Document:

EXHIBIT 10.66
                                                                   -------------

                               SECURITY AGREEMENT

     THIS SECURITY AGREEMENT dated as of the ______ day of May, 2007, is by and
between PERFORMANCE HEALTH TECHNOLOGIES, INC., a Delaware corporation having an
address at 427 Riverview Plaza, Trenton, New Jersey 08611 (the "Borrower") and
________________________, with an address at 155 Village Boulevard, Princeton,
New Jersey 08540 (the "Lender").

                                   BACKGROUND

                                    ARTICLE I
                                   DEFINITIONS

     1.01. For all purposes of this Agreement, except as otherwise expressly
provided herein, the following terms (including both the singulars and plurals
thereof) shall have the meanings respectively assigned to them directly or by
reference below in this Section 1.01:

     "Collateral" shall mean:

     All present and future accounts, contract rights, chattel paper, documents,
instruments and general intangibles, as defined in the Uniform Commercial Code
(including, without limitation, all patents, trademarks and tax refunds);
merchandise returns and other goods represented thereby; all proceeds of the
foregoing; and the books and records pertaining thereto with the equipment
containing said books and records, wherever located.

     All present and hereafter acquired inventory, as defined in the Uniform
Commercial Code, wherever located; including but not limited to raw materials,
work in process and finished goods; all proceeds and products of the foregoing;
and documents relating thereto.

     All present and hereafter acquired equipment, as defined in the Uniform
Commercial Code, all furniture and fixtures, and all accessories, improvements,
substitutions, parts, replacements, attachments and additions thereto wherever
located; and proceeds of the foregoing.

     All present and hereafter acquired warehouse receipts, bills of lading,
shipping documents, documents of title, chattel paper and instruments, whether
negotiable or not, the goods and inventory relating thereto or represented
thereby in all stages of manufacture, process or production, which arise under
or relate to letters of credit or similar credit mechanisms opened for the
Debtor's account or benefit and all cash and non-cash proceeds thereof, wherever
located.

     "Event of Default" means any event or condition described in Article II of
this Agreement.

     "Existing Indebtedness" shall mean the existing indebtedness of the
Borrower to Lender.

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     "Lien" means any mortgage, deed of trust, pledge, security interest,
hypothecation, assignment for security, security deposit arrangement,
encumbrance, lien (statutory or other), or preference, priority, or other
security agreement or preferential arrangement, charge, or encumbrance of any
kind or nature whatsoever (including, without limitation, any conditional sale
or other title retention agreement, any financing lease having substantially the
same economic effect as any of the foregoing, and the filing of any financing
statement under the UCC or comparable law of any jurisdiction to evidence any of
the foregoing).

     "Loan Documents" shall mean the Note, this Agreement, and UCC-1 Financing
Statements.

     "Note" shall mean the Promissory Note executed by the Borrower in favor of
Lender in the principal amount of $300,000.

     "UCC" shall mean the Uniform Commercial Code as enacted in New Jersey, as
the same may be amended from time to time.

                                   ARTICLE II
                                   ----------
                               SECURITY AGREEMENT

     2.01. Collateral. To secure the punctual payment of the Note and the
performance of the Borrower's obligations under the this Agreement, the Borrower
hereby pledges, transfers, assigns, sets over and grants to the Lender a
security interest in, the Collateral.

     2.02. Financing Statements. To perfect the Lender's security interest in
and to the Collateral, the Borrower authorized the Lender to file such financing
statements as the Lender may specify, and will pay the cost of filing the same,
in such public offices as the Lender shall designate, and do all other further
acts and things reasonably requested by the Lender to perfect the security
interest granted to the Lender in this Article II.

     2.03. Place of Business; Location of Collateral.

          (a) The Borrower will notify the Lender prior to (i) any change in the
location of its place of business, (ii) any change in the place where Borrower
keeps the Collateral, its books and records, (iii) the establishment of any new
or the discontinuance of any existing place of business, and (iv) the
establishment of any new or the discontinuance of any location where the
Collateral are kept.

          (b) The Borrower will not permit the Collateral to be removed from its
current location without the Lender's prior written consent.

     2.04. Collateral. The Borrower represents, warrants and agrees that:

          (a) The Borrower is the absolute owner of its Collateral, subject only
to the security interests created prior to the date hereof (the "Existing
Security Interests") and hereby;

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          (b) After the occurrence and during the continuance of an Event of
Default, the Lender shall have the right to take possession of the Collateral
subject to the Existing Security Interests;

          (c) If any Collateral is or becomes represented by a Document, such
Document shall be in such form as to permit the Lender or anyone to whom the
Lender may negotiate the same to obtain delivery to it of the Collateral
represented thereby. This Section shall not be deemed to be a consent by the
Lender to such conversion;

          (d) The Borrower will not dispose of any of the Collateral or permit
any of the Collateral to become a fixture or an accession to other goods without
the prior written consent of the Lender (which will not be unreasonably
withheld) in each instance;

          (e) The Borrower shall keep and maintain the Collateral in good
condition; and

          (f) The Borrower shall immediately notify the Lender of any material
lien or material damage to the Collateral.

     2.05. Condition of Collateral. The Borrower will immediately notify the
Lender of any event of deterioration, loss or depreciation of value of any
substantial portion of the Collateral and the amount of such deterioration, loss
or depreciation.

     2.06. Access to Collateral. The Borrower shall permit the Lender's
representatives to have access to the Collateral from time to time during normal
business hours, as reasonably requested by the Lender, for purposes of
examination, inspection, and appraisal thereof and verification of the
Borrower's records pertaining thereto. Except after the occurrence and during
the continuance of an Event of Default, the Lender shall give the Borrower at
least two (2) Business Days prior telephone notice before exercising the rights
granted in the preceding sentence. Upon the occurrence of an Event of Default,
upon demand by the Lender, the Borrower shall assemble the Collateral and make
it available to the Lender at Borrower's place of business. At the request of
the Lender, after the occurrence of an Event of Default, the Borrower shall
provide warehousing space in its own premises to the Lender for the purpose of
taking the Collateral into the custody of the Lender without removal thereof
from such premises and will erect such structures and post such signs as the
Lender may require in order to place such Collateral under the exclusive control
of the Lender.

     2.07. Notices. If notice of sale, disposition or other intended action by
the Lender with respect to the Collateral is required by the UCC or other
applicable law, any notice thereof sent to the Borrower at its addresses listed
on the signature page hereof or such other address of the Borrower as may
previously been designated by the Borrower as the address of the Borrower to
which notice should be given under this Agreement, at least ten (10) days prior
to such action, shall constitute reasonable notice to the Borrower.

     2.08. Expenses of the Lender. The Borrower will reimburse the Lender on
demand for all reasonable expenses (including the reasonable fees and expenses
of legal counsel for the Lender) in connection with the enforcement of the
Lender's rights to take possession of the Collateral and the

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<PAGE>

proceeds thereof and to hold, collect, render in compliance with applicable
environmental laws and regulations, prepare for sale, sell and dispose of the
Collateral.

