Document:

EXECUTION COPY

      THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS
WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE
SOLD,

      OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO BRAINSTORM CELL THERAPEUTICS INC. THAT SUCH REGISTRATION IS NOT
REQUIRED.

       Right to Purchase 47,500 shares of Common Stock of Brainstorm Cell
                                Therapeutics Inc.
                   (subject to adjustment as provided herein)

                COMMON STOCK PURCHASE WARRANT AT $1.62 PER SHARE

Issue Date: May 16, 2005

      BRAINSTORM CELL THERAPEUTICS INC., a corporation organized under the laws
of the State of Washington (the "Company"), hereby certifies that, for value
received, Trout Capital LLC a limited liability company, with its address at 740
Broadway, New York, New York 10003, or its assigns (the "Holder"), is entitled,
subject to the terms set forth below, to purchase from the Company at any time
after the Issue Date up to 5:00 p.m., E.S.T. on the FIFTH anniversary of the
Issue Date (the "Expiration Date") 47,500 fully paid and nonassessable shares of
the common stock of the Company (the "Common Stock"), $.00005 par value per
share at a per share purchase price of $1.62. The aforedescribed purchase price
per share, as adjusted from time to time as herein provided, is referred to
herein as the "Purchase Price." The number and character of such shares of
Common Stock and the Purchase Price are subject to adjustment as provided
herein. The Company may reduce the Purchase Price without the consent of the
Holder. This Warrant is that certain Warrant referred to in Section 4(e) of the
Engagement Letter dated May __, 2005 between the Company and Trout Capital LLC
(the "Engagement Letter"). All capitalized terms used but not defined in this
Warrant which are defined in the Engagement Letter shall have the same meaning
in this Warrant as in the Engagement Letter.

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

      (a) The term "Company" shall include Brainstorm Cell Therapeutics Inc. and
any corporation which shall succeed or assume the obligations of Brainstorm Cell
Therapeutics Inc.

      (b) The term "Common Stock" includes (i) the Company's Common Stock,
$.00005 par value per share, and (ii) any other securities into which or for
which any of the securities described in (i) may be converted or exchanged
pursuant to a plan of recapitalization, reorganization, merger, sale of assets
or otherwise.

      (c) The term "Other Securities" refers to any stock (other than Common
Stock) and other securities of the Company or any other person (corporate or
otherwise) which the holder of the Warrant at any time shall be entitled to
receive, or shall have received, on the exercise of the Warrant, in lieu of or
in addition to Common Stock, or which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to Section 4 or otherwise.

<PAGE>

                                                                  EXECUTION COPY

      (d) The term "person" or "Person" means any individual, corporation,
partnership, limited liability company, trust, association, governmental agency
or body or any other entity of any type.

      1. Exercise of Warrant.

            1.1 Number of Shares Issuable upon Exercise. From and after the
Issue Date through and including the Expiration Date, the Holder hereof shall be
entitled to receive, upon exercise of this Warrant in whole in accordance with
the terms of subsection 1.2 or upon exercise of this Warrant in part in
accordance with subsection 1.3, shares of Common Stock of the Company, subject
to adjustment pursuant to Section 4.

            1.2 Full Exercise. This Warrant may be exercised in full by the
Holder hereof by delivery of an original or facsimile copy of the form of
subscription attached as Exhibit A hereto (the "Subscription Form") duly
executed by such Holder and surrender of the original Warrant (or such other
instrument as may be required pursuant to Section 8) within seven (7) days of
exercise, to the Company at its principal office or at the office of its Warrant
Agent (as provided hereinafter), accompanied by payment, in cash, wire transfer
or by certified or official bank check payable to the order of the Company, in
the amount obtained by multiplying the number of shares of Common Stock for
which this Warrant is then exercisable by the Purchase Price then in effect.

            1.3 Partial Exercise. This Warrant may be exercised in part (but not
for a fractional share) by surrender of this Warrant in the manner and at the
place provided in subsection 1.2 except that the amount payable by the Holder on
such partial exercise shall be the amount obtained by multiplying (a) the number
of whole shares of Common Stock designated by the Holder in the Subscription
Form by (b) the Purchase Price then in effect. On any such partial exercise, the
Company, at its expense, will forthwith issue and deliver to or upon the order
of the Holder hereof a new Warrant of like tenor, in the name of the Holder
hereof or as such Holder (upon payment by such Holder of any applicable transfer
taxes) may request, the whole number of shares of Common Stock for which such
Warrant may still be exercised.

            1.4 Fair Market Value. Fair Market Value of a share of Common Stock
as of a particular date (the "Determination Date") shall mean:

                  (a) If the Company's Common Stock is traded on an exchange or
is quoted on the National Association of Securities Dealers, Inc. Automated
Quotation ("NASDAQ") National Market System, NASDAQ SmallCap Market or the
American Stock Exchange, LLC, then the closing or last sale price, respectively,
reported for the last trading day immediately preceding the Determination Date;

                  (b) If the Company's Common Stock is not traded on an exchange
or on the NASDAQ National Market System, the NASDAQ SmallCap Market or the
American Stock Exchange, Inc., but is quoted on the OTC Bulletin Board or, if
such is not available, the Pink Sheets LLC (formerly the National Quotation
Bureau), then the average of the closing bid and ask prices for the Common Stock
quoted by two market makers of the Common Stock reported for the last trading
day immediately preceding the Determination Date;

                                       2
<PAGE>

                                                                  EXECUTION COPY

            (c) Except as provided in clause (d) below, if the Company's Common
Stock is not publicly traded, then as the Holder and the Company agree, or in
the absence of such an agreement, by arbitration in accordance with the rules
then standing of the American Arbitration Association, before a single
arbitrator to be chosen from a panel of persons qualified by education and
training to pass on the matter to be decided; or

            (d) If the Determination Date is the date of a liquidation,
dissolution or winding up, or any event deemed to be a liquidation, dissolution
or winding up pursuant to the Company's charter, then all amounts to be payable
per share to holders of the Common Stock pursuant to the charter in the event of
such liquidation, dissolution or winding up, plus all other amounts to be
payable per share in respect of the Common Stock in liquidation under the
charter, assuming for the purposes of this clause (d) that all of the shares of
Common Stock then issuable upon exercise of all of the Warrants are outstanding
at the Determination Date.

      1.5 Company Acknowledgment. The Company will, at the time of the exercise
of the Warrant, acknowledge in writing its continuing obligation to afford to
such Holder any rights to which such Holder shall continue to be entitled after
such exercise in accordance with the provisions of this Warrant.

      1.6 Trustee for Warrant Holders. In the event that a bank or trust company
shall have been appointed as trustee for the Holder of the Warrants pursuant to
Subsection 3.2, such bank or trust company shall have all the powers and duties
of a warrant agent (as hereinafter described) and shall accept, in its own name
for the account of the Company or such successor person as may be entitled
thereto, all amounts otherwise payable to the Company or such successor, as the
case may be, on exercise of this Warrant pursuant to this Section 1.

      1.7 Delivery of Stock Certificates, etc. on Exercise. The Company agrees
that the shares of Common Stock purchased upon exercise of this Warrant shall be
deemed to be issued to the Holder hereof as the record owner of such shares as
of the close of business on the date on which this Warrant shall have been
surrendered and payment made for such shares as aforesaid. As soon as
practicable after the exercise of this Warrant in full or in part, and in any
event within ten (10) business days thereafter, the Company at its expense
(including the payment by it of any applicable issue taxes) will cause to be
issued in the name of and delivered to the Holder hereof, or as such Holder
(upon payment by such Holder of any applicable transfer taxes) may direct in
compliance with applicable securities laws, a certificate or certificates for
the number of duly and validly issued, fully paid and nonassessable shares of
Common Stock (or Other Securities) to which such Holder shall be entitled on
such exercise, plus, in lieu of any fractional share to which such Holder would
otherwise be entitled, cash equal to such fraction multiplied by the then Fair
Market Value of one full share of Common Stock, together with any other stock or
other securities and property (including cash, where applicable) to which such
Holder is entitled upon such exercise pursuant to Section 1 or otherwise.

                                       3
<PAGE>

                                                                  EXECUTION COPY

      2. Exercise or Conversion.

            (a) This Warrant may be exercised in whole or in part for cash, wire
transfer or by certified or official bank check payable to the order of the
Company equal to the applicable aggregate Purchase Price for the number of
shares of Common Stock and/or Other Securities being purchased upon exercise of
this Warrant.

            (b) (i) In lieu of the exercise of this Warrant as provided in
Section 2(a), the Holder shall have the option to convert this Warrant in whole
or in part into Common Stock at any time during the term of this Warrant (the
"Conversion Right") having value equal to the value (as determined below) of
this Warrant, or any part hereof, in which event the Company shall issue to the
Holder a number of shares of Common Stock computed using the following formula:

                                   X = Y(A-B)
                                       -----
                                         A

         Where:         X =   the number of shares of Common Stock to be
                              issued to the Holder;

                        Y =   the number of shares of Common Stock issuable
                              upon exercise of this Warrant or, if only a
                              portion of this Warrant is being exercised, the
                              portion of this Warrant being canceled (at the
                              date of such calculation);

                        A =   the Fair Market Value of one share of Common
                              Stock (at the date of such calculation);

                        B =   the Purchase Price (as adjusted to the date of
                              such calculation).

                  (ii) No fractional shares shall be issuable upon exercise of
the Conversion Right, and, if the number of shares to be issued determined in
accordance with the foregoing formula is other than a whole number, the Company
shall pay to the holder an amount in cash equal to the Fair Market Value of the
resulting fractional share on the Conversion Date.

                  (iii) The Conversion Right provided under this Section 2(b)
may be exercised in whole or in part and at any time and from time to time while
any Warrant remains outstanding. In order to exercise the Conversion Right, the
Holder shall surrender to the Company, at its offices, this Warrant accompanied
by a duly completed Form of Subscription in the form attached hereto as Exhibit
A. The Warrant (or so much thereof as shall have been surrendered for
conversion) shall be deemed to have been converted immediately prior to the
close of business on the day (such day, the "Conversion Date") of surrender of
the Warrant for conversion in accordance with the foregoing provisions. As
promptly as practicable on or after the Conversion Date, the Company shall issue
and shall deliver to the Holder (A) a certificate or certificates representing
the number of shares of Common Stock to which the Holder shall be entitled as a
result of the conversion, and (B) if the Warrant is being converted in part
only, a new certificate in principal amount equal to the unconverted portion of
the Warrant.

                                       4
<PAGE>

                                                                  EXECUTION COPY

      3. Adjustment for Reorganization, Consolidation, Merger, etc.

      The Purchase Price in effect at the time, and the number and kind of
securities purchasable upon exercise of the Warrant, shall be subject to
adjustment from time to time upon the happening of certain events as follows.

            3.1 Reorganization, Consolidation, Merger, etc. In case at any time
or from time to time, the Company shall (a) effect a reorganization, (b)
consolidate with or merge into any other person or (c) transfer all or
substantially all of its properties or assets to any other person then, in each
such case, as a condition to the consummation of such a transaction, proper and
adequate provision shall be made by the Company whereby the Holder of this
Warrant, on the exercise hereof as provided in Section 1, at any time after the
consummation of such reorganization, consolidation or merger or the effective
date of such transfer, as the case may be, shall receive, in lieu of the Common
Stock (or Other Securities) issuable on such exercise prior to such consummation
or such effective date, the stock and other securities and property (including
cash) to which such Holder would have been entitled upon such consummation or in
connection with such transfer, as the case may be, if such Holder had so
exercised this Warrant, immediately prior thereto, all subject to further
adjustment thereafter as provided in Section 4.

            3.2 Dissolution. In the event of any dissolution of the Company
following the transfer of all or substantially all of its properties or assets,
the Company, prior to such dissolution, shall at its expense deliver or cause to
be delivered the stock and other securities and property (including cash, where
applicable) receivable by the Holder of the Warrants after the effective date of
such dissolution pursuant to this Section 3 to a bank or trust company (a
"Trustee") as trustee for the Holder of the Warrants, pursuant to a trust or
similar agreement in form and substance satisfactory to the Holder.

            3.3 Continuation of Terms. Upon any reorganization, consolidation,
merger or transfer (and any dissolution following any transfer) referred to in
this Section 3, this Warrant shall continue in full force and effect and the
terms hereof shall be applicable to the Other Securities and property receivable
on the exercise of this Warrant after the consummation of such reorganization,
consolidation or merger or the effective date of transfer or dissolution
following any such transfer, as the case may be, and shall be binding upon the
issuer of any Other Securities, including, in the case of any such transfer, the
person acquiring all or substantially all of the properties or assets of the
Company, whether or not such person shall have expressly assumed the terms of
this Warrant as provided in Section 4. In the event this Warrant does not
continue in full force and effect after the consummation of the transaction
described in this Section 3, then only in such event will the Company's
securities and property (including cash, where applicable) receivable by the
Holder of the Warrants be delivered to the Trustee as contemplated by Section
3.2.

                                       5
<PAGE>

                                                                  EXECUTION COPY

      4. Extraordinary Events Regarding Common Stock. In the event that the
Company shall (a) issue additional shares of the Common Stock or Other
Securities as a dividend or other distribution on outstanding Common Stock or
Other Securities, (b) subdivide or reclassify its outstanding shares of Common
Stock into a greater number of shares of Common Stock, or (c) combine or
reclassify its outstanding shares of the Common Stock into a smaller number of
shares of the Common Stock, then, in each such event, the Purchase Price shall,
simultaneously with the happening of such event, be adjusted by multiplying the
then Purchase Price by a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding immediately prior to such event and the
denominator of which shall be the number of shares of Common Stock outstanding
immediately after such event, and the product so obtained shall thereafter be
the Purchase Price then in effect. The Purchase Price, as so adjusted, shall be
readjusted in the same manner upon the happening of any successive event or
events described herein in this Section 4. The number of shares of Common Stock
that the Holder of this Warrant shall thereafter, on the exercise hereof as
provided in Section 1, be entitled to receive shall be adjusted to a number
determined by multiplying the number of shares of Common Stock that would
otherwise (but for the provisions of this Section 4) be issuable on such
exercise by a fraction of which (a) the numerator is the Purchase Price that
would otherwise (but for the provisions of this Section 4) be in effect, and (b)
the denominator is the Purchase Price in effect on the date of such exercise. In
the event that any warrants issued to Trout Targets in the Transaction contain
more favorable protection against dilution and other events to the holders of
such warrants than the provisions contained in Section 3 and 4 of this Warrant,
the provisions of this Warrant automatically shall be amended to include such
more favorable provisions for the benefit of the Holder, and the Company,
promptly, at its expense, shall provide to the Holder a revised Warrant
containing such amended provisions.

