Document:

THE SECURITIES REPRESENTED BY THESE WARRANTS AND THE COMMON STOCK ISSUABLE
THEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR ANY OTHER APPLICABLE SECURITIES LAW. THE SECURITIES
REPRESENTED BY THESE WARRANTS MAY NOT BE TRANSFERRED, EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER, OR IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER, THE SECURITIES ACT AND IN ACCORDANCE WITH ANY OTHER
APPLICABLE SECURITIES LAWS.

                                    WARRANTS

                           to Purchase Common Stock of

                             HENLEY HEALTHCARE, INC.

                     Expiring on ___________, [2003 or 2005]

        These Common Stock Purchase Warrants (the "Warrants") certify that for
value received, _______________ (the "Holder") or its permitted assigns, is
entitled, subject to the terms and conditions set forth below, to subscribe for
and purchase from the Company (as hereinafter defined), in whole or in part,
_______ shares of duly authorized, validly issued, fully paid and nonassessable
shares of Common Stock (as hereinafter defined) at the initial Exercise Price of
$3.00 per share, subject, however, to the provisions and upon the terms and
conditions hereinafter set forth. The number of Warrants (as hereinafter
defined), the number of shares of Common Stock purchasable hereunder, and the
Exercise Price therefor are subject to adjustment as hereinafter set forth.
These Warrants and all rights hereunder shall expire at 5:00 p.m., Houston,
Texas time, on _____________________, [2003 or 2005] (the "Expiration Date").

                                    ARTICLE I

                                   DEFINITIONS

        As used herein, the following terms shall have the meanings set forth
below:

        1.1 "COMPANY" shall mean Henley Healthcare, Inc., a Texas corporation,
and shall also include any successor thereto with respect to the obligations
hereunder, by merger, consolidation or otherwise.

        1.2 "COMMON STOCK" shall mean and include the Company's Common Stock,
par value $.01 per share, authorized on the date of the original issue of these
Warrants and shall
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also include (i) in case of any reorganization, reclassification, consolidation,
merger, share exchange or sale, transfer or other disposition of assets, the
stock or other securities provided for herein, and (ii) any other shares of
common stock of the Company into which such shares of Common Stock may be
converted.

        1.3 "EXERCISE PRICE" shall mean the initial purchase price per share of
Common Stock of $3.00 payable upon exercise of the Warrants, as adjusted from
time to time pursuant to the provisions hereof.

        1.4 "MARKET PRICE" for any day, when used with reference to Common
Stock, shall mean the last reported sale price for the Common Stock on such day
on the principal securities exchange on which the Common Stock is listed or
admitted to trading, or if no such sale takes place on such date, the average of
the closing bid and asked prices thereof as officially reported, or, if not so
listed or admitted to trading on any securities exchange, the last sale price
for the Common Stock on the National Association of Securities Dealers national
market system on such date, or, if there shall have been no trading on such date
or if the Common Stock shall not be listed on such system, the average of the
closing bid and asked prices in the over-the-counter market as furnished by any
NASD member firm selected from time to time by the Company for such purpose.

        1.5 "WARRANT" shall mean the right upon exercise to purchase one Warrant
Share.

        1.6 "WARRANT SHARES" shall mean the shares of Common Stock purchased or
purchasable by the holder hereof upon the exercise of the Warrants

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<PAGE>
                                   ARTICLE II

                              EXERCISE OF WARRANTS

        2.1 METHOD OF EXERCISE. The Warrants represented hereby may be exercised
by the Holder, in whole or in part, at any time and from time to time on or
after the date of first issuance of the Warrant until 5:00 p.m., Houston, Texas
time, on the Expiration Date. To exercise the Warrants, the Holder shall deliver
to the Company, at the Warrant Office designated herein, (i) a written notice in
the form of the Subscription Notice attached as an exhibit hereto, stating
therein the election of the Holder to exercise the Warrants in the manner
provided in the Subscription Notice; (ii) payment in full of the Exercise Price;
and (iii) these Warrants. The Warrants shall be deemed to be exercised on the
date of receipt by the Company of the Subscription Notice, accompanied by
payment for the Warrant Shares and surrender of these Warrants, as aforesaid,
and such date is referred to herein as the "Exercise Date." Upon such exercise,
the Company shall, as promptly as practicable and in any event within five
business days, issue and deliver to the Holder a certificate or certificates for
the full number of the Warrant Shares purchased by the Holder hereunder, and
shall, unless the Warrants have expired, deliver to the Holder a new Warrant
representing the number of Warrants, if any, that shall not have been exercised,
in all other respects identical to these Warrants. As permitted by applicable
law, the person in whose name the certificates for Common Stock are to be issued
shall be deemed to have become a holder of record of such Common Stock on the
Exercise Date and shall be entitled to all of the benefits of such holder on the
Exercise Date, including without limitation the right to receive dividends and
other distributions for which the record date falls on or after the Exercise
Date and to exercise voting rights.

        2.2 EXPENSES AND TAXES. The Company shall pay all expenses and taxes
(including, without limitation, all documentary, stamp or other transnational
taxes) other than income or transfer taxes attributable to the preparation,
issuance or delivery of the Warrants and of the shares of Common Stock issuable
upon exercise of the Warrants.

        2.3 RESERVATION OF SHARES. The Company shall reserve at all times so
long as the Warrants remain outstanding, free from preemptive rights, out of its
authorized but unissued shares of Common Stock, solely for the purpose of
effecting the exercise of the Warrants, a sufficient number of shares of Common
Stock to provide for the exercise of the Warrants.