     2.09. Security Agreement. It is the intention of the parties hereto that
this Agreement constitute a security agreement under the UCC in the State of New
Jersey for the purpose of creating the security interests granted herein.

     2.10. Further Assurances. From time to time the Borrower will execute and
deliver to the Lender such additional instruments as the Lender may reasonably
request to effectuate the purposes of this Agreement and to assure to the
Lender, as secured party, a first priority, perfected security interest in the
Collateral.

     2.11. Continuing Collateral. The Lender shall be under no obligation to
proceed first against any part of the Collateral before proceeding against any
other part of the Collateral. It is expressly agreed that all of the Collateral
stands as equal security for all Obligations under the Loan, and the Lender
shall have the right to proceed against or sell any and/or all of the Collateral
in any order, or simultaneously, as it, in its sole discretion, shall determine.

                                   ARTICLE III
                                   -----------
                         REPRESENTATIONS AND WARRANTIES

     To induce the Lender to enter into this Agreement and to make the Loan, the
Borrower represents and warrants to the Lender that:

     3.01. Organization, Powers, etc. The Borrower (a) is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, (b) has the requisite power and authority to own its assets and to
carry on its business as now being conducted (and as now contemplated) and (c)
has the requisite power and authority to engage in and consummate the
transactions contemplated by this Agreement, and to execute and deliver the Loan
Documents.

     3.02 Execution of Loan Documents. The execution, delivery and performance
by the Borrower of the Loan Documents and the consummation of the transactions
contemplated hereunder, (a) have been duly authorized by all necessary corporate
action, (b) will not violate any provisions of law, rule or regulation, any
order of any court or other agency of government, (c) will not violate any
provision of any material contract, indenture, agreement or other instrument to
which the Borrower is a party or to which the Borrower is bound, or results in
the creation of any Lien except for Liens created hereunder, or (d) will not
violate any provision of the charter documents of the Borrower.

     3.03. Validity of Agreement and Loan Documents. This Agreement constitutes,
and the Loan Documents when duly executed and delivered will constitute, valid
and legally binding obligations of the Borrower, enforceable in accordance with
the respective terms, except as such enforceability may be limited by
bankruptcy, insolvency, fraudulent conveyance or other similar laws affecting
the enforcement of creditors' rights generally and by general principles of
equity (regardless of whether such enforceability is considered in a proceeding
at law or in equity).

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                                   ARTICLE IV
                                   ----------
                              COVENANTS OF BORROWER

     To induce the Lender to enter into this Agreement, the Borrower covenants
and agrees that:

     4.01. Preservation of Existence, Business and Property. The Borrower will
at all times preserve and maintain its existence, rights and privileges, conduct
the same line of business as presently conducted or as contemplated hereby and
will preserve and protect its assets in good repair, working order and condition
(ordinary wear and tear excepted), and will make, or will cause to be made, all
needed and proper repairs, renewals, replacements, betterment and improvements
thereto.

     4.02. Payment of Taxes. The Borrower will promptly pay and discharge or
cause to be promptly paid and discharged, all taxes, assessments and
governmental charges or levies imposed upon them or in respect of any of its
assets and any and all payroll taxes, social security payments or similar
payroll deductions before the same shall become in default except for (i) taxes,
assessments and governmental charges or levies which are being contested in good
faith for which an adequate reserve or accrual has been established or (ii)
taxes, assessments and governmental charges or levies which are payable without
penalty or interest for which an adequate reserve or accrual has been
established or extensions duly filed, as well as all lawful claims which, if
unpaid, might become a lien or charge upon such property and assets or any part
thereof except for claims which are being contested in good faith for which an
adequate reserve or accrual has been established.

     4.03. Insurance. During the term of this Agreement, the Borrower agrees to
maintain insurance to the extent and against such hazards and liabilities as is
customarily maintained by companies similarly situated.

     4.04. Payment of Legal Fees and Expenses. The Borrower shall pay to the
Lender, upon demand, together with interest at the Default Rate set forth in the
Note from the date when incurred or advanced by the Lender until repaid by the
Borrower all reasonable costs, expenses or other sums incurred or advanced by
the Lender after an Event of Default and during the continuance thereof
(including legal fees and disbursements), to enforce the Lender's rights against
the Borrower, or in the prosecution or defense of any action or proceeding
related to this Agreement, including without limitation, reasonable legal fees,
expenses and disbursements.

     4.05. Merger; Corporate Structure. The Borrower will not enter into any
merger or consolidation or change its corporate structure or the nature or
character of its stock.

     4.06. Compliance with Laws. The Borrower will comply with all laws and
regulations applicable to it in the operation of its business if the failure to
so comply could have a material adverse effect on the Borrower's financial
condition, its ability to do business, or its operations.

     4.07. Liens. The Borrower shall not incur, create or otherwise permit to
exist any Liens on the Collateral other than the Lien created hereby.

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                                    ARTICLE V
                                    ---------
                              DEFAULTS AND REMEDIES

     5.01. Event of Default. Any one or more of the following events shall
constitute an event of default hereunder (an "Event of Default"):

          (a) The Borrower's failure to pay any payment of principal, interest
or other charges due and owing to the Lender under the Note or this Agreement
when due;

          (b) If the Borrower fails to observe or perform any covenant,
condition or agreement on the part of the Borrower to be observed or performed
pursuant to the terms hereof or any other Loan Document (other than a payment
default under the Note or this Agreement which shall be governed by (a) above),
and such default shall continue uncured for fifteen (15) days after written
notice of default from the Lender;

          (c) If any representation or warranty made herein or in any other Loan
Document or in any report, certificate, financial statement or other instrument
furnished in connection with this Agreement shall be false or misleading in any
material respect on the date on which it was made;

          (d) If the Borrower admits in writing its inability to pay its debts
as they mature, or make an assignment for the benefit of its creditors; or if
the Borrower shall apply for or consent to the appointment of any receiver,
trustee, or similar officer or the equivalent under any law for the Borrower or
for all or any substantial part of its property; or such receiver, trustee or
similar officer or the equivalent under any law shall be appointed without the
application or consent of the Borrower and shall continue undischarged for a
period of sixty (60) days; or if the Borrower shall institute (by petition,
application, answer, consent or otherwise) any bankruptcy, insolvency,
reorganization, arrangement, readjustment of debt, dissolution, liquidation or
similar proceeding relating to it under the laws of any jurisdiction; or if any
such proceeding shall be instituted (by petition, application or otherwise)
against the Borrower and an order for relief or similar remedy shall be entered
in such proceeding or such proceeding shall remain undismissed for a period of
sixty (60) days; or if any judgment, writ, warrant of attachment or execution or
similar process shall be issued or levied against any substantial portion of the
properties of the Borrower and such judgment, writ, or similar process shall not
be released, vacated, stayed or fully bonded within ninety (90) days after its
issue or levy;

          (e) If any default as defined in any loan or similar agreement to
which the Borrower is now or hereafter a party, or any other event thereunder
upon the occurrence of which any holder or holders of indebtedness outstanding
thereunder may declare the same due and payable, shall occur and shall continue
beyond any grace period, provided therein.