      5. Certificate as to Adjustments. In each case of any adjustment or
readjustment in the shares of Common Stock (or Other Securities) issuable on the
exercise of the Warrants, the Company at its expense will promptly cause its
Chief Financial Officer or other appropriate designee to compute such adjustment
or readjustment in accordance with the terms of the Warrant and prepare a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based, including a
statement of (a) the consideration received or receivable by the Company for any
additional shares of Common Stock (or Other Securities) issued or sold or deemed
to have been issued or sold, (b) the number of shares of Common Stock (or Other
Securities) outstanding or deemed to be outstanding, and (c) the Purchase Price
and the number of shares of Common Stock (or Other Securities) to be received
upon exercise of this Warrant, in effect immediately prior to such adjustment or
readjustment and as adjusted or readjusted as provided in this Warrant. The
Company will forthwith mail a copy of each such certificate to the Holder of the
Warrant and any Warrant Agent of the Company (appointed pursuant to Section 3
hereof).

                                       6
<PAGE>

                                                                  EXECUTION COPY

      6. Reservation of Stock, etc. Issuable on Exercise of Warrant; Financial
Statements. The Company will at all times reserve and keep available, solely for
issuance and delivery on the exercise of the Warrants, all shares of Common
Stock (or Other Securities) from time to time issuable on the exercise of the
Warrant. The Company covenants and agrees that all shares of Common Stock and
Other Securities which the Holder may purchase under this Warrant or are
otherwise issuable hereunder, will, upon issuance and delivery against the
payment therefore of the requisite Purchase Price, be duly and validly issued,
fully paid and nonassesable. This Warrant entitles the Holder hereof to receive
copies of all financial and other information distributed or required to be
distributed to the holders of the Company's Common Stock.

      7. Assignment; Exchange of Warrant. Subject to compliance with applicable
securities laws, this Warrant, and the rights evidenced hereby, may be
transferred by any registered holder hereof (a "Transferor"). On the surrender
for exchange of this Warrant, with the Transferor's endorsement in the form of
Exhibit B attached hereto (the "Transferor Endorsement Form") and together with
an opinion of counsel reasonably satisfactory to the Company that the transfer
of this Warrant will be in compliance with applicable securities laws, the
Company at its expense, (but with payment by the Transferor of any applicable
transfer taxes), will issue and deliver to or on the order of the Transferor
thereof a new Warrant or Warrants of like tenor, in the name of the Transferor
and/or the transferee(s) specified in such Transferor Endorsement Form (each a
"Transferee"), calling in the aggregate on the face or faces thereof for the
number of shares of Common Stock called for on the face or faces of the Warrant
so surrendered by the Transferor. No such transfers shall result in a public
distribution of the Warrant; and the Company shall be responsible for "blue sky"
compliance expenses for resales under any registration statement.

      8. Replacement of Warrant. On receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this Warrant
and, in the case of any such loss, theft or destruction of this Warrant, on
delivery of an indemnity agreement or security reasonably satisfactory in form
and amount to the Company or, in the case of any such mutilation, on surrender
and cancellation of this Warrant, the Company at its expense, will execute and
deliver, in lieu thereof, a new Warrant of like tenor.

      9. Registration Rights. The Company covenants and agrees with the Holder
as follows:

            (a) The Company shall advise the Holder or its permitted transferee,
whether the Holder holds the Warrant or has exercised the Warrant and holds
shares of Common Stock or any Other Securities issuable upon exercise of the
Warrant ("Registrable Securities"), by written notice at least ten (10) business
days prior to the filing of any registration statement under the Act, covering
any equity securities of the Company, for its own account or for the account of
others, except for any registration statement filed on Form S-4 or S-8 (or other
comparable form), or otherwise relating solely to the sale of securities to
participants in a Company stock plan, relating solely to the issuance of
securities pursuant to a corporate reorganization or other transaction under
Rule 145 of the Act, a registration on any form that does not include
substantially that same information as would be required to be included in a
registration statement covering the sale of the Registrable Securities, or a
registration in which the only Common Stock being registered is Common Stock
issuable upon conversion of debt securities that are also being registered, and
will, upon the request of the Holder, include in any such new registration
statement (the "Registration Statement") all such information as may be required
to permit a public offering of, all or any of the Registrable Securities.

                                       7
<PAGE>

                                                                  EXECUTION COPY

            (b) For so long as the Registrable Securities included in any
Registration Statement remain unsold, the Company shall, subject to Section
9(f), (i) use its commercially reasonable efforts to maintain the effectiveness
of such Registration Statement; (ii) timely file all reports required under the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Securities and Exchange Commission (the "Commission") thereunder; (iii) file
such post-effective amendments to the Registration Statement as may be necessary
so that the Registration Statement does not contain any misstatement of a
material fact or omit to state any material fact required to make the statements
therein not misleading; (iv) supply prospectuses and such other documents as any
Holder whose Registrable Securities are included in such Registration Statement
may reasonably request in order to facilitate the public sale or other
disposition of such Registrable Securities; (v) register and qualify any of the
Registrable Securities for sale in such jurisdictions within the United States
as any such Holder designates, provided that the nothing in this clause (v)
shall require the Company to qualify to do business as a foreign corporation,
submit to taxation in any jurisdiction or to file a general consent to service
of process in any jurisdiction in which it is not otherwise so qualified or
required to file such a consent at the time; (vi) list or quote or shall cause
to be listed or quoted on the exchange or quotation system or other market on
which the other securities covered by such Registration Statement are listed or
quoted, all Registrable Securities of the Holders included in the Registration
Statement; (vii) provide a transfer agent and registrar for all Registrable
Securities registered pursuant to such Registration Statement and a CUSIP number
for all such Registrable Securities; (viii) furnish, at the request of the
Holder requesting registration of Registrable Securities, on the date that such
Registrable Securities are delivered to the underwriters for sale, if such
securities are being sold through underwriters, (A) an opinion, dated as of such
date, of the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to underwriters in
an underwritten public offering and reasonably satisfactory to a majority in
interest of the Holders requesting registration, addressed to the underwriters,
if any, and to the Holders requesting registration of Registrable Securities;
and (B) a "comfort" letter dated as of such date, from the independent certified
public accountants of the Company, in form and substance as is customarily given
by independent certified public accountants to underwriters in an underwritten
public offering and reasonably satisfactory to the Holder requesting
registration, addressed to the underwriters, if any, and to the Holders
requesting registration of Registrable Securities; (ix) permit any Holder of
Registrable Securities that might be deemed, in the reasonable opinion of
counsel to such Holder, reasonably acceptable to the Company, to be an
underwriter or a controlling person of the Company, to require the insertion in
the registration statement of material, furnished to the Company in writing,
that in the reasonable opinion of counsel to such Holder should be included; (x)
otherwise 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 (12) months, but not
more than eighteen (18) months, beginning with the first month after the
effective date of the Registration Statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Act and (xi) do any and all other
acts and things which may be commercially reasonable to enable any such Holder
to consummate the public sale or other disposition of the Registrable Securities
included in the Registration Statement, all at no expense to such Holder (except
as provided in the immediately following sentence). All costs and expenses in
connection with any Registration Statement shall be borne by the Company, except
that the Holder(s) shall bear the fees of their own counsel and any other
advisors retained by them and any underwriting discounts or sales or other
commissions applicable to any of the Registrable Securities sold by them. In
connection with any Registration Statement, the Company shall furnish
indemnification in the manner provided in Section 10 hereof, and each Holder
whose Registrable Securities are included therein shall furnish information and
indemnification in the manner provided in Section 10.

                                       8
<PAGE>

                                                                  EXECUTION COPY

            (c ) Notwithstanding the foregoing set forth in this Section 9, the
Company shall not be required to include in any Registration Statement any
Registrable Securities of a Holder if in the opinion of counsel to the Company
(which counsel and opinion are reasonably acceptable to counsel to the Holder)
all Registrable Securities held by such Holder (and any affiliate of the Holder
with whom such Holder must aggregate its sales under Rule 144) would be saleable
without registration, restriction or limitation under the holding period
requirements and volume limitations under Rule 144 (or its successor) if the
Warrant was exercised or converted pursuant to this Agreement.

            (d) If any registration pursuant to this Section 9 is in the form of
an underwritten offering, the Company will select and obtain the investment
banker or investment bankers and manager or managers that will administer the
offering and the Company shall not be required under this Section 9 to include
any of the Holder's securities in such underwriting unless they accept the terms
of the underwriting as agreed upon between the Company and the underwriters
selected by it and enter into an underwriting agreement in customary form with
an underwriter or underwriters selected by the Company, and then only in such
quantity as the underwriters determine in their good faith discretion will not
jeopardize the success of the offering by the Company (as further described in
Section 9(e) below). Each Holder hereby agrees that such Holder shall not sell
or otherwise transfer any securities of the Company held by such Holder (other
than those included in the registration) during a "lock-up" period specified by
the managing underwriter(s) of such registration, which shall not exceed 6
months. All Holders hereby agree to abide by any customary "lock-up" period
restrictions during the aforesaid applicable periods as may be required by the
managing underwriter(s) in such registrations; provided however that all
officers, directors and holders of at least five percent (5%) of the Company's
issued and outstanding shares are similarly bound and, provided further, that,
at the request of the Holder, the Company shall use commercially reasonable
efforts to cause the managing underwriter(s) to permit the Holder to sell during
any such restricted periods such number of Registrable Securities as may be
required so as to yield net proceeds to the Holder equal to the amount of the
Purchase Price and other costs, expenses and taxes paid or payable by the Holder
as a result of the exercise of this Warrant. Each Holder agrees to execute and
deliver such other agreements as may be reasonable requested by the Company or
the underwriter which are consistent with the foregoing or which are necessary
to give effect thereto. In order to enforce the foregoing covenant, the Company
may impose stop-transfer instructions with respect to the Registrable Securities
of each Holder (and the shares or securities of every other person subject to
the foregoing restriction) until the end of such period.

                                       9
<PAGE>

                                                                  EXECUTION COPY

            (e) In the event that any registration pursuant to Section 9 shall
be in connection with an underwritten offering, and the managing underwriter
determines in good faith and advises that the number of Registrable Securities
to be included in such offering, together with the number of shares of Common
Stock to be included in the Registration Statement by the Company or other
holders of the Company's securities with the right to request inclusion in the
Registration Statement, if any, exceeds the number of shares of Common Stock
that it is advisable to offer and sell at such time or would interfere with the
successful marketing of the Common Stock covered by the Registration Statement,
then priority for including shares of Common Stock in the Registration
Statement, up to the number advised by the managing underwriter, shall be
allocated first, to the Company and each other person who has requested
inclusion of shares of Common Stock pursuant to a "demand" registration right,
pro rata in proportion to the respective number of shares of Common Stock to be
included by them, and second, to the extent of any remaining capacity as advised
by the managing underwriter, to all other holders of the Company's securities
with the right to request inclusion in the Registration Statement, including the
Holders requesting registration of their Registrable Securities, pro rata in
proportion to the respective number of shares of Common Stock (including
Registrable Securities) to be included by them and, then, to all other persons.

            (f) In any registration in which Holders request inclusion of their
Registrable Securities pursuant to Section 9(a), if at any time after giving
notice of its intention to register securities and prior to the effective date
of the Registration Statement the Company or such other person shall determine
for any reason not to register or to delay registration of it securities, the
Company may, at its election, delay, terminate or withdraw such registration.
The Company shall give written notice of any such determination to each Holder
that has requested inclusion of Registrable Securities in the Registration
Statement (provided, that the failure to give such notice shall not prejudice
the Company's request to delay, terminate or withdraw such registration) and (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 shall be obligated to reimburse the Holder for any reasonable
fees and expenses it has incurred in connection therewith) 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. If (iii) at any time when a prospectus relating to Registrable
Securities is required to be delivered under the Act, the Company discovers
that, or any event occurs as a result of which, the prospectus (including any
supplement thereto) included in any 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,
in the light of the circumstances under which they were made, not misleading, or
(iv) the Commission issues any stop order suspending the effectiveness of any
Registration Statement or proceedings are initiated or threatened for that
purpose, then the Company shall promptly deliver a written notice to such effect
to each Holder whose Registrable Securities are included in such Registration
Statement, and each such Holder shall immediately upon receipt of such notice
discontinue its disposition of Registrable Securities pursuant to such
Registration Statement until its receipt of the copies of the supplemented or
amended prospectus contemplated by the immediately following sentence and, if so
directed by the Company, shall deliver to the Company (at the Company's expense)
all copies, other than permanent file copies, then in such Holder's possession
of the prospectus or prospectus supplement relating to such Registrable
Securities current at the time of receipt of such notice. As promptly as
practicable following the event or discovery referred to in clause (iii) of the
immediately preceding sentence, the Company shall (at the Company's expense)
prepare and file with the Commission such amendment or supplement to the
Registration Statement or prospectus which does 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, in the light of the
circumstances under which they were made, not misleading, and furnish to the
Holders whose Registrable Securities are included in such Registration Statement
a reasonable number of copies of an amendment or supplement of such prospectus
so that, as thereafter delivered to purchasers of such Registrable Securities,
such prospectus shall not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.

                                       10
<PAGE>

                                                                  EXECUTION COPY

            (g) No Holder shall have any right to obtain or seek an injunction
restraining or otherwise delaying any registration as the result of any
controversy that might arise with respect to the interpretation or
implementation of this Section 9.

            (f) The selling Holder shall furnish the Company such information
regarding themselves, the Registrable Securities held by them, and the intended
method of disposition of such securities as shall be required to timely effect
the Registration of their Registrable Securities.

