Exhibit 4.7

                          REGISTRATION RIGHTS AGREEMENT

     This  Registration  Rights Agreement (the  "Agreement") is made and entered
into as of this 14th day of March,  2007 by and among Z Trim  Holdings  Inc., an
Illinois  corporation  (the  "Company"),  J.P. Turner & Company,  LLC, a Georgia
limited liability company ("Placement  Agent"), and certain accredited investors
purchasing  shares of common stock,  par value $.00005 per share, of the Company
(the  "Common  Stock")  offered in private  placement  (the  "Offering")  by the
Company.  Such  investors  are each  referred  to herein as an  "Investor"  and,
collectively, as the "Investors".

     WHEREAS,  in  connection  with certain  Subscription  Agreements  among the
Investors  and the  Company  (the  "Subscription  Agreement")  which  have  been
executed in connection with the consummation of the transactions contemplated in
that certain Confidential Private Placement Memorandum dated March 14, 2007 (the
"Memorandum"),  the  Company  has  agreed,  upon the  terms and  subject  to the
conditions of the  Subscription  Agreements and the Memorandum to issue and sell
to the Investors an aggregate of up to 80 units ($8,000,000),  with each unit (a
"Unit" or "Units")  consisting of 100,000 shares of Common Stock and a five-year
warrant, with an exercise price of $1.20 per share, (the "Warrants") to purchase
25,000 shares of Common Stock;

     WHEREAS,  to induce the  Investors to execute and deliver the  Subscription
Agreement,  the Company has agreed to provide certain  registration  rights with
respect to the shares of Common Stock (i) sold in the Offering and (ii) issuable
upon exercise of the Warrants; and

     WHEREAS, the Company has agreed to provide certain registration rights with
respect to the shares (the  "Placement  Agent  Warrant  Shares") of Common Stock
issuable  upon exercise of the warrants  issued to the  Placement  Agent and its
permitted  transferees  (the "Placement  Agent  Warrants") both on the terms and
conditions provided herein.

     NOW,  THEREFORE,  for good and valuable  consideration,  the parties hereby
agree as follows:

     1. Certain Definitions.

     As used in this  Agreement,  the  following  terms shall have the following
meanings:

     "Affiliate"  means,  with  respect to any person,  any other  person  which
directly or indirectly  controls,  is controlled  by, or is under common control
with, such person.

     "Business Day" means a day, other than a Saturday or Sunday, on which banks
in Illinois are open for the general transaction of business.

     "Common Stock" as defined in the Preamble.

     "Investors" means the Investors purchasing  Registrable Securities pursuant
to the  Subscription  Agreements,  the  Placement  Agent  and any  Affiliate  or
permitted  transferee of any Investor or the Placement Agent who is a subsequent
holder of any Warrants or Registrable Securities.

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     "Memorandum" as defined in the Preamble.

     "Offering" as defined in the Preamble.

     "Placement Agent Warrants" as defined in the Preamble.

     "Placement Agent Warrant Shares" as defined in the Preamble.

     "Prospectus" means the prospectus  included in any Registration  Statement,
as amended or  supplemented  by any prospectus  supplement,  with respect to the
terms of the offering of any portion of the  Registrable  Securities  covered by
such  Registration  Statement and by all other amendments and supplements to the
prospectus, including post-effective amendments and all material incorporated by
reference in such prospectus.

     "Register," "registered" and "registration" refer to a registration made by
preparing and filing a Registration  Statement or similar document in compliance
with the  1933 Act (as  defined  below),  and the  declaration  or  ordering  of
effectiveness of such Registration Statement or document.

     "Registrable  Securities" shall mean (i) the shares of Common Stock sold in
the Offering,  (ii) the Warrant Shares, (iii) the Placement Agent Warrant Shares
and (iv) any other securities  issued or issuable with respect to or in exchange
for  Registrable  Securities;  provided,  that,  a security  shall cease to be a
Registrable Security upon (A) sale pursuant to a Registration  Statement or Rule
144 under the 1933 Act, or (B) such security  becoming  eligible for sale by the
Investors pursuant to Rule 144(k) under the 1933 Act.

     "Registration  Statement"  shall  mean any  registration  statement  of the
Company  filed  under  the  1933  Act  that  covers  the  resale  of  any of the
Registrable Securities pursuant to the provisions of this Agreement,  amendments
and  supplements  to  such  Registration  Statement,   including  post-effective
amendments,  all  exhibits and all  material  incorporated  by reference in such
Registration Statement.

     "Required  Investors"  means  the  Investors  holding  a  majority  of  the
Registrable Securities.

     "SEC" means the U.S. Securities and Exchange Commission. ---

     "Shares" means the shares of Common Stock sold in the Offering.

     "Subscription Agreement" as defined in the Preamble.

     "1933 Act" means the Securities Act of 1933, as amended,  and the rules and
regulations promulgated thereunder.

     "1934 Act" means the Securities  Exchange Act of 1934, as amended,  and the
rules and regulations promulgated thereunder.

     "Warrants" as defined in the Preamble.

     "Warrant  Shares"  means  the  shares  of Common  Stock  issuable  upon the
exercise of the Warrants.


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     2. Registration.

        (a) Registration Statements.