     5.02. Remedies. Upon the occurrence and during the continuance of an Event
of Default, the Lender may take one or more of the following remedial steps:

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          (a) At the option of the Lender upon notice to the Borrower if any
Event of Default other than those described in Section 5.01(d) shall occur and
be continuing, and automatically if any Event of Default described in Section
5.01(d) shall occur, the entire principal amount of the Note shall become
immediately due and payable, without presentment, demand for payment, protest,
notice of nonpayment or protest, notice of dishonor or any other notice or
demand whatsoever all of which are hereby expressly waived. Upon such
acceleration, the Borrower may only cure an Event of Default by paying to the
Lender the entire unpaid principal balance of the Notes, with interest accrued
thereon, and all other sums due and payable under the Note, this Agreement or
the Loan Documents;

          (b) Take any action at law or in equity to collect from the Borrower
the payments then due and thereafter to become due under the Note or to enforce
performance and observance of any obligation, agreement or covenant of the
Borrower under the Loan Documents;

          (c) Endorse the name of the Borrower upon any and all checks, drafts,
money orders and other instruments for the payment of monies which are payable
to the Borrower and constitute Proceeds of the Collateral;

          (d) The Lender may give written notice to the Borrower, whereupon the
Borrower shall, at its expense, promptly deliver any and all Collateral to such
place as the Lender may designate, or the Lender shall have the right to enter
upon the premises where the Collateral is located and take immediate possession
of and remove the Collateral without liability to the Lender, except as a result
of the gross negligence or willful misconduct of the Lender. In the event the
Lender obtains possession of the Collateral, the Lender may sell, assign or
otherwise dispose of the Collateral, but the Lender shall give the Borrower
reasonable notice of the time after which any private sale or other intended
disposition thereof is to be made; the requirement of reasonable notice shall be
met if notice of the sale or other intended disposition is mailed (by certified
mail, postage prepaid) to the Borrower at its address specified herein at least
ten (10) days prior to the time of sale or disposition; at such sale the Lender
may sell the Collateral for cash or upon credit or otherwise, at such prices and
upon such terms as it deems advisable and the Lender may bid or become purchaser
at such sale, free of the right of redemption, which is hereby waived. The
Lender may adjourn such sales at the time and place fixed therefor without
further notice or advertisement, and may sell such Collateral as an entirety or
in such parts as it deems advisable, but the Lender shall not be obligated to
sell all or any part of such Collateral at the time and placed fixed for such
sale if it determines not to do so. The Lender may apply the Proceeds of any
such sale first to the Lender's reasonable expenses in preparing the Collateral
for sale (including reasonable attorneys' fees) and second to the complete
satisfaction of the Borrower's obligation hereunder and under the other Loan
Documents;

          (e) The Lender shall have the right immediately, and without notice or
other action, to set-off any money owed by the Lender in any capacity to the
Borrower against the liability of the Borrower to the Lender, and the Lender
shall be deemed to have exercised such right to set-off and to have made a
charge against any such money immediately upon the occurrence of such Event of
Default, even though the actual book entries may be made at some time subsequent
thereto; and

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<PAGE>

          (f) Exercise any and all of the remedies of a secured party under the
UCC and otherwise available to it as a matter of law or equity or under any of
the other Loan Documents.

     5.03. No Remedy Exclusive. No remedy herein conferred or reserved to the
Lender is intended to be exclusive of any other available remedy or remedies,
but each and every such remedy shall be cumulative and shall be in addition to
every other remedy given under this Loan Agreement or now or hereafter existing
at law or in equity or by statute. No delay or omission to exercise any right or
power accruing upon any Event of Default shall impair any such right or power or
shall be construed to be a waiver thereof, but any such right and power may be
exercised from time to time and as often as may be deemed expedient. In order to
entitle the Lender to exercise any remedy reserved to it in this Article, it
shall not be necessary to give notice, other than such notice as may be required
in this Article.

     5.04. No Additional Waiver Implied by One Waiver. In the event any
agreement contained in any Loan Document should be breached by any party and
thereafter such breach should be waived by any party, such waiver shall be
limited to the particular breach so waived and shall not be deemed to waive any
other breach hereunder.

     5.05. Waiver of Automatic Stay. In consideration of the Lender's agreement
to enter into the Loan and other accommodations being made to Borrower, the
Borrower agrees that, in the event the Borrower shall (i) file with any
bankruptcy court of competent jurisdiction or be the subject of a petition under
Title 11 of the U.S. Code, as amended (the "Bankruptcy Code"), (ii) be the
subject of any order for relief under the Bankruptcy Code, (iii) file or be the
subject of any petition seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution, or similar relief under any present or
future federal or state act or law relating to bankruptcy, insolvency, or other
relief for debtors, (iv) have sought or consented to or acquiesced in the
appointment of any trustee, receiver, conservator or liquidator, or (v) be the
subject of any order, judgment, or decree entered by any court of competent
jurisdiction approving a petition filed against such party for any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar relief under any present or future federal or state act
or law relating to bankruptcy, insolvency, or other relief for debtors, Lender
shall thereupon be entitled, and the Borrower irrevocably consents, to the
extent not otherwise prohibited by law, to immediate and unconditional relief
from any automatic stay imposed by Section 362 of the Bankruptcy Code, or
otherwise, in addition to the exercise of rights and remedies otherwise
available to Lender, or any other documents or instruments executed and
delivered in connection with the Loans and as otherwise provided by law, and the
Borrower irrevocably waives any right to object to such relief and will not
contest any motion by Lender seeking relief from the automatic stay.

                                   ARTICLE VI
                                   ----------
                                  MISCELLANEOUS

     6.01. Notice. Any notice to the parties to this Agreement shall be
conclusively deemed to have been received by, and to be effective on the date on
which delivered to it, at the address set forth on page one (1) of this
Agreement, or if sent by certified mail, on the third Business Day after

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<PAGE>

the day on which mailed, addressed to the party at said address set forth on
page one (1) of this Agreement, as evidenced by a signed receipt.

     6.02. Successors and Assigns. Whenever in this Agreement any of the parties
hereto is referred to, such reference shall be deemed to include the successors
and assigns of such party except that the Borrower shall not have the right to
assign its rights or obligations hereunder or any interest herein.

     6.03. Survival. All covenants, agreements, representations and warranties
made by the Borrower herein or in any of the Loan Documents or any certificate
or instrument contemplated hereby shall survive any independent examination made
by the Lender and the execution and delivery of this Agreement and the Note, and
said certificates or instruments and shall continue so long as any obligations
are outstanding and unsatisfied, applicable statute of limitations to the
contrary notwithstanding.

     6.04. New Jersey Law Governs. This Agreement and the other Loan Documents
shall be construed in accordance with and governed by the laws of the State of
New Jersey.

     6.05. Waivers in Writing. The waiver of any provisions of this Agreement or
any other Loan Documents, or consent to any departure by the Borrower therefrom,
shall in no event be effective unless the same shall be in writing and signed by
the Lender by an authorized person. Any such waiver shall be effective only in
the specific instance and for the purpose for which given. No notice to or
demand on the Borrower in any case shall entitle it to any other further notice
or demand in the same circumstances.