      10. Indemnification.

            (a) Whenever pursuant to Section 9 a Registration Statement relating
to any shares of Common Stock or Other Securities issued upon exercise of the
Warrant is filed under the Act, amended or supplemented, the Company will
indemnify and hold harmless each Holder of the securities covered by such
Registration Statement, amendment or supplement (such Holder being hereinafter
called the "Distributing Holder"), and each person, if any, who controls (within
the meaning of the Act) the Distributing Holder, and each underwriter (within
the meaning of the Act) of such securities and each person, if any, who controls
(within the meaning of the Act) any such underwriter, against any losses,
deficiencies, claims, actions, damages, liabilities, assessments, judgments,
obligations, penalties, awards and other liabilities, costs and expenses,
including, but not limited to, interest, penalties, and reasonable fees,
disbursements, and expense of attorneys, accountants, financial and other
advisors, experts and witnesses, both those incurred in connection with the
defense or prosecution of the indemnifiable claim and those incurred in
connection with the enforcement of this provision (collectively, "Damages"),
joint or several, to which the Distributing Holder, any such controlling person
or any such underwriter may become subject, under the Act or otherwise, insofar
as such Damages are caused by, result from, arise out of or are based upon (i)
any violation by the Company or any of its representatives of the federal or
state securities laws, (ii) any untrue statement or alleged untrue statement of
any material fact contained in any such Registration Statement or any
preliminary prospectus or final prospectus constituting a part thereof or any
amendment or supplement thereto, (iii) the omission or the alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading or (iv) any act or failure to act, or any
alleged act or failure to act, by any Distributing Holder in connection with, or
relating in any manner to, the Registration Statement, the preliminary
prospectus, final prospectus or the offering contemplated thereby, and which is
included as part of or referred to in any Damage arising out of or based upon
matters covered by clause (i), (ii) or (iii) above; provided, however, that (i)
the Company will not be liable in any such case to the extent that any such
Damage arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in said Registration Statement,
said preliminary prospectus, said final prospectus or said amendment or
supplement in reliance upon and in conformity with written information furnished
by such Distributing Holder or any other Distributing Holder for use in the
preparation thereof , and (ii) the foregoing indemnity with respect to any
preliminary prospectus shall not inure to the benefit of any Distributing Holder
or underwriter, or any person controlling such Distributing Holder or
underwriter, from whom the person asserting any such Damage purchased shares in
the offering, if a copy of the prospectus (as then amended or supplemented if
the Company shall have furnished any amendments or supplements thereto) was not
sent or given by or on behalf of such Distributing Holder or underwriter to such
person, if required by law so to have been delivered, at or prior to the written
confirmation of the sale of the shares to such person, and if the prospectus (as
so amended or supplemented) would have cured the defect giving rise to such
Damage. This indemnity agreement is not exclusive and will be in addition to any
liability, which the Company might otherwise have and shall not limit any rights
or remedies that may otherwise be available at law or in equity to each
Distributing Holder.

                                       11
<PAGE>

                                                                  EXECUTION COPY

            (b) The Distributing Holder will indemnify and hold harmless the
Company, each of its directors, each of its officers who have signed said
Registration Statement and such amendments and supplements thereto, and each
person, if any, who controls the Company (within the meaning of the Act) against
any Damages, joint or several, to which the Company or any such director,
officer or controlling person may become subject, under the Act or otherwise,
insofar as such Damages are caused by, results from, arise out of or are based
upon (i) any untrue or alleged untrue statement of any material fact contained
in said Registration Statement, said preliminary prospectus, said final
prospectus, or said amendment or supplement, or (ii) the omission or the alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such Damage is caused by, results from,
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in said Registration Statement, said
preliminary prospectus, said final prospectus or said amendment or supplement in
reliance upon and in conformity with written information furnished by such
Distributing Holder for use in the preparation thereof. This indemnity agreement
is not exclusive and will be in addition to any liability, which each
Distributing Holder might otherwise have and shall not limit any rights or
remedies that may otherwise be available at law or in equity to the Company.

                                       12
<PAGE>

                                                                  EXECUTION COPY

            (c) Promptly after receipt by an indemnified party under this
Section 10 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party
under this Section 10, notify the indemnifying party in writing of the
commencement thereof, but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party for
indemnity or contribution to the extent it is not prejudiced as a proximate
result of such failure. In case any such action is brought against any
indemnified party, and such indemnified party seeks or intends to seek indemnity
from an indemnifying party, the indemnifying party will be entitled to
participate in, and, to the extent that it shall elect, jointly with any other
indemnifying party similarly notified, by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party; provided, however, that if (i) the
indemnified claim seeks an order, injunction or other equitable or declaratory
relief; (ii) the indemnified party shall have reasonably concluded that there is
an actual or potential conflict of interest between the positions of the
indemnifying party and the indemnified party in conducting the defense of any
such action; (iii) there are legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party; (iv) the indemnifying party shall have failed to employ
counsel reasonably satisfactory to the indemnified party, or (v) the
indemnifying party is not timely or diligently defending such claim, then, in
any such event, the indemnified party or parties shall have the right to select
one separate counsel (plus such local counsel as may be necessary and, if there
is more than one indemnified party, and such parties may not be represented by
one counsel because of a conflict of interest, than such additional other
counsel as may be necessary as a result of such conflicts) to assume such legal
defenses and to otherwise participate in the defense of such action on behalf of
such indemnified party or parties, all at the expense of the indemnifying party.
Upon receipt of notice from the indemnifying party to such indemnified party of
such indemnifying party's election so to assume the defense of such action and
approval by the indemnified party of counsel (which approval shall not be
unreasonably withheld or delayed), the indemnifying party will not be liable to
such indemnified party under this Section 10 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless: (i) the indemnified party shall have employed separate counsel
in accordance with the preceding sentence; (ii) the indemnifying party shall not
have employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of the
action; (iii) the indemnifying party is not permitted to defend the indemnified
claim in accordance with the preceding sentence; (iv) the indemnifying party
contests its obligations to indemnify such claim; or (v) the indemnifying party
has authorized the employment of counsel for the indemnified party satisfactory
to the indemnified party at the expense of the indemnifying party, in each of
which cases the fees and expenses of counsel and the fees and expenses otherwise
associated with the defense of such claim, shall be at the expense of the
indemnifying party.

                                       13
<PAGE>

                                                                  EXECUTION COPY

            (d) The indemnifying party under this Section 10 shall not be liable
for any settlement of any proceeding effected without its written consent, which
consent shall not be unreasonably withheld or delayed, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party against any Damage by reason of
such settlement or judgment. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement, compromise or
consent to the entry of judgment in any pending or threatened action, suit or
proceeding in respect of which any indemnified party is or could have been a
party and indemnity was or could have been sought hereunder by such indemnified
party, unless such settlement, compromise or consent includes: (i) an
unconditional release of such indemnified party from all liability, claims or
other Damages that are the subject matter of such action, suit or proceeding;
and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified party.

            (e) Any Damages for which an indemnified party is entitled to
indemnification or contribution under this Section 10 shall be paid by the
indemnifying party to the indemnified party as such Damages are incurred.

            (f) If the indemnification provided for in this Section 10 is
unavailable to or insufficient to hold harmless an indemnified party under
Section 10 in respect of any Damages (or actions or proceedings in respect
thereof) then each indemnifying party shall contribute to the aggregate amount
paid or payable by such indemnified party in such proportion as is appropriate
to reflect the relative fault of such indemnifying party on the one hand and the
Distributing Holder on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof), as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or the "control" stockholders on the one
hand or the Distributing Holder on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and each Distributing Holder agree that it
would not be just and equitable if contributions pursuant to this Section 10(f)
were determined by pro rata allocation or by any other method of allocation
which does not take account of the equitable considerations referred to above in
this Section 10(f). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions or proceedings
in respect thereof) referred to above in this Section 10(f) shall be deemed to
include 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 Section 10(f): (i) each Distributing
Holder shall not be required to contribute any amount in excess of the amount of
proceeds received by such Holder from sale(s) of such Holder's shares of Common
Stock or Other Securities pursuant to the Registration Statement; and (ii) no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.

                                       14
<PAGE>

                                                                  EXECUTION COPY

      11. Notice of Certain Events.

            11.1 In the event that:

                  (a) the Company shall declare any cash dividend upon its
Common Stock or Other Securities, or

                  (b) the Company shall declare any dividend upon its Common
Stock or Other Securities payable in stock or other securities or make any
special dividend or other distribution to the holders of its Common Stock or
Other Securities, or

                  (c) the Company shall offer for subscription pro rata to the
holders of its Common Stock or Other Securities any additional shares of stock
of any class or other rights, or

                  (d) there shall be any capital reorganization or
reclassification of the capital stock of the Company, including any subdivision
or combination of its outstanding shares of Common Stock or Other Securities, or
consolidation or merger of the Company into or with another company, the merger
or consolidation of any other company into or with the Company, or

                  (e) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company; or

                  (f) there shall be a sale or other transfer of all or
substantially all of the assts of the Company;

then, in connection with such event, the Company shall give to the Holders:

                        (i) at least fifteen (15) 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, payment or subscription rights or for
determining rights to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up or other event; and

                        (ii) in the case of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up or other event, at least fifteen (15) days prior written notice of
the date when the same shall take place. Such notice in accordance with the
foregoing clause (i) shall also specify, in the case of any such dividend,
distribution, payment or subscription rights, the date on which the holders of
Common Stock or Other Securities shall be entitled thereto, and such notice in
accordance with this clause (ii) shall also specify the date on which the
holders of Common Stock or Other Securities shall be entitled to exchange their
Common Stock or Other Securities for securities or other property deliverable
upon such reorganization, reclassification consolidation, merger, sale,
dissolution, liquidation or winding up or other event, as the case may be. Each
such written notice shall be given in accordance with the provisions of Section
12 of this Warrant.

                                       15
<PAGE>

                                                                  EXECUTION COPY

            11.2 Failure to give any such notice or any defect therein shall not
affect the validity of any action taken in connection with such dividend,
distribution, subscription offer, payment, reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation, winding-up or other
event; provided, however that any rights of the Holders with respect to any
failure of the Company to give notice as provided herein of any such action
shall not be prejudiced by any such action.

      12. Notices. All notices, demands, requests, consents, approvals, and
other communications required or permitted hereunder shall be in writing and,
unless otherwise specified herein, shall be (a) personally served, (b) deposited
in the mail, registered or certified, return receipt requested, postage prepaid,
(c) delivered by reputable air courier service with charges prepaid, or (d)
transmitted by hand delivery, addressed as set forth below or to such other
address as such party shall have specified most recently by written notice. Any
notice or other communication required or permitted to be given hereunder shall
be deemed effective upon actual receipt (or if refused, upon such refusal). The
addresses for such communications shall be:

                        (i)   if to the Company to: 1350 Avenue of Americas, New
                              York, NY 10019

                        (ii)  if to the Holder, to the address listed on the
                              first paragraph of this Warrant.

                        or such other address as either party may provide to the
                        other in accordance with the provisions of this Section
                        12.

13. Miscellaneous.

            (a) This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought.

            (b) This Warrant shall be construed and enforced in accordance with
and governed by the laws of New York. THE PARTIES HERETO IRREVOCABLY: (I) AGREE
THAT ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF THIS AGREEMENT SHALL BE
BROUGHT ONLY IN THE COURTS OF THE STATE OF NEW YORK OR THE COURTS OF THE UNITED
STATES LOCATED WITHIN THE STATE OF NEW YORK, IN EACH CASE IN THE COUNTY OF NEW
YORK, (II) CONSENT AND SUBMIT TO THE EXCLUSIVE JURISDICTION AND VENUE OF EACH
SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING, (III) WAIVE ANY OBJECTION
WHICH THEY, OR ANY OF THEM, MAY HAVE TO PERSONAL JURISDICTION OR THE LAYING OF
VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY OF SUCH COURTS, AND AGREE
NOT TO SEEK TO CHANGE VENUE, (IV) WAIVE THE RIGHT TO TRIAL BY JURY IN ANY SUIT,
ACTION OR OTHER PROCEEDING AND (V) CONSENT TO SERVICE OF PROCESS IF GIVEN IN
WRITING IN ACCORDANCE WITH THE PROVISIONS OF SECTION 12.

                                       16
<PAGE>

                                                                  EXECUTION COPY

            (c) The headings in this Warrant are for purposes of reference only,
and shall not limit or otherwise affect any of the terms hereof.

            (d) The invalidity or unenforceability of any provision hereof shall
in no way affect the validity or enforceability of any other provision.

                                       17
<PAGE>

                                                                  EXECUTION COPY

      IN WITNESS WHEREOF, the Company has caused this Warrant to be issued at
the date first above written.

                                       BRAINSTORM CELL THERAPEUTICS INC.

                                       By: /s/ Yaffa Beck
                                           -------------------------------------
                                           Name: Yaffa Beck
                                           Title: President & CEO

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

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

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

                                       18
<PAGE>

                                                                  EXECUTION COPY

                                    EXHIBIT A

                              FORM OF SUBSCRIPTION

                   (to be signed only on exercise of Warrant)

      TO: BRAINSTORM CELL THERAPEUTICS INC.

      The undersigned, pursuant to the provisions set forth in the attached
Warrant (No.____), hereby irrevocably elects to purchase ________ shares of the
Common Stock covered by such Warrant.

      The undersigned herewith either:

      |_| makes payment of the full purchase price for such shares at the price
per share provided for in such Warrant, which is $___________. Such payment
takes the form of $__________ in lawful money of the United States; or

      |_| elects pursuant to Section 2(b) of the Warrant to convert such Warrant
into Common Stock in accordance with the formula set forth in Section 2(b).

      The undersigned requests that the certificates for such shares be issued
in the name of, and delivered to
_____________________________________________________ whose address is
__________________________________.

      The undersigned represents and warrants that all offers and sales by the
undersigned of the securities issuable upon exercise of the within Warrant shall
be made pursuant to registration of the Common Stock under the Securities Act of
1933, as amended (the "Securities Act"), or pursuant to an exemption from
registration under the Securities Act.

Dated:___________________

                                       ---------------------------------------
                                       (Signature to conform to name of holder
                                       as specified on the face of the Warranty)

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

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

                                       ---------------------------------------
                                       (Address)

                                       A-1
<PAGE>

                                    EXHIBIT B

                         FORM OF TRANSFEROR ENDORSEMENT

                   (To be signed only on transfer of Warrant)

      For value received, the undersigned hereby sells, assigns, and transfers
unto the person(s) named below under the heading "Transferees" the right
represented by the within Warrant to purchase the percentage and number of
shares of Common Stock of BRAINSTORM CELL THERAPEUTICS INC. to which the within
Warrant relates specified under the headings "Percentage Transferred" and
"Number Transferred," respectively, opposite the name(s) of such person(s) and
appoints each such person Attorney to transfer its respective right on the books
of BRAINSTORM CELL THERAPEUTICS INC. with full power of substitution in the
premises.

