REGISTRATION RIGHTS AGREEMENT
 
This Registration Rights Agreement, dated January 4, 2005, is between Allion
Healthcare, Inc., a Delaware corporation (“Allion”), and Michael Stone and
Jonathan Spanier (together, the “Warrant Holders”).
 
Each of the Warrant Holders has been issued warrants (the “Warrants”) to
purchase shares of Common Stock, $.01 par value per share, of Allion (“Common
Stock”), and Allion has agreed to grant to the Warrant Holders the registration
rights provided for herein.
 
The parties agree as follows: 

1. Request for Registration. If at any time Allion shall receive a written
request from both Warrant Holders (a “Demand Request”) that Allion effect a
registration under the Securities Act of 1933, as amended (the “Securities
Act”), Allion shall, within 45 days after its receipt of the Demand Request,
file with the Securities and Exchange Commission (the “SEC”) a registration
statement on a form deemed appropriate by Allion’s counsel covering all the
Warrant Holder’s Registrable Shares, and Allion shall use its reasonable best
efforts to cause the registration statement to become effective. For purposes of
this Agreement, “Registrable Shares” means the shares of Common Stock issued or
issuable upon exercise of the Warrants. Registrable Shares shall cease to be
such when (a) a registration statement covering such Registrable Shares has
become or been declared effective and they have been disposed of pursuant to
that registration statement, (b) eligible to be sold, transferred or distributed
pursuant to or in compliance with Rule 144 (or any similar provision then in
force) or any other exemption from registration under the Securities Act, or (c)
they have been otherwise transferred and Allion has delivered new certificates
not subject to any stop transfer order or other restriction on transfer and not
bearing a legend restricting transfer in the absence of an effective
registration statement.
 
Allion shall not be obligated to effect a registration pursuant to this Section
1:
 
(a)  after Allion has already effected one such registration pursuant to this
Section 2, that registration has been declared or ordered effective and no stop
order suspending the effectiveness of that registration statement has been
issued within 30 days of that effectiveness (provided that Allion shall be
deemed to have effected a registration pursuant to this Section 1 if it files a
registration statement pursuant to this Section 1 and such registration
statement is subsequently withdrawn because the Warrant Holders request for any
reason whatsoever that such registration statement be withdrawn); or
 
(b)  if, at the time it receives a Demand Request, Allion would be required to
prepare any financial statements other than those it customarily prepares or
Allion determines in good faith in its reasonable judgment that the registration
and offering would interfere with any material financing, acquisition, corporate
reorganization or other material corporate transaction or development involving
Allion that is pending or contemplated at the time and promptly gives the
Warrant Holders written notice of that determination (in which case Allion shall
have the right to defer such filing for a period of not more than 60 days after
receipt of the Demand Request).
 
-1-

--------------------------------------------------------------------------------

2.  “Market Stand-off” Agreement. Each of the Warrant Holders agrees, if
requested by Allion and an underwriter of Common Stock of Allion Stock and if
imposed generally on officers and directors of Allion and acquirers of Common
Stock of Allion or rights to Common Stock in acquisitions by Allion and its
subsidiaries, not to sell or otherwise transfer or dispose of any Common Stock
held by such Warrant Holder during the 180-day period following the effective
date of any registration statement of Allion prepared and filed under the
Securities Act. If requested by the underwriters, the Warrant Holders shall
execute a separate agreement to the foregoing effect. Allion may impose
stop-transfer instructions with respect to the Common Stock subject to the
foregoing restriction until the end of said 180-day period.
 
3.  Expenses of Registration. Allion shall pay all registration and filing fees,
printing expenses, fees and disbursements of counsel and independent public
accountants for Allion, fees of the National Association of Securities Dealers,
Inc., fees of transfer agents and registrars, and expenses of listing the
Registrable Securities on any exchange or securities market. All (a)
underwriting discounts, selling commissions and brokerage fees, (b) stock
transfer taxes incurred in respect of the Registrable Shares being sold, (c)
fees and expenses of each of the Warrant Holders and their respective counsel
and (d) other fees and expenses required to be paid by Warrant Holders under
applicable law shall be borne and paid ratably by the Warrant Holders whose
Registrable Securities are included in any such registration.
 