          (i) Promptly  following  the final closing of the purchase and sale of
the securities  contemplated by the Memorandum (the "Closing Date") but no later
than sixty (60) days after the Closing Date (the "Filing Deadline"), the Company
shall prepare and file with the SEC one Registration  Statement on Form S-3 (or,
if Form S-3 is not then available to the Company,  on such form of  registration
statement  as is then  available  to  effect a  registration  for  resale of the
Registrable  Securities,  subject to the Required Investors' consent),  covering
the  resale of the  Registrable  Securities  in an amount at least  equal to the
Shares,  the  Warrant  Shares  and the  Placement  Agent  Warrant  Shares.  Such
Registration Statement shall include the plan of distribution attached hereto as
Exhibit A. Such Registration Statement also shall cover, to the extent allowable
under the 1933 Act and the rules  promulgated  thereunder  (including Rule 416),
such  indeterminate  number of additional  shares of Common Stock resulting from
stock  splits,  stock  dividends  or similar  transactions  with  respect to the
Registrable  Securities.  The Company shall use its  reasonable  best efforts to
obtain from each person who now has  piggyback  registration  rights a waiver of
those  rights  with  respect to the  Registration  Statement.  The  Registration
Statement  (and each  amendment  or  supplement  thereto,  and each  request for
acceleration  of  effectiveness  thereof)  shall be provided in accordance  with
Section 3(c) to the  Investors  and their  counsel  prior to its filing or other
submission.  If a Registration  Statement covering the Registrable Securities is
not filed with the SEC on or prior to the Filing Deadline, the Company will make
pro rata payments to each Investor,  as liquidated damages and not as a penalty,
in an amount equal to 2.0% of the aggregate amount invested by such Investor for
each 30-day  period or pro rata for any  portion  thereof  following  the Filing
Deadline  for which no  Registration  Statement  is filed  with  respect  to the
Registrable  Securities.  Such payments shall be in partial  compensation to the
Investors,  and shall not constitute the  Investors'  exclusive  remedy for such
events.  Such  payments  shall be made to each  Investor  in cash or  additional
shares  of Common  Stock,  as  determined  by each  Investor,  and shall be paid
monthly  within  three  (3)  Business  Days  after  the last  day of each  month
following the Filing Deadline.

          (ii) Additional Registrable Securities. Upon the written demand of any
Investor and upon any change in the  Exercise  Price (as defined in the Warrants
and the Placement Agent Warrants,  respectively)  such that additional shares of
Common Stock become issuable upon the exercise of the Warrants and/or  Placement
Agent  Warrants,  the  Company  shall  prepare and file with the SEC one or more
Registration  Statements on Form S-3 or amend the  Registration  Statement filed
pursuant to clause (i) above, if such Registration  Statement has not previously
been declared  effective  (or, if Form S-3 is not then available to the Company,
on  such  form of  registration  statement  as is then  available  to  effect  a
registration  for  resale  of  such  additional  shares  of  Common  Stock  (the
"Additional  Shares"),  subject to the Required Investors' consent) covering the
resale of the Additional  Shares,  but only to the extent the Additional  Shares
are  not at the  time  covered  by an  effective  Registration  Statement.  Such
Registration  Statement also shall cover, to the extent allowable under the 1933
Act  and  the  rules   promulgated   thereunder   (including   Rule  416),  such
indeterminate  number of additional  shares of Common Stock resulting from stock
splits,  stock dividends or similar  transactions with respect to the Additional
Shares.  The Company shall use its  reasonable  best efforts to obtain from each
person who now has piggyback  registration  rights a waiver of those rights with
respect to such  Registration  Statement.  The Registration  Statement (and each
amendment  or  supplement   thereto,   and  each  request  for  acceleration  of
effectiveness  thereof) shall be provided in accordance with Section 3(c) to the
Investors  and  their  counsel  prior to its  filing or other  submission.  If a

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Registration  Statement  covering the Additional  Shares is required to be filed
under  this  Section  2(a)(ii)  and is not filed  with the SEC  within  ten (10)
Business Days after the request of any Investor or the  occurrence of any of the
events specified in this Section 2(a)(ii) (the  "Additional  Shares  Deadline"),
the Company will make pro rata payments to each Investor,  as liquidated damages
and not as a  penalty,  in an  amount  equal  to 2.0%  of the  aggregate  amount
invested by such  Investor  for each  30-day  period or pro rata for any portion
thereof following the date by which such Registration Statement should have been
filed  for  which  no  Registration  Statement  is  filed  with  respect  to the
Additional  Shares.  Such  payments  shall  be in  partial  compensation  to the
Investors,  and shall not constitute the  Investors'  exclusive  remedy for such
events.  Such  payments  shall be made to each  Investor  in cash or  additional
shares  of Common  Stock,  as  determined  by each  Investor,  and shall be paid
monthly  within  three  (3)  Business  Days  after  the last  day of each  month
following the Additional Shares Deadline.

          (iii) S-3  Qualification.  If the  Company  is not  eligible  to use a
registration  statement on Form S-3 as provided in Sections 2(a)(i) and 2(a)(ii)
above, then, promptly following the date (the  "Qualification  Date") upon which
the Company  becomes  eligible to use a  registration  statement  on Form S-3 to
register the Registrable  Securities or Additional  Shares,  as applicable,  for
resale, but in no event more than ten (10) Business Days after the Qualification
Date (the  "Qualification  Deadline"),  the  Company  shall file a  registration
statement on Form S-3 covering the Registrable  Securities or Additional Shares,
as applicable  (or a  post-effective  amendment on Form S-3 to the  registration
statement  on  Form  S-1) (a  "Shelf  Registration  Statement")  and  shall  use
commercially reasonable efforts to cause such Shelf Registration Statement to be
declared   effective  as  promptly  as  practicable   thereafter.   If  a  Shelf
Registration Statement covering the Registrable Securities is not filed with the
SEC on or prior to the  Qualification  Deadline,  the Company will make pro rata
payments to each  Investor,  as liquidated  damages and not as a penalty,  in an
amount equal to 2.0% of the aggregate  amount invested by such Investor for each
30-day  period or pro rata for any portion  thereof  following the date by which
such Shelf Registration Statement should have been filed for which no such Shelf
Registration  Statement is filed with respect to the  Registrable  Securities or
Additional Shares, as applicable. Such payments shall be in partial compensation
to the Investors,  and shall not constitute the Investors'  exclusive remedy for
such events.  Such payments shall be made to each Investor in cash or additional
shares  of Common  Stock,  as  determined  by each  Investor,  and shall be paid
monthly  within  three  (3)  Business  Days  after  the last  day of each  month
following the Qualification Deadline.