        2.4 VALID ISSUANCE. All shares of Common Stock that may be issued upon
exercise of the Warrants will, upon issuance by the Company, be duly and validly
issued, fully paid and nonassessable and free from all taxes, liens and charges
with respect to the issuance thereof and, without limiting the generality of the
foregoing, the Company shall take no action or fail to take any action which
will cause a contrary result (including, without limitation, any action that
would cause the Exercise Price to be less than the par value, if any, of the
Common Stock).

        2.5 ACKNOWLEDGMENT OF RIGHTS. At the time of the exercise of the
Warrants in accordance with the terms hereof and upon the written request of the
Holder, the Company will

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acknowledge in writing its continuing obligation to afford to the Holder any
rights (including, without limitation, any right to registration of the Warrant
Shares) to which the Holder shall continue to be entitled after such exercise in
accordance with the provisions of these Warrants; PROVIDED, however, that if the
Holder shall fail to make any such request, such failure shall not affect the
continuing obligation of the Company to afford to the Holder any such rights.

        2.6 NO FRACTIONAL SHARES. The Company shall not be required to issue
fractional shares of Common Stock on the exercise of these Warrants. If more
than one Warrant shall be presented for exercise at the same time by the same
holder, the number of full shares of Common Stock which shall be issuable upon
such exercise shall be computed on the basis of the aggregate number of whole
shares of Common Stock purchasable on exercise of the Warrants so presented. If
any fraction of a share of Common Stock would, except for the provisions of this
Section, be issuable on the exercise of these Warrants, the Company shall pay an
amount in cash calculated by it to be equal to the Market Price of one share of
Common Stock at the time of such exercise multiplied by such fraction computed
to the nearest whole cent.

                                   ARTICLE III

                                    TRANSFER

        3.1 WARRANT OFFICE. The Company shall maintain an office for certain
purposes specified herein (the "Warrant Office"), which office shall initially
be the Company's principal executive offices at 120 Industrial Boulevard, Sugar
Land, Texas 77478, and may subsequently be such other office of the Company or
of any transfer agent of the Common Stock in the continental United States as to
which written notice has previously been given to the Holder. The Company shall
maintain, at the Warrant Office, a register for the Warrants in which the
Company shall record the name and address of the person in whose name these
Warrants has been issued, as well as the name and address of each permitted
assignee of the rights of the registered owner hereof.

        3.2 OWNERSHIP OF WARRANTS. The Company may deem and treat the person in
whose name the Warrants are registered as the holder and owner hereof until
provided with notice to the contrary. The Warrants may be exercised by an
assignee for the purchase of Warrant Shares without having new Warrants issued.

        3.3 RESTRICTIONS ON TRANSFER OF WARRANTS. Subject to the provisions of
Section 3.4 below, these Warrants may be transferred, in whole or in part, by
the Holder. The Company agrees to maintain at the Warrant Office books for the
registration and transfer of the Warrants. The Company, from time to time, shall
register the transfer of the Warrants in such books upon surrender of this
Warrant at the Warrant Office properly endorsed or accompanied by appropriate
instruments of transfer and written instructions for transfer. Upon any such
transfer and upon payment by the Holder or its transferee of any applicable
transfer taxes, new Warrants shall be issued to the transferee and the
transferor (as their respective interests may appear) and the surrendered
Warrants shall be canceled by the Company. The Company shall pay all taxes

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(other than securities transfer taxes or income taxes) and all other expenses
and charges payable in connection with the transfer of the Warrants pursuant to
this Section.

        3.4 COMPLIANCE WITH SECURITIES LAWS. Subject to the terms hereof and
notwith-standing any other provisions contained in these Warrants, the Holder
understands and agrees that the following restrictions and limitations shall be
applicable to the Warrants and all Warrant Shares and to all resales or other
transfers thereof pursuant to the Securities Act of 1933, as amended (the
"Securities Act"):

               3.4.1 The Holder agrees that the Warrants and the Warrant Shares
        may not be sold or otherwise transferred unless the Warrants and Warrant
        Shares are registered under the Securities Act and applicable state
        securities or blue sky laws or are exempt therefrom.

               3.4.2 Legends in substantially the following form will be placed
        on the certificate(s) evidencing the Warrants and Warrant Shares:

                      "THE SECURITIES REPRESENTED BY THIS CERTIFICATE
               HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
               1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY OTHER
               APPLICABLE SECURITIES LAW AND, ACCORDINGLY, THE
               SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
               RESOLD, PLEDGED, OR OTHERWISE TRANSFERRED, EXCEPT
               PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER,
               OR IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER,
               THE SECURITIES ACT AND IN ACCORDANCE WITH ANY OTHER
               APPLICABLE SECURITIES LAWS."

               3.4.3 Stop transfer instructions will be imposed with respect to
        the Warrants and Warrant Shares so as to restrict resale or other
        transfer thereof.

                                        5
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                                   ARTICLE IV

                                   ADJUSTMENTS

        4.1 STOCK SPLITS AND REVERSE SPLITS. In the event that the Company shall
at any time subdivide its outstanding shares of Common Stock into a greater
number of shares, the Exercise Price in effect immediately prior to such
subdivision shall be proportionately reduced and the number of Warrant Shares
purchasable pursuant to this Warrant immediately prior to such subdivision shall
be proportionately increased, and conversely, in the event that the outstanding
shares of Common Stock shall at any time be combined into a smaller number of
shares, the Exercise Price in effect immediately prior to such combination shall
be proportionately increased and the number of Warrant Shares purchasable upon
the exercise of this Warrant immediately prior to such combination shall be
proportionately reduced.