     6.06. Failure to Exercise Rights. Neither any failure nor any delay on the
part of the Lender in exercising any right, power or privilege hereunder or
under any Loan Document shall operate as a waiver hereof or thereof, nor shall a
single or partial exercise thereof preclude any other or further exercise of any
other right, power or privilege.

     6.07. Captions. The section headings contained herein are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.

     6.08. Severability. In the event any provision of this Agreement or any
Loan Document shall be held invalid or unenforceable by any court of competent
jurisdiction, such holding shall not invalidate or render unenforceable any
other provision hereof or thereof.

     6.09. Judicial Proceedings. Any judicial proceeding brought against the
Borrower with respect to this Agreement or the Note shall be brought in any
court of competent jurisdiction in the State of New Jersey, and, by execution
and delivery of this Agreement, the Borrower accepts, generally and
unconditionally, the jurisdiction of such courts and any related appellate
court.

     6.10. Advice of Counsel. The Borrower hereby confirms actual and full
knowledge and acceptance of the terms and provisions of the Loan Documents and
this Agreement, as to all of which the Borrower further acknowledges that the
Borrower has received the advice of counsel.

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<PAGE>

     6.11. Release of Lien in Collateral. Upon the payment in full of the Note,
the Lien of the Lender in the Collateral shall be released and discharged by the
Lender. The Lender shall execute such release documents to evidence such release
and discharge as the Borrower may reasonably request.

     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized officers on the date first hereinabove written.

                                       PERFORMANCE HEALTH TECHNOLOGIES, INC.

                                       By: _________________________________
                                           Robert D. Prunetti
                                           President and Chief Executive Officer

                                       By: _________________________________

                                       10EXHIBIT 10.67
                                                                   -------------

                          REGISTRATION RIGHTS AGREEMENT

         This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of
____________, by Performance Health Technologies, Inc., a Delaware corporation
(the "Company"), in favor of holders of Registrable Stock (as hereinafter
defined).

The Company hereby grants the following rights to every Holder of Registrable
Securities:

         1. Definitions. As used herein, unless the context otherwise requires,
the following terms have the following respective meanings:

         Commission: The Securities and Exchange Commission or any other Federal
agency at the time administering the Securities Act.

         Common Stock: The shares of Common Stock, par value $0.01 per share, of
the Company as existing on the date hereof.

         Company:  As defined in the first paragraph of this Agreement.

         Holder: Any Person who holds Registrable Securities and any holder of
Registrable Securities to whom the registration rights conferred by this
Agreement have been transferred in compliance with Section 7 hereof.

         Initiating Holders: Any holder or holders of Registrable Securities
holding greater than or equal to 50% of the Registrable Securities (by number of
shares at the time issued and outstanding) and initiating a request pursuant to
Section 2.1 hereof for the registration of all or part of such holder's or
holders' Registrable Securities.

         Other Stockholders: Persons other than Holders who, by virtue of
agreements with the Company, are entitled or permitted to include their
securities in certain registrations hereunder.

         Person: A corporation, an association, a partnership, an organization,
business, an individual, a governmental or political subdivision thereof or a
governmental agency.

         Registrable Securities: (a) any shares of Common Stock to be issued at
any Closing described in the Company's Confidential Private Placement Memorandum
dated ______________, and any shares of Common Stock to be issued either in
payment of interest or upon conversion of any Convertible Note issued at any
Closing described in such Confidential Private Placement Memorandum and (b)
securities issued or issuable with respect to any Common Stock referred to in
the foregoing subdivision (a) by way of stock dividend or stock split or in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization or otherwise. As to any particular Registrable
Securities, such securities shall cease to be Registrable Securities when (i) a
registration statement with respect to the sale

                                       1
<PAGE>

of such securities shall have become effective under the Securities Act and such
securities shall have been disposed of in accordance with such registration
statement, (ii) they shall have been distributed to the public pursuant to Rule
144 (or any successor provision) under the Securities Act, (iii) they shall have
been otherwise transferred, new certificates for them not bearing a legend
restricting further transfer shall have been delivered by the Company and
subsequent disposition of them shall not require registration or qualification
of them under the Securities Act or any similar state law then in force, or (iv)
they shall have ceased to be outstanding.

         register, registered and registration: These terms shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.

         Registration Expenses: All expenses incident to the Company's
performance of or compliance with Section 2 hereof, including, without
limitation, all registration, filing and NASD fees, all fees and expenses of
complying with securities or blue sky laws, all word processing, duplicating and
printing expenses, messenger and delivery expenses, the fees and disbursements
of counsel for the Company and of its independent public accountants, including
the expenses of any special audits or "cold comfort" letters required by or
incident to such performance and compliance, and any fees and disbursements of
underwriters customarily paid by issuers or sellers of securities, but excluding
underwriting discounts, commissions, and non-accountable expense allowance and
transfer taxes, if any, provided that, in any case where Registration Expenses
are not to be borne by the Company, such expenses shall not include salaries of
the Company personnel or general overhead expenses of the Company, auditing
fees, premiums or other expenses relating to liability insurance required by
underwriters of the Company or other expenses for the preparation of financial
statements or other data normally prepared by the Company in the ordinary course
of its business or which the Company would have incurred in any event.

         Securities Act: The Securities Act of 1933, or any similar Federal
statute, and the rules and regulations of the Commission thereunder, all as the
same shall be in effect at the time. References to a particular section of the
Securities Act shall include a reference to the comparable section, if any, of
any such similar Federal statute.

         2. Registration under Securities Act, etc.

         2.1 Demand Registration.

         (a) Request. Upon the written request of one or more Initiating Holders
requesting that the Company effect the registration under the Securities Act of
all or part of such Initiating Holders' Registrable Securities and specifying
the intended method of disposition thereof, the Company will promptly give
written notice of such requested registration to all registered holders of
Registrable Securities, and thereupon the Company will use its best efforts to
effect the registration under the Securities Act of:

                                       2
<PAGE>

                  (i) the Registrable Securities which the Company has been so
         requested to register by such Initiating Holders for disposition in
         accordance with the intended method of disposition stated in such
         request;

                  (ii) all other Registrable Securities the holders of which
         shall have made a written request to the Company for registration
         thereof within 30 days after the giving of such written notice by the
         Company (which request shall specify the intended method of disposition
         of such Registrable Securities); and

