of not more than ninety (90) days after delivery by
the Company of the certificate referred to above in this Section 11.  During the
Suspension Period, the Investor shall not offer or sell any Registrable Shares
pursuant to or in reliance upon the Registration Statement or prospectus and
Investor shall keep the fact of the above described certificate and its contents
confidential.  The Company shall use commercially reasonable efforts to
terminate any Suspension Period as promptly as commercially practicable.
 
12.         TRANSFER OF REGISTRATION RIGHTS.  None of the rights of Investor
under this Agreement shall be transferred or assigned to any person unless (i)
such person is a Qualifying Holder (as defined below), and (ii) such person
agrees to become a party to, and bound by, all of the terms and conditions of,
this Agreement.  For purposes of this Section 12, the term "Qualifying Holder"
shall mean, with respect to Investor, (a) any corporation, partnership, limited
liability company or other entity or association controlling, controlled by, or
under common control with, Investor, (b) any corporation, partnership, limited
liability company or other entity or association into which Investor is merged
or which acquires the capital stock of Investor or substantially all of the
assets of Investor or (c) any person, corporation, partnership, limited
liability company or other entity or association that acquires from Investor
greater than 50% of the Warrant Shares or portions of the Warrants representing
the right to acquire greater than 50% of the Warrant Shares.  None of the rights
of Investor under this Agreement shall be transferred or assigned to any person
(including, without limitation, a Qualifying Holder) that acquires Registrable
Shares in the event that and to the extent that such person is eligible to
resell such Registrable Shares without restriction (including without any
requirement concerning the availability of adequate current public information
concerning the Company) pursuant to Rule 144 of the Securities Act.  After any
transfer in accordance with this Section 12 the rights and obligations of the
Investor as to any transferred Registrable Shares shall be the rights and
obligations of such Qualifying Holder transferee holding such Registrable
Shares.

 
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13.         ENTIRE AGREEMENT/TERMINATION.  This Agreement, the Warrants and the
Warrant Purchase Agreement constitute and contain the entire agreement and
understanding of the parties with respect to the subject matter hereof, and
supersede any and all prior negotiations, correspondence, agreements or
understandings with respect to the subject matter hereof.   Notwithstanding
anything herein to the contrary, this Agreement and all obligations hereunder
shall terminate immediately upon a “Transaction Termination Event” (as defined
in the Warrant).
 
14.         MISCELLANEOUS.
 
(a)           This Agreement may not be amended, modified or terminated, and no
rights or provisions may be waived, except with the written consent of the
Investor and the Company.
 
(b)           This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware and without regard to any
conflicts of laws concepts which would apply the substantive law of some other
jurisdiction, and shall be binding upon and inure to the benefit of the parties
hereto and their respective heirs, personal representatives, successors or
assigns, provided that the terms and conditions of Section 12 hereof are
satisfied.  This Agreement shall also be binding upon and inure to the benefit
of any transferee of any of the Warrant Shares provided that the terms and
conditions of Section 12 hereof are satisfied.  Subject to Section 12, if at any
time following exercise of the Warrants in full the Investor shall transfer all
of its Warrant Shares, all of Investor's rights under this Agreement shall
immediately terminate.  Any dispute arising in relation to this Agreement shall
be resolved in accordance with the dispute resolution provisions set forth in
the Warrant Purchase Agreement.
 
(c)            Any notices, reports or other correspondence (hereinafter
collectively referred to as "correspondence") required or permitted to be given
hereunder shall be in writing and shall be sent by postage prepaid first class
mail, courier or telecopy or delivered by hand to the party to whom such
correspondence is required or permitted to be given hereunder, and shall be
deemed sufficient upon receipt when delivered personally or by courier,
overnight delivery service or confirmed facsimile, or three (3) business days
after being deposited in the regular mail as certified or registered mail
(airmail if sent internationally) with postage prepaid, if such notice is
addressed to the party to be notified at such party's address or facsimile
number as set forth below:

 
B-10

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(i)  All correspondence to the Company shall be addressed as follows:
 
Patient Safety Technologies, Inc.
43460 Ridge Park Drive, Suite 140
Temecula, CA 92951
Attention: Steven H. Kane, President and Chief Executive Officer
Facsimile: 951.587.6237
 
with a copy to:
 
Reed Smith LLP
101 Second Street, Suite 2000
San Francisco, CA 94105
Attention: Donald C. Reinke
Facsimile: 415.391.8269

(ii)  All correspondence to Investor shall be sent to Investor at the address
set forth on the signature page hereto.
 
(iii)  Any entity may change the address to which correspondence to it is to be
addressed by written notification as provided for herein.
 
(d)           The parties acknowledge and agree that in the event of any breach
of this Agreement, remedies at law may be inadequate, and each of the parties
hereto shall be entitled to seek specific performance of the obligations of the
other parties hereto and such appropriate injunctive relief as may be granted by
a court of competent jurisdiction.
 
(e)           Should any part or provision of this Agreement be held
unenforceable or in conflict with the applicable laws or regulations of any
jurisdiction, the invalid or unenforceable part or provisions shall be replaced
with a provision which accomplishes, to the extent possible, the original
business purpose of such part or provision in a valid and enforceable manner,
and the remainder of this Agreement shall remain binding upon the parties
hereto.
 
(f)           This Agreement may be executed in a number of counterparts, any of
which together shall for all purposes constitute one Agreement, binding on all
the parties hereto notwithstanding that all such parties have not signed the
same counterpart.
 
(g)           Neither the Company nor any of its subsidiaries has entered into,
as of the date hereof, nor shall the Company or any of its subsidiaries, on or
after the date of this Agreement, enter into any agreement with respect to its
securities, that would have the effect of impairing the rights granted to
Investor in this Agreement or otherwise conflicts with or is inconsistent with
the provisions hereof.
 
[Signature Page to Follow]

 
B-11

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IN WITNESS WHEREOF, the parties hereto have executed this Registration Rights
Agreement as of the date and year first above written.
 
CARDINAL HEALTH, INC.
 
By:
   
 
Name:
 
PATIENT SAFETY TECHNOLOGIES, INC.
 
By:
   
 
Name:

 
B-12

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