      --------------------------------------------------------------------------
      Transferees Percentage Transferred Number Transferred

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

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

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

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

      Dated: ______________, ___________

                                       ---------------------------------------
                                       (Signature to conform to name of holder
                                       as specified on the face of the Warranty)

                                       Signed in the presence of:

                                       ---------------------------------------
                                        (Name)

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

                                       ---------------------------------------
                                       (Address)

                                       B-1
<PAGE>

                                       ACCEPTED AND AGREED:

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

                                       [TRANSFEREE]

                                       ---------------------------------------
                                       (address)

                                       ---------------------------------------
                                       (Name)

                                      B-2Unassociated Document

    
      

       

      ASSET
        PURCHASE AGREEMENT

       

      dated
        August 4, 2005

       

      by
        and
        between

       

      MEDICINE
        MADE EASY

      

      and

      

      FRONTIER
        PHARMACY & NUTRITION, INC.

      

      

      

      

      

      

      

      

      

      

      

      

      

      
        
          
             

          

           

        

        
           

          
            

          

        

        
           

          
          

        

      

      ASSET
        PURCHASE AGREEMENT

       

      This
        ASSET PURCHASE AGREEMENT dated August 4, 2005, is by and between MEDICINE
        MADE
        EASY, a California corporation (“Buyer”), and FRONTIER PHARMACY & NUTRITION,
        INC., a California corporation d/b/a PMW PHARMACY, INC. (“Seller”).

       

      Seller
        is
        a licensed California pharmacy located at 1020 East Pacific Coast Highway,
        Long
        Beach, California.

       

      Buyer
        desires to purchase and Seller desires to sell, transfer and deliver to Buyer
        Seller’s right title and interest in and to all or substantially all of its
        business, assets and properties, including without limitation its customer
        lists, books and records, files and goodwill, on the terms and conditions
        set
        forth in this Agreement.

       

      The
        parties agree as follows:

       

      ARTICLE
        I

       

      DEFINITIONS

       

      The
        terms
        defined in this Article I, whenever used herein (including the schedules
        hereto,
        unless otherwise defined therein), shall have the following
        meanings:

       

      1.1  “Additional
        Payment”
        shall
        have the meaning set forth in Section 2.2(b) of this Agreement.

       

      1.2  “Affiliate”
        shall
        mean any Person that directly or indirectly controls, is controlled by or
        is
        under common control with another Person.

       

      1.3  “Acquired
        Assets”
        shall
        mean all of Seller's right, title and interest in and to its business, assets
        and properties, whether tangible or intangible, and including, without
        limitation, the Equipment, inventory, supplies, packaging and shipping
        materials, tenant improvements, manufacturers warranties, customer lists,
        books
        and records, files and goodwill, and all other information pertaining to
        the
        Acquired Assets. “Acquired Assets” does not include any of the Contracts listed
        on Schedule 4.9.

       

      1.4  “Allion”
        shall
        mean Allion Healthcare, Inc., a Delaware corporation.

       

      1.5  “Business
        Day”
        shall
        mean any day other than a Saturday, Sunday or other day on which banks are
        closed or are authorized to be closed in New York, New York.

       

      1.6  “Buyer
        Claimant”
        shall
        have the meaning set forth in Section 8.2 of this Agreement.

       

      1.7  “Closing”
        shall
        mean the closing of the purchase and sale of the Acquired Assets, as
        contemplated by this Agreement.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      1.8  “Closing
        Date”
        shall
        have the meaning set forth in Section 3.1 of this Agreement.

       

      1.9  “Code”
        shall
        mean the Internal Revenue Code of 1986, as amended.

       

      1.10  “Contract”
        shall
        have the meaning set forth in Section 4.9 of this Agreement.

       

      1.11  “Employee
        Benefit Plan”
        means
        any “employee benefit plan” within the meaning of Section 3(3) of ERISA, and any
        other bonus, profit sharing, compensation, pension, severance, deferred
        compensation, fringe benefit, insurance, welfare, medical, post-retirement
        health or welfare benefit, medical reimbursement, health, life, stock option,
        stock purchase, tuition refund,
        service award, company car, scholarship, relocation, disability, accident,
        sick
        pay, sick leave, vacation, termination, individual employment, executive
        compensation, incentive, bonus, commission, payroll practices, retention
        or
        other plan, agreement, policy, trust fund or arrangement, whether written
        or
        unwritten, and whether maintained, sponsored or contributed to by Seller
        or any
        entity that would be deemed a “single employer” with Seller under Section
        414(b), (c), (m) or (o) of the Code or Section 4001(a)(14) of ERISA (an “ERISA
        Affiliate”) on behalf of any of the current, former or retired employees of
        Seller or its beneficiaries or with respect to which Seller or any ERISA
        Affiliate has or has had any obligation on behalf of any such employee or
        beneficiary. 

       

      1.12  “Encumbrance”
        shall
        mean any lien, charge, encumbrance, option, right of first refusal, security
        interest, easement, obligation or claim or other third party right of any
        kind.

       

      1.13  “Environment”
        shall
        mean any surface or subsurface physical medium or natural resource, including,
        air, land, soil, surface waters, ground waters, stream and river sediments,
        and
        biota.

       

      1.14  “Environmental
        Laws”
        shall
        mean any federal, state, local or foreign law, rule, regulation, ordinance,
        code, order or judgment (including the common law and any judicial or
        administrative interpretations, guidances, directives or opinions) relating
        to
        the injury to, or the pollution or protection of human health and safety
        or the
        Environment.

       

      1.15  “Environmental
        Liabilities”
        shall
        mean any claims, judgments, damages (including punitive damages), losses,
        penalties, fines, liabilities, encumbrances, liens, violations, costs and
        expenses (including attorneys and consultants fees) of investigation,
        remediation or defense of any matter relating to human health, safety or
        the
        Environment of whatever kind or nature by any party, entity or authority,
        (a)
        which are incurred as a result of (i) the existence of Hazardous Substances
        in,
        on, under, at or emanating from any real property presently or formerly owned
        or
        operated by Seller or any of its Affiliates, (ii) the offsite transportation,
        treatment, storage or disposal of Hazardous Substances generated by Seller
        or
        any of its Affiliates, or (iii) the violation of any Environmental Laws or
        (b)
        which arise under the Environmental Laws.

       

      1.16  “Equipment”
        shall
        mean all items of machinery, equipment, computers, tools, parts, furniture
        and
        fixtures set forth on Schedule 4.6 and all other items of machinery, equipment,
        computers, tools, parts, furniture and fixtures owned by Seller.

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      1.17  “ERISA”
        shall
        mean the Employee Retirement Income Security Act of 1974, as amended, and
        the
        regulations thereunder.

       

      1.18  “ERISA
        Affiliate”
        shall
        have the meaning set forth in the definition of “Employee Benefit
        Plan”.

       

      1.19  “Excluded
        Assets”
        shall
        have the meaning set forth in Section 2.1(b) of this
        Agreement.

       

      1.20  “Excluded
        Liabilities”
        shall
        have the meaning set forth in Section 2.1(c) of this
        Agreement.

       

      1.21  “Financial
        Statements”
        shall
        mean (a) the unaudited balance sheet and profit and loss statements of the
        Seller as of December 31, 2002, 2003 and 2004, and for each of the fiscal
        years
        then ended, (b) the unaudited balance sheet and profit and loss statements
        of
        the Seller as of May 31, 2005, and for the twelve month period then ended,
        and
        (c) the unaudited balance sheet and profit and loss statements of the Seller
        as
        of May 31, 2005 and for the five month period then ended.

       

      1.22  “GAAP”
        shall
        mean generally accepted accounting principles.

       

      1.23  “Hazardous
        Discharge”
        shall
        mean any releasing, spilling, leaking, pumping, pouring, emitting, emptying,
        discharging, injecting, escaping, leaching, migrating, disposing or dumping
        (including the movement of any material through or in air, soil, surface
        or
        groundwater) of Hazardous Substances, whether on, off, under or from the
        Real
        Property or any other real property owned, operated, leased or used at any
        time
        by Seller or its predecessors.

       

      1.24  “Hazardous
        Substances”
        shall
        mean petroleum, petroleum products, petroleum-derived substances, radioactive
        materials, hazardous wastes, polychlorinated biphenyls, lead based paint,
        urea
        formaldehyde, asbestos or any materials containing asbestos, and any materials,
        wastes or substances regulated or defined as or included in the definition
        of
“hazardous substances,”“hazardous materials,”“hazardous constituents,”“toxic
        substances,”“pollutants,”“contaminants” or any similar denomination intended
        to classify substances by reason of toxicity, carcinogenicity, ignitability,
        corrosivity or reactivity under any Environmental Laws.

       

      1.25  “Indemnitee”
        and
“Indemnitor”
        shall
        have the meanings set forth in Section 8.4(a) of this
        Agreement.

       

      1.26  “Initial
        Payment”
        shall
        have the meaning set forth in Section 2.2(a) of this Agreement.

       

      1.27  “Intellectual
        Property” means
        (a)
        all United States and foreign patents and pending patent applications,
        trademarks, service marks and trade names, including, without limitation,
        the
        marks and patents described on Schedule 4.8 of this Agreement, and copyrights,
        and registrations and pending applications, computer programs and software,
        research and development, know-how, inventions and other proprietary processes
        and information of any kind, and all software necessary or desirable to run
        Equipment, all as set forth on Schedule 4.8 of this Agreement; (b) all copies
        and tangible embodiments of the foregoing; and (c) the right to sue for past
        and
        future misappropriation or infringement of any of the foregoing.

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      1.28  “Inventory
        Payment”
        shall
        have the meaning set forth in Section 2.2(c) of this Agreement.

       

      1.29  “IRS”
        shall
        mean the Internal Revenue Service

       

      1.30  “Licenses
        and Permits”
        shall
        have the meaning set forth in Section 4.12 of this Agreement. 

       

      1.31  “Losses”
        shall
        have the meaning set forth in Section 8.2 of this Agreement.

       

      1.32  “Material
        Adverse Effect”
        shall
        mean any material adverse effect, individually or in the aggregate, on the
        condition (financial or otherwise), business, assets, operations or prospects
        of
        Seller or the Acquired Assets.

       

      1.33  “Payment
        Program”
        shall
        have the meaning set forth in Section 4.16 of this Agreement.

       

      1.34  “Person”
        shall
        mean any natural person, corporation, professional corporation, limited or
        limited liability partnership, general partnership, joint venture, association,
        joint-stock company, limited liability company, company, trust, bank, trust
        company, land trust, business trust or other organization, whether or not
        a
        legal entity, and any governmental unit or agency or political subdivision
        thereof.

       

      1.35  “Purchase
        Price”
        shall
        have the meaning set forth in Section 2.2(c) of this Agreement.

       

      1.36  “Real
        Property”
        shall
        mean the real property and interests in real property described on Schedule
        4.7
        leased by Seller and the plants, buildings, structures, storage tanks, erections
        and improvements of all kinds made to, located on or forming a part of the
        real
        property and interests in real property (including, without limitation, all
        fixtures), together with all easements, rights-of-way, appurtenances and
        tenements to, on or otherwise beneficial to the use of such real property
        or
        interests in real property.

       

      1.37  “Related
        Party”
        shall
        have the meaning set forth in Section 4.13 of this Agreement.

       

      1.38  “Seller
        Claimant”
        shall
        have the meaning set forth in Section 8.3 of this Agreement.

       

      1.39  “Taxes”
        (or
“Tax” where the context requires)
        shall
        mean all federal, state, local, foreign or other taxes, duties, or similar
        charges (including, without limitation, income (whether net or gross), profits,
        premium, estimated, excise, sales, use, environmental (including taxes under
        Code Section 59A), occupancy, franchise, license, value added stamp, windfall
        profits, social security, gross receipts, franchise, ad valorem, severance,
        capital levy, production, transfer, gains, withholding, occupation, employment
        and payroll related and property taxes, alternative or add-on, minimum or
        estimated, import and export duties and other governmental charges and
        assessments) imposed by any taxing or governmental authority on or payable
        by
        Seller or any other party with respect to the income, operations, products,
        assets or properties of Seller, whether attributable to statutory or
        nonstatutory rules and whether or not measured in whole or in part by net
        income, and including interest, additions to tax or interest, and penalties
        with
        respect thereto, and including expenses associated with contesting any proposed
        adjustment related to any of the foregoing.

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      ARTICLE
        II

       

      SALE
        AND PURCHASE OF THE ASSETS

       

      2.1     Purchase
        of the Assets. 

       

      (a)  Upon
        the
        terms and subject to the conditions hereof, and upon the basis of the
        agreements, representations and warranties contained in, and the schedules
        to,
        this Agreement, at the Closing, Seller shall sell, transfer, assign, convey
        and
        deliver to Buyer, and Buyer shall purchase and acquire from Seller, all of
        the
        Acquired Assets, in each case free and clear of Encumbrances of any
        kind.

       

      (b)  Notwithstanding
        anything contained in this Agreement, Seller shall not sell, transfer, assign,
        convey or deliver to Buyer, and Buyer shall not purchase or acquire from
        Seller,
        any of the assets of Seller listed on Schedule 2.1(b) (the “Excluded
        Assets”).