                  (iii) all shares of Common Stock which the Company and any
         Other Stockholders may elect to register in connection with the
         offering of Registrable Securities pursuant to this Section 2.1, all to
         the extent requisite to permit the disposition (in accordance with the
         intended methods thereof as aforesaid) of the Registrable Securities
         and the additional shares of Common Stock, if any, so to be registered;

provided that the Company shall not be required to effect (i) more than one
registration pursuant to this Section 2.1, (ii) the registration of Registrable
Securities pursuant to this Section 2.1 unless the aggregate number of shares of
Registrable Securities requested to be registered by all holders of Registrable
Securities is equal to or greater than 50% of the Registrable Securities
originally issuable under the Warrant Agreement or have a market value (based
upon the closing price of such Registrable Securities quoted on the securities
exchange or over-the-counter quotation system on which such Registrable
Securities are listed or quoted, as the case may be, on the trading day
immediately preceding any request pursuant to this Section 2.1) of at least $5
million at the close of the last trading day prior to such request, (iii) during
the period starting with the date thirty (30) days prior to the Company's good
faith estimate of the date of filing of, and ending on a date ninety (90) days
after the effective date of, a Company-initiated registration (provided that the
Company is actively employing in good faith all reasonable efforts to cause such
registration statement to become effective), and (iv) the registration of
Registrable Securities pursuant to this Section 2.1 if (x) in the good faith
judgment of the board of directors of the Company, such registration would be
seriously detrimental to the Company and the board of directors of the Company
concludes, as a result, that it is essential to defer the filing of such
registration statement at such time, and (y) the Company shall furnish to such
Holders a certificate signed by the president of the Company stating that in the
good faith judgment of the board of directors of the Company, it would be
seriously detrimental to the Company for such registration statement to be filed
in the near future and that it is, therefore, essential to defer the filing of
such registration statement, then the Company shall have the right to defer such
filing for the period during which such registration would be seriously
detrimental (provided that the Company may not defer the filing for a period of
more than one hundred eighty (180) days after receipt of the request of
Initiating Holders, and, provided further, that the Company shall not defer its
obligation in this manner more than once in any twelve-month period).

         (b) Expenses. The Company will pay all Registration Expenses in
connection with each registration of Registrable Securities requested pursuant
to this Section 2.1.

         (c) Effective Registration Statement. The registration requested
pursuant to this Section 2.1 shall not be deemed to have been effected (i)
unless a registration statement with respect

                                       3
<PAGE>

thereto has become effective, provided that a registration which does not become
effective after the Company has filed a registration statement with respect
thereto solely by reason of the refusal to proceed of the Initiating Holders
(other than a refusal to proceed based upon the advice of counsel relating to a
matter with respect to the Company) shall be deemed to have been effected by the
Company at the request of such Initiating Holders unless the Initiating Holders
shall have elected to pay all Registration Expenses in connection with such
registration, (ii) if, after it has become effective, such registration is
interfered with by any stop order, injunction or other order or requirement of
the Commission or other governmental agency or court for any reason (other than
a stop order, injunction or other order or requirement resulting from some act
or omission by the Initiating Holders), or (iii) the conditions to closing
specified in the purchase agreement or underwriting agreement entered into in
connection with such registration are not satisfied, other than by reason of
some act or omission by such Initiating Holders.

         (d) Underwritten Offering. If any offering of Registrable Shares
pursuant to this Section 2.1 involves an underwritten offering, the Company
shall (after first consulting with the Initiating Holders) select the investment
banking firm or firms to manage the underwritten offering.

         The right of any Holder to registration pursuant to this Section 2.1
shall be conditioned upon such Holder's participation in such underwriting and
the inclusion of such Holder's Registrable Securities in the underwriting
(unless otherwise mutually agreed by a majority in interest of Initiating
Holders and such Holder with respect to such participation and inclusion) to the
extent provided herein. A Holder may elect to include in such underwriting all
or a part of the Registrable Securities held by such Holder.

         If the Company shall request inclusion in any registration pursuant to
this Section 2.1 of securities being sold for its own account, or if an Other
Stockholder shall request inclusion in any registration pursuant to this Section
2.1, the Initiating Holders shall, on behalf of all Holders, offer to include
such securities in the underwriting and may condition such offer on their
acceptance of the further applicable provisions of this Agreement (including
without limitation Section 2.6 hereof). In such event, the Company shall
(together with all Holders and other persons proposing to distribute their
securities through such underwriting) enter into an underwriting agreement in
customary form with the representative of the underwriter or underwriters
selected for such underwriting by the Initiating Holders. If a person who has
requested inclusion in such registration as provided above does not agree to the
terms of any such underwriting, such person shall be excluded therefrom by
written notice from Company, the underwriter or Initiating Holders. The
securities so excluded shall also be withdrawn from registration. Any
Registrable Securities or other securities excluded shall also be withdrawn from
such registration.

         (e) Priority in Demand Registrations. Notwithstanding any other
provision of this Section 2.1, if any financial advisor retained by the
Initiating Holders or the Company shall advise the Company in writing that, in
its opinion, the number of securities requested to be included in such
registration (including securities of the Company which are not Registrable
Securities) exceeds the number which can be sold in the contemplated offering
within a price range acceptable to the holders of a majority of the Registrable
Securities requested to be included in such registration, the Company will
include in such registration, to the extent of the

                                       4
<PAGE>

number which the Company is so advised can be sold in such offering the
Registrable Securities requested to be included in such registration by the
holder or holders of Registrable Securities, the securities the Company proposes
to sell and other securities of the Company included in such registration by the
holders thereof, pro rata among such holders on the basis of the number of such
securities requested to be included by such holders and the Company.

         2.2 Piggyback Registration.

         (a) Right to Include Registrable Securities. If the Company at any time
proposes to register any of its securities under the Securities Act (other than
by a registration on Form S-4, S-8, S-14 or S-15 or any successor or similar
forms), whether or not for sale for its own account, it will each such time give
prompt written notice to all holders of Registrable Securities of its intention
to do so and of such holders' rights under this Section 2.2. Upon the written
request of any such holder made within 10 days after the receipt of any such
notice (which request shall specify the Registrable Securities intended to be
disposed of by such holder and the intended method of disposition thereof), the
Company, subject to Section 2.2(d), will use its best efforts to effect the
registration under the Securities Act of all Registrable Securities which the
Company has been so requested to register by the holders thereof, to the extent
requisite to permit the disposition (in accordance with the intended methods
thereof as aforesaid) of the Registrable Securities so to be registered, by
inclusion of such Registrable Securities in the registration statement which
covers the securities which the Company proposes to register, provided that if,
at any time after giving written notice of its intention to register any
securities and prior to the effective date of the registration statement filed
in connection with such registration, the Company shall determine for any reason
either not to register or to delay registration of such securities, the Company
may, at its election, give written notice of such determination to each holder
of Registrable Securities and, thereupon, (i) in the case of a determination not
to register, shall be relieved of its obligation to register any Registrable
Securities in connection with such registration (but not from its obligation to
pay the Registration Expenses in connection therewith), without prejudice,
however, to the rights of any holder or holders of Registrable Securities
entitled to do so to request that such registration be effected as a
registration under Section 2.1 hereof, and (ii) in the case of a determination
to delay registering, shall be permitted to delay registering any Registrable
Securities, for the same period as the delay in registering such other
securities. No registration effected under this Section 2.2 shall relieve the
Company of its obligation to effect any registration upon request under Section
2.1 hereof. In no event shall the Company be required to effect more than two
registrations of Registrable Securities pursuant to this Section 2.2.