        (b)  Expenses.  The Company will pay all expenses  associated  with each
registration,  including  filing and printing  fees,  the Company's  counsel and
accounting  fees and expenses,  costs  associated  with clearing the Registrable
Securities for sale under applicable  state  securities laws,  listing fees, and
fees and expenses of one counsel to the Investors (not to exceed $7,500).  Other
than the above, the Investors shall bear their respective expenses in connection
with the registration,  including, without limitation,  discounts,  commissions,
fees of  underwriters,  selling brokers,  dealer managers or similar  securities
industry professionals with respect to the Registrable Securities being sold.

<PAGE>

        (c) Effectiveness.

          (i) The Company shall use commercially  reasonable efforts to have the
Registration  Statement declared  effective as soon as practicable.  The Company
shall notify the  Investors  by facsimile or e-mail as promptly as  practicable,
and  in any  event,  within  twenty-four  (24)  hours,  after  any  Registration
Statement is declared effective and shall  simultaneously  provide the Investors
with copies of any related  Prospectus to be used in connection with the sale or
other  disposition of the securities  covered  thereby.  If after a Registration
Statement has been declared  effective by the SEC, sales cannot be made pursuant
to such Registration  Statement for any reason (including  without limitation by
reason of a stop  order,  or the  Company's  failure to update the  Registration
Statement),  but excluding the inability of any Investor to sell the Registrable
Securities  covered  thereby  due to market  conditions  and  except as  excused
pursuant  to  subparagraph  (ii)  below,  then the  Company  will  make pro rata
payments to each  Investor,  as liquidated  damages and not as a penalty,  in an
amount equal to 2.0% of the aggregate  amount invested by such Investor for each
30-day  period or pro rata for any portion  thereof  following the date by which
such Registration  Statement should have been effective (the "Blackout Period").
Such payments shall be in partial  compensation to the Investors,  and shall not
constitute the Investors'  exclusive remedy for such events. The amounts payable
as liquidated  damages  pursuant to this paragraph  shall be paid monthly within
three  (3)  Business  Days  after  the  last  day of each  month  following  the
commencement  of the  Blackout  Period  until the  termination  of the  Blackout
Period.  Such  payments  shall be made to each Investor in cash or in additional
shares of Common Stock as determined by each Investor.

          (ii) For not more than twenty (20)  consecutive days or for a total of
not more than forty-five (45) days in any twelve (12) month period,  the Company
may delay the  disclosure  of material  non-public  information  concerning  the
Company,  by suspending the use of any Prospectus  included in any  registration
contemplated  by this Section  containing  such  information,  the disclosure of
which at the time is not, in the good faith opinion of the Company,  in the best
interests of the Company (an "Allowed Delay");  provided, that the Company shall
promptly  (a) notify the  Investors  and the  Placement  Agent in writing of the
existence of (but in no event,  without the prior written consent of an Investor
and the Placement Agent,  shall the Company disclose to such Investor any of the
facts or circumstances regarding) material non-public information giving rise to
an Allowed Delay, (b) advise the Investors and the Placement Agent in writing to
cease all sales under the  Registration  Statement  until the end of the Allowed
Delay and (c) use commercially  reasonable efforts to terminate an Allowed Delay
as promptly as practicable.

     3.  Company  Obligations.  The  Company  will use  commercially  reasonable
efforts to effect the  registration of the Registrable  Securities in accordance
with the terms hereof,  and pursuant  thereto the Company will, as expeditiously
as possible:

        (a) use  commercially  reasonable  efforts  to cause  such  Registration
Statement to become effective and to remain continuously  effective for a period
that will  terminate  upon the earlier of (i) the date on which all  Registrable
Securities covered by such Registration  Statement as amended from time to time,
have been sold, and (ii) the date on which all Registrable Securities covered by
such   Registration   Statement  may  be  sold  pursuant  to  Rule  144(k)  (the
"Effectiveness   Period")   and  advise  the   Investors  in  writing  when  the
Effectiveness Period has expired;

<PAGE>
        (b) prepare  and file with the SEC such  amendments  and  post-effective
amendments to the Registration  Statement and the Prospectus as may be necessary
to keep the Registration Statement effective for the period specified in Section
3(a) and to  comply  with the  provisions  of the 1933 Act and the 1934 Act with
respect  to  the  distribution  of all of  the  Registrable  Securities  covered
thereby;

        (c) provide copies to and permit counsel designated by the Investors and
also provide copies to and permit counsel  designated by the Placement  Agent to
review each Registration Statement and all amendments and supplements thereto no
fewer than seven (7) days  prior to their  filing  with the SEC and not file any
document to which such counsel reasonably objects;