        4.2 REORGANIZATIONS AND ASSET SALES. If any capital reorganization or
reclassification of the capital stock of the Company, or any consolidation,
merger or share exchange of the Company with another person, or the sale,
transfer or other disposition of all or substantially all of its assets to
another person shall be effected in such a way that holders of Common Stock
shall be entitled to receive capital stock, securities or assets with respect to
or in exchange for their shares, then the following provisions shall apply:

               4.2.1 As a condition of such reorganization, reclassification,
        consolidation, merger, share exchange, sale, transfer or other
        disposition, lawful and adequate provisions shall be made whereby the
        Holder shall thereafter have the right to purchase and receive upon the
        terms and conditions specified in these Warrants and in lieu of the
        Warrant Shares immediately theretofore receivable upon the exercise of
        the rights represented hereby, such shares of capital stock, securities
        or assets as may be issued or payable with respect to or in exchange for
        a number of outstanding shares of such Common Stock equal to the number
        of Warrant Shares immediately theretofore so receivable had such
        reorganization, reclassification, consolidation, merger, share exchange
        or sale not taken place, and in any such case appropriate provision
        reasonably satisfactory to the Holder shall be made with respect to the
        rights and interests of the Holder to the end that the provisions hereof
        (including, without limitation, provisions for adjustments of the
        Exercise Price and of the number of Warrant Shares receivable upon the
        exercise) shall thereafter be applicable, as nearly as possible, in
        relation to any shares of capital stock, securities or assets thereafter
        deliverable upon the exercise of Warrants.

               4.2.2 In the event of a merger, share exchange or consolidation
        of the Company with or into another person as a result of which a number
        of shares of common stock or its equivalent of the successor person
        greater or lesser than the number of shares of Common Stock outstanding
        immediately prior to such merger, share exchange or consolidation are
        issuable to holders of Common Stock, then the Exercise Price in effect
        immediately prior to such merger, share exchange or consolidation shall
        be adjusted in

                                        6

<PAGE>
        the same manner as though there were a subdivision or combination of the
        outstanding shares of Common Stock.

               4.2.3 The Company shall not effect any such consolidation,
        merger, share exchange, sale, transfer or other disposition unless prior
        to or simultaneously with the consummation thereof the successor person
        (if other than the Company) resulting from such consolidation, share
        exchange or merger or the person purchasing or otherwise acquiring such
        assets shall have assumed by written instrument executed and mailed or
        delivered to the Holder at the last address of the Holder appearing on
        the books of the Company the obligation to deliver to the Holder such
        shares of capital stock, securities or assets as, in accordance with the
        foregoing provisions, the Holder may be entitled to receive, and all
        other liabilities and obligations of the Company hereunder. Upon written
        request by the Holder, such successor person will issue new Warrants
        revised to reflect the modifications in these Warrants effected pursuant
        to this Section.

               4.2.4 If a purchase, tender or exchange offer is made to and
        accepted by the holders of 50% or more of the outstanding shares of
        Common Stock, the Company shall not effect any consolidation, merger,
        share exchange or sale, transfer or other disposition of all or
        substantially all of the Company's assets with the person having made
        such offer or with any affiliate of such person, unless prior to the
        consummation of such consolidation, merger, share exchange, sale,
        transfer or other disposition the Holder shall have been given a
        reasonable opportunity to then elect to receive upon the exercise of the
        Warrants either the capital stock, securities or assets then issuable
        with respect to the Common Stock or the capital stock, securities or
        assets, or the equivalent, issued to previous holders of the Common
        Stock in accordance with such offer.

        4.3 ADJUSTMENT FOR ASSET DISTRIBUTION. If the Company declares a
dividend or other distribution payable to all holders of shares of Common Stock
in evidences of indebtedness of the Company or other assets of the Company
(including, cash (other than regular cash dividends declared by the Board of
Directors), capital stock (other than Common Stock, convertible securities or
options or rights thereto) or other property), the Exercise Price in effect
immediately prior to such declaration of such dividend or other distribution
shall be reduced by an amount equal to the amount of such dividend or
distribution payable per share of Common Stock, in the case of a cash dividend
or distribution, or by the fair value of such dividend or distribution per share
of Common Stock (as reasonably determined in good faith by the Board of
Directors of the Company), in the case of any other dividend or distribution.
Such reduction shall be made whenever any such dividend or distribution is made
and shall be effective as of the date as of which a record is taken for purpose
of such dividend or distribution or, if a record is not taken, the date as of
which holders of record of Common Stock entitled to such dividend or
distribution are determined.

        4.4 DE MINIMIS ADJUSTMENTS. No adjustment in the number of shares of
Common Stock purchasable hereunder shall be required unless such adjustment
would require an increase

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<PAGE>
or decrease of at least one share of Common Stock purchasable upon an exercise
of each Warrant and no adjustment in the Exercise Price shall be required unless
such adjustment would require an increase or decrease of at least $0.01 in the
Exercise Price; provided, however, that any adjustments are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations shall be made to the nearest full share or nearest
one hundredth of a dollar, as applicable.

        4.5 NOTICE OF ADJUSTMENT. Whenever the Exercise Price or the number of
Warrant Shares issuable upon the exercise of the Warrants shall be adjusted as
herein provided, or the rights of the Holder shall change by reason of other
events specified herein, the Company shall compute the adjusted Exercise Price
and the adjusted number of Warrant Shares in accordance with the provisions
hereof and shall prepare an officer's certificate setting forth the adjusted
Exercise Price and the adjusted number of Warrant Shares issuable upon the
exercise of the Warrants or specifying the other shares of stock, securities or
assets receivable as a result of such change in rights, and showing in
reasonable detail the facts and calculations upon which such adjustments or
other changes are based. The Company shall cause to be mailed to the Holder
copies of such officer's certificate together with a notice stating that the
Exercise Price and the number of Warrant Shares purchasable upon exercise of the
Warrants have been adjusted and setting forth the adjusted Exercise Price and
the adjusted number of Warrant Shares purchasable upon the exercise of the
Warrants.