       

      (c)  Buyer
        shall not be required to assume, pay, fulfill, perform or otherwise discharge
        any liabilities or obligations of Seller, including of Seller’s business, of any
        kind whatsoever (the “Excluded Liabilities”), and Seller shall pay, fulfill,
        perform and discharge such Excluded Liabilities. The Excluded Liabilities
        include, without limitation:

       

      (i)  Legal,
        accounting, brokerage, finder’s fees, Taxes or other expenses incurred by Seller
        or any Affiliate, including, without limitation, in connection with this
        Agreement or the consummation of the transactions contemplated
        hereby;

       

      (ii)  Any
        intercompany debt or other liability or obligation of any nature between
        Seller
        and any past or present Related Party of Seller;

       

      (iii)  Liabilities
        or obligations incurred by Seller or any Affiliate of Seller after the
        Closing;

       

      (iv)  Any
        obligation or liability relating to any litigation or any claim arising out
        of
        any dispute, the elements of which occurred prior to the Closing, whether
        or not
        listed on any schedule hereto and regardless of whether accruing prior to
        or
        subsequent to the Closing;

       

      (v)  Any
        liability for any Taxes accrued to or incurred by Seller or any Affiliate
        of
        Seller or relating to operations, products or assets of Seller or any Affiliate
        of Seller or arising as a consequence of the transactions contemplated
        hereby;

       

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      (vi)  Any
        liability or costs (including, without limitation, costs of remediation)
        arising
        out of or relating to a Hazardous Discharge or the release, discharge or
        disposal of any solid wastes or the handling, storage, use, transportation
        or
        disposal of any of the foregoing, as these terms are defined by the
        Environmental Laws in, on, under or from facilities of Seller at any time
        prior
        to the Closing, regardless of whether such liability or costs arise before
        or
        after Closing and whether or not in breach of any representation or warranty
        under this Agreement;

       

      (vii)  Any
        liability or obligation to employees, government agencies or other third
        parties
        in connection with any option plan, pension plan, other ERISA plan or other
        Employee Benefit Plan, and any health, dental or life insurance benefits,
        whether or not insured and whether or not disclosed on any schedule
        hereto;

       

      (viii)  Any
        liability or obligation under any contract or commitment that is not a Contract
        assigned to Buyer hereunder or any Contract which relates to any default
        in
        respect of such contract or other commitment or obligation of
        Seller;

       

      (ix)  Any
        liability or obligation to employees in the nature of accrued payroll, vacation,
        holiday or sick pay, worker’s compensation relating to the period prior to the
        Closing, whether or not listed on any schedule hereto and regardless of whether
        accruing prior or subsequent to the Closing;

       

      (x)  Any
        trade
        debt, accounts payable, notes payable and bank debts; or

       

      (xi)  Any
        other
        liability or obligation.

       

      2.2     Purchase
        Price.

       

      (a)  At
        the
        Closing, in consideration for the Acquired Assets, Buyer shall pay to Seller
        an
        amount in cash equal to Eight Million Seven Hundred Thirty Thousand Dollars
        ($8,730,000), less any deposits received by Seller or its counsel from Buyer
        or
        its Affiliates (the “Initial Payment”), plus the amounts set forth in Sections
        2.2(b) and (c) below. Buyer and Seller acknowledge and agree that the total
        amount of the Initial Payment has or will be deposited with Seller and/or
        its
        counsel as of the date that this Agreement is executed and deliver by Buyer
        and
        Seller, subject to release upon and only upon the Closing.

       

      (b)  On
        the
        three (3) month anniversary of the Closing Date, in consideration for the
        Acquired Assets, Buyer shall pay to Seller an amount equal to Nine Hundred
        Seventy Thousand Dollars ($970,000) (the “Additional Payment”), provided that
        Devendar Kaushik has during such three (3) month period provided during normal
        business hours such reasonable assistance to Buyer as Buyer from time to
        time
        has requested to transition the business of Seller and the Acquired Assets
        to
        Buyer.

       

      (c)  On
        the
        date that is one business day after Buyer and Seller conduct an inventory
        (which
        inventory the parties agree will take place as soon as practicable after
        the
        Closing), Buyer shall pay to Seller an amount equal to Seller’s acquisition cost
        for its inventory (having a shelf life of at least one year, or having a
        shelf
        life of between six month and one year if representatives of Buyer and Seller
        mutually agree in good faith that such inventory is saleable by Buyer in
        the
        ordinary course of business after the Closing) on hand as of the close of
        business on August 5, 2005, up to $150,000 (the “Inventory Payment” and,
        collectively with the Initial Payment and Additional Payment, the “Purchase
        Price”), which inventory Seller has used its commercially reasonable best
        efforts to minimize as of such time.

       

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      2.3     Allocation
        of Purchase Price. The
        Purchase Price for the Acquired Assets shall be allocated for federal, state,
        local and foreign tax purposes by each party among the Acquired Assets as
        determined in good faith by the parties. For all pertinent tax purposes,
        each
        party hereto shall report the purchase and sale provided for, and with the
        characterization given these transactions in this Agreement, to taxing
        authorities on a basis consistent with such allocation, and each party agrees
        not to take a position inconsistent with such allocation. After the Closing,
        Seller and Buyer each shall timely file form 8594 with the IRS detailing
        this
        allocation. In the event that Buyer determines, subject to Seller's reasonable
        approval, that any adjustments to such allocation are necessary, Seller shall
        make such modifications as are necessary, reporting the same on Seller's
        form
        8594 (if required) or any tax report or return filed or to be filed by Seller
        in
        order to conform to Buyer's allocation as adjusted.

       

      2.4     Nonassignable
        Contracts. To
        the
        extent that the assignment of any Contract to be assigned to Buyer pursuant
        to
        this Agreement shall require the consent of any other Person, this Agreement
        shall not constitute a contract to assign the same if an attempted assignment
        would constitute a breach thereof. Seller shall use all reasonable efforts,
        and
        Buyer shall cooperate where appropriate, to obtain any consent necessary
        to any
        such assignment where such consent is requested by Buyer. If any such consent
        is
        not obtained, Seller shall cooperate with Buyer in any reasonable arrangement
        designed to provide for Buyer the benefit, monetary or otherwise, of the
        Contracts, including enforcement of any and all rights of Seller or Seller’s
        business against the other party thereto arising out of a breach or cancellation
        thereof by such other party or otherwise.

       

      ARTICLE
        III

       

      CLOSING

       

      3.1     The
        Closing.
        Subject
        to the terms and conditions of this Agreement, the Closing shall occur on
        August
        5, 2005 (the
        “Closing Date”) and will be effective as of the close of business on the Closing
        Date.

       

      3.2     Obligations
        of Seller. At
        the
        Closing, Seller shall deliver to Buyer the following:

       

      (a)  A
        bill of
        sale, in customary form, duly executed by Seller.

       

      (b)  Copies
        of
        the resolutions of the Board of Directors and shareholders of Seller certified
        by the secretary or assistant secretary of Seller, which resolutions shall
        approve and authorize the execution and delivery of this Agreement and the
        consummation of the transactions contemplated hereby.

       

      (c)  All
        consents to the assignment to Buyer of each of the Acquired Assets.

       

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

      (d)  Such
        other instruments of assignment and conveyance as may be necessary or
        appropriate to fully and effectively transfer to Buyer the Assets.

       

      (e)  The
        Discontinuation of Pharmacy Form required to be filed with the California
        State
        Board of Pharmacy, duly executed by Seller, which form shall be filed by
        Seller
        within 45 days after the Closing Date, evidence of which shall promptly
        thereafter be delivered to Buyer.

       

      (f)  All
        of
        the other documents and instruments required to be delivered by
        Seller.

       

      3.3     Obligations
        of Buyer. At
        the
        Closing, Buyer shall deliver to Seller the following:

       

      (a)  The
        Initial Payment.

       

      (b)  Copies
        of
        the resolutions of the Board of Directors of Buyer certified by the secretary
        or
        assistant secretary of Seller, which resolutions shall approve and authorize
        the
        execution and delivery of this Agreement and the consummation of the
        transactions contemplated hereby.

       

      (c)  All
        of
        the other documents and instruments required to be delivered by
        Buyer.

       

      ARTICLE
        IV

       

      REPRESENTATIONS
        AND WARRANTIES REGARDING SELLER
        AND
        SELLER’S BUSINESS

       

      Seller
        hereby represents and warrants to Buyer, as of the date hereof and as of
        the
        Closing, as follows:

       

      4.1        
        Organization
        and Qualification.
        Seller
        is a corporation duly organized, validly existing and in good standing under
        the
        laws of the State of California, with full corporate power and authority
        to own,
        lease and operate its properties and assets and to conduct its business as
        it is
        now being conducted. Seller has no subsidiaries or equity interest in any
        other
        Person. Seller is duly qualified and in good standing as a foreign corporation
        and has all requisite corporate power and authority to do business in the
        jurisdictions set forth on Schedule 4.1, which jurisdictions are the only
        jurisdictions wherein the character of the properties owned or leased or
        the
        nature of activities conducted by Seller make such qualification
        necessary.

       

      4.2          Authority. Seller
        has all requisite power and authority to execute and deliver this Agreement
        and
        all documents, certificates, agreements, instruments and writings related
        hereto
        to which it is a party and to perform, carry out and consummate the transactions
        contemplated hereby and thereby. The execution, delivery and performance
        of this
        Agreement have been duly authorized by all necessary corporate action on
        the
        part of Seller. This Agreement has been duly and validly executed by Seller
        and
        constitutes the legal, valid and binding obligations of Seller, enforceable
        against Seller in accordance with its terms.

       

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

      4.3      
          No
        Breach. Neither
        the execution and delivery of this Agreement by Seller nor the consummation
        of
        the transactions contemplated hereby will: (a) violate any provision of the
        Certificate of Incorporation or Bylaws of Seller; (b) conflict with, result
        in a
        breach of or constitute a default (or an event which, with or without notice,
        lapse of time or both, would constitute a default) under the Contracts or
        any
        other material agreement, document, certificate or other instrument to which
        Seller is a party or by which Seller or any of its properties or assets
        (including the Assets) is subject or bound; (c) result in the creation of,
        or
        give any party the right to create, any Encumbrance upon any of the Acquired
        Assets; (d) conflict with, violate, result in a breach of or constitute a
        default under any judgment, decree, order or process of any court or
        governmental authority; (e) conflict with or violate any material statute,
        law
        or regulation applicable to Seller or any of the Acquired Assets; or (f)
        require
        Seller to obtain any authorization, consent, approval or waiver from, or
        to make
        any filing with, any governmental or regulatory authority.

       

      4.4  
Financial
        Statements and Sales Information.
        Prior to
        the date hereof, Seller has delivered to Buyer the Financial Statements attached
        hereto as Schedule 4.4(a). The Financial Statements: (a) were prepared from
        the
        books and records of Seller, which books and records have been maintained
        in
        accordance with all legal and accounting requirements and completely and
        accurately reflect all financial transactions of Seller, including, without
        limitation, the accounts receivable, accounts payable and revenue of Seller
        for
        the periods covered by and as at the dates of the Financial Statements; (b)
        were
        prepared in accordance with GAAP consistently applied; and (c) present fairly
        the financial condition of Seller and the results of its operations for the
        periods covered by, and as at the dates of, each of the Financial Statements.
        The statements of profit and loss included in the Financial Statements do
        not
        contain any material items of special or non-recurring income or other income
        not earned in the ordinary course of business except as expressly specified
        therein. All liabilities (whether accrued, unmatured, contingent or otherwise,
        and whether due or to become due) of Seller are set forth or adequately reserved
        against on the face of the most recent Financial Statements, except for
        liabilities incurred since the date thereof in the ordinary course of business
        as theretofore conducted, which liabilities are not, individually or in the
        aggregate, materially adverse to the condition (financial or otherwise),
        business, assets, operations or prospects of Seller. Seller is neither aware
        nor
        ought reasonably to be aware of any basis for the assertion against Seller
        of
        any materially adverse liability or loss contingency. Prior to the date hereof,
        Seller has provided Buyer with sales information, by patient, for its past
        three
        fiscal years. The books and records of Seller are accurate and complete and
        have
        been maintained in accordance with good business practices.

       

      4.5  
Absence
        of Certain
        Changes or Events.
        Since
        December 31, 2004: Seller’s business has been conducted and the Acquired Assets
        have been acquired and operated only in the ordinary and usual course consistent
        with past practice; neither Seller’s business nor the Acquired Assets have
        suffered any event or condition that has had a Material Adverse Effect; and
        Seller has not become aware of any event or condition that has occurred or
        would
        reasonably be expected to occur that could result in a Material Adverse Effect,
        except for changes affected generally in the industry by government policies
        regarding the reimbursement for certain kinds of drugs.

       

      4.6          
         Assets.
        Seller
        has good and freely transferable title to all of the Acquired Assets, free
        and
        clear of all Encumbrances, and has the complete and unrestricted power and
        right
        to sell and transfer the Assets to Buyer in accordance with the terms hereof.
        Schedule 4.6 sets forth a complete and accurate list of all items of Equipment.
        Each piece of Equipment is and will when delivered be adequate for the uses
        to
        which it is being put, is and will when delivered be in good order and working
        condition, ordinary wear and tear excepted, and have no material defects,
        and no
        condition exists or will when such Equipment is delivered exist which interferes
        with the value thereof or the use thereof. Seller has maintained the Equipment
        in accordance with good business practices. The Acquired Assets constitute
        all
        of the properties and assets used by Seller in connection with the operation
        of
        Seller’s business, and include all of the properties and assets necessary to
        operate Seller’s business as it has been operated.

       

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

      

        4.7         
          Real
          Property.
          Seller
          does not own any real property. Schedule 4.7 sets forth an accurate and
          complete
          list of all leases of Real Property used by Seller in connection with Seller’s
          business. Seller has peaceful possession of the Real Property and has no
          other
          interest in real property in connection with Seller’s business. The Real
          Property is and will when delivered be in good order and working condition,
          ordinary wear and tear excepted, and have no material defects. No condition
          exists or will when such property is delivered exist which, to the knowledge
          of
          Seller, interferes with the value thereof or the use thereof in the manner
          used
          by or for Seller’s business prior to the Closing Date. Seller has maintained the
          Real Property in accordance with good business practices.

         

      

      4.8        
         Intellectual
        Property.
        Seller
        owns or licenses all the Intellectual Property, including, without limitation,
        all patents, trademarks, service marks, trade names and copyrights, in each
        case
        registered or unregistered, inventions, know-how, trade secrets and other
        intellectual property rights used in the Seller’s business as presently
        conducted. Schedule 4.8 contains a list of all Intellectual Property owned
        and
        used by Seller and any Intellectual Property which is licensed for use by
        others. No Intellectual Property infringes any rights owned or held by any
        other
        person. There is no pending or, to the knowledge of Seller, threatened claim
        or
        litigation against Seller or Seller’s business contesting its right exclusively
        to use any Intellectual Property. To the knowledge of Seller, no person is
        infringing the rights of Seller or Seller’s business in any Intellectual
        Property. No product or service sold or provided by Seller’s business violates
        or infringes any intellectual property right owned or held by any other person.
        The source code of Lab Tracker has not been disclosed by Seller or any of
        its
        employees, agents or representatives to any Person other than pursuant to
        a duly
        executed confidentiality agreement. To the knowledge of Seller, all Intellectual
        Property used in the Seller’s business as presently conducted is valid,
        enforceable and subsisting, and all application, issuance, renewal, maintenance
        and other payments that are or have become due with respect thereto have
        been
        timely paid and all assignments, certificates and other instruments necessary
        to
        perfect and record Seller’s rights thereto have been timely filed with the
        relevant governmental offices.