         (b) Expenses. The Company will pay all Registration Expenses in
connection with each registration of Registrable Securities requested pursuant
to this Section 2.2

         (c) Piggyback Underwritten Offerings. If the Company at any time
proposes to register any of its securities under the Securities Act as
contemplated by this Section 2.2 and such securities are to be distributed by or
through one or more underwriters, the Company will, if requested by any Holder
of Registrable Securities as provided in this Section 2.2 and subject to the
provisions of Section 2.2(d) hereof, use its reasonable best efforts to arrange
for such

                                       5
<PAGE>

underwriters to include all the Registrable Securities to be offered and sold by
such holder among the securities to be distributed by such underwriters.

         The holders of Registrable Securities to be distributed by such
underwriters shall be parties to the underwriting agreement between the Company
and such underwriters and may, at their option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters shall also be made to and
for the benefit of such holders of Registrable Securities and that any or all of
the conditions precedent to the obligations of such underwriters under such
underwriting agreement be conditions precedent to the obligations of such
holders of Registrable Securities. Any such holder of Registrable Securities
shall not be required to make any representations or warranties to or agreements
with the Company or the underwriters other than representations, warranties or
agreements regarding such holder, such holder's Registrable Securities and such
holder's intended method of distribution and any other representation required
by law.

         (d) Priority in Piggyback Registrations. If (i) a registration pursuant
to this Section 2.2 involves an underwritten offering of the securities so being
registered, whether or not for sale for the account of the Company, to be
distributed (on a firm commitment, best efforts or other basis) by or through
one or more underwriters and (ii) the managing underwriter of such underwritten
offering shall inform the Company and holders of the Registrable Securities
requesting inclusion of their Registrable Securities in such registration by
letter of its belief that the distribution of all or a specified number of the
securities requested to be included in such registration concurrently with the
securities being distributed by such underwriters would interfere with the
successful marketing of the securities being distributed by such underwriters
(such writing to state the basis of such belief and the approximate number of
such securities which may be distributed without such effect), then the Company
will be obligated to include in such registration statement the Registrable
Securities of the Holders in sequence, in accordance with the following:

                  (x) in the case of an offering by the Company for its own
         account, (A) first, any and all securities for sale by the Company, (B)
         second, securities requested to be included in such registration
         statement by Other Stockholders pursuant to any other registration
         rights that may have been, or may hereafter be, granted by the Company,
         with priority as to registration rights over the registration rights of
         the Holders granted under this Agreement, and (C) third, Registrable
         Securities requested to be included in such registration by the Holders
         and securities requested to be included in such registration statement
         by Other Stockholders (other than those described in (B)) pursuant to
         any other registration rights that may have been, or may hereafter be,
         granted by the Company, pro rata based on the number of such securities
         requested to be included by such Holders and such Other Stockholders;

                  (y) in the case of an offering by the Company for the account
         of any of its securityholders (other than the Holders), (A) first,
         securities requested to be registered by any such securityholder
         pursuant to the exercise of demand registration rights, (B) second,
         securities for the account of the Company and securities requested to
         be included in such registration statement by Other Stockholders
         pursuant to any other registration rights that may have been, or may

                                       6
<PAGE>

         hereafter be, granted by the Company, with priority as to registration
         rights over the registration rights of the Holders granted under this
         Agreement, and (C) third, Registrable Securities requested to be
         registered by the Holders and securities requested to be included in
         such registration statement by Other Stockholders (other than those
         described in (B)) pursuant to any other registration rights that may
         have been, or may hereafter be, granted by the Company, pro rata based
         on the number of such securities requested to be included by such
         Holders, the Company and such Other Stockholders.

         2.3 Registration Procedures. Notwithstanding any other provision of
this Agreement, the Company will have no obligation to effect the registration
of any Registrable Securities under the Securities Act as provided in Section
2.1 hereof unless and until such Registrable Securities shall have been issued
by the Company, and the Company agrees to immediately issue the Registrable
Securities when required to do so under the Convertible Notes. If and whenever
the Company is required to use its best efforts to effect the registration of
any Registrable Securities under the Securities Act as provided in Section 2.1
hereof, the Company shall, as expeditiously as possible:

                  (i) prepare and (within 90 days after the end of the period
         within which requests for registration may be given to the Company, or
         in any event as soon thereafter as possible) file with the Commission
         the requisite registration statement to effect such registration
         (including such audited financial statements as may be required by the
         Securities Act or the rules and regulations promulgated thereunder) and
         thereafter use its best efforts to cause such registration statement to
         become and remain effective, provided, however, that the Company may
         discontinue any registration of its securities including Registrable
         Securities at any time prior to the effective date of the registration
         statement relating thereto, and further provided that before filing
         such registration statement or any amendments thereto, the Company will
         furnish to one counsel selected by the Holders of Registrable
         Securities which are to be included in such registration copies of all
         such documents proposed to be filed, which documents will be subject to
         the review of such counsel, at the expense of the Holders;

                  (ii) prepare and file with the Commission such amendments and
         supplements to such registration statement and the prospectus used in
         connection therewith as may be necessary and to comply with the
         provisions of the Securities Act with respect to the disposition of all
         securities covered by such registration statement, and use best efforts
         to keep such registration statement effective until the earlier of such
         time as all of such securities have been disposed of in accordance with
         the intended methods of disposition by the seller or sellers thereof
         set forth in such registration statement or the expiration of 180 days
         after such registration statement becomes effective (provided, however,
         that such 180-day period shall be extended for a period of time equal
         to the period Holder refrains from selling any securities included in
         such registration at the request of an underwriter of common stock (or
         other securities) of the Company);

                  (iii) furnish to each seller of Registrable Securities covered
         by such registration statement and each underwriter, if any, of the
         securities being sold by

                                       7
<PAGE>

         such seller such number of conformed copies of such registration
         statement and of each such amendment and supplement thereto (in each
         case including all exhibits), such number of copies of the prospectus
         contained in such registration statement (including each preliminary
         prospectus and any summary prospectus) and any other prospectus filed
         under Rule 424 under the Securities Act, in conformity with the
         requirements of the Securities Act, and such other documents, as such
         seller may reasonably request in order to facilitate the public sale or
         other disposition of the Registrable Securities owned by such Seller;

                  (iv) use its best efforts (A) to register or qualify all
         Registrable Securities and other securities covered by such
         registration statement under such other securities laws or blue sky
         laws of such jurisdictions as shall reasonably be requested by such
         seller, (B) to keep such registrations or qualifications in effect for
         so long as such registration statement remains in effect, and (C) take
         any other action which may be reasonably necessary or advisable to
         enable each seller to consummate the disposition in such jurisdictions
         of the securities owned by such seller, except that the Company shall
         not for any such purpose be required to qualify generally to do
         business as a foreign corporation in any jurisdiction wherein it would
         not, but for the requirements of this subdivision (iv), be obligated to
         be so qualified, to subject itself to taxation in any such jurisdiction
         or to consent to general service of process in any such jurisdiction;