        4.6 NOTIFICATIONS TO HOLDERS. In case at any time the Company proposes:

               (i) to declare any dividend upon its Common Stock payable in
        capital stock or make any special dividend or other distribution (other
        than cash dividends) to the holders of its Common Stock;

               (ii) to offer for subscription pro rata to all of the holders of
        its Common Stock any additional shares of capital stock of any class or
        other rights;

               (iii) to effect any capital reorganization, or reclassification
        of the capital stock of the Company, or consolidation, merger or share
        exchange of the Company with another person, or sale, transfer or other
        disposition of all or substantially all of its assets; or

               (iv) to effect a voluntary or involuntary dissolution,
        liquidation or winding up of the Company,

then, in any one or more of such cases, the Company shall give the Holder (a) at
least 10 days (but not more than 90 days) prior written notice of the date on
which the books of the Company shall close or a record shall be taken for such
dividend, distribution or subscription rights or for determining rights to vote
in respect of any such issuance, reorganization,

                                        8
<PAGE>
reclassification, consolidation, merger, share exchange, sale, transfer,
disposition, dissolution, liquidation or winding up, and (b) in the case of any
such issuance, reorganization, reclassification, consolidation, merger, share
exchange, sale, transfer, disposition, dissolution, liquidation or winding up,
at least 10 days (but not more than 90 days) prior written notice of the date
when the same shall take place. Such notice in accordance with the foregoing
clause (a) shall also specify, in the case of any such dividend, distribution or
subscription rights, the date on which the holders of Common Stock shall be
entitled thereto, and such notice in accordance with the foregoing clause (b)
shall also specify the date on which the holders of Common Stock shall be
entitled to exchange their Common Stock, as the case may be, for securities or
other property deliverable upon such reorganization, reclassification,
consolidation, merger, share exchange, sale, transfer, disposition, dissolution,
liquidation or winding up, as the case may be.

                                    ARTICLE V

                                   REDEMPTION

        5.1 COMPANY'S RIGHT TO REDEEM; NOTICE. At such time that the Market
Price of the Common Stock is equal to or greater than $3.50 per share for a
period of ten consecutive trading days, but prior to the Expiration Date, the
Company at its sole discretion shall have the right to redeem these Warrants, in
whole or in part, at a redemption price of $[.10 or .20] (the "Redemption
Price") for each Warrant. Notice of any proposed redemption shall be made by
means of certified mail return receipt requested, addressed to the Holder at
this address as it appears on the books of the Company at least thirty (30) days
prior to the date fixed for such redemption (the "Redemption Date"). Each such
notice shall specify (i) the Redemption Date, (ii) the Redemption Price, (iii)
the place for payment and for delivering the Warrants and other necessary
transfer instruments to be executed by the Holder in order for the Holder to
collect the Redemption Price. Any notice given in such manner (a "Redemption
Notice") shall be conclusively deemed to have been duly given whether or not
such notice is in fact received.

        5.2 RIGHT TO RECEIVE REDEMPTION PRICE. The holder of any Warrants
redeemed upon any exercise of the Company's redemption right shall not be
entitled to receive payment of the Redemption Price for such Warrants until such
holder shall cause to be delivered to the place specified in the Redemption
Notice (i) the Warrants subject to such redemption and (ii) transfer instruments
satisfactory to the Company. Any redemption of less than all of the outstanding
Warrants subject to redemption ("Redeemable Warrants") shall be on a pro rata
basis based on the number of Redeemable Warrants held by each holder as it
relates to the total number of Redeemable Warrants outstanding on the date of
notice of redemption.

        5.3 EFFECT OF REDEMPTION. On the Redemption Date, each Warrant specified
in the Redemption Notice shall be deemed to cease to be outstanding and all
rights of the Holder with respect to such Warrants shall be extinguished on the
Redemption Date, except for the right to receive the Redemption Price. The
Holder shall have the right to exercise the Warrants at any time prior to 5:00
p.m. Houston, Texas time on the last business day preceding the Redemption Date.

                                        9
<PAGE>
                                   ARTICLE VI

                                  MISCELLANEOUS

        6.1 ENTIRE AGREEMENT. Except as provided in the related Warrant Purchase
Agreement, these Warrants contain the entire agreement between the Holder and
the Company with respect to the Warrant Shares purchasable upon exercise hereof
and the related transactions and supersedes all prior arrangements or
understandings with respect thereto.

        6.2 GOVERNING LAW. These Warrants shall be governed by and construed in
accordance with the laws of the State of Texas.

        6.3 WAIVER AND AMENDMENT. Any term or provision of these Warrants may be
waived at any time by the party which is entitled to the benefits thereof and
any term or provision of these Warrants may be amended or supplemented at any
time by agreement of the Holder hereof and the Company, except that any waiver
of any term or condition, or any amendment or supplementation, of these Warrants
shall be in writing. A waiver of any breach or failure to enforce any of the
terms or conditions of these Warrants shall not in any way effect, limit or
waive a party's rights hereunder at any time to enforce strict compliance
thereafter with every term or condition of these Warrants.

        6.4 ILLEGALITY. In the event that any one or more of the provisions
contained in these Warrants shall be determined to be invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in any other respect and the remaining
provisions of these Warrants shall not, at the election of the party for whom
the benefit of the provision exists, be in any way impaired.

