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.


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    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.


    
      
         


      

      
        B-9

        
          

        

      

      
         


      

    


    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

        
          

        

      

      
         


      

    


    (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

        
          

        

      

      
         


      

    


    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