                  (v) use its best efforts to cause all Registrable Securities
         covered by such registration statement to be registered with or
         approved by such other governmental agencies or authorities as may be
         necessary to enable the seller or sellers thereof to consummate the
         disposition of such Registrable Securities;

                  (vi) cause the Registrable Securities included in any
         registration statement to be (i) listed on each securities exchange, if
         any, on which similar securities issued by the Company are then listed,
         or (ii) authorized to be quoted and/or listed (to the extent
         applicable) on the National Association of Securities Dealers, Inc.
         Automated Quotation ("NASDAQ") or the National Market System of NASDAQ
         if the Registrable Securities so qualify;

                  (vii) provide a CUSIP number for the Registrable Securities
         included in any registration statement not later than the effective
         date of such registration statement;

                  (viii) furnish to each Holder selling securities in such
         registration and underwriter a signed counterpart of (i) an opinion or
         opinions of counsel to the Company, and (ii) a comfort letter or
         comfort letters from the Company's independent public accountants, each
         in customary form and covering such matters of the type customarily
         covered by opinions or comfort letters, as the case may be, as the
         Holders selling securities in such registration or managing underwriter
         reasonably requests;

                                       8
<PAGE>

                  (ix) notify each seller of Registrable Securities covered by
         such registration statement, at any time when a prospectus relating
         thereto is required to be delivered under the Securities Act, upon the
         discovery that, or upon the happening of any event as a result of
         which, the prospectus included in such registration statement, as then
         in effect, includes an untrue statement of a material fact or omits to
         state any material fact required to be stated therein or necessary to
         make the statements therein not misleading in the light of the
         circumstances under which they were made, and at the request of any
         such seller promptly prepare and furnish to such seller (and each
         underwriter, if any) a reasonable number of copies of a supplement to
         or an amendment of such prospectus as may be necessary so that, as
         thereafter delivered to the purchasers of such securities, such
         prospectus shall not include an untrue statement of a material fact or
         omit to state a material fact required to be stated therein or
         necessary to make the statements therein not misleading in the light of
         the circumstances under which they were made;

                  (x) otherwise use its best efforts to comply with all
         applicable rules and regulations of the Commission, and make available
         to its security holders, as soon as reasonably practicable, an earnings
         statement covering the period of at least twelve months, but not more
         than eighteen months, beginning with the first day of the full calendar
         month after the effective date of such registration statement, if such
         earnings statement is necessary to satisfy the provisions of Section
         11(a) of the Securities Act, and will furnish to each such seller at
         least five business days (or such shorter reasonable time period as
         given circumstances shall dictate) prior to the filing thereof a copy
         of any amendment or supplement to such registration statement or
         prospectus and shall not file any thereof to which any such seller
         shall have reasonably objected on the grounds that such amendment or
         supplement does not comply in all material respects with the
         requirements of the Securities Act or of the rules or regulations
         thereunder; and

                  (xi) enter into such agreements and take such other actions as
         sellers of such Registrable Securities holding more than 50% of the
         shares so to be sold shall reasonably request in order to expedite or
         facilitate the disposition of such Registrable Securities.

         The Company may require each seller of Registrable Securities as to
which any registration is being effected to furnish the Company such information
regarding such seller and the distribution of such securities as the Company may
from time to time reasonably request in writing and as shall be required by
applicable law or the Commission in connection therewith. Each holder of
Registrable Securities agrees by acquisition of such Registrable Securities
that, upon receipt of any notice from the Company of the occurrence of any event
of the kind described in subdivision (ix) of this Section 2.3, such holder will
forthwith discontinue such holder's disposition of Registrable Securities
pursuant to the registration statement relating to such Registrable Securities
until such holder's receipt of the copies of the supplemented or amended
prospectus contemplated by subdivision (ix) of this Section 2.3 and, if so
directed by the Company, will deliver to the Company (at the Company's expense)
all copies, other than

                                       9
<PAGE>

permanent file copies, then in such holder's possession of the prospectus
relating to such Registrable Securities current at the time of receipt of such
notice.

         2.4 Preparation; Reasonable Investigation. (a) In connection with the
preparation and filing of each registration statement under the Securities Act
pursuant to this Agreement, the Company will give the holders of Registrable
Securities registered under such registration statement, their underwriters, if
any, and their respective counsel and accountants, the opportunity, at the
expense of the holders, to participate in the preparation of such registration
statement, each prospectus included therein or filed with the Commission, and
each amendment thereof or supplement thereto, and will give each of them such
reasonable access to its books and records and such opportunities to discuss the
business of the Company with its officers and the independent public accountants
who have certified its financial statements as shall be reasonably necessary, in
the opinion of such holders' and such underwriters' respective counsel, to
conduct a reasonable investigation within the meaning of the Securities Act.

         (b) Certain Information. The Company agrees to include in any
registration statement that includes Registrable Securities filed under Section
2.1 hereof, all information which holders of Registrable Securities being
registered shall reasonably request (after giving due regard to the
confidentiality of such information).

         2.5 Indemnification.

         (a) Indemnification by the Company. In the event of any registration of
any securities of the Company under the Securities Act, the Company will, and
hereby does, indemnify and hold harmless, in the case of any registration
statement covering Registrable Securities, the holder of any Registrable
Securities covered by such registration statement, its directors and officers,
each other Person who participates as an underwriter in the offering or sale of
such securities and each other Person, if any, who controls such holder or any
such underwriter within the meaning of the Securities Act, against any losses,
claims, damages or liabilities, joint or several, to which such holder or any
such director or officer or underwriter or controlling Person may become subject
under the Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon, any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such securities were registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and the Company will
reimburse such holder, and each such director, officer, underwriter and
controlling Person for any legal or any other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
liability, action or proceeding; provided that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in such registration statement, any such preliminary prospectus,
final prospectus, summary prospectus, amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by any
Holder for use in the preparation thereof and, provided further that the Company
shall not be liable to any Person who participates as an underwriter, in the
offering or

                                       10
<PAGE>

sale of Registrable Securities or to any other Person, if any, who controls such
underwriter within the meaning of the Securities Act, in any such case to the
extent that any such loss, claim, damage, liability (or action or proceeding in
respect thereof) or expense arises out of such Person's failure to send or give
a copy of the final prospectus, as the same may be then supplemented or amended,
to the Person asserting an untrue statement or alleged untrue statement or
omission or alleged omission at or prior to the written confirmation of the sale
of Registrable Securities to such Person if such statement or omission was
corrected in such final prospectus. Such indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of such holder
or any such director, officer, underwriter or controlling person and shall
survive the transfer of such securities by such holder.

         (b) Indemnification by the Holders. The Company may require, as a
condition to including any Registrable Securities in any registration statement
filed pursuant to Section 2.2 hereof, that the Company shall have received an
undertaking satisfactory to it from the prospective seller of such Registrable
Securities, to indemnify and hold harmless (in the same manner and to the same
extent as set forth in subdivision (a) of this Section 2.4) the Company, each
director of the Company, each officer of the Company and each other Person, if
any, who controls the Company within the meaning of the Securities Act, with
respect to any statement or alleged statement in or omission or alleged omission
from such registration statement, any preliminary prospectus, final prospectus
or summary prospectus contained therein, or any amendment or supplement thereto,
if such statement or alleged statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company through an instrument duly executed by such seller specifically stating
that it is for use in the preparation of such registration statement,
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement. Such indemnity shall be limited to the extent required by applicable
law and shall remain in full force and effect, regardless of any investigation
made by or on behalf of the Company or any such director, officer or controlling
person and shall survive the transfer of such securities by such seller.

