Document:

MIM CORPORATION
                            2001 INCENTIVE STOCK PLAN

                             AS AMENDED AND RESTATED
                             EFFECTIVE JUNE 5, 2003

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                                TABLE OF CONTENTS
                                                                                     Page

ss.1. BACKGROUND AND PURPOSE1

ss.2. DEFINITIONS  1

<S>               <C>                                                                   <C>
                  2.1               Affiliate............................................1
                  2.2               Board................................................1
                  2.3               Change in Control....................................1
                  2.4               Code.................................................2
                  2.5               Committee............................................2
                  2.6               Ending Value.........................................2
                  2.7               Fair Market Value....................................2
                  2.8               ISO..................................................2
                  2.9               Key Employee.........................................2
                  2.10              1933 Act.............................................2
                  2.11              1934 Act.............................................2
                  2.12              MIM..................................................2
                  2.13              Non-ISO..............................................2
                  2.14              Option...............................................3
                  2.15              Option Certificate...................................3
                  2.16              Option Price.........................................3
                  2.17              Parent...............................................3
                  2.18              Performance Goal.....................................3
                  2.19              Performance Period...................................3
                  2.20              Performance Unit.....................................3
                  2.21              Plan.................................................3
                  2.22              Restricted Stock Unit................................3
                  2.23              Restricted Stock Unit Certificate....................3
                  2.24              Rule 16b-3...........................................3
                  2.25              SAR Value............................................3
                  2.26              Stock................................................3
                  2.27              Stock Appreciation Right.............................3
                  2.28              Stock Appreciation Right Certificate.................3
                  2.29              Stock Grant..........................................3
                  2.30              Stock Grant Certificate..............................4
                  2.31              Subsidiary...........................................4
                  2.32              Ten Percent Shareholder..............................4

ss.3. SHARES RESERVED UNDER PLAN.........................................................4

ss.4. EFFECTIVE DATE.....................................................................5

ss.5. COMMITTEE..........................................................................5

ss.6. ELIGIBILITY AND ANNUAL GRANT CAPS..................................................5

ss.7. OPTIONS............................................................................6

                  7.1               Committee Action.....................................6
                  7.2               $100,000 Limit.......................................6
                  7.3               Option Price.........................................6
                  7.4               Payment..............................................6

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                  7.5               Exercise Period......................................7
                  7.6               Reload Option Grants Prohibited......................7

ss.8. STOCK APPRECIATION RIGHTS..........................................................8

                  8.1               Committee Action.....................................8
                  8.2               Terms and Conditions.................................8
                  8.3               Exercise.............................................9

ss.9. RESTRICTED STOCK UNITS.............................................................9

                  9.1               Committee Action.....................................9
                  9.2               No Adjustment for Cash Dividends....................10
                  9.3               Payment for Restricted Stock Units..................10
                  9.4               Deferrals...........................................10
                  9.5               Performance Goals...................................11

ss.10. STOCK GRANTS.....................................................................11

                  10.1              Committee Action....................................11
                  10.2              Conditions..........................................11
                  10.3              Dividends and Voting Rights.........................12
                  10.4              Satisfaction of Forfeiture Conditions...............13
                  10.5              Performance Goals...................................13

ss.11. PERFORMANCE UNITS................................................................13

                  11.1              Committee Action....................................13
                  11.2              Conditions..........................................13
                  11.3              Performance Goals...................................13
                  11.4              Performance Period..................................14
                  11.5              Payment for Performance Unit........................14

ss.12. NON-TRANSFERABILITY..............................................................14

ss.13. SECURITIES REGISTRATION..........................................................15

ss.14. LIFE OF PLAN.....................................................................15

ss.15. ADJUSTMENT.......................................................................16

                  15.1              Capital Structure...................................16
                  15.2              Mergers.............................................16
                  15.3              Fractional Shares...................................17

ss.16. CHANGE IN CONTROL................................................................17

ss.17. AMENDMENT OR TERMINATION.........................................................18

ss.18. MISCELLANEOUS....................................................................18

                  18.1              Shareholder Rights..................................18
                  18.2              No Contract of Employment...........................18
                  18.3              Withholding.........................................19
                  18.4              Construction........................................19
                  18.5              Other Conditions....................................19
                  18.6              Rule 16b-3..........................................20
                  18.7              Loans...............................................20
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                                       ii

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                                      ss.1

                             BACKGROUND AND PURPOSE

         The  purpose  of  this  Plan  is to  promote  the  interest  of  MIM by
authorizing  the  Committee  to grant  Options,  Stock  Appreciation  Rights and
Performance  Units and to make  Stock  Grants to Key  Employees  in order (1) to
attract and retain Key Employees, (2) to provide an additional incentive to each
Key  Employee to work to increase the value of Stock and (3) to provide each Key
Employee  with a stake in the  future of MIM which  corresponds  to the stake of
each of MIM's stockholders.