       

      4.9        
        Contracts
        and Commitments.
        The
        contracts listed on Schedule 4.9 are all of Seller’s leases, agreements,
        arrangements, contracts, commitments or understandings, written or oral,
        and
        whether legally binding or otherwise, relating to Seller’s business
        (“Contracts”). Seller is not in breach or default, nor is there any basis for
        any valid claim of breach or default by Seller, under any Contract. The
        Contracts are valid and in full force and effect and, assuming the obtaining
        of
        any consents to the assignment thereof, consummation of the transactions
        contemplated by this Agreement will not cause any Contract to cease to be
        valid
        and in full force and effect. Accurate and complete copies of the Contracts,
        including all amendments thereto, have been heretofore delivered to
        Buyer.

       

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

      4.10        
        Litigation,
        Etc.
        There
        has not been in the five years prior to the date hereof, nor is there currently,
        any claim, action, suit, inquiry, proceeding or, to the best of Seller's
        knowledge, investigation of any kind or nature whatsoever, by or before any
        court or governmental or other regulatory or administrative agency, commission
        or tribunal brought, asserted or initiated by Seller, or pending or, to the
        best
        of Seller's knowledge, threatened against or involving Seller. To the best
        of
        Seller’s knowledge, there is no valid basis for any such claim, action, suit,
        inquiry, proceeding or investigation. Seller is not subject to any judgment,
        order or decree.

       

      4.11          Employee
        Benefit Plans; Employees.

       

      (a)
        Schedule 4.11(a) hereto sets forth a true and complete list of each Employee
        Benefit Plan.

       

      (b)
        Each
        of the Employee Benefit Plans is and has been in compliance with all applicable
        laws, including without limitation ERISA and the Code in all material respects;
        each of the Employee Benefit Plans intended to be “qualified” within the meaning
        of Section 401(a) of the Code is so qualified and has received a determination
        letter from the Internal Revenue Service pursuant to Revenue Procedure 93-39
        to
        the effect that such Employee Benefit Plan is qualified under Section 401(a)
        of
        the Code; no Employee Benefit Plan has or is expected to have an accumulated
        or
        waived funding deficiency within the meaning of Section 412 of the Code;
        neither
        Seller nor any ERISA Affiliate has incurred or is expected to incur, directly
        or
        indirectly, any liability (including any contingent liability) to or on account
        of a Employee Benefit Plan pursuant to Title IV of ERISA; no proceedings
        have
        been instituted to terminate any Employee Benefit Plan that is subject to
        Title
        IV of ERISA; no “reportable event,” as such term is defined in Section 4043(b)
        of ERISA, has occurred or is expected to occur with respect to any Employee
        Benefit Plan; and no condition exists that presents a risk to Seller or any
        ERISA Affiliate of incurring a liability to or on account of an Employee
        Benefit
        Plan pursuant to Title IV of ERISA.

       

      (c)
        The
        current value of the assets of each of the Employee Benefit Plans that are
        subject to Title IV of ERISA, based upon the actuarial assumptions (to the
        extent reasonable) presently used by the Employee Benefit Plans, exceeds
        the
        present value of the accrued benefits under each such Employee Benefit Plan
        calculated as the projected benefit obligation using the methodology under
        Financial Accounting Standards Board Statement No. 87; no Employee Benefit
        Plan
        is a multiemployer plan (within the meaning of Sections 3(37) or 4001(a)(3)
        of
        ERISA or Section 414(f) of the Code (“Multiemployer Plan”) and no Employee
        Benefit Plan is a multiple employer plan subject to Sections 4063 and 4064
        of
        ERISA or as defined in Section 413 of the Code (“Multiple Employer Plan”); and
        all contributions or other amounts payable by Seller as of the Closing with
        respect to each Employee Benefit Plan in respect of current or prior plan
        years
        have been paid. Neither Seller nor any ERISA Affiliate is or was obligated
        to
        contribute to any Multiemployer Plan or Multiple Employer Plan. There are
        no
        pending, threatened or, to the best knowledge of Seller, anticipated claims
        (other than routine claims for benefits) by, on behalf of or against any
        of the
        Employee Benefit Plans or any trusts related thereto.

       

      (d)
        No
        Employee Benefit Plan provides death or medical benefits (whether or not
        insured), with respect to current or former employees of Seller or any ERISA
        Affiliate beyond their retirement or other termination of service other than
        (i)
        coverage mandated by applicable law or (ii) death benefits under any “employee
        pension plan” (as that term is defined in Section 3(2) of ERISA) that is
        qualified under Section 401(a) of the Code.

       

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

      4.12        
        Compliance
        with Law.
        Seller
        is and has been conducting its business, marketing and selling its services
        and/or products, and owning and operating all of its assets, in compliance
        in
        all material respects with all applicable laws, rules, regulations, orders,
        building and other codes, zoning and other ordinances, authorizations, judgments
        and decrees, including all material Environmental Laws, of all federal, state,
        local, foreign or other governmental or regulatory authorities.
        Seller
        has made available to Buyer true and complete copies of all permits, licenses,
        registrations, franchises, certificates, concessions and other governmental
        approvals and authorizations held by Seller or any of the owners, occupants,
        subcontractors, sublessees, licensees or operators of the Real Property or
        the
        operations of Seller, as amended, supplemented and modified through the date
        hereof (the “Licenses and Permits”). Schedule 4.12 contains a list of each of
        such Licenses and Permits. Seller and each of its employees or agents providing
        services at the pharmacy, as applicable, (a) hold all Licenses and Permits
        required for the operation of Seller’s business, including, without limitation,
        all Licenses and Permits required by federal, state and local law and all
        applicable regulatory agencies, and (b) are in compliance in all material
        respects with all applicable laws, regulations and agreements. All such Licenses
        and Permits are in full force and effect and Seller is not in default in
        any
        respect with respect to any such Licenses and Permits. No notice from any
        authority with respect to the revocation, termination, suspension or limitation
        of any such Licenses and Permits has been issued or given, nor is Seller
        aware
        of the proposed or threatened issuance of any such notice..

       

      4.13         
        Finders. Neither
        Seller, nor any of its Affiliates, nor any of Seller’s directors or officers,
        has taken any action that, directly or indirectly, would obligate Buyer or
        any
        of its Affiliates to anyone acting as broker, finder, financial advisor or
        in
        any similar capacity in connection with this Agreement or any of the
        transactions contemplated hereby.

       

      4.14          
        Related
        Party Transactions; Intercompany Accounts. Except
        as
        set forth on Schedule 4.14 hereto, there are no Contracts between Seller,
        on one
        hand, and any shareholder, director, officer, employee, consultant or Affiliate
        of Seller (each, a “Related Party”), on the other, related to Seller’s business.
        Set forth on Schedule 4.14 is a true and complete list of each transaction
        during the prior 18 months between Seller, on one hand, and any Related Party,
        on the other, related to Seller’s business. Except for compensation for services
        rendered, no amounts are owed by or to Seller to or by any Related Party,
        related to Seller’s business. Devendar Kaushik and Gurjit Sethi are the only
        shareholders of Seller.

      

      4.15         
        Tax
        Matters.
        All
        Taxes that are due or payable by Seller, whether or not disputed by Seller,
        have
        been paid in full, or provision has been made for payment of taxes and all
        amounts due or payable will be paid. All tax returns to be filed in connection
        with Taxes have been accurately prepared and duly and timely filed.

       

      4.16          Improper
        Payments. Neither
        Seller, nor any of Seller’s officers and employees nor, to the best of Seller’s
        knowledge, Seller’s agents have made any illegal or improper payments to, or
        provided any illegal or improper benefit or inducement for, any governmental
        official, supplier, customer or other person, in an attempt to influence
        any
        such person to take or to refrain from taking any action relating to Seller’s
        business.

       

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

      4.17        
         Payment
        Programs.
        Neither
        Seller, nor any of its officers or employees, nor, to the best knowledge
        of
        Seller, agents has received written notice that it is subject to any restriction
        or limitation on the receipt of payment under the Medicare or Medicaid programs,
        any other federally funded health care program or any other third party payor
        (collectively, the “Payment Programs”). Seller has valid and current provider
        agreements with the Payment Programs. Seller is in compliance in all material
        respects with the conditions of participation for the Payment Programs. Neither
        seller, nor any of Seller’s officers or employees, nor, to the best knowledge of
        Seller, agents has received written notice that a Payment Program has requested
        or threatened any recoupment, refund or set-off from target, or imposed any
        fine, penalty or other sanction on Seller, nor has Seller been excluded from
        participation in a payment program. Seller has not submitted to a Payment
        Program any false or fraudulent claim for payment, nor has Seller at any
        time
        violated in any material respect any condition for participation, or any
        published rule, regulation, policy or standard of a Payment
        Program.

       

      4.18
                 
         Fraud
        and Abuse.
        Neither
        Seller, nor any of Seller’s officers, employees or agents, has engaged in any
        activities that are prohibited under Federal Medicare and Medicaid statutes,
        42
        U.S.C. §§ 1320a-7, 1320a-7a, 1320a-7b or the Federal False Claims Act, 31 U.S.C.
§ 3729 et seq., the regulations promulgated pursuant to such statutes, or
        any
        related state or local statutes or regulations. 

       

      4.19             
        Physician
        Self-Referrals.
        Seller’s operations are in compliance in all material respects with and do not
        otherwise violate the Federal Medicare and Medicaid statutes regarding physician
        self-referrals, 42 U.S.C. §§ 1395nn and 1396b(s), the regulations promulgated
        pursuant to such statutes, or any related state or local statutes or
        regulations.
        Neither
        Seller, nor any of Seller’s officers, employees or agents, has engaged in any
        activities that may violate such statutes or regulations.

       

      4.20         
        Controlled
        Substances.
        Seller
        has not engaged in any activities which are prohibited under the Federal
        Controlled Substances Act, 21 U.S.C. § 801 et seq., or the regulations
        promulgated pursuant to such statute or any related state or local statutes
        or
        regulations concerning the dispensing and sale of controlled
        substances.

       

      4.21          Customers
        and Suppliers.
        Schedule
        4.21 hereto sets forth a list of Seller’s fifteen largest suppliers and
        referrers of customers in order of dollar volume of referrals and purchases,
        respectively, during its last three fiscal years, showing the approximate
        total
        referrals and purchases, respectively, in dollars and product description
        to or
        from each such referral source and supplier, respectively, during each such
        period. There has not been any adverse change, other than price changes that
        may
        have been mandated by the Medicare or Medicaid programs, and there are no
        facts
        known to Seller which may reasonably be expected to indicate that any adverse
        change may occur in the business relationship of Seller or, after the Closing,
        Buyer with any referral source or supplier named on Schedule 4.21.

       

      4.22          
        Insurance.
        Schedule 4.22 contains a complete and correct list of all policies
        of
        insurance of any kind or nature covering Seller, including, without limitation,
        policies of life, fire, theft, casualty, product liability, workmen’s
        compensation, business interruption, employee fidelity and other casualty
        and
        liability insurance, indicating the type of coverage, name of insured, the
        insurer, the premium, the expiration date of each policy and the amount of
        coverage. All such policies (i) are with insurance companies reasonably
        believed by Seller to be financially sound and reputable and are in full
        force
        and effect; (ii) are sufficient for compliance with all requirements
        of law
        and of all applicable agreements; (iii) are valid, outstanding and
        enforceable policies; and (iv) provide full insurance coverage for
        the
        assets and operations of Seller for all risks normally insured against by
        persons carrying on the same business as Seller. Complete and correct copies
        of
        such policies have been furnished to Buyer.
        

       

      
        
           

        

        
          13

          
            

          

        

        
           

        

      

      4.23          
        Disclosure. No
        representation, warranty or other statement by Seller herein or made in writing
        in connection herewith contains or will contain an untrue statement of a
        material fact, or omits or will omit to state a material fact necessary to
        make
        the statements contained herein or therein not misleading.

       

      ARTICLE
        V

       

      REPRESENTATIONS
        AND WARRANTIES REGARDING BUYER

       

      Buyer
        hereby represents and warrants to Seller as follows:

       

      5.1     Organization
        and Qualification. Buyer
        is
        a corporation duly organized, validly existing and in good standing under
        the
        laws of the State of California, with full corporate power and authority
        to own,
        lease and operate its properties and assets and to conduct its business as
        it is
        now being conducted.

       

      5.2     Authority. Buyer
        has
        all requisite power and authority to execute and deliver this Agreement and
        to
        perform, carry out and consummate the transactions contemplated hereby. The
        execution, delivery and performance of this Agreement have been duly authorized
        by all necessary corporate action on the part of Buyer. This Agreement
        constitutes the legal, valid and binding obligations of Buyer, enforceable
        against Buyer in accordance with its terms.

       

      5.3     No
        Breach.
        Neither
        the execution and delivery of this Agreement by Buyer nor the consummation
        of
        the transactions contemplated herein will: (i) violate any provision of the
        Certificate of Incorporation or Bylaws of Buyer; (ii) conflict with, result
        in a
        breach of or constitute a default (or an event which, with or without notice,
        lapse of time or both, would constitute a default) under, or give any third
        party the right to terminate or modify, any material agreement or other
        instrument to which Buyer is a party or by which it or any of its assets
        is
        bound; (iii) conflict with, violate, result in a breach of or constitute
        a
        default under any judgment, decree, order or process of any court or
        governmental authority; (iv) conflict with or violate any material statute,
        law
        or regulation applicable to the business of Buyer; or (v) require Buyer to
        obtain any authorization, consent, approval or waiver from, or to make any
        filing with, any governmental or regulatory authority.

       

      5.4     Finders. Neither
        Buyer, nor any of its Affiliates, nor any of their respective directors or
        officers, has taken any action that, directly or indirectly, would obligate
        Seller or any of its Affiliates to anyone acting as a broker, finder, financial
        advisor or in any similar capacity in connection with this Agreement or any
        of
        the transactions contemplated hereby.