        6.5 COPY OF WARRANT. A copy of these Warrants shall be filed among the
records of the Company.

        6.6 NOTICE. Any notice or other document required or permitted to be
given or delivered to the Holder shall be in writing and delivered at, or sent
by certified or registered mail or by facsimile to the Holder at, the last
address shown on the books of the Company maintained at the Warrant Office for
the registration of these Warrants or at any more recent address of which the
Holder shall have notified the Company in writing. Any notice or other document
required or permitted to be given or delivered to the Company, other than such
notice or documents required to be delivered to the Warrant Office, shall be
delivered at, or sent by certified or registered mail or by facsimile to, the
offices of the Company at 120 Industrial Boulevard, Sugar Land, Texas 77478 or
such other address within the continental United States of America as shall have
been furnished by the Company to the Holder.

        6.7 LIMITATION OF LIABILITY; NOT SHAREHOLDERS. No provision of these
Warrants shall be construed as conferring upon the Holder the right to vote,
consent, receive dividends or

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<PAGE>
receive notices (other than as herein expressly provided) in respect of meetings
of shareholders for the election of directors of the Company or any other matter
whatsoever as a shareholder of the Company. No provision hereof, in the absence
of affirmative action by the Holder to purchase shares of Common Stock, and no
mere enumeration herein of the rights or privileges of the Holder, shall give
rise to any liability of the Holder for the purchase price of any shares of
Common Stock or as a shareholder of the Company, whether such liability is
asserted by the Company or by creditors of the Company.

        6.8 EXCHANGE, LOSS OR DESTRUCTION. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, mutilation or destruction of
these Warrants, and in the case of any such loss, theft or destruction upon
delivery of an appropriate affidavit in such form as shall be reasonably
satisfactory to the Company and include reasonable indemnification of the
Company, or in the event of such mutilation upon surrender and cancellation of
these Warrants, the Company will make and deliver new Warrants of like tenor, in
lieu of such lost, stolen, destroyed or mutilated Warrants. Any Warrants issued
under the provisions of this Section in lieu of any Warrants alleged to be lost,
destroyed or stolen, or in lieu of any mutilated Warrants, shall constitute an
original contractual obligation on the part of the Company. These Warrants shall
be promptly canceled by the Company upon the surrender hereof in connection with
any exchange or replacement. The Company shall pay all taxes (other than
securities transfer taxes or income taxes) and all other expenses and charges
payable in connection with the preparation, execution and delivery of Warrants
pursuant to this Section.

        IN WITNESS WHEREOF, the Company has caused this Warrant to be signed in
its name.

Dated:_________________________, 2000.

                                           HENLEY HEALTHCARE, INC.

                                           By: _________________________________
                                               Michael M. Barbour, President

                                       11
<PAGE>
                               SUBSCRIPTION NOTICE

        The undersigned, the holder of the foregoing Warrants, hereby elects to
exercise purchase rights represented thereby for, and to purchase thereunder,
______________________ shares of the Common Stock covered by such Warrants, and
herewith makes payment in full for such shares, and requests (a) that
certificates for such shares (and any other securities or other property
issuable upon such exercise) be issued in the name of, and delivered to,
___________________ and (b), if such shares shall not include all of the shares
issuable as provided in such Warrants, that new Warrants of like tenor and date
for the balance of the shares issuable thereunder be delivered to the
undersigned.

                                     ___________________________________________

Date: ___________________________

                                       12
<PAGE>
                                   ASSIGNMENT

        For value received, _______________________, hereby sells, assigns and
transfers unto ____________ these Warrants, together with all rights, title and
interest therein, and does irrevocably constitute and appoint
________________________ attorney, to transfer such Warrants on the books of the
Company, with full power of substitution.

                                     ___________________________________________

Date: ___________________________

                                       13SUBSCRIPTION AGREEMENT

                             HENLEY HEALTHCARE, INC.

                                PRIVATE PLACEMENT
               OF WARRANTS TO PURCHASE UP TO _____________ SHARES
                                       OF
                                  COMMON STOCK

        This Subscription Agreement (this "AGREEMENT") is made between Henley
Healthcare, Inc., a Texas corporation (the "COMPANY"), and the undersigned
prospective purchaser who is subscribing hereby for three- and/or five-year
warrants (collectively, the "WARRANTS") to purchase shares of common stock, par
value $.01 per share ("COMMON STOCK"), of the Company. The three-year warrants
shall be in the form of EXHIBIT A attached hereto and the five-year Warrants
shall be in the form of EXHIBIT B attached hereto. The Warrants shall have the
following material terms:

                     THREE-YEAR WARRANTS           FIVE-YEAR WARRANTS
                     ___________________           ___________________
PURCHASE PRICE   :    $ .10 per warrant             $ .20 per warrant
EXERCISE PERIOD  :       Three Years                   Five Years
REDEMPTION PRICE :    $ .10 per warrant             $ .20 per warrant
EXERCISE PRICE   :    $3.00 per share               $3.00 per share

        The undersigned must subscribe for a minimum of 2,000 three-year
Warrants and/or 2,000 five-year Warrants. The Company may reject any such
subscriptions in whole or in part in its sole discretion. In no event will the
Company accept subscriptions for more than ______________ Warrants in the
aggregate.