                                      ss.2

                                   DEFINITIONS

         2.1 Affiliate -- means any organization  (other than a Subsidiary) that
would be treated as under common control with MIM  underss.414(c) of the Code if
"50 percent"  were  substituted  for "80 percent" in the income tax  regulations
underss.414(c) of the Code.

         2.2 Board -- means the Board of Directors of MIM.

         2.3 Change in Control  -- means (i) a  "person"  or "group"  within the
meaning of  sections  13(d) and 14(d) of the 1934 Act  becomes  the  "beneficial
owner"  (within the meaning of Rule 13d-3 under the 1934 Act) of  securities  of
MIM  (including  options,  warrants,  rights and  convertible  and  exchangeable
securities)  representing 50% or more of the combined voting power of MIM's then
outstanding  securities in any one or more  transactions  unless  approved by at
least two-thirds of the Board then serving at that time; provided, however, that
purchases by employee  benefit plans of MIM and by MIM or its  Subsidiaries  and
Affiliates  shall be  disregarded;  or (ii) any sale,  lease,  exchange or other
transfer (in one  transaction  or a series of related  transactions)  of all, or
substantially  all,  of the  operating  assets  of MIM;  or  (iii) a  merger  or
consolidation,  or a transaction  having a similar effect,  where (A) MIM is not
the  surviving  corporation,  (B) the  majority of the common stock of MIM is no
longer held by the stockholders of MIM immediately prior to the transaction,  or
(C) MIM's common  stock is converted  into cash,  securities  or other  property
(other than the common stock of a company into which MIM is merged)

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         2.4 Code -- means the Internal Revenue Code of 1986, as amended.

         2.5  Committee  -- means a  committee  of the Board which shall have at
least 2  members,  each of whom  shall be  appointed  by and shall  serve at the
pleasure of the Board and shall come within the  definition  of a  "non-employee
director"  under Rule 16b-3 and an  "outside  director"  underss.  162(m) of the
Code.

         2.6  Ending  Value --  means,  a value for each  Performance  Unit or a
formula  for  determining  the  value  of each  Performance  Unit at the time of
payment.

         2.7 Fair Market Value -- means (1) the closing  price on any date for a
share of Stock as  reported  by The Wall  Street  Journal or, if The Wall Street
Journal no longer reports such closing price,  such closing price as reported by
a newspaper or trade  journal  selected by the  Committee or, if no such closing
price is  available  on such date,  (2) such  closing  price as so  reported  in
accordance withss.  2.7(1) for the immediately preceding business day, or, if no
newspaper  or trade  journal  reports  such  closing  price or if no such  price
quotation is available,  (3) the price which the Committee  acting in good faith
determines  through any reasonable  valuation method that a share of Stock might
change hands between a willing buyer and a willing  seller,  neither being under
any  compulsion  to buy or to sell and both having  reasonable  knowledge of the
relevant facts.

         2.8 ISO -- means an option  granted  under this Plan to purchase  Stock
which is intended to satisfy the requirements ofss. 422 of the Code.

         2.9 Key  Employee  -- means an  employee  of MIM or any  Subsidiary  or
Parent or  Affiliate  designated  by the  Committee  who, in the judgment of the
Committee  acting in its absolute  discretion,  is key directly or indirectly to
the success of MIM.

         2.10 1933 Act -- means the Securities Act of 1933, as amended.

         2.11 1934 Act -- means the Securities Exchange Act of 1934, as amended.

         2.12 MIM -- means MIM Corporation and any successor to MIM Corporation.

         2.13  Non-ISO -- means an option  granted  under this Plan to  purchase
Stock which is intended to fail to satisfy  the  requirements  ofss.  422 of the
Code.

                                       2
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         2.14 Option -- means an ISO or a Non-ISO which is granted underss.7.

         2.15 Option  Certificate  -- means the written  certificate  which sets
forth the terms and conditions of an Option granted under this Plan.

         2.16  Option  Price -- means the price  which shall be paid to purchase
one share of Stock upon the exercise of an Option granted under this Plan.

         2.17  Parent -- means  any  corporation  which is a parent  corporation
(within the meaning ofss. 424(e) of the Code) of MIM.

         2.18 Performance Goal -- means a performance goal described inss. 10.3.

         2.19  Performance  Period -- means a  performance  period as  described
inss. 10.4.

         2.20 Performance Unit -- means an award granted underss.10.

         2.21 Plan -- means this MIM  Corporation  2001 Incentive  Stock Plan as
effective  as of the date  adopted by the Board in 2001 and as amended from time
to time thereafter.

         2.22 Restricted Stock Unit -- means an award granted under Section 9.

         2.23 Restricted Stock Unit Certificate -- means the written certificate
which sets forth the terms and conditions of a Restricted Stock Unit.