       

      
        
           

        

        
          14

          
            

          

        

        
           

        

      

      ARTICLE
        VI

       

      COVENANTS

       

      6.1     Obtaining
        Consents. Seller
        shall use its best efforts to obtain all consents to the assignment to Buyer
        of
        all Contracts to be assigned to Buyer pursuant to this Agreement, in each
        case
        without any condition or qualification adverse to Buyer. Buyer and Seller
        shall
        use all reasonable efforts to obtain all consents, approvals and waivers
        from,
        and give all notices to, and make all declarations, filings and registrations
        with, any governmental and regulatory agencies that are required to consummate
        the transactions contemplated hereby. Buyer and Seller shall coordinate and
        cooperate with one another and supply such assistance as may be reasonably
        requested by each in connection with the foregoing.

       

      6.2     Transfer
        and Retention of Records. Except
        as
        may be required for tax purposes or other regulatory purposes, neither Seller,
        nor any of its respective successors and assigns, will retain any document,
        databases or other media embodying any confidential or proprietary information
        relating to Seller’s business or use, publish or disclose to any third person
        any such confidential or proprietary information relating to Seller’s business;
provided,
        however,
        that
        Seller shall be entitled to retain copies of any of the foregoing (and have
        access to the same after the Closing) to the extent necessary in connection
        with
        prosecuting or defending any matter not assumed by Buyer. Seller shall take
        all
        actions requested by Buyer to transfer records relating to Seller’s business to
        Buyer, which may include making duplicate copies of any records retained
        by
        Seller in the form of papers or computer media.

       

      6.3     Employee
        Matters.
        Buyer
        shall not assume or be responsible in any way for the obligations, liabilities
        or responsibilities (a) of any Employee Benefit Plan of Seller, (b) of Seller,
        any Affiliate of Seller or any fiduciary under, arising from, or with respect
        to
        any Employee Benefit Plan of Seller or (c) to any of Seller's officers,
        directors, employees and agents, arising from
        or
        related to the transactions contemplated by this Agreement. Buyer shall not
        be
        deemed to be a successor employer with respect to the employment of any employee
        of Seller or with respect to any of Seller's Employee Benefit Plans.
        Buyer
        may offer employment to any or all of Seller’s employees and former employees,
        but shall not be obligated to do so.

       

      6.4     Insurance.
        Seller
        shall cause Seller’s business to obtain and/or continue to maintain in full
        force and effect “occurrence” based general liability insurance policies or
        other insurance arrangements reasonably satisfactory to Buyer through the
        Closing Date and shall not allow any breach, default, termination or
        cancellation of such insurance policies or agreements to occur or
        exist.

       

      6.5     Further
        Assurances.
        Buyer
        and Seller shall, and shall cause their respective Affiliates to, at the
        request
        and the expense of the other, execute and deliver such other instruments
        of
        conveyance and transfer and assumption and take such other action as may
        be
        reasonably requested so as to consummate the transactions contemplated hereby
        or
        otherwise to consummate the intent of this Agreement. Without limiting the
        generality of the foregoing, the Seller will, and will cause its management
        to,
        execute management representation letters reasonably requested by Allion’s
        outside auditors in connection with the audit of Seller required by applicable
        law.

       

      
        
           

        

        
          15

          
            

          

        

        
           

        

      

      6.6     Certain
        Covenants of Seller.
        Seller
        hereby covenants that (unless Buyer otherwise gives its written approval
        in its
        sole discretion) Seller shall at its sole cost and expense take the actions
        set
        forth below:

       

      (a)  At
        the
        Closing, Seller shall pay or otherwise discharge (in full, without discount
        or
        compromise) all the Excluded Liabilities.

       

      (b)  Prior
        to
        the Closing, Seller shall operate its business in the ordinary course as
        historically conducted, and maintain the Assets in good operating condition.
        Prior to the Closing, Seller shall pay its debts and accounts payable in
        the
        ordinary course of business and on a timely basis.

       

      (c)  Prior
        to
        and after the Closing, Seller shall afford Buyer, its attorneys, accountants,
        consultants and representatives, free and full access to Seller, the Assets,
        the
        books and records of Seller relating thereto and employees of Seller, at
        all
        reasonable times upon reasonable notice and during normal business hours,
        and
        shall provide to Buyer and its representatives such additional financial
        and
        operating data and other information as Buyer shall from time to time reasonably
        request. The access will be provided to the fullest extent permitted by law,
        including applicable provisions of HIPAA.

       

      (d)  Prior
        to
        and after the Closing, Seller shall use its best efforts to preserve for
        Buyer
        the goodwill of its customers and suppliers, and others having business
        relations with Seller, and prior to and after the Closing shall do all things
        reasonably requested by Buyer for such purpose. However, at no time prior
        to the
        Closing shall Seller engage in marketing activities on behalf of Buyer, or
        activities which include the promotion of Buyer or its business.

       

      (e)  Prior
        to
        and after the Closing, Seller shall promptly advise Buyer in writing of the
        commencement or threat against Seller of any suit, litigation or legal
        proceeding that relates to or might affect Seller or the Assets.

       

      (f)  Prior
        to
        the Closing, Seller shall not, and shall not permit its shareholders, officers,
        directors, employees or agents to, directly or indirectly, initiate, solicit
        or
        knowingly encourage (including by way of furnishing non-public information
        or
        assistance) any offer or proposal for, or enter into negotiations of any
        type,
        or any letter of intent or purchase agreement, merger agreement or other
        similar
        agreement with any individual or entity with respect to, a sale of any Assets
        (other than in the ordinary course of business consistent with past practice)
        or
        license of any Assets, or a merger, consolidation or business combination
        in
        which Seller is a constituent entity, any sale of all or any portion of Seller’s
        equity, or any liquidation or similar extraordinary transaction with respect
        to
        Seller. Prior to Closing, Seller shall, and shall cause its shareholders,
        officers, directors, employees and agents to, immediately cease all discussions
        and negotiations with respect to any such transaction, and promptly advise
        Buyer
        of any solicitation or other request by any individual or entity relating
        to any
        such transaction.

       

      (g)  Prior
        to
        the Closing, Seller shall not dispose, encumber or cause, permit or allow
        any
        Encumbrance to be placed on any of the Assets, except for sales in the ordinary
        course of business.

       

      
        
           

        

        
          16

          
            

          

        

        
           

        

      

      (h)  Prior
        to
        the Closing, Seller shall use its best efforts to take any action where the
        failure or omission to take such action would cause (i) any representation
        or warranty in Article IV hereof to be untrue or incorrect as of the Closing
        or
        (ii) any of the conditions to the Closing not to be satisfied.

       

      ARTICLE
        VII

       

      RESTRICTIVE
        COVENANTS

       

      7.1     Non-Competition. Seller
        and its shareholders hereby agree that as a material inducement to Buyer
        to
        enter into this Agreement, and for other good and valuable consideration,
        the
        receipt and sufficiency of which are hereby acknowledged, Seller and its
        shareholders covenant and agree that they, and each of Seller’s officers,
        directors and Affiliates, shall not, for the period from the date hereof
        until
        three (3) years following the Closing Date (the “Restricted Period”), directly
        or indirectly, on their own behalf or in the service of or on the behalf
        of
        others, as a director, trustee, owner (except as the owner of less than two
        percent (2%) of the outstanding stock of a publicly held corporation), employee,
        consultant, advisor, independent contractor or in any other capacity, engage
        in
        the pharmacy business within twenty-five (25) miles of 1020 East Pacific
        Coast
        Highway, Long Beach, California (the “Restricted Territory”). Notwithstanding
        the foregoing, Gurjit Sethi, a shareholder of Seller, shall be permitted
        to own
        and operate his present pharmacy, Care Health, Inc., in Orange County,
        California, provided that (x) such pharmacy serves only the Orange, Riverside
        and San Bernardino communities and (y) nothing contained herein shall in
        any way
        limit the covenants contained in Section 6.2 relating to confidential or
        proprietary information of Seller (including permit Mr. Sethi or his pharmacy
        to
        use or disclose such information), or Section 7.2.

       

      7.2     Non-Interference.
        Seller
        and its shareholders further agree that, during the Restricted Period and
        within
        the Restricted Territory, Seller and its shareholders will not, directly
        or
        indirectly; (i) induce any former customer of Seller or customer of
        Buyer
        to patronize any Person who competes with Buyer; (ii) request or advise
        any
        former customer of Seller or customer of Buyer to withdraw, curtail or cancel
        such Person’s business with Buyer; (iii) enter into any contract, the
        purpose or result of which would benefit such Seller if any former customer
        of
        Seller or customer of Buyer were to withdraw, curtail, or cancel such customer’s
        business with Buyer; or (iv) disclose to any other Person the names
        or
        addresses of any former customer of Seller or customer of Buyer, either
        individually or collectively.

       

      7.3     Acknowledgements.
        If
        the
        provisions of this Article VII are violated, in whole or in part, Buyer shall
        be
        entitled, upon application to any court of proper jurisdiction, to a temporary
        restraining order or preliminary injunction to restrain and enjoin Seller
        and
        its shareholders from such violation without prejudice as to any other remedies
        Buyer may have at law or in equity. In the event of a violation, Seller and
        its
        shareholders agree that it would be virtually impossible for Buyer to calculate
        its monetary damages and that Buyer would be irreparably harmed. If Buyer
        seeks
        such temporary restraining order or preliminary injunction, Buyer shall not
        be
        required to post any bond with respect thereto, or, if a bond is required,
        it
        may be posted without surety thereon. If any restriction contained in this
        Article VII is held by any court to be unenforceable, or unreasonable, as
        to
        time, geographic area or business limitation, Buyer, Seller and its shareholders
        agree that such provisions shall be and are hereby reformed to the maximum
        time,
        geographic area or business limitation permitted by applicable laws. The
        parties
        further agree that the remaining restrictions contained in this Article VII
        shall be severable and shall remain in effect and shall be enforceable
        independently of each other. Seller and its shareholders specifically
        acknowledge, represent and warrant that the covenants set forth in this Article
        VII are reasonable and necessary to protect the legitimate interests of Buyer,
        and that Buyer would not have entered into this Agreement or paid the Purchase
        Price in the absence of such covenants.

       

      
        
           

        

        
          17

          
            

          

        

        
           

        

      

      ARTICLE
        VIII

       

      INDEMNIFICATION

       

      8.1     Survival
        of Representations and Warranties.  All
        representations and warranties contained in Articles IV and V of this Agreement
        shall survive the Closing indefinitely.

       

      8.2     Indemnification
        by Seller and its Shareholders.
        Seller
        and its shareholders shall indemnify and save Buyer and its Affiliates, their
        respective directors, officers, employees, agents and representatives and
        all of
        their successors and assigns (collectively “Buyer Claimants” and individually a
“Buyer Claimant”) harmless from and defend each of them from and against any and
        all demands, claims, actions, liabilities, losses, costs, damages or expenses
        whatsoever (including any reasonable attorneys' fees) (collectively, “Losses”)
        asserted against, imposed upon or incurred by Buyer Claimants resulting from
        or
        arising out of (a) any inaccuracy or breach of any representation or warranty
        of
        Seller and its shareholders contained herein; (b) any breach of any covenant
        or
        obligation of Seller contained herein; (c) any liability of Seller arising
        out
        of events occurring, conditions existing, products sold or activities of
        Seller;
        (d) noncompliance with any applicable bulk sales or similar laws (including
        laws
        which may impose transferee liability on Buyer or an Affiliate of Buyer or
        create Encumbrances on the Assets relating to Seller's liability for sales,
        use
        or other taxes or withholdings arising out of the operations of Seller);
        and (e)
        any liability arising out of or related to Seller’s business prior to Closing,
        or the assertion against a Buyer Claimant of a claim which, if valid, would
        constitute a liability arising out of or related to Seller’s business prior to
        Closing.

       

      8.3     Indemnification
        by Buyer.
        Buyer
        shall indemnify and save Seller and its respective Affiliates and their
        respective directors, officers, employees, agents and representatives
        (collectively “Seller Claimants” and individually a “Seller Claimant”) harmless
        from and defend each of them from and against any and all Losses asserted
        against, imposed upon or incurred by Seller Claimants resulting from or arising
        out of (a) any inaccuracy or breach of any representation or warranty of
        Buyer
        contained herein; (b) any breach of any covenant or obligation of Buyer
        contained herein; and (c) except as described in Section 8.2 above, Buyer's
        ownership of the Assets and operation of its business from and after the
        Closing
        Date.

       

      8.4     Indemnification
        Procedures.

       

      (a)  The
        rights and obligations of each party claiming a right to indemnification
        hereunder (“Indemnitee”) from the other party (“Indemnitor”) shall be governed
        by the following rules:

       

      
        
           

        

        
          18

          
            

          

        

        
           

        

      

      (i)  The
        Indemnitee shall give prompt written notice to the Indemnitor of any state
        of
        facts which Indemnitee determines will give rise to a claim by the Indemnitee
        against the Indemnitor based on the indemnity agreements contained herein,
        stating the nature and basis of said claims and the amount thereof, to the
        extent known. No failure to give such notice shall affect the indemnification
        obligations of Indemnitor hereunder, except to the extent such failure
        materially prejudices such Indemnitor's ability successfully to defend the
        matter giving rise to the indemnification claim.

       

      (ii)  In
        the
        event any action, suit or proceeding is brought against the Indemnitee, with
        respect to which the Indemnitor may have liability under the indemnity
        agreements contained herein, then upon the written acknowledgment by the
        Indemnitor within thirty days of the bringing of such action, suit or proceeding
        that it is undertaking and will prosecute the defense of the claim under
        such
        indemnity agreements and confirming that the claim is one with respect to
        which
        the Indemnitor is obligated to indemnify and that it will be able to pay
        the
        full amount of potential liability in connection with any such claim, the
        action, suit or proceeding (including all proceedings on appeal or for review
        which counsel for the Indemnitee shall deem appropriate) may be defended
        by the
        Indemnitor. However, in the event the Indemnitor shall not offer reasonable
        assurances as to its financial capacity to satisfy any final judgment or
        settlement, the Indemnitee may assume the defense and dispose of the claim,
        after 30 days prior written notice to the Indemnitor. The Indemnitee shall
        have
        the right to employ its own counsel in any such case, but the fees and expenses
        of such counsel shall be at the Indemnitee's own expense unless (A) the
        employment of such counsel and the payment of such fees and expenses both
        shall
        have been specifically authorized by the Indemnitor in connection with the
        defense of such action, suit or proceeding or (B) the Indemnitee shall have
        reasonably concluded and specifically notified the Indemnitor that there
        may be
        specific defenses available to it which are different from or additional
        to
        those available to the Indemnitor.