        Pursuant to the offering of the Warrants to which the undersigned
subscribes, the undersigned has been provided with the following, each of which
the undersigned has reviewed thoroughly:

        (1)    Risk Factors;

        (2)    the Company's Annual Report on Form 10-KSB for the year ended
               December 31, 1998; and

        (3)    the Company's Quarterly Report on Form 10-QSB for the quarter
               ended June 30, 1999.
<PAGE>
        In consideration of the Company's agreement to sell the Warrants to the
undersigned upon the terms and conditions of this Agreement and the Warrants,
the undersigned agrees and represents as follows:

        1.     SUBSCRIPTION

               (a) The undersigned hereby irrevocably subscribes for and agrees
        to purchase the number of Warrants indicated on the signature page
        hereto at a purchase price of $.10 per three-year Warrant and $.20 per
        five-year Warrant. The undersigned encloses herewith payment in good
        funds payable to the Company in the full amount of the purchase price of
        the Warrants for which the undersigned is subscribing (the "PAYMENT").

               (b) The undersigned understands that the Payment as provided in
        paragraph (a) above shall be delivered to the Company at its executive
        offices in Houston, Texas. The payment (or, in the case of rejection of
        all or a portion of the undersigned's subscription, the part of the
        payment relating to such rejected whole or portion) will be returned
        promptly, without interest, if the undersigned's subscription is
        rejected in whole or in part.

               (c) The offering of the Warrants (the "OFFERING") will terminate
        on _________________ (the "TERMINATION DATE") unless extended on one or
        more occasions at the option of the Company. Upon receipt by the Company
        of Payment for all Warrants to be purchased by the subscribers whose
        subscriptions are accepted in whole or in part (each, a "PURCHASER" and,
        collectively, the "PURCHASERS"), the Warrants so purchased will be
        issued in the names of each such Purchaser, and the names and addresses
        of each such Purchaser will be entered into a register for the Warrants,
        to be maintained by the Company, as the record owners of Warrants. The
        Company will issue to each Purchaser a certificate representing the
        Warrants purchased in the form of EXHIBIT A, in the case of three-year
        Warrants, and in the form of EXHIBIT B, in the case of five-year
        Warrants.

        2. REPRESENTATIONS AND WARRANTIES OF THE UNDERSIGNED. The undersigned
hereby represents and warrants to, and agrees with the Company as follows:

               (a) The undersigned has been furnished with and has carefully
        read the Risk Factors and this Agreement, including Exhibits A and B
        hereto, and is familiar with and understands the terms of the Offering.
        The undersigned has carefully considered and has, to the extent the
        undersigned believes such discussion necessary, discussed with the
        undersigned's professional legal, tax, accounting and financial
        advisors, of the suitability of an investment in the Warrants for the
        undersigned's particular tax and financial situation and has determined
        that the Warrants being subscribed for by the undersigned are a suitable
        investment for the undersigned.

                                        2
<PAGE>
               (b) The undersigned is an individual "ACCREDITED INVESTOR," as
        that term is defined in Rule 501(a) promulgated under the Securities
        Act, which is incorporated herein by reference. The undersigned has the
        knowledge and experience in financial and business matters necessary for
        evaluating the merits and risks of an acquisition of Warrants. THE
        UNDERSIGNED HAS CHECKED THE BOX ON THE SIGNATURE PAGE HERETO INDICATING
        THE BASIS ON WHICH HE IS REPRESENTING HIS STATUS AS AN "ACCREDITED
        INVESTOR."

               (c) The undersigned acknowledges that (i) the undersigned has had
        the right to request copies of any documents, records, and books
        pertaining to this investment and (ii) any such documents, records and
        books which the undersigned requested have been made available for
        inspection by the undersigned and the undersigned's attorney, accountant
        or adviser.

               (d) The undersigned or the undersigned's adviser has had a
        reasonable opportunity to ask questions of and receive answers from a
        person or persons acting on behalf of the Company concerning the
        offering and all such questions have been answered to the full
        satisfaction of the undersigned.

               (e) The undersigned is not subscribing for Warrants as a result
        of or after any advertisement, article, notice or other communication
        published in any newspaper, magazine or similar media or broadcast over
        television or radio or presented at any seminar or meeting.

               (f) If the undersigned is a natural person, the undersigned has
        reached the age of majority in the state in which the undersigned
        resides, has adequate means of providing for the undersigned's current
        financial needs and contingencies, is able to bear the substantial
        economic risks of an investment in the Warrants for an indefinite period
        of time, has no need for liquidity in such investment and, at the
        present time, could afford a complete loss of such investment.

               (g) The undersigned or the undersigned's purchaser
        representative, as the case may be, has such knowledge and experience in
        financial, tax and business matters so as to enable the undersigned to
        use the information made available to the undersigned in connection with
        the offering to evaluate the merits and risks of an investment in the
        Warrants and to make an informed investment decision with respect
        thereto.

               (h) The undersigned will not sell or otherwise transfer the
        Warrants or the shares of Common Stock issuable upon exercise of the
        Warrants (the "WARRANT SHARES") without registration under the
        Securities Act of 1933, as amended (the "SECURITIES ACT") and applicable
        state securities laws or an exemption therefrom. Subject to the terms of
        Section 4 below, neither the Warrants nor the Warrant Shares have been
        registered under the Securities Act or under the securities laws of any
        state. The undersigned represents that the undersigned is purchasing the
        Warrants and the Warrant Shares for the undersigned's own account, for
        investment and not with a view to resale or

                                        3
<PAGE>
        distribution except in compliance with the Securities Act. The
        undersigned has not offered or sold the Warrants being acquired nor does
        the undersigned have any present intention of selling, distributing or
        otherwise disposing of such Warrants or Warrant Shares either currently
        or after the passage of a fixed or determinable period of time or upon
        the occurrence or non-occurrence of any predetermined event or
        circumstance in violation of the Securities Act. The undersigned is
        aware that there is currently no market for the Warrants, the Company
        has no obligation to register the Warrants subscribed for hereunder, or
        to make available an exemption from the registration requirements
        pursuant to Rule 144 or any successor rule for resale of the Warrants.