         2.24 Rule  16b-3 -- means the  exemption  under  Rule  16b-3 to Section
16(b) of the 1934 Act or any successor to such rule.

         2.25 SAR Value -- means the value  assigned by the Committee to a share
of Stock in connection with the grant of a Stock Appreciation Right underss.8.

         2.26 Stock -- means the common  stock,  $.0001 par value per share,  of
MIM.

         2.27  Stock  Appreciation  Right  --  means  a  right  to  receive  the
appreciation in a share of Stock which is granted underss.8.

         2.28  Stock   Appreciation  Right  Certificate  --  means  the  written
certificate  which sets forth the terms and  conditions of a Stock  Appreciation
Right which is not granted to a Key Employee as part of an Option.

         2.29 Stock Grant -- means Stock granted underss. 10.

                                       3
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         2.30 Stock Grant  Certificate  -- means the written  certificate  which
sets forth the terms and conditions of a Stock Grant.

         2.31   Subsidiary  --  means  a  corporation   which  is  a  subsidiary
corporation (within the meaning ofss. 424(f) of the Code) of MIM.

         2.32 Ten Percent  Shareholder  -- means a person who owns (after taking
into  account  the  attribution  rules  ofss.  424(d) of the Code) more than ten
percent of the total combined voting power of all classes of stock of either
MIM, a Subsidiary or Parent.

                                      ss.3

                           SHARES RESERVED UNDER PLAN

         There shall  (subject to ss. 15) be 3,750,000  shares of Stock reserved
for issuance  under this Plan (which number shall include the 950,000  shares of
Stock originally  reserved for issuance as well as the additional 800,000 shares
reserved for issuance upon stockholder  approval at the Company's Annual Meeting
of  Stockholders  on June 4, 2002 under this Plan  prior to this  amendment  and
restatement of this Plan), and no more than such number of shares shall (subject
to ss. 15) be issued in  connection  with the  exercise of ISOs.  Such shares of
Stock shall be reserved to the extent that MIM deems appropriate from authorized
but unissued shares of Stock and from shares of Stock which have been reacquired
by MIM.  Any shares of Stock  subject to an Option or Stock Grant  which  remain
unissued after the cancellation,  expiration or exchange of such Option or Stock
Grant or which are  forfeited  after  issuance;  any shares of Stock  subject to
issuance  under a Stock  Appreciation  Right  which  remain  unissued  after the
cancellation or expiration of such Stock  Appreciation  Right; and any shares of
Stock  subject to  issuance  upon the  vesting of  Restricted  Stock Units which
remain unissued after the  cancellation  or forfeiture of such units  thereafter
shall again become  available for issuance  under this Plan. Any shares of Stock
used to satisfy a withholding  obligation  shall be treated as issued under this
Plan and not again become available for grants under this Plan.

                                       4
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                                      ss.4

                                 EFFECTIVE DATE

         The  effective  date of this Plan shall be the date of its  adoption by
the Board,  provided the shareholders of MIM (acting at a duly called meeting of
such  shareholders)  approve  such  adoption  within  twelve (12) months of such
effective  date. Any Option or Stock  Appreciation  Right granted or Stock Grant
made before such shareholder approval  automatically shall be granted subject to
such approval.

                                      ss.5

                                    COMMITTEE

         This Plan shall be administered by the Committee.  The Committee acting
in its absolute  discretion  shall  exercise such powers and take such action as
expressly called for under this Plan and, further,  the Committee shall have the
power to interpret this Plan and (subject toss. 16 andss.  17 and Rule 16b-3) to
take such other action in the  administration  and operation of this Plan as the
Committee deems equitable under the circumstances, which action shall be binding
on MIM, on each  affected  Key  Employee  and on each other  person  directly or
indirectly affected by such action.

                                      ss.6

                        ELIGIBILITY AND ANNUAL GRANT CAPS

         Only Key  Employees  who are employed by MIM or a Subsidiary  or Parent
shall be eligible for the grant of ISOs under this Plan. All Key Employees shall
be eligible  for the grant of  Non-ISOs  and Stock  Appreciation  Rights and for
Stock Grants  under this Plan.  However,  no Key  Employee in any calendar  year
shall be granted (i) Options to purchase  (subject to ss. 15) more than  350,000
shares of Stock, (ii) more than 350,000 Stock  Appreciation  Rights based on the
appreciation with respect to Stock (subject to ss. 15) (iii) Stock, Stock Grants
for (subject to ss. 15) more than 350,000  shares of Stock;  or (iv)  Restricted
Stock  Units  based on the Fair  Market  Value of  (subject  to ss.15) more than
350,000  shares of Stock;  or any  combination  of such  awards  covering in the
aggregate 500,000 shares of Stock. In addition, subsequent to the effective date
of this  amendment and  restatement of the Plan, the Company will not make Stock
Grants or grants of Restricted  Stock Units or  Performance  Units totaling more
than 1,000,000 shares under the Plan.