       

      (iii)  In
        addition, in any event specified in clause (B) of the second sentence of
        subparagraph (ii) above, the Indemnitor, to the extent made necessary by
        such
        different or additional defenses, shall not have the right to direct the
        defense
        of such action, suit or proceeding on behalf of the Indemnitee. If Indemnitor
        and Indemnitee cannot agree on a mechanism to separate the defense of matters
        extending beyond the scope of indemnification, such matters shall be defended
        on
        the basis of joint consultation.

       

      (iv)  The
        Indemnitee shall be kept fully informed by the Indemnitor of such action,
        suit
        or proceeding at all stages thereof, whether or not it is represented by
        counsel. The Indemnitor shall, at the Indemnitor's expense, make available
        to
        the Indemnitee and its attorneys and accountants all books and records of
        the
        Indemnitor relating to such proceedings or litigation, and the parties hereto
        agree to render to each other such assistance as they may reasonably require
        of
        each other in order to ensure the proper and adequate defense of any such
        action, suit or proceeding.

       

      (v)  The
        Indemnitor shall make no settlement of any claims which Indemnitor has
        undertaken to defend, without Indemnitee's consent, unless the Indemnitor
        fully
        indemnifies the Indemnitee for all losses, there is no finding or admission
        of
        violation of law by, or effect on any other claims that may be made against,
        the
        Indemnitee and the relief granted in connection therewith requires no action
        on
        the part of and has no effect on the Indemnitee.

       

      
        
           

        

        
          19

          
            

          

        

        
           

        

      

      ARTICLE
        IX

       

      CONDITIONS
        PRECEDENT TO OBLIGATIONS OF BUYER

       

      The
        obligation of Buyer under this Agreement to consummate the transactions
        contemplated hereby at the Closing shall be subject to the satisfaction,
        at or
        prior to the Closing, of all of the following conditions, any one or more
        of
        which may be waived in writing by Buyer:

       

      9.1     Representations
        and Warranties Accurate. All
        representations and warranties of Seller contained in this Agreement shall
        be
        true and accurate in all material respects on and as of the Closing Date
        as if
        made again at and as of such date.

       

      9.2     Performance
        by Seller. Seller
        shall have performed and complied with all agreements required by this Agreement
        to be performed and complied with by it prior to or on the Closing
        Date.

       

      9.3     Certificate. Buyer
        shall have received a certificate, dated the Closing Date, signed on behalf
        of
        Seller by a principal corporate officer of Seller, to the effect that the
        conditions set forth in Sections 9.1 and 9.2 have been satisfied.

       

      9.4     Legal
        Prohibition.
        No suit,
        action, investigation, inquiry or other proceeding by any court or regulatory
        or
        governmental body or other Person shall have been instituted or threatened
        which
        (a) could reasonably be expected to result in a material adverse change in
        the
        business, condition (financial or otherwise), prospects, assets or operations
        of
        Seller’s business or, after the Closing, Buyer; (b) arises out of or relates to
        this Agreement or the transactions contemplated hereby; or (c) questions
        the
        validity hereof or seeks to obtain damages in respect thereof. On the Closing
        Date, there shall be no effective permanent or preliminary injunction, writ,
        temporary restraining order or any order of any nature issued by a court
        of
        competent jurisdiction directing that the transactions provided for herein
        not
        be consummated as so provided.

       

      9.5     Closing
        Deliveries. Buyer
        shall have received all deliveries to be made to it pursuant to Article III
        of
        this Agreement

       

      ARTICLE
        X

       

      CONDITIONS
        PRECEDENT TO
        OBLIGATIONS OF 

      SELLER

       

      The
        obligations of Seller under this Agreement shall be subject to the satisfaction,
        at or prior to the Closing, of all of the following conditions, any one or
        more
        of which may be waived in writing by Seller.

       

      10.1     Representations
        and Warranties Accurate. All
        representations and warranties of Buyer contained in this Agreement shall
        be
        true and accurate in all material respects on and as of the Closing Date
        as if
        made again at and as of such date.

       

      
        
           

        

        
          20

          
            

          

        

        
           

        

      

      10.2     Performance
        by Buyer. Buyer
        shall have performed and complied with all agreements required by this Agreement
        to be performed and complied with by it prior to or on the Closing
        Date.

       

      10.3     Certificate. Seller
        shall have received a certificate, dated the Closing Date, signed on behalf
        of
        Buyer by a principal corporate officer of Buyer, to the effect that the
        conditions set forth in Sections 10.1 and 10.2 have been satisfied.

       

      10.4     Legal
        Prohibition.
        No suit,
        action, investigation, inquiry or other proceeding by any court or regulatory
        or
        governmental body or other person shall have been instituted which arises
        out of
        or relates to this Agreement or the transactions contemplated hereby or
        questions the validity hereof or seeks to obtain substantial damages in respect
        thereof. On the Closing Date, there shall be no effective permanent or
        preliminary injunction, writ, temporary restraining order or any order of
        any
        nature issued by a court of competent jurisdiction directing that the
        transactions provided for herein not be consummated as so provided.

       

      10.5     Closing
        Deliveries. Seller
        shall have received all deliveries to be made to them pursuant to Article
        III of
        this Agreement. 

       

      ARTICLE
        XI

       

      MISCELLANEOUS

       

      11.1     Termination. 

       

      (a)  This
        Agreement may be terminated at any time prior to Closing Date:

       

      (i)  by
        mutual
        consent of the parties hereto;

       

      (ii)  by
        Buyer,
        by written notice given to the Seller, if any of the conditions set forth
        in
        Article IX shall have become incapable of fulfillment and shall not have
        been
        waived by Buyer; or 

       

      (iii)  by
        Seller, by written notice given to the Buyer, if any of the conditions set
        forth
        in Article X shall have become incapable of fulfillment and shall not have
        been
        waived by Seller; or

       

      (iv)  by
        either
        of the parties hereto:

       

      (A)  if
        a
        court of competent jurisdiction or governmental, regulatory or administrative
        agency or commission shall have issued an order, decree or ruling or taken
        any
        other action (which order, decree or ruling the parties hereto shall use
        their
        best efforts to lift), in each case permanently restraining, enjoining or
        otherwise prohibiting the transactions contemplated by this Agreement, and
        such
        order, decree, ruling or other action shall have become final and nonappealable;
        or

       

      (B)  if
        the
        Closing Date shall not have occurred on or before August 15, 2005; provided,
        however,
        that
        the right to terminate this Agreement shall not be available to any party
        whose
        breach of this Agreement has been the cause of, or resulted in, the failure
        of
        the Closing to occur on or before such date; or

       

      
        
           

        

        
          21

          
            

          

        

        
           

        

      

      (v)  by
        Buyer,
        if there has been a breach in any material respect of any representation
        or
        warranty by Seller.

       

      (b)  In
        the
        event of termination pursuant to Section 11.1(a) of this Agreement, written
        notice thereof shall forthwith be given to the other party to this Agreement
        and
        this Agreement shall terminate, without further action by either of the parties
        hereto. If this Agreement is terminated as provided herein, no party hereto
        shall have any liability or further obligation to any other party to this
        Agreement resulting from such termination except (A) that the provision of
        this
        Section 11.1(b) and the proviso of Section 11.1(a)(iv)(B) of this Agreement
        shall remain in full force and effect and (B) no party waives any claim or
        right
        against a breaching party to the extent that such termination results from
        the
        breach by a party hereto of any of its representations, warranties, covenants
        or
        agreements set forth in this Agreement.

       

      11.2     Expenses. Each
        party hereto shall pay its own expenses incurred in connection with this
        Agreement, except as otherwise specified in this Agreement and except that
        all
        sales, transfer and other similar taxes, levies and charges that may be imposed,
        levied or assessed in connection with the consummation of the transactions
        contemplated hereby shall be borne by Seller.

       

      11.3     Amendment. This
        Agreement may not be terminated, amended, altered or supplemented except
        by a
        written agreement executed by the parties hereto.

       

      11.4     Entire
        Agreement. This
        Agreement, including the schedules hereto, and the instruments and other
        documents delivered pursuant to this Agreement, contain the entire agreement
        of
        the parties relating to the subject matter of this Agreement and supersede
        all
        other agreements and understandings of any kind between the parties respecting
        such subject matter. Each and every representation, warranty and covenant
        shall
        be deemed to include the information contained in the schedules
        thereto.

       

      11.5     Waivers. Waiver
        by
        either party of either breach of or failure to comply with any provision
        of this
        Agreement by the other party shall not be construed as, or constitute, a
        continuing waiver of such provision, or a waiver of any other breach of,
        or
        failure to comply with, any other provision of this Agreement. No waiver
        of any
        such breach or failure or of any term or condition of this Agreement shall
        be
        effective unless in a written notice signed by the waiving party and delivered,
        in the manner required for notices generally, to each affected
        party.

       

      11.6     Notices. All
        notices, consents, directions, approvals, instructions, requests and other
        communications required or permitted by the terms of this Agreement to be
        given
        to any Person shall be in writing, and any such communication shall become
        effective five Business Days after being deposited in the United States mails,
        certified or registered (return receipt requested), with appropriate postage
        prepaid for first class mail or, if delivered by hand or courier service
        or in
        the form of a telex, telecopy or telegram, when received (if received during
        normal business hours on a Business Day, or if not, then on the next Business
        Day thereafter), and shall be directed to the following address or telex
        or
        telecopy number:

       

      
        
           

        

        
          22

          
            

          

        

        
           

        

      

      If
        to
        Seller:

       

      Frontier
        Pharmacy & Nutrition, Inc.

      1020
        East
        Pacific Coast Highway

      Long
        Beach, California

      Telecopier:
        _________________

      

      With
        a
        copy to:

       

      The
        Chugh
        Firm

      13304
        Alondra Blvd., 2nd
        Floor

      Cerritos,
        California 90703

      Attention:
        Navneet S. Chugh

      Telecopier:
        562-229-1221

      

      If
        to
        Buyer:

       

      Medicine
        Made Easy

      c/o
        Allion Healthcare, Inc.

      1660
        Walt
        Whitman Road

      Melville,
        New York 11747

      Attention:
        Mr. Mike Moran

      Telecopier:
        631-249-5863

      

      With
        a
        copy to:

       

      Nixon
        Peabody LLP

      990
        Stewart Avenue

      Garden
        City, New York 11530

      Attention:
        Allan H. Cohen 

      Telecopier:
        (516) 832-7555

      

      or
        to
        such other address as a party may have furnished to the other parties in
        writing
        in accordance herewith, except that notices of change of address shall only
        be
        effective upon receipt. Any notice which is so mailed shall be deemed delivered
        on the fourth Business Day (or Days) after mailing; any notice which is
        transmitted by telecopier shall be deemed delivered when transmitted to the
        telecopier number specified above and acknowledgment of receipt of such
        facsimile is received.

       

      11.7     Counterparts.
        This
        Agreement may be executed in two or more counterparts, and by the different
        parties hereto in separate counterparts each of which when executed shall
        be
        deemed to be an original, but all of which together shall constitute one
        and the
        same document.

       

      11.8     Governing
        Law; Submission to Jurisdiction.
        This
        Agreement shall be governed by, and construed in accordance with, the law
        of the
        State of California, without regard to applicable principles of conflict
        of laws
        that might otherwise govern.

       

      
        
           

        

        
          23

          
            

          

        

        
           

        

      

      11.9     Binding
        Effect; Assignment.
        This
        Agreement shall be binding upon and shall inure to the benefit of the parties
        hereto and their respective successors and assigns. Neither party shall assign
        or transfer this Agreement nor any right or obligation hereunder by operation
        of
        law or otherwise without the consent of the other party, except that Buyer
        may
        assign its rights under this Agreement to an Affiliate of Buyer.

       

      11.10    
Severability. If
        any
        provision of this Agreement or any part of any such provision is held under
        any
        circumstances to be invalid or unenforceable in any jurisdiction, then: (a)
        such
        provision or part thereof shall, with respect to such circumstances and in
        such
        jurisdiction, be deemed amended to conform to applicable laws so as to be
        valid
        and enforceable to the fullest possible extent; (b) the invalidity or
        unenforceability of such provision or part thereof under such circumstances
        and
        in such jurisdiction shall not affect the validity or enforceability of such
        provision or part thereof under any other circumstances or in any other
        jurisdiction; and (c) such invalidity or enforceability of such provision
        or
        part thereof shall not affect the validity or enforceability of the remainder
        of
        such provision or the validity or enforceability of any other provision of
        this
        Agreement. Each provision of this Agreement is separable from every other
        provision of this Agreement, and each part of each provision of this Agreement
        is separable from every other part of such provision.

       

      11.11     Headings.
        The
        headings contained in this Agreement (including the schedules) are for reference
        purposes only and shall not affect in any way the meaning or interpretation
        of
        this Agreement.

       

      11.12     No
        Agency.
        Neither
        party hereto shall be deemed hereunder to be an agent of, or partner or joint
        venture with, the other party hereto.

       

      11.13     Third
        Parties.
        Nothing
        herein is intended or shall be construed to confer upon or give to any person
        other than the parties hereto any rights or remedies under or by reason of
        this
        Agreement.

       

      11.14     Passage
        of Title and Risk of Loss.
        Legal
        title, equitable title and risk of loss with respect to the Assets will not
        pass
        to Buyer until the Assets are transferred at the Closing.

       

      IN
        WITNESS WHEREOF, the parties hereto have executed this Agreement effective
        as of
        the date first above written.

       

      SELLER:
        
           

          FRONTIER
            PHARMACY & NUTRITION, INC.

          

          

          By:                                                                              
                   

                
            Authorized Officer

          

           

        

      

      
        
           

        

        
          24

          
            

          

        

        
           

        

      

      
        BUYER:

        

        MOM’S
          PHARMACY, INC.

         

        

        By:                                                                              
          

              
          Michael Moran

              
          President and Chief Executive Officer

      

       

                           

      
        AGREED
          AS
          TO ARTICLE VII:

         

         

                                                                                  
          

        
          Devendar
            Kaushik

           

          
             

                                                                                      

          

          
            Gurjit
              Sethi

             

             

            
              
                 

              

              
                25

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00089-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00089-of-00352.parquet"}]]