        (d) furnish to the Investors  and their legal counsel & Placement  Agent
and their legal  counsel (i)  promptly  after the same is prepared  and publicly
distributed,  filed with the SEC, or received by the Company (but not later than
two (2) Business  Days after the filing date,  receipt date or sending  date, as
the case may be) one (1) copy of any  Registration  Statement  and any amendment
thereto,  each  preliminary  prospectus  and  Prospectus  and each  amendment or
supplement  thereto,  and each letter  written by or on behalf of the Company to
the SEC or the staff of the SEC, and each item of correspondence from the SEC or
the  staff of the SEC,  in each case  relating  to such  Registration  Statement
(other than any portion of any thereof which contains  information for which the
Company has sought confidential treatment),  and (ii) such number of copies of a
Prospectus,   including  a  preliminary  prospectus,   and  all  amendments  and
supplements  thereto and such other  documents as each  Investor  and  Placement
Agent may  reasonably  request in order to  facilitate  the  disposition  of the
Registrable  Securities  owned by such Investor  and/or the Placement Agent that
are covered by the related Registration Statement;

        (e) use commercially  reasonable  efforts to (i) prevent the issuance of
any stop order or other suspension of  effectiveness  and, (ii) if such order is
issued, obtain the withdrawal of any such order at the earliest possible moment;

        (f)  prior  to  any  public  offering  of  Registrable  Securities,  use
commercially  reasonable  efforts to register or qualify or  cooperate  with the
Investors  and  their  counsel  and  the  Placement  Agent  and its  counsel  in
connection with the registration or qualification of such Registrable Securities
for offer and sale under the  securities or blue sky laws of such  jurisdictions
requested by the Investors and do any and all other commercially reasonable acts
or  things   necessary  or  advisable  to  enable  the   distribution   in  such
jurisdictions  of  the  Registrable   Securities  covered  by  the  Registration
Statement;  provided,  however,  that  the  Company  shall  not be  required  in
connection  therewith or as a condition thereto to (i) qualify to do business in
any  jurisdiction  where it would not  otherwise  be required to qualify but for
this Section 3(f), (ii) subject itself to general  taxation in any  jurisdiction
where it would not  otherwise be so subject but for this Section  3(f), or (iii)
file a general consent to service of process in any such jurisdiction;

<PAGE>
        (g)  use  commercially  reasonable  efforts  to  cause  all  Registrable
Securities  covered by a Registration  Statement to be listed on each securities
exchange,  interdealer  quotation  system  or  other  market  on  which  similar
securities issued by the Company are then listed;

        (h)  immediately  notify the Investors and the Placement  Agent,  at any
time when a  Prospectus  relating to  Registrable  Securities  is required to be
delivered  under the 1933 Act, upon discovery that, or upon the happening of any
event as a result of which, the Prospectus included in a Registration Statement,
as then in effect,  includes an untrue  statement of a material fact or omits to
state any material fact  required to be stated  therein or necessary to make the
statements  therein not misleading in light of the circumstances  then existing,
and at the  request of any such  holder,  promptly  prepare  and furnish to such
holder a reasonable  number of copies of a supplement to or an amendment of such
Prospectus  as  may  be  necessary  so  that,  as  thereafter  delivered  to the
purchasers of such Registrable Securities,  such Prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements  therein not misleading in
light of the circumstances then existing; and

        (i) otherwise  use  commercially  reasonable  efforts to comply with all
applicable rules and regulations of the SEC under the 1933 Act and the 1934 Act,
take such  other  actions  as may be  reasonably  necessary  to  facilitate  the
registration of the Registrable Securities hereunder;  and make available to its
security  holders,  as soon as  reasonably  practicable,  but not later than the
Availability Date (as defined below), an earnings statement covering a period of
at  least  twelve  (12)  months,  beginning  after  the  effective  date of each
Registration Statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the 1933 Act,  including Rule 158  promulgated  thereunder (for
the  purpose of this  subsection  3(i),  "Availability  Date" means the 45th day
following the end of the fourth fiscal  quarter that includes the effective date
of such  Registration  Statement,  except that, if such fourth fiscal quarter is
the last quarter of the  Company's  fiscal year,  "Availability  Date" means the
90th day after the end of such fourth fiscal quarter).

        (j) With a view to making  available to the  Investors and the Placement
Agent the  benefits  of Rule 144 (or its  successor  rule) and any other rule or
regulation  of the SEC that may at any time permit the  Investors to sell shares
of Common Stock to the public without  registration,  the Company  covenants and
agrees to: (i) make and keep public  information  available,  as those terms are
understood  and defined in Rule 144,  until the earlier of (A) six months  after
such date as all of the  Registrable  Securities may be resold  pursuant to Rule
144(k)  or any  other  rule of  similar  effect  or (B) such  date as all of the
Registrable  Securities  shall  have  been  resold;  (ii) file with the SEC in a
timely manner all reports and other documents  required of the Company under the
1934 Act;  and (iii)  furnish to each  Investor  upon  request,  as long as such
Investor owns any Registrable Securities, (A) a written statement by the Company
that it has complied with the reporting requirements of the 1934 Act, (B) a copy
of the Company's most recent Annual Report on Form 10-KSB or Quarterly Report on
Form 10-QSB,  and (C) such other  information as may be reasonably  requested in
order to avail such  Investor of any rule or  regulation of the SEC that permits
the selling of any such Registrable Securities without registration.

<PAGE>

     4. Due Diligence  Review;  Information.  The Company shall make  available,
during  normal  business  hours,  for  inspection  and review by the  Investors,
advisors  to  and  representatives  of the  Investors  (who  may  or may  not be
affiliated with the Investors and who are reasonably acceptable to the Company),
all  financial  and other  records,  all SEC  filings,  and all other  corporate
documents and  properties of the Company as may be reasonably  necessary for the
purpose  of such  review,  and  cause  the  Company's  officers,  directors  and
employees,  within a  reasonable  time  period,  to supply all such  information
reasonably  requested by the  Investors or any such  representative,  advisor or
underwriter in connection with such Registration  Statement (including,  without
limitation,  in response to all questions and other inquiries reasonably made or
submitted  by any of them),  prior to and from time to time after the filing and
effectiveness of the Registration Statement for the sole purpose of enabling the
Investors  and  such  representatives,   advisors  and  underwriters  and  their
respective  accountants  and  attorneys  to  conduct  initial  and  ongoing  due
diligence  with  respect to the  Company and the  accuracy of such  Registration
Statement.