                                       5
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                                      ss.7

                                     OPTIONS

         7.1 Committee Action.  The Committee acting in its absolute  discretion
shall have the right to grant Options to Key Employees under this Plan from time
to time to purchase  shares of Stock.  Each grant of an Option to a Key Employee
shall be evidenced by an Option  Certificate,  and each Option Certificate shall
set forth  whether  the  Option is an ISO or a Non-ISO  and shall set forth such
other terms and conditions of such grant as the Committee acting in its absolute
discretion  deems  consistent  with the  terms  of this  Plan;  however,  if the
Committee  grants an ISO and a Non-ISO to a Key  Employee on the same date,  the
right of the Key Employee to exercise the ISO shall not be conditioned on his or
her failure to exercise the Non-ISO.  Options,  once issued, may not be repriced
without first obtaining the approval of the shareholders of MIM.

         7.2 $100,000  Limit. No Option shall be treated as an ISO to the extent
that the  aggregate  Fair Market Value of the Stock  subject to the Option which
would first become  exercisable in any calendar year  $100,000.  Any such excess
shall  instead  automatically  be  treated  as a Non-ISO.  The  Committee  shall
interpret  and  administer  the ISO  limitation  set  forth in this  ss.  7.2 in
accordance  with ss. 422(d) of the Code, and the Committee  shall treat this ss.
7.2 as in effect only for those  periods for which ss.  422(d) of the Code is in
effect.

         7.3 Option  Price.  The Option Price for each share of Stock subject to
an Option shall be no less than the Fair Market Value of a share of Stock on the
date the Option is granted;  provided,  however, if the Option is an ISO granted
to a Key  Employee who is a Ten Percent  Shareholder,  the Option Price for each
share of Stock subject to such ISO shall be no less than 110% of the Fair Market
Value of a share of Stock on the date such ISO is granted.

         7.4  Payment.  The  Option  Price  shall be  payable  in full  upon the
exercise  of any  Option,  and at the  discretion  of the  Committee  an  Option
Certificate  can provide for the payment of the Option Price either in cash,  by
check or in Stock  which has been held for at least six (6)  months and which is
acceptable to the Committee or in any combination of cash, check and such Stock.
The Option Price in addition may be paid through any cashless exercise procedure
which is acceptable  to the  Committee or its delegate and which is  facilitated
through a sale of Stock.  Any payment made in Stock shall be treated as equal to
the Fair Market Value of such Stock on the date the  certificate  for such Stock
(or proper  evidence of such  certificate)  is presented to the Committee or its
delegate in such form as acceptable to the Committee.

                                       6
<PAGE>

         7.5  Exercise  Period.  Each  Option  granted  under this Plan shall be
exercisable  in  whole  or in part at such  time or  times  as set  forth in the
related  Option  Certificate,  but no Option  Certificate  shall  make an Option
exercisable  on or  after  the  earlier  of (1)  the  date  which  is the  fifth
anniversary  of the date the Option is granted,  if the Option is an ISO and the
Key Employee is a Ten Percent  Shareholder on the date the Option is granted, or
(2) the date which is the tenth  anniversary  of the date the Option is granted,
if the Option is (a) a Non-ISO or (b) an ISO which is granted to a Key  Employee
who is not a Ten  Percent  Shareholder  on the date the  Option is  granted.  An
Option  Certificate  may  provide  for  the  exercise  of an  Option  after  the
employment of a Key Employee has terminated for any reason whatsoever, including
death or disability.

         7.6 Reload Option Grants Prohibited.  The Committee may not, as part of
the grant of an Option,  provide in the related Option  Certificate for "reload"
Option grants (i.e., the automatic grant of an additional Option to pay all or a
part of the Option  Price or using Stock to satisfy all or a part of any related
tax withholding requirement.

                                       7
<PAGE>

                                     ss. 8.

                            STOCK APPRECIATION RIGHTS

         8.1 Committee Action.  The Committee acting in its absolute  discretion
shall have the right to grant Stock  Appreciation  Rights to Key Employees under
this Plan from time to time,  and each Stock  Appreciation  Right grant shall be
evidenced  by  a  Stock   Appreciation  Right  Certificate  or,  if  such  Stock
Appreciation  Right is granted as part of an Option,  shall be  evidenced by the
Option Certificate for the related Option.