         (c) Notices of Claims, etc. Promptly after receipt by an indemnified
party of notice of the commencement of any action or proceeding involving a
claim referred to in the preceding subdivisions of this Section 2.5, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to the latter of the commencement of
such action, provided that the failure of any indemnified party to give notice
as provided herein shall not relieve the indemnifying party of its obligations
under the preceding subdivisions of this Section 2.5, except to the extent that
the indemnifying party is actually prejudiced by such failure to give notice. In
case any such action is brought against an indemnified party, unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified and indemnifying parties may exist in respect of such claim, the
indemnifying party shall be entitled to participate in and to assume the defense
thereof, jointly with any other indemnifying party similarly notified, to the
extent that the indemnifying party may wish, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified party
for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the consent of the
indemnified party,

                                       11
<PAGE>

consent to entry of any judgment or enter into any settlement of any such action
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such indemnified party of a release from all liability,
or a covenant not to sue, in respect to such claim or litigation. No indemnified
party shall consent to entry of any judgment or enter into any settlement of any
such action the defense of which has been assumed by an indemnifying party
without the consent of such indemnifying party.

         (d) Other Indemnification. Indemnification similar to that specified in
the preceding subdivisions of this Section 2.5 (with appropriate modifications)
shall be given by the Company and each seller of Registrable Securities with
respect to any required registration or other qualification of securities under
any Federal or state law or regulation of any governmental authority, other than
the Securities Act.

         (e) Indemnification Payments. The indemnification required by this
Section 2.4 shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills are received or
expense, loss, damage or liability is incurred.

         (f) Contribution. If the indemnification provided for in the preceding
subdivisions of this Section 2.5 is unavailable to an indemnified party in
respect of any expense, loss, damage or liability referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such expense, loss, damage or liability (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the holder or underwriter, as the case may be, on the other from the
distribution of the Registrable Securities or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and of the
holder or underwriter, as the case may be, on the other in connection with the
statements or omissions which resulted in such expense, loss, damage or
liability, as well as any other relevant equitable considerations. The relative
fault of the Company on the one hand and of the holder or underwriter, as the
case may be, on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
omission to state a material fact relates to information supplied by the
Company, by the holder or by the underwriter and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission; provided, that the foregoing contribution agreement shall
not inure to the benefit of any indemnified Person if indemnification would be
unavailable to such indemnified Person by reason of the proviso contained in the
first sentence of subdivision (a) of this Section 2.4, and in no event shall the
obligation of any indemnifying party to contribute under this subdivision (f)
exceed the amount that such indemnifying party would have been obligated to pay
by way of indemnification if the indemnification provided for under subdivisions
(a) or (b) of this Section 2.4 had been available under the circumstances.

         The Company and the holders of Registrable Securities agree that it
would not be just and equitable if contribution pursuant to this subdivision (f)
were determined by pro rata allocation (even if the holders and any underwriters
were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations referred
to

                                       12
<PAGE>

in the immediately preceding paragraph. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages and liabilities
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth in the preceding sentence and subdivisions
(c) of this Section 2.5, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim.

         Notwithstanding the provisions of this subdivision (f), no holder of
Registrable Securities or underwriter shall be required to contribute any amount
in excess of the amount by which (i) in the case of any such holder, the net
proceeds received by such holder from the sale of Registrable Securities or (ii)
in the case of an underwriter, the total price at which the Registrable
Securities purchased by it and distributed to the public were offered to the
public exceeds, in any such case, the amount of any damages that such holder or
underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.

         3. Other Registration Rights. Nothing in this Agreement shall be deemed
to prevent the Company from granting any rights or entering into any agreement
with any holder or prospective holder of any securities of the Company giving
such holder or prospective holder any registration rights the terms of which are
more favorable than the registration rights granted to the Holders hereunder.

         4. Amendments and Waivers. This Agreement may be amended and the
Company may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if the Company shall have obtained the
written consent to such amendment, action or omission to act, of the holder or
holders of more than 50% of the shares of Registrable Securities. Each holder of
any Registrable Securities at the time or thereafter outstanding shall be bound
by any consent authorized by this Section 4, whether or not such Registrable
Securities shall have been marked to indicate such consent.

         5. Nominees for Beneficial Owners. In the event that any Registrable
Securities are held by a nominee for the beneficial owner thereof, the
beneficial owner thereof may, at its election, be treated as the holder of such
Registrable Securities for purposes of any request or other action by any holder
or holders of Registrable Securities pursuant to this Agreement or any
determination of any number or percentage of shares of Registrable Securities
held by any holder or holders of Registrable Securities contemplated by this
Agreement. If the beneficial owner of any Registrable Securities so elects, the
Company may require assurances reasonably satisfactory to it of such owner's
beneficial ownership of such Registrable Securities.

         6. Notices. Except as otherwise provided in this Agreement, all
communications provided for hereunder shall be in writing and either hand
delivered or sent by prepaid commercial courier, telecopy or first-class
registered or certified mail, postage prepaid, and addressed

         if to a Holder:      To the Address of the Holder then reflected on the
                              books of the Company

                                       13
<PAGE>

         if to the Company:   Performance Health Technologies, Inc.
                              6654 Gunpark Drive, Suite 100
                              Boulder, Colorado 80301
                              Attention: Marc R. Silverman
                              Facsimile: (303) 527-1661

or at such other address the Holder or the Company shall have given notice to
other. Notices sent by commercial courier services for next day delivery shall
be deemed given and received the day after they are sent, notices sent by
telecopy shall be deemed given and received the day they are sent, and notices
sent by mail shall be deemed given and received five (5) days after being mailed
as aforesaid.

         7. Assignment. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the Holders and the Company and their
respective successors and permitted assigns. In addition, and whether or not any
express assignment shall have been made, the provisions of this Agreement which
are for the benefit of the Holders shall also be for the benefit of and
enforceable by any subsequent holder of any Registrable Securities, provided,
that the transferee or assignee of such rights assumes the obligations of such
Holder under this Agreement by a written agreement reasonably acceptable to the
Company.

         8. Descriptive Headings. The descriptive headings of the several
sections and paragraphs of this Agreement are inserted for reference only and
shall not limit or otherwise affect the meaning hereof.

         9. Governing Law. This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws of
the State of New York without reference to the principles of conflicts of laws.

         IN WITNESS WHEREOF, the Company has executed this Agreement effective
as of the day and year first written above.

                                       THE COMPANY:

                                       PERFORMANCE HEALTH TECHNOLOGIES, INC.

                                       By:______________________________________
                                          Marc. R. Silverman
                                          President & CEO

                                       14

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