     The  Company  shall not  disclose  material  nonpublic  information  to the
Investors,  or to advisors to or representatives of the Investors,  unless prior
to disclosure of such  information the Company  identifies  such  information as
being material nonpublic  information and provides the Investors,  such advisors
and  representatives  with the  opportunity  to accept or refuse to accept  such
material  nonpublic  information  for review and any Investor  wishing to obtain
such information enters into an appropriate  confidentiality  agreement with the
Company with respect thereto.

     5. Obligations of the Investors.

        (a)  Each  Investor  shall  furnish  in  writing  to  the  Company  such
information  regarding  itself,  the  Registrable  Securities held by it and the
intended  method of disposition  of the  Registrable  Securities  held by it, as
shall be  reasonably  required to effect the  registration  of such  Registrable
Securities and shall execute such documents in connection with such registration
as the Company may reasonably  request. At least five (5) Business Days prior to
the first  anticipated  filing date of any Registration  Statement,  the Company
shall notify each  Investor of the  information  the Company  requires from such
Investor  if such  Investor  elects  to have any of the  Registrable  Securities
included  in  the  Registration   Statement.  An  Investor  shall  provide  such
information  to the  Company at least two (2)  Business  Days prior to the first
anticipated  filing date of such Registration  Statement if such Investor elects
to  have  any  of  the  Registrable  Securities  included  in  the  Registration
Statement.

        (b) Each  Investor,  by its  acceptance  of the  Registrable  Securities
agrees to cooperate  with the Company as reasonably  requested by the Company in
connection  with  the  preparation  and  filing  of  a  Registration   Statement
hereunder,  unless  such  Investor  has  notified  the Company in writing of its
election to exclude all of its  Registrable  Securities  from such  Registration
Statement.

        (c) Each  Investor  agrees  that,  upon  receipt of any notice  from the
Company of either (i) the  commencement  of an Allowed Delay pursuant to Section
2(c)(ii) or (ii) the happening of an event pursuant to Section 3(h) hereof, such
Investor will  immediately  discontinue  disposition of  Registrable  Securities
pursuant to the Registration  Statement  covering such  Registrable  Securities,

<PAGE>
until the  Investor's  receipt  of the  copies of the  supplemented  or  amended
prospectus filed with the SEC and until any related post-effective  amendment is
declared  effective  and, if so  directed by the  Company,  the  Investor  shall
deliver to the Company (at the expense of the  Company) or destroy  (and deliver
to the  Company a  certificate  of  destruction)  all  copies in the  Investor's
possession of the Prospectus covering the Registrable  Securities current at the
time of receipt of such notice.

     6. Indemnification.

        (a) Indemnification by the Company.  The Company will indemnify and hold
harmless  each  Investor and its  officers,  directors,  members,  employees and
agents, successors and assigns, and each other person, if any, who controls such
Investor within the meaning of the 1933 Act, against any losses, claims, damages
or  liabilities,  joint or several,  to which they may become  subject under the
1933 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
statement or alleged  untrue  statement of any  material  fact  contained in any
Registration Statement, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement  thereof;  (ii) any blue sky application
or other document executed by the Company specifically for that purpose or based
upon written  information  furnished by the Company  filed in any state or other
jurisdiction in order to qualify any or all of the Registrable  Securities under
the  securities  laws thereof  (any such  application,  document or  information
herein called a "Blue Sky Application");  (iii) 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; (iv) any violation by the Company or
its agents of any rule or regulation  promulgated  under the 1933 Act applicable
to the Company or its agents and relating to action or inaction  required of the
Company in connection with such registration;  or (v) any failure to register or
qualify the  Registrable  Securities  included in any such  Registration  in any
state where the Company or its agents has affirmatively  undertaken or agreed in
writing that the Company will undertake such registration or qualification on an
Investor's  behalf and will  reimburse  such  Investor,  and each such  officer,
director  or member  and each  such  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  Company  will not be liable in any such case if and to the extent that
any such  loss,  claim,  damage or  liability  arises out of or is based upon an
untrue  statement or alleged untrue statement or omission or alleged omission so
made in  conformity  with  information  furnished  by such  Investor or any such
controlling  person  in  writing  specifically  for  use  in  such  Registration
Statement or Prospectus.

        (b)  Indemnification by the Investors.  Each Investor agrees,  severally
but not jointly, to indemnify and hold harmless, to the fullest extent permitted
by law, the Company, its directors,  officers, employees,  stockholders and each
person who controls the Company (within the meaning of the 1933 Act) against any
losses, claims, damages,  liabilities and expense (including reasonable attorney
fees) resulting from any untrue  statement of a material fact or any omission of
a  material  fact  required  to be  stated  in  the  Registration  Statement  or
Prospectus  or  preliminary  prospectus  or amendment or  supplement  thereto or
necessary to make the statements therein not misleading, to the extent, but only
to the extent  that such  untrue  statement  or  omission  is  contained  in any
information  furnished in writing by such  Investor to the Company  specifically
for  inclusion  in such  Registration  Statement or  Prospectus  or amendment or
supplement thereto. In no event shall the liability of an Investor be greater in
amount than the dollar  amount of the proceeds  (net of all expense paid by such
Investor in connection  with any claim relating to this Section 6 and the amount

<PAGE>
of any damages such  Investor has  otherwise  been  required to pay by reason of
such untrue  statement or omission)  received by such  Investor upon the sale of
the Registrable Securities included in the Registration Statement giving rise to
such indemnification obligation.