         8.2 Terms and Conditions.

                    (a)  Stock  Appreciation  Right  Certificate.   If  a  Stock
                         Appreciation Right is evidenced by a Stock Appreciation
                         Right Certificate, such certificate shall set forth the
                         number of  shares of Stock on which the Key  Employee's
                         right to appreciation  shall be based and the SAR Value
                         of each share of Stock. Such SAR Value shall be no less
                         than the Fair  Market  Value of a share of Stock on the
                         date that the Stock Appreciation Right is granted.  The
                         Stock  Appreciation  Right  Certificate shall set forth
                         such other terms and conditions for the exercise of the
                         Stock   Appreciation   Right  as  the  Committee  deems
                         appropriate  under  the  circumstances,  but  no  Stock
                         Appreciation  Right  Certificate  shall  make  a  Stock
                         Appreciation  Right  exercisable  on or after  the date
                         which is the tenth  anniversary  of the date such Stock
                         Appreciation Right is granted.

                    (b)  Option  Certificate.  If a Stock  Appreciation Right is
                         evidenced  by an  Option  Certificate,  the  number  of
                         shares  of Stock on which the Key  Employee's  right to
                         appreciation  shall be  based  shall be the same as the
                         number of shares of Stock subject to the related Option
                         and the SAR Value for each such share of Stock shall be
                         no less than the Option Price under the related Option.

                                       8
<PAGE>

                         Each such Option  Certificate  shall  provide  that the
                         exercise of the Stock  Appreciation  Right with respect
                         to any share of Stock shall  cancel the Key  Employee's
                         right to  exercise  his or her Option  with  respect to
                         such share and,  conversely,  that the  exercise of the
                         Option with  respect to any share of Stock shall cancel
                         the Key  Employee's  right to exercise his or her Stock
                         Appreciation  Right with respect to such share. A Stock
                         Appreciation  Right  which  is  granted  as  part of an
                         Option  shall be  exercisable  only  while the  related
                         Option is exercisable. The Option Certificate shall set
                         forth such other terms and  conditions for the exercise
                         of the Stock  Appreciation Right as the Committee deems
                         appropriate under the circumstances.

         8.3 Exercise. A Stock Appreciation Right shall be exercisable only when
the Fair Market Value of a share of Stock on which the right to  appreciation is
based  exceeds  the SAR Value for such  share,  and the  payment due on exercise
shall be based on such excess  with  respect to the number of shares of Stock to
which the exercise relates. A Key Employee upon the exercise of his or her Stock
Appreciation  Right shall  receive a payment from MIM in cash or in Stock issued
under this Plan, or in a combination of cash and Stock, and the number of shares
of Stock  issued  shall be based on the Fair Market Value of a share of Stock on
the date the Stock Appreciation Right is exercised.  The Committee acting in its
absolute  discretion  shall have the right to determine the form and time of any
payment under this ss. 8.3.

                                     ss. 9.

                             RESTRICTED STOCK UNITS

         9.1 Committee Action.  The Committee acting in its absolute  discretion
shall have the right from time to time to grant to Key Employees under this Plan
non-equity Restricted Stock Units, the value of each of which corresponds to the
Fair Market Value of a share of Stock. Each Restricted Stock Unit grant shall be
evidenced by a Restricted Stock Unit Certificate that shall set forth the number
of  Restricted  Stock Units granted to the Key  Employee,  the vesting  schedule
applicable to such Restricted Stock Units and such other terms and conditions of
such grant as the Committee  acting in its absolute  discretion deems consistent
with the terms of this Plan.

                                       9
<PAGE>

         9.2 No Adjustment for Cash  Dividends.  Except for dividend  equivalent
adjustments  made by the  Committee for stock  dividends in accordance  with ss.
15.1,  there shall be no adjustment to Restricted Stock Units for dividends paid
by MIM.

         9.3 Payment for Restricted Stock Units.  Unless a Key Employee has made
a deferral  election in  accordance  with ss. 9.5, a Key Employee  shall receive
upon the vesting of a  Restricted  Stock Unit  payment  from MIM in Stock issued
under this Plan,  and the number of shares of Stock  issued to the Key  Employee
shall be equal to the number of  Restricted  Stock  Units that have at such time
become  vested.  At the time a Key  Employee  receives  shares of stock equal in
number  to such Key  Employee's  vested  Restricted  Stock  Units,  such  vested
Restricted  Stock Units shall  automatically be cancelled and shall give the Key
Employee no further rights to payment of any kind.

         9.4 Deferrals. The Committee, in its absolute discretion,  may permit a
Key  Employee to elect to defer such Key  Employee's  receipt of the delivery of
shares of Stock that would  otherwise  be due to such Key  Employee by virtue of
the vesting of a Restricted Stock Unit;  provided such deferral election is made
at least 12 months before the Restricted  Stock Unit vests. If any such deferral
election is permitted by the  Committee,  the Committee  shall,  in its absolute
discretion,   establish   additional  rules  and  procedures  for  such  payment
deferrals. However, notwithstanding the preceding provisions of this ss. 9.3 and
notwithstanding any other provision of this Plan to the contrary,  the Committee
shall  not,  (1) in  establishing  the  terms  and  provisions  of any  grant of
Restricted  Stock  Units,  or (2) in  exercising  its powers under this ss. 9.3,
create any arrangement  which would  constitute an employee pension benefit plan
as defined in ss. 3(2) of the Employee  Retirement  Income Security Act of 1974,
as amended ("ERISA"),  unless the arrangement provides benefits solely to one or
more  individuals  who  constitute  members of a select group of  management  or
highly  compensated  employees  (within  the  meaning  of ERISA  ss.ss.  201(2),
301(a)(3), 401(a)(1) and 4021(b)(6)).

