EMPLOYMENT AGREEMENT

                               (Marc R. Silverman)



      This Employment Agreement (this "Agreement") is entered into effective as

of the 1st day of January, 2005 (the "Effective Date"), by and between

Performance Health Technologies, Inc., a Delaware corporation ("Company"), and

Marc R. Silverman ("Executive").



      WHEREAS, Company is engaged in the business of designing, developing,

manufacturing, and marketing health care rehabilitation products; and



      WHEREAS, Company desires to retain the services of Executive in a capacity

appropriate to his knowledge and experience and Employee desires to provide his

services as provided in this Agreement.



      NOW, THEREFORE, in consideration of the mutual covenants contained herein,

the parties agree as follows:



      1. EMPLOYMENT. Company agrees to employ Executive and Executive agrees to

accept employment with Company subject to the conditions herein.



      2. TERM.



            (a) TERM. The term of this Agreement shall commence on the Effective

Date and shall continue until the earlier of (i) the termination of this

Agreement following the Conversion Option as provided in Section 2(c) or (d),

(ii) two years after the date the first Conversion Trigger occurs, or (iii)

termination in accordance with Section 5. The term of this Agreement is referred

to herein as the "Employment Term."



            (b) CONVERSION OPTION. The "Conversion Option" shall be deemed to

occur if and when Company, upon approval of the Company's Board of Directors,

tenders to Executive a Consulting Agreement substantially in the form of Exhibit

A (or, if not substantially in the form of Exhibit A, with such modifications as

are mutually acceptable to Company and Executive) duly executed by Company (such

agreement hereinafter referred to as the "Consulting Agreement"). PROVIDED,

HOWEVER, the Conversion Option may not occur until at least one of the

Conversion Triggers occurs. Any of the following shall be a "Conversion

Trigger": (i) Company receives an aggregate of $2.5 million of gross proceeds

from one or more financings from and after the Effective Date, (ii) the sale,

lease, license, or similar transaction of, or involving, all or substantially

all of Company's assets, products, or technology, or (iii) a change-in-control

of Company, as defined in Company's Amended and Restated 1999 Stock Incentive

Plan, as amended from time to time. Company shall have the right, in its sole

discretion, but no duty, to tender the Consulting Agreement.



            (c) ACCEPTANCE OF CONSULTING AGREEMENT. In the event Executive

accepts the Consulting Agreement, this Employment Agreement shall be deemed to

terminate as of the end of the normal Company pay period following the date the

Consulting Agreement is tendered and the effective date of the Consulting

Agreement shall be deemed to commence simultaneous with the termination of this

Agreement.

{PAGE}



            (d) REJECTION OF CONSULTING AGREEMENT. In the event Executive

rejects the Consulting Agreement, the rejection shall be deemed for all purposes

under this Agreement to be notice of Executive's voluntary termination under

Section 5(d). The notice shall be deemed given as of the end of the normal

Company pay period following the date the Consulting Agreement is tendered and

the 90-day period contemplated in Section 5(d) shall run from such date.

Following such 90-day period the provisions of this Agreement that survive

termination of this Agreement, including, without limitation, Section 7, 8, and

9 shall continue in full force and effect as provided in this Agreement.



            (e) REJECTION OR ACCEPTANCE OF CONSULTING AGREEMENT. Regardless of

whether Executive accepts or rejects the Consulting Agreement, upon tender of

the Consulting Agreement all non-expired Options issued to Executive under the

Company's 1999 Stock Incentive Plan, as such Plan has heretofore or may

hereafter be amended (the "Plan") shall be deemed vested automatically without

action of Company or Executive. Additionally, as soon as reasonably practicable

after the tender of the Consulting Agreement, Executive shall surrender to the

Company all such non-expired Qualified Options and Company shall issue in

exchange therefore Nonqualified Options on the same terms and conditions as the

surrendered. For purposes of illustration, if Executive surrenders Qualified

Options that expire in May 2007 with an option price of $.50 and Qualified

Options that expire in October 2012 with an option price of $.75, the

Nonqualified Options to be issued by Company in exchange would expire on May

2007 with an option price of $.50 and October 2012 with an option price of $.75,

respectively, and all other terms of the Nonqualified Options would be the same

as the Qualified Options.



      3. DUTIES AND RESPONSIBILITIES.



            (a) TITLE. Subject to the power of the Board of Directors of Company

to elect and remove officers, Executive shall serve Company as Chief Executive

Officer and President, or otherwise, in a capacity and with a title appropriate

to his knowledge and experience as the Board of Directors from time to time may

determine and shall perform, faithfully and diligently, the supervisory and

management services and functions relating to such position or otherwise

reasonably incident to such position as may be designated from time to time by

the Board of Directors; provided, however, that all such services and functions

shall be reasonable and within Executive's area of expertise.



            (b) SCHEDULE. Executive shall, during the Employment Term, devote

such of his time, attention, energies and business efforts to his duties as an

executive of Company as are reasonably necessary to carry out such duties.

Executive shall not, during the Employment Term, engage in any other business

activity (regardless of whether such business activity is pursued for gain,

profit, or other pecuniary advantage) if such business activity would materially

impair Executive's ability to carry out his duties hereunder.



      4. COMPENSATION AND BENEFITS. As compensation for his services under the

terms of this Agreement:



            (a) BASE SALARY. Commencing on the Effective Date of this Agreement,

Executive shall be paid an annual salary of not less than $162,000, payable in

accordance with the standard payroll policies of Company. Such annual salary is

herein referred to as the "Base Salary." Of the Base Salary, $30,000 per annum

will be deferred at the rate of $2,500 per month. The deferred portion of the

salary will be paid at such time and in such manner as is mutually agreed upon

by the Compensation Committee of the Board of Directors and Mr. Silverman. Until

paid, the deferred compensation accrues interest at the rate of 6% per annum.

The Base Salary shall be reviewed annually by the Board of Directors and shall

be subject to increase or decrease (but not below $162,000).





                                       -2-

{PAGE}



            (b) BENEFITS. Executive shall be entitled to receive any and all

current or future benefits resulting from such group life, sickness, accident,

health, and disability insurance programs that are provided from time to time to

Company's employees generally or as are otherwise approved from time to time by

the Board of Directors of Company. Nothing in this Agreement shall be deemed to

obligate Company to provide any such benefits or to prevent Company from

increasing or decreasing any such benefits in any manner approved from time to

time by the Board of Directors of Company.



            (c) VACATIONS. Executive shall be entitled to such vacation,

holidays, and other paid or unpaid leaves of absence as are consistent with the

normal policies of Company or as are otherwise approved by the Board of

Directors.



      5. TERMINATION OF EMPLOYMENT.



      (a) FOR DUE CAUSE. Nothing herein shall prevent Company from terminating

Executive, without prior notice, for Due Cause, in which event Executive shall

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