        (c)  Conduct of  Indemnification  Proceedings.  Any person  entitled  to
indemnification hereunder shall (i) give prompt notice to the indemnifying party
of any claim with respect to which it seeks indemnification and (ii) permit such
indemnifying  party to assume the defense of such claim with counsel  reasonably
satisfactory to the  indemnified  party;  provided,  that any person entitled to
indemnification hereunder shall have the right to employ separate counsel and to
participate  in the  defense of such  claim,  but the fees and  expenses of such
counsel shall be at the expense of such person unless (a) the indemnifying party
has agreed to pay such fees or  expenses,  or (b) the  indemnifying  party shall
have  failed to assume the defense of such claim and employ  counsel  reasonably
satisfactory  to such  person  or (c) in the  reasonable  judgment  of any  such
person,  based upon written advice of its counsel, a conflict of interest exists
between such person and the  indemnifying  party with respect to such claims (in
which case, if the person notifies the  indemnifying  party in writing that such
person  elects to employ  separate  counsel at the  expense of the  indemnifying
party, the indemnifying  party shall not have the right to assume the defense of
such claim on behalf of such person); and provided, further, that the failure of
any  indemnified  party to give notice as provided  herein shall not relieve the
indemnifying party of its obligations hereunder,  except to the extent that such
failure to give notice shall materially  adversely affect the indemnifying party
in the  defense  of any such  claim or  litigation.  It is  understood  that the
indemnifying  party shall not, in  connection  with any  proceeding  in the same
jurisdiction,  be liable for fees or expenses of more than one separate  firm of
attorneys at any time for all such indemnified  parties.  No indemnifying  party
will, except with the consent of the indemnified party,  consent to entry of any
judgment or enter into any settlement that does not include as an  unconditional
term thereof the giving by the claimant or plaintiff to such  indemnified  party
of a release from all liability in respect of such claim or litigation.

        (d) Contribution.  If for any reason the indemnification provided for in
the preceding  paragraphs (a) and (b) is unavailable to an indemnified  party or
insufficient  to hold it harmless,  other than as expressly  specified  therein,
then the  indemnifying  party shall  contribute to the amount paid or payable by
the indemnified  party as a result of such loss,  claim,  damage or liability in
such  proportion  as is  appropriate  to  reflect  the  relative  fault  of  the
indemnified  party and the  indemnifying  party,  as well as any other  relevant
equitable  considerations.  No  person  guilty of  fraudulent  misrepresentation
within  the  meaning  of  Section  11(f) of the 1933 Act  shall be  entitled  to
contribution from any person not guilty of such fraudulent misrepresentation. In
no event shall the contribution obligation of a holder of Registrable Securities
be greater in amount than the dollar amount of the proceeds (net of all expenses
paid by such holder in connection  with any claim relating to this Section 6 and
the amount of any damages  such  holder has  otherwise  been  required to pay by
reason of such  untrue or  alleged  untrue  statement  or  omission  or  alleged
omission) received by it upon the sale of the Registrable Securities giving rise
to such contribution obligation.


<PAGE>
     7. Miscellaneous.

        (a)  Amendments  and Waivers.  This  Agreement  may be amended only by a
writing signed by the Company and the Required  Investors.  The Company may take
any action herein  prohibited,  or omit to perform any act herein required to be
performed by it, only if the Company shall have obtained the written  consent to
such amendment, action or omission to act, of the Required Investors.

        (b)  Notices.  All  notices  and other  communications  provided  for or
permitted  hereunder  shall be made in  accordance  with the  provisions  of the
Subscription Agreement.

        (c)  Assignments  and  Transfers by  Investors.  The  provisions of this
Agreement  shall be binding upon and inure to the benefit of the  Investors  and
their respective  successors and assigns. An Investor may transfer or assign, in
whole or from time to time in part, to one or more persons its rights  hereunder
in connection  with the transfer of  Registrable  Securities by such Investor to
such person,  provided  that such  Investor  complies  with all laws  applicable
thereto and provides  written notice of assignment to the Company promptly after
such assignment is effected.

        (d) Assignments and Transfers by the Company.  This Agreement may not be
assigned by the Company  (whether by operation of law or otherwise)  without the
prior written consent of the Required  Investors,  provided,  however,  that the
Company may assign its rights and delegate its duties hereunder to any surviving
or successor  corporation in connection  with a merger or  consolidation  of the
Company with another  corporation,  or a sale,  transfer or other disposition of
all or substantially all of the Company's assets to another corporation, without
the prior written consent of the Required Investors,  after notice duly given by
the Company to each Investor.

        (e)  Benefits  of the  Agreement.  The  terms  and  conditions  of  this
Agreement  shall  inure to the  benefit  of and be binding  upon the  respective
permitted  successors  and assigns of the  parties.  Nothing in this  Agreement,
express or implied,  is intended to confer upon any party other than the parties
hereto  or  their  respective  successors  and  assigns  any  rights,  remedies,
obligations,  or  liabilities  under or by reason of this  Agreement,  except as
expressly provided in this Agreement.

        (f)  Counterparts;  Faxes. This Agreement may be executed in two or more
counterparts,  each of  which  shall be  deemed  an  original,  but all of which
together shall constitute one and the same  instrument.  This Agreement may also
be executed via facsimile, which shall be deemed an original.