                                       10
<PAGE>

         9.5  Performance  Goals.  The  Committee  may, at the time a Restricted
Stock  Unit is  granted,  prescribe  corporate,  divisional,  and/or  individual
performance  goals,  applicable to all or any the Restricted Stock Units subject
to the grant.  Performance  goals may be based on  achieving a certain  level of
total revenue,  earnings,  earnings per share or return on equity of MIM and its
and its  Subsidiaries  and  Affiliates,  or on the  extent  of  changes  in such
criteria.

                                    ss. 10.

                                  STOCK GRANTS

         10.1 Committee Action. The Committee acting in its absolute  discretion
shall have the right to make Stock  Grants to Key  Employees.  Each Stock  Grant
shall  be  evidenced  by  a  Stock  Grant  Certificate,  and  each  Stock  Grant
Certificate  shall set forth the  conditions,  if any, under which Stock will be
issued under the Stock Grant and the  conditions  under which the Key Employee's
interest in any Stock which has been  issued will become  non-forfeitable.

         10.2 Conditions.

                    (a)  Conditions to Issuance of Stock.  The Committee  acting
                         in its  absolute  discretion  may make the  issuance of
                         Stock under a Stock Grant  subject to the  satisfaction
                         of one, or more than one, condition which the Committee
                         deems  appropriate  under  the  circumstances  for  Key
                         Employees   generally   or  for  a  Key   Employee   in
                         particular,  and the related  Stock  Grant  Certificate
                         shall set forth each such  condition  and the  deadline
                         for satisfying each such condition.  Stock subject to a
                         Stock  Grant  shall  be  issued  in the  name  of a Key
                         Employee  only after each such  condition,  if any, has
                         been timely satisfied, and any Stock which is so issued
                         shall be held by MIM  pending the  satisfaction  of the
                         forfeiture  conditions,  if any,  under ss. 10.2(b) for
                         the related Stock Grant.

                                       11
<PAGE>

                    (b)  Forfeiture  Conditions.  The  Committee  acting  in its
                         absolute  discretion  may make Stock issued in the name
                         of a Key  Employee  subject  to one,  or more than one,
                         objective  employment,  performance or other forfeiture
                         condition  that the  Committee  acting in its  absolute
                         discretion deems  appropriate  under the  circumstances
                         for Key  Employees  generally  or for a Key Employee in
                         particular,  and the related  Stock  Grant  Certificate
                         shall set forth each such forfeiture condition, if any,
                         and the  deadline,  if any,  for  satisfying  each such
                         forfeiture condition. A Key Employee's  non-forfeitable
                         interest  in the  shares  of Stock  underlying  a Stock
                         Grant  shall  depend  on the  extent to which he or she
                         timely  satisfies  each such  condition.  Each share of
                         Stock  underlying  a Stock Grant  shall be  unavailable
                         underss.  3 after such grant is  effective  unless such
                         share  thereafter is forfeited as a result of a failure
                         to timely  satisfy  a  forfeiture  condition,  in which
                         event such share of Stock shall again become  available
                         underss. 3 as of the date of such forfeiture.

         10.3 Dividends and Voting Rights. If a cash dividend is paid on a share
of Stock  after such Stock has been  issued  under a Stock  Grant but before the
first  date  that a Key  Employee's  interest  in such  Stock  (1) is  forfeited
completely or (2) becomes  completely  non-forfeitable,  MIM shall pay such cash
dividend  directly to such Key Employee.  If a Stock  dividend is paid on such a
share of Stock during such period,  such Stock dividend shall be treated as part
of the related Stock Grant, and a Key Employee's interest in such Stock dividend
shall be forfeited or shall become non-forfeitable at the same time as the Stock
with  respect  to which the Stock  dividend  was paid is  forfeited  or  becomes
non-forfeitable.  The  disposition  of each  other  form of  dividend  which  is
declared on such a share of Stock during such period shall be made in accordance
with such rules as the Committee shall adopt with respect to each such dividend.
A Key  Employee  also shall have the right to vote the Stock issued under his or
her Stock Grant during such period.