4.  Registration Procedures. In the case of each registration effected by Allion
pursuant to this Agreement, Allion shall:
 
(a)  keep such registration statement effective for a period of 60 days or until
each Warrant Holder has completed the distribution described in the registration
statement, whichever occurs first;
 
(b)  furnish each Warrant Holder copies of any registration statement and each
preliminary or final prospectus, or supplement or amendment required to be
prepared pursuant to this agreement, as any Warrant Holder may from time to time
reasonably request;
 
(c)  prepare and promptly file with the SEC and promptly notify each Warrant
Holder of the filing of any amendments or supplements to such registration
statement or prospectus as may be necessary to correct any statements or
omissions if, at any time when a prospectus relating to the Registrable Shares
is required to be delivered under the Securities Act, any event with respect to
Allion shall have occurred as a result of which any such prospectus or any other
prospectus as then in effect would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements made, in the light of the circumstances under which they were made,
not misleading; and
 
(d)  use its best efforts to qualify as soon as reasonably practicable the
Registrable Shares included in the registration statement for sale under the
securities or blue-sky laws of such states and jurisdictions within the United
States as shall be reasonably requested by any Warrant Holder; provided that
Allion shall not be required in connection therewith or as a condition thereto
to qualify to do business, to become subject to taxation or to file a consent to
service of process generally in any of the aforesaid states or jurisdictions.
 
-2-

--------------------------------------------------------------------------------

5.  Delay of Registration. No Warrant Holder shall have any right to take any
action to restrain, enjoin or otherwise delay any registration as a result of
any controversy that may arise with respect to the interpretation or
implementation of this agreement.
 
6.  Indemnification.
 
(a)  Subject to the limitations set forth below in this Section 6(a), Allion
shall indemnify each Warrant Holder offering Registrable Shares for sale
pursuant to each registration that has been effected pursuant to this Agreement
against all claims, losses, damages and liabilities (or actions in respect
thereof) (collectively, “Losses”) arising out of or based solely on any untrue
statement of a material fact contained in any registration statement under which
such Registrable Shares were registered under the Securities Act, or based on
any omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse each
such Warrant Holder for any legal or other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action; provided, however, that Allion shall pay for only one
counsel for all such Warrant Holders and Allion shall not be liable to a Warrant
Holder in any such case (i) to the extent that any such Losses arise out of or
are based on or result from any untrue statement or omission made in such
registration statement based upon written information furnished to Allion by
such Warrant Holder or (ii) in the case of a sale directly by a Warrant Holder
of Registrable Shares (including a sale of such Registrable Shares through any
underwriter retained by such Warrant Holder engaging in a distribution on behalf
of such Warrant Holder), such untrue statement or omission was contained in a
preliminary prospectus and corrected in a final or amended prospectus, and such
Warrant Holder failed to deliver a copy of the final or amended prospectus at or
prior to the confirmation of the sale of the Registrable Shares to the person or
entity asserting any such Losses or (iii) to the extent that any such Losses
arise out of or are based on or result from any other act or omission on the
part of any Warrant Holder that is inconsistent with the Warrant Holder’s rights
hereunder or a violation of law.
 
(b)  Subject to the limitations set forth below in this Section 6(b), each
Warrant Holder shall, if Registrable Shares held by him are included in the
securities as to which such registration is being effected, severally and not
jointly indemnify Allion, each of its directors and officers who sign such
registration statement, each affiliate and control person of Allion, each
underwriter, if any, of Allion’s securities covered by such registration
statement, and each other security holder whose securities are included in such
registration, and each affiliate thereof against all Losses arising out of or
based solely on any untrue statement of a material fact contained in any such
registration statement under which such Registrable Shares were registered under
the Securities Act, or based on any omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse Allion, such directors, officers, employees,
affiliates, or security holders or underwriters for any legal or any other
expenses reasonably incurred in connection with investigating or defending any
such Losses; provided, however that such Warrant Holder will be liable hereunder
in any such case if and only to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in reliance upon and in
conformity with information pertaining to such Warrant Holder, furnished in
writing to Allion by such Warrant Holder specifically for use in the
registration statement or the prospectus included therein.
 