        (g)  Titles  and  Subtitles.  The  titles  and  subtitles  used  in this
Agreement  are  used  for  convenience  only  and  are not to be  considered  in
construing or interpreting this Agreement.

        (h) Severability.  Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability  without  invalidating the
remaining provisions hereof but shall be interpreted as if it were written so as

<PAGE>
to be  enforceable to the maximum  extent  permitted by applicable  law, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render  unenforceable  such provision in any other  jurisdiction.  To the extent
permitted by applicable law, the parties hereby waive any provision of law which
renders any provisions hereof prohibited or unenforceable in any respect.

        (i) Further  Assurances.  The parties shall execute and deliver all such
further  instruments  and  documents  and  take all such  other  actions  as may
reasonably be required to carry out the transactions  contemplated hereby and to
evidence the fulfillment of the agreements herein contained.

        (j) Entire  Agreement.  This  Agreement  is intended by the parties as a
final  expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the  subject  matter  contained  herein.  This  Agreement  supersedes  all prior
agreements and  understandings  between the parties with respect to such subject
matter.

        (k) Governing Law; Consent to Jurisdiction;  Waiver of Jury Trial.  This
Agreement  shall be governed by, and construed in accordance  with, the internal
laws of the State of  Illinois  without  regard to the choice of law  principles
thereof.  Each  of the  parties  hereto  irrevocably  submits  to the  exclusive
jurisdiction  of the courts of the State of Illinois  located in Lake County and
the United States  District Court for the Northern  District of Illinois for the
purpose of any suit,  action,  proceeding or judgment relating to or arising out
of this Agreement and the transactions  contemplated hereby.  Service of process
in connection  with any such suit,  action or  proceeding  may be served on each
party hereto  anywhere in the world by the same methods as are specified for the
giving of notices under this Agreement.  Each of the parties hereto  irrevocably
consents  to the  jurisdiction  of any such  court in any such  suit,  action or
proceeding  and to the  laying  of  venue  in  such  court.  Each  party  hereto
irrevocably waives any objection to the laying of venue of any such suit, action
or proceeding  brought in such courts and irrevocably  waives any claim that any
such suit, action or proceeding brought in any such court has been brought in an
inconvenient  forum.  EACH OF THE PARTIES  HERETO  WAIVES ANY RIGHT TO REQUEST A
TRIAL BY JURY IN ANY  LITIGATION  WITH RESPECT TO THIS  AGREEMENT AND REPRESENTS
THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.



                  [remainder of page intentionally left blank]
<PAGE>
     IN WITNESS  WHEREOF,  the parties have  executed  this  Agreement or caused
their duly  authorized  officers to execute this  Agreement as of the date first
above written.


The Company:                       Z TRIM HOLDINGS INC.



                                   By:_________________________
                                   Name: Gregory J. Halpern
                                   Title: Chief Executive Officer


The Placement Agent:               J.P. TURNER & COMPANY, LLC



                                   By:_________________________
                                   Name:
                                   Title:

The Investors:  [Contained in Omnibus Signature Page in Subscription Agreement]


<PAGE>
                                    Exhibit A

                              Plan of Distribution

     The selling stockholders (the "Selling Stockholders",  which as used herein
includes  donees,  pledgees,  transferees or other  successors-in-interest  of a
Selling  Stockholder  selling  shares of Common  Stock or interests in shares of
Common  Stock  received  after  the  date  of  this  prospectus  from a  Selling
Stockholder as a gift, pledge,  partnership distribution or other transfer) may,
from time to time,  sell,  transfer or otherwise  dispose of any or all of their
shares  of Common  Stock or  interests  in  shares of Common  Stock on any stock
exchange,  market or  trading  facility  on which the  shares  are  traded or in
private  transactions.  These dispositions may be at fixed prices, at prevailing
market prices at the time of sale, at prices  related to the  prevailing  market
price,  at  varying  prices  determined  at the time of sale,  or at  negotiated
prices.

     The Selling  Stockholders may use any one or more of the following  methods
when disposing of shares or interests therein:

     -  ordinary   brokerage   transactions   and   transactions  in  which  the
broker-dealer solicits purchasers;

     - block trades in which the  broker-dealer  will attempt to sell the shares
as agent,  but may  position  and resell a portion of the block as  principal to
facilitate the transaction;

     - purchases by a broker-dealer as principal and resale by the broker-dealer
for its account;

     - an exchange  distribution  in accordance with the rules of the applicable
exchange;

     - privately negotiated transactions;

     - short sales effected after the date the  registration  statement of which
this Prospectus is a part is declared effective by the SEC;

     -  through  the  writing  or   settlement   of  options  or  other  hedging
transactions, whether through an options exchange or otherwise;

     -  broker-dealers  may  agree  with  the  Selling  Stockholders  to  sell a
specified number of such shares at a stipulated price per share; and

     - a combination of any such methods of sale.

     The Selling Stockholders may, from time to time, pledge or grant a security
interest in some or all of the shares of Common Stock owned by them and, if they
default in the performance of their secured obligations, the pledgees or secured
parties may offer and sell the shares of Common Stock,  from time to time, under
this  Prospectus,  or under an amendment to this Prospectus under Rule 424(b)(3)
or other  applicable  provision  of the 1933 Act  amending  the list of  Selling

<PAGE>
Stockholders to include the pledgee, transferee or other  successors-in-interest
as Selling Stockholders under this Prospectus. The Selling Stockholders also may
transfer  the shares of Common Stock in other  circumstances,  in which case the
transferees,  pledgees  or  other  successors-in-interest  will  be the  selling
beneficial owners for purposes of this Prospectus.