                                       12
<PAGE>

         10.4  Satisfaction  of  Forfeiture  Conditions.  A share of Stock shall
cease to be subject to a Stock Grant at such time as a Key  Employee's  interest
in such Stock  becomes  non-forfeitable  under this  Plan,  and the  certificate
representing  such share  shall be  transferred  to the Key  Employee as soon as
practicable thereafter. 10.5 Performance Goals. The Committee may, at the time a
Stock  Grant  is  made,  prescribe  corporate,   divisional,  and/or  individual
performance goals, applicable to all or any portion of the shares subject to the
Stock  Grant.  Performance  goals may be based on  achieving a certain  level of
total revenue,  earnings,  earnings per share or return on equity of MIM and its
and its  Subsidiaries  and  Affiliates,  or on the  extent  of  changes  in such
criteria.

                                     ss. 11.

                                PERFORMANCE UNITS

         11.1 Committee  Action.  The Committee  (acting in its sole discretion)
may from time to time grant  Performance  Units to Key Employees  under the Plan
representing  the right to receive in cash an amount  determined by reference to
certain performance measurements,  subject to such restrictions,  conditions and
other terms as the Committee may determine.

         11.2 Conditions. The written agreement covering Performance Units shall
specify  Performance  Goals (as defined in ss. 11.3),  a Performance  Period (as
defined in ss.  11.4)) and an Ending Value.  Performance  Units granted to a Key
Employee shall be credited to a bookkeeping  account  established and maintained
for such Key Employee.

         11.3  Performance  Goals.  With  respect to each  award of  Performance
Units,  the  Committee   (acting  in  its  sole  discretion)  shall  specify  as
Performance Goals the corporate,  division,  and/or individual performance goals
which must be  satisfied in order for the Key Employee to be entitled to payment
to such Performance Units. Performance Goals may be based on achieving a certain
level of total revenue, earnings,  earnings per share or return on equity of MIM
and its  Subsidiaries  and  Affiliates,  or on the  extent  of  changes  in such
criteria. Different Performance Goals may be established for different awards of
Performance  Units,  and a Key  Employee  may be granted  more than one award of
Performance Units at the same time.

                                       13
<PAGE>

         11.4 Performance  Period. The Committee (acting in its sole discretion)
shall determine the Performance Period, which shall be the period of time during
which the  Performance  Goals must be satisfied in order for the Key Employee to
be  entitled  to  payment of  Performance  Units  granted to such Key  Employee.
Different  Performance  Periods may be  established  for  different  Performance
Units.  Performance Periods may run consecutively or concurrently.  11.5 Payment
for Performance Units. As soon as practicable following the end of a Performance
Period,  the Committee  shall determine  whether the  Performance  Goals for the
Performance Period have been achieved.  As soon as reasonably  practicable after
such  determination,  or at  such  later  date or in  such  installments  as the
Committee  shall  determine  at the  time of  grant,  MIM  shall  pay to the Key
Employee an amount in cash equal to the Ending Value of each Performance Unit as
to which the Performance Goals have been satisfied;  provided,  however, that in
no event  shall a Key  Employee  receive  an amount in excess of  $1,000,000  in
respect of Performance Units for any given year.

                                    ss. 12.

                               NON-TRANSFERABILITY

         No Option,  Stock  Grant,  Restricted  Stock Unit,  Stock  Appreciation
Right,  or  Performance   Unit  shall  (absent  the   Committee's   consent)  be
transferable  by a Key Employee other than by will or by the laws of descent and
distribution,  and any Option or Stock  Appreciation  Right  shall  (absent  the
Committee's consent) be exercisable during a Key Employee's lifetime only by the
Key Employee.  The person or persons to whom an Option, Stock Grant,  Restricted
Stock Unit, Stock  Appreciation Right or Performance Unit is transferred by will
or by the laws of descent and  distribution  (or with the  Committee's  consent)
thereafter shall be treated as the Key Employee.

                                       14
<PAGE>

                                    ss. 13.

                             SECURITIES REGISTRATION

         As a condition  to the receipt of shares of Stock under this Plan,  the
Key Employee  shall,  if so requested by MIM, agree to hold such shares of Stock
for investment and not with a view toward resale or  distribution  to the public
and,  if  so  requested  by  MIM,  shall  deliver  to  MIM a  written  statement
satisfactory to MIM to that effect. Furthermore, if so requested by MIM, the Key
Employee shall make a written representation to MIM that he or she will not sell
or offer for sale any of such Stock unless a registration  statement shall be in
effect with respect to such Stock under the 1933 Act and any applicable  federal
or state  securities  law or he or she shall have furnished to MIM an opinion in
form and substance  satisfactory to MIM or its legal counsel satisfactory to MIM
that such  registration  is not required.  Certificates  representing  the Stock
transferred  upon  the  exercise  of an  Option,  Stock  Appreciation  Right  or
Restricted Stock Unit or upon the lapse of the forfeiture conditions, if any, on
any Stock  Grant may at the  discretion  of MIM bear a legend to the effect that
such Stock has not been  registered  under the 1933 Act or any applicable  state
securities  law and that such Stock  cannot be sold or  offered  for sale in the
absence of an effective  registration  statement as to such Stock under the 1933
Act and any applicable  state securities law or an opinion in form and substance
satisfactory to MIM of legal counsel  satisfactory to MIM that such registration
is not required.