-3-

--------------------------------------------------------------------------------

(c)  Each party entitled to indemnification under this Section 6 (the
“Indemnified Party”) shall give notice to the party required to provide
indemnification (the “Indemnifying Party”) promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and any
claim or any litigation resulting therefrom. In case any action is brought
against an Indemnified Party, and it notifies the Indemnifying Parties of the
commencement thereof, the Indemnifying Party will be entitled to participate in
and, to the extent it so determines, assume the defense thereof; provided that
counsel for the Indemnifying Party, who shall conduct the defense of such claim
or any litigation resulting therefrom, shall be approved by the Indemnified
Party (whose approval shall not unreasonably be withheld), and the Indemnified
Party may participate in such defense at such party’s expense. After notice from
the Indemnifying Party of its election to so assume the defense thereof, the
Indemnifying Party will not be liable to such Indemnified Party for any legal or
other expenses subsequently incurred by the Indemnified Party in connection with
the defense thereof. Each Indemnified Party shall furnish such information
regarding itself or the claim in question as an Indemnifying Party may
reasonably request and as shall be reasonably required in connection with the
defense of such claim and litigation resulting therefrom.
 
7.  Conditions to Registration. As a condition to Allion’s obligation under this
Agreement to cause a registration statement to be filed or Registrable Shares to
be included in a registration statement, each Warrant Holder shall provide such
information and execute such documents as may reasonably be required in
connection with such registration. Without limiting the foregoing, no Warrant
Holder may participate in any registration under this agreement which is
underwritten unless such Warrant Holder (a) agrees to sell its securities on the
basis provided in any such underwriting arrangements and (b) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents required under the terms of such underwriting
arrangements.
 
8.  Notices. All notices, requests, demands and other communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered by courier, or if mailed, when mailed by United States first-class,
certified or registered mail, postage prepaid, to the other party at the
following addresses or by telecopy, receipt confirmed (or at such other address
as shall be given in writing by any party to the other):
 
If to Allion, to:
 
Allion Healthcare, Inc.
1660 Walt Whitman Road
Melville, New York 11747
Fax: (631) 547-6532
Attention: Michael P. Moran
 
-4-

--------------------------------------------------------------------------------

With a copy to:
 
Nixon Peabody LLP
990 Stewart Avenue, 3rd Floor
Garden City, New York 11530
Fax: (516) 832-7555
Attention: Allan H. Cohen
 
If to Sellers, to:
 
Michael Stone
18 Ozone Avenue
Venice, California 90291

and
 
Jonathan Spanier
269 South Beverly Drive, #1162
Beverly Hills, California 90212

With a copy to:
 
Ackerman, Levine, Cullen, Brickman & Limmer, LLP
175 Great Neck Road
Great Neck, New York 11021
Fax: (516) 829-6966
Attention: Leslie J. Levine, Esq.

9.  Successors and Assigns. This Agreement, and all rights and powers granted
hereby, will bind and inure to the benefit of the parties hereto and their
respective successors and assigns.

10.  Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without regard to the
conflicts of law provisions thereof.

11.  Consent to Jurisdiction. The parties hereby agree that any action,
proceeding or claim against it arising out of, or relating in any way to, this
Agreement may be brought and enforced in the courts of the State of California
or of the United States of America located in the County of Los Angeles, State
of California, and irrevocably submits to such jurisdiction for such purpose.
The parties hereby irrevocably waive any objection to such exclusive
jurisdiction or inconvenient forum.

12.  Headings. The headings preceding the text of the sections and subsections
hereof are inserted solely for convenience of reference and shall not constitute
a part of this Agreement, nor shall they affect its meaning, construction, or
effect.

-5-

--------------------------------------------------------------------------------

13.  Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but which together shall constitute
one and the same instrument. Facsimile copies of original signatures shall be
effective as original signatures.

14.  Entire Agreement. This Agreement sets forth all of the promises, covenants,
agreements, conditions and undertakings between the parties hereto with respect
to the subject matter hereof and supersede all prior and contemporaneous
agreements and understandings, inducements or conditions, express or implied,
oral or written. This Agreement may not be amended except by an instrument in
writing signed by the party sought to be charged with effect of such amendment.

[end of text; signature page follows]

 

-6-

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and
year first above written.
 
ALLION HEALTHCARE, INC.
 
 
By: __/s/ Michael Moran_____
Name: Michael Moran
Title: President and CEO
 

___/s/ Michael Stone__________
Name: Michael Stone
 

__/s/ Jonathan Spanier_________
Name: Jonathan Spanier
 

-7-

--------------------------------------------------------------------------------