     Broker-dealers  engaged by the Selling  Stockholders  may arrange for other
brokers-dealers to participate in sales.  Broker-dealers may receive commissions
or discounts from the Selling  Stockholders  (or, if any  broker-dealer  acts as
agent  for the  purchaser  of  shares,  from the  purchaser)  in  amounts  to be
negotiated.  The  Selling  Stockholders  do not  expect  these  commissions  and
discounts to exceed what is customary in the types of transactions involved.

     J.P.  Turner  &  Company,  LLC  ("JP  Turner")  has  indicated  to  us  its
willingness to act as selling agent on behalf of the Selling  Stockholders named
in the Prospectus under "Selling  Security Holders" that purchased our privately
placed securities. All shares sold, if any, on behalf of Selling Stockholders by
JP Turner would be in transactions  executed by JP Turner on an agency basis and
commissions  charged to its customers in connection with each transaction  shall
not exceed a maximum  of 5% of the gross  proceeds.  JP Turner  does not have an
underwriting  agreement with us and/or the Selling  Stockholders  and no Selling
Stockholders are required to execute transactions through JP Turner.

     In connection with the sale of our Common Stock or interests  therein,  the
Selling  Stockholders may enter into hedging transactions with broker-dealers or
other  financial  institutions,  which may in turn  engage in short sales of the
common stock in the course of hedging the  positions  they  assume.  The Selling
Stockholders  may also sell shares of our Common  Stock short and deliver  these
securities  to close out their  short  positions,  or loan or pledge  the Common
Stock to  broker-dealers  that in turn may sell these  securities.  The  Selling
Stockholders   may  also  enter   into   option  or  other   transactions   with
broker-dealers  or other  financial  institutions or the creation of one or more
derivative  securities which require the delivery to such broker-dealer or other
financial  institution of shares offered by this  Prospectus,  which shares such
broker-dealer  or  other  financial  institution  may  resell  pursuant  to this
Prospectus (as supplemented or amended to reflect such transaction).

     The Selling  Stockholders will receive the aggregate proceeds from the sale
of the Common  Stock  offered by them.  The  aggregate  proceeds  to the Selling
Stockholders  from the sale of the  Common  Stock  offered  by them  will be the
purchase price of the Common Stock less discounts or  commissions,  if any. Each
of the Selling  Stockholders  reserves  the right to accept and,  together  with
their  agents from time to time,  to reject,  in whole or in part,  any proposed
purchase  of Common  Stock to be made  directly or through  agents.  We will not
receive any of the proceeds from the sale of Common Stock in this  offering.  We
may receive  proceeds  from  holders who  exercise  their  warrants  and pay the
applicable cash exercise price in connection with those exercises.

     The Selling  Stockholders also may resell all or a portion of the shares in
open market  transactions  in reliance upon Rule 144 under the Securities Act of
1933,  provided that they meet the criteria and conform to the  requirements  of
that rule.

<PAGE>
     The Selling  Stockholders and any  underwriters,  broker-dealers  or agents
that  participate  in the sale of the Common Stock or  interests  therein may be
"underwriters"  within  the  meaning  of  Section  2(11)  of the 1933  Act.  Any
discounts,  commissions,  concessions  or profit  they earn on any resale of the
shares may be underwriting discounts and commissions under the 1933 Act. Selling
Stockholders who are  "underwriters"  within the meaning of Section 2(11) of the
1933 Act will be subject to the  prospectus  delivery  requirements  of the 1933
Act.

     To the extent  required,  the shares of our  common  stock to be sold,  the
names of the Selling  Stockholders,  the respective  purchase  prices and public
offering prices, the names of any agent,  dealer or underwriter,  any applicable
commissions or discounts with respect to a particular offer will be set forth in
an  accompanying  prospectus  supplement or, if  appropriate,  a  post-effective
amendment to the registration statement that includes this Prospectus.

     In order to comply with the securities laws of some states,  if applicable,
the Common Stock may be sold in these  jurisdictions  only through registered or
licensed  brokers or dealers.  In addition,  in some states the Common Stock may
not be sold unless it has been  registered or qualified for sale or an exemption
from  registration  or  qualification  requirements is available and is complied
with.

     We have advised the Selling Stockholders that the  anti-manipulation  rules
of  Regulation  M under the 1934 Act may apply to sales of shares in the  market
and to the  activities  of the Selling  Stockholders  and their  affiliates.  In
addition,  we will make copies of this  Prospectus (as it may be supplemented or
amended from time to time) available to the Selling Stockholders for the purpose
of satisfying the prospectus delivery  requirements of the 1933 Act. The Selling
Stockholders may indemnify any  broker-dealer  that participates in transactions
involving  the sale of the shares of Common Stock against  certain  liabilities,
including liabilities arising under the 1933 Act.

     We  will  pay all of the  expenses  incident  to  registration  other  than
commissions, fees and discounts of underwriters, brokers, dealers and agents. We
will pay for offering expenses  including the SEC registration  fee,  accounting
fees, legal fees, printing expenses and other related miscellaneous expenses. We
have agreed to indemnify the Selling Stockholders against liabilities, including
liabilities  under  the 1933 Act and  state  securities  laws,  relating  to the
registration of the shares offered by this Prospectus.

     We have  agreed  with the  Selling  Stockholders  to keep the  registration
statement  of which  this  Prospectus  constitutes  a part  effective  until the
earlier of (1) such time as all of the shares  covered by this  Prospectus  have
been disposed of pursuant to and in accordance with the  registration  statement
or (2) the date on which the shares may be sold  pursuant  to Rule 144(k) of the
1933 Act.