               (i) The undersigned recognizes that investment in the Warrants
        involves substantial risks, including loss of the entire amount of such
        investment. Further, the undersigned has carefully read and considered
        the matters set forth in the Risk Factors and has taken full cognizance
        of and understands all of the risks related to the purchase of the
        Warrants.

               (j) In addition to any other restrictive legends that may be
        required by the terms of the Warrants, the undersigned acknowledges that
        the certificates representing the Warrants and the Warrant Shares shall
        be stamped or otherwise imprinted with a legend substantially in the
        following form:

                      "THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
               REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
               OR ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES
               NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD,
               TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT
               PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
               SUCH ACT AND SUCH LAWS OR PURSUANT TO AN EXEMPTION
               THEREFROM, WHICH, IN THE OPINION OF COUNSEL FOR THE
               HOLDER, WHICH COUNSEL AND OPINION ARE REASONABLY
               SATISFACTORY TO COUNSEL FOR THIS CORPORATION, IS
               AVAILABLE."

               (k) The undersigned shall indemnify and hold harmless the
        Company, and its officers, directors or control persons who are or may
        be a party or are or may be threatened to be made a party to any
        threatened, pending or completed action, suit or proceeding, whether
        civil, criminal, administrative or investigative, by reason of or
        arising from any actual or alleged misrepresentation or misstatement of
        facts or omission to represent or state facts made or alleged to have
        been made by the undersigned to the Company, or omitted or alleged to
        have been omitted by the undersigned, concerning the undersigned or the
        undersigned's authority to invest or financial position in connection
        with the offering, against losses, liabilities and expenses for which
        the Company, or its officers, directors or control persons have not
        otherwise been reimbursed (including attorneys' fees, judgements, fines
        and amounts paid in settlement) actually and reasonably incurred by the
        Company, or such officers, directors or control persons in connection
        with such action, suit or proceeding.

                                        4
<PAGE>
        3. ADDITIONAL AGREEMENTS. The undersigned understands, acknowledges and
agrees with the Company as follows:

               (a) This subscription may be rejected, in whole or in part, by
        the Company in its sole and absolute discretion at any time. The
        acceptance, in whole or in part, by the Company of this subscription
        shall be evidenced by the countersignature of a duly authorized
        representative of the Company on the page immediately following the
        signature page hereto (the "ACCEPTANCE PAGE").

               (b) Except as set forth in Section 3(a) above, the undersigned
        hereby acknowledges and agrees that the subscription hereunder is
        irrevocable by the undersigned, that, except as required by law, the
        undersigned is not entitled to cancel, terminate or revoke this
        Agreement or any agreements of the undersigned hereunder and that this
        Agreement and such other agreements shall survive the death or
        disability of the undersigned and shall be binding upon and inure to the
        benefit of the parties and their heirs, executors, administrators,
        successors, legal representatives and permitted assigns. If the
        undersigned is more than one person, the obligations of the undersigned
        hereunder shall be joint and several and the agreements,
        representations, warranties and acknowledgments herein contained shall
        be deemed to be made by and be binding upon each such person and his
        heirs, executors, administrators, successors, legal representatives and
        permitted assigns.

               (c) No federal or state agency has made any finding or
        determination as to the accuracy or adequacy of the information provided
        by the Company to the undersigned in connection with the Offering or as
        to the fairness of the terms of the Offering for investment or any
        recommendation or endorsement of the Warrants or the Warrant Shares.

               (d) The Offering is intended to be exempt from registration under
        the Securities Act by virtue of Section 4(2) of the Securities Act and
        the provisions of Regulation D thereunder, which is in part dependent
        upon the truth, completeness and accuracy of the representations and
        warranties of the undersigned herein.

               (e) The representations, warranties and agreements of the
        undersigned contained herein and in any other writing delivered in
        connection with the transactions contemplated hereby shall survive the
        execution and delivery of this Agreement and the purchase of the
        Warrants.

        4. REGISTRATION RIGHTS. The Company covenants and agrees that within one
hundred (100) days following the Termination Date, the Company will cause to be
filed pursuant to Rule 415 of the Securities Act a Shelf Registration Statement
on Form S-3, or such other Form as the Company is then eligible to use, (the
"SHELF REGISTRATION STATEMENT") as to the Warrant Shares issuable upon exercise
of the Warrants sold to the Purchasers in the Offering contemplated herein,
naming the holders of the Warrants as selling shareholders. The

                                        5
<PAGE>
Company shall use its commercially reasonable best efforts to have such Shelf
Registration Statement declared effective as soon as reasonably practicable
after such filing, and to keep such Shelf Registration Statement continuously
effective until five years following the date on which Shelf Registration
Statement becomes effective under the Securities Act; provided, however, that
the Company may voluntarily suspend the effectiveness of such Shelf Registration
Statement for a limited time, which in no event shall be longer than 120 days,
if the Company has been advised by counsel that the offering of the Warrant
Shares pursuant to the Shelf Registration Statement would adversely affect, or
would be improper in view of (or improper without disclosure in a prospectus), a
proposed financing, reorganization, re-capitalization, merger, consolidation, or
similar transaction involving the Company, in which case the Company shall be
required to keep such Shelf Registration Statement effective for an additional
period of time beyond five years following the date of the effectiveness thereof
equal to the number of days the effectiveness thereof is suspended pursuant to
this proviso. Upon the occurrence of any event that would cause the Shelf
Registration Statement to contain a material misstatement or omission or not to
be effective and usable during the period that such Shelf Registration Statement
is required to be effective and usable, the Company shall promptly file an
amendment to the Shelf Registration Statement and use its best efforts to cause
such amendment to be declared effective as soon as practicable thereafter. The
Company will bear all costs and expenses related to the Shelf Registration
Statement other than the expenses incurred by the Purchasers for underwriters'
commissions and discounts or legal fees incurred by the Purchasers. The
Purchasers shall furnish to the Company such information regarding their
holdings and the proposed manner of distribution thereof as the Company may
reasonably request and it shall be required in connection with the Shelf
Registration Statement.

        5.     MISCELLANEOUS

               (a) This Agreement shall not be waived, modified, changed,
        discharged, terminated, revoked or canceled except by an instrument in
        writing signed by the party effecting the same against whom any change,
        discharge or termination is sought.

               (b) Notices required or permitted to be given hereunder shall be
        in writing and shall be deemed to be sufficiently given when personally
        delivered or sent by registered mail, return receipt requested,
        addressed: (i) if to the Company, at 120 Industrial Boulevard, Sugar
        Land, Texas 77478, Attention: President, and (ii) if to the undersigned,
        to the address for correspondence set forth on the signature page
        hereto, or at such other address as may have been specified by written
        notice given in accordance with this Paragraph 5(b).

               (c) Failure of the Company to exercise any right or remedy under
        this Agreement or any other agreement between the Company and the
        undersigned, or otherwise, or delay by the Company in exercising such
        right or remedy, will not operate as a waiver thereof. No waiver by the
        Company will be effective unless and until it is in writing and signed
        by the Company.

                                        6
<PAGE>
               (d) This Agreement shall be enforced, governed and construed in
        all respects in accordance with the laws of the State of Texas, without
        regard to laws governing choice of law, as such laws are applied by
        Texas courts to agreements entered into and to be performed in Texas by
        and between residents of Texas, and shall be binding upon the
        undersigned, the undersigned's heirs, estate, legal representatives,
        successors and assigns and shall inure to the benefit of the Company,
        its successors and assigns. If any provision of this Agreement is
        invalid or unenforceable under any applicable statute or rule of law,
        then such provision shall be deemed inoperative to the extent that it
        may conflict therewith and shall be deemed modified to conform with such
        statute or rule of law. Any provision hereof that may prove invalid or
        unenforceable under any law shall not affect the validity or
        enforceability of any other provision hereof.

               (e) This Agreement, including the exhibits hereto, constitutes
        the entire agreement between the parties hereto with respect to the
        subject matter hereof and may be amended only by a writing executed by
        both parties hereto.

               (f) Each party hereto has had the opportunity to review this
        Agreement with its separate legal counsel.

        6. SIGNATURE. The signature of this Agreement is contained as part of
the applicable subscription package, entitled "SIGNATURE PAGE."

                     [SIGNATURE AND ACCEPTANCE PAGES FOLLOW]

                                        7
<PAGE>
                                 SIGNATURE PAGE

The undersigned hereby subscribes for the number of Warrants set forth below.

1.      Dated: ____________________________________

2.      Number and Purchase Price of Warrants:

--------------------------------------------------------------------------------
                      (A) NUMBER OF   (B) PURCHASE PRICE   (C) TOTAL PURCHASE
  TYPE OF WARRANT        WARRANTS         PER WARRANT       PRICE (A X B =C)
--------------------------------------------------------------------------------
Three-Year Warrants                          $.10                   $
--------------------------------------------------------------------------------
Five-Year Warrants                           $.20                   $
--------------------------------------------------------------------------------

3.      Aggregate Purchase Price for number of Warrants subscribed for (combine
        Total Purchase Price for both types of Warrants): $_____________________

4.      Check the box below indicating the basis on which you are representing
        your status as an "accredited investor":

        [ ]    a corporation or partnership, not formed for the specific
               purpose of acquiring the Shares, with total assets in excess of
               $5,000,000;

        [ ]    a director or executive officer of the Company;

        [ ]    a natural person whose individual net worth, or joint net worth
               with the undersigned's spouse, at the time of this purchase
               exceeds $1,000,000;

        [ ]    a natural person who had an individual income in excess of
               $200,000 in each of the two most recent years or joint income
               with the undersigned's spouse in excess of $300,000 in each of
               those years and has a reasonable expectation of reaching the same
               income level in the current year;

        [ ]    a trust with total assets in excess of $5,000,000, not formed
               for the specific purpose of acquiring the Shares, whose purchase
               is directed by a person who has such knowledge and experience in
               financial and business matters that he is capable of evaluating
               the merits and risks of the prospective investment; or

        [ ]    an entity in which all of the equity holders are "accredited
               investors" by virtue of their meeting one or more of the above
               standards.

_____________________________________   ________________________________________
Signature of Purchaser                  Taxpayer Identification or
(and title, if applicable)              Social Security Number

_____________________________________   Name and Residence Address
Name of Purchaser (please print as         (post office address not acceptable):
name will appear on certificates)

                                        ________________________________________
                                        Number and Street

                                        ________________________________________
                                        City               State        Zip Code

                                        8
<PAGE>
                                 ACCEPTANCE PAGE

The Company hereby accepts the foregoing subscription as indicated below:

1.      Dated: _________________________

2.      Name of Purchaser: _______________________________________

3.      Number of Three-Year Warrants accepted: __________________

4.      Number of Five-Year Warrants accepted: ___________________

                                            HENLEY HEALTHCARE, INC.

                                            By: ________________________________
                                                Michael M. Barbour, President
                                        9

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