                                    ss. 14.

                                  LIFE OF PLAN

                  No Option, Stock Appreciation Right, Restricted Stock Unit or
Performance Unit shall be granted or Stock Grant made under this Plan on or
after the earlier of

                    (1)  the tenth  anniversary  of the  effective  date of this
                         Plan (as  determined  underss.  4), in which event this
                         Plan  otherwise  thereafter  shall  continue  in effect
                         until all  outstanding  Options and Stock  Appreciation
                         Rights  have been  exercised  in full or no longer  are
                         exercisable,  all Stock  issued  under any Stock Grants
                         under  this  Plan have been  forfeited  or have  become
                         non-forfeitable, all Restricted Stock Units have vested
                         and all Performance Periods have ended, or

                                       15
<PAGE>

                    (2)  the date on which all of the Stock reserved underss.  3
                         has (as a result of the  exercise  of  Options or Stock
                         Appreciation   Rights   granted  under  this  Plan  the
                         satisfaction of the forfeiture  conditions,  if any, on
                         Stock Grants, or the payment of shares upon the vesting
                         of Restricted  Stock Units) been issued or no longer is
                         available  for use under this Plan, in which event this
                         Plan also shall terminate on such date.

                                    ss. 15.

                                   ADJUSTMENT

         15.1 Capital Structure.  The number,  kind or class (or any combination
thereof)  of  shares  of Stock  reserved  under ss.  3, the  annual  grant  caps
described in ss. 6, the number,  kind or class (or any  combination  thereof) of
shares of Stock subject to Options, Restricted Stock Units or Stock Appreciation
Rights granted under this Plan, the Option Price of such Options,  the SAR Value
of such Stock Appreciation  Rights as well as the number,  kind or class (or any
combination  thereof) of shares of Stock  subject to Stock Grants  granted under
this Plan shall be adjusted by the  Committee in an equitable  manner to reflect
any change in the  capitalization  of MIM,  including,  but not limited to, such
changes as stock dividends or stock splits.

         15.2  Mergers.  The  Committee  as  part of any  corporate  transaction
described  in ss.  424(a) of the Code  shall  have the  right to adjust  (in any
manner which the Committee in its discretion deems consistent with ss. 424(a) of
the Code) the number,  kind or class (or any  combination  thereof) of shares of
Stock  reserved  under  ss. 3 and the  annual  grant  caps  described  in ss. 6.
Furthermore, the Committee as part of any corporate transaction described in ss.
424(a)  of the Code  shall  have the right to adjust  (in any  manner  which the
Committee in its discretion  deems  consistent  with ss. 424(a) of the Code) the
number, kind or class (or any combination thereof) of shares of Stock subject to
any  outstanding  Stock Grants under this Plan and any related grant  conditions

                                       16
<PAGE>

and forfeiture  conditions,  and the number,  kind or class (or any  combination
thereof)  of  shares  subject  to  Option,   Restricted  Stock  Unit  and  Stock
Appreciation Right grants previously made under this Plan and the related Option
Price and SAR Value for each such Option Stock  Appreciation Right and, further,
shall have the right (in any manner which the Committee in its discretion  deems
consistent  with ss.  424(a) of the Code and without  regard to the annual grant
caps  described in ss. 6 of this Plan) to make any Stock Grants and Option Stock
Appreciation Right and Restricted Stock Unit grants to effect the assumption of,
or the  substitution  for,  stock grants and option,  restricted  stock unit and
stock  appreciation right grants previously made by any other corporation to the
extent that such corporate transaction calls for such substitution or assumption
of such  stock  grants  and  stock  option,  restricted  stock  unit  and  stock
appreciation right grants.

         15.3  Fractional  Shares.  If any  adjustment  under  this ss. 15 would
create a fractional  share of Stock or a right to acquire a fractional  share of
Stock,  such  fractional  share shall be disregarded and the number of shares of
Stock reserved under this Plan and the number subject to any Options, Restricted
Stock Unit or Stock Appreciation Right grants and Stock Grants shall be the next
lower number of shares of Stock,  rounding all fractions downward. An adjustment
made under this ss. 15 by the Committee  shall be conclusive  and binding on all
affected persons.

                                    ss. 16.

                                CHANGE IN CONTROL

         If there is a Change in  Control  of MIM on any date,  then any and all
conditions  to the exercise of all  outstanding  Options and Stock  Appreciation
Rights on such date,  any and all  conditions to the vesting of all  outstanding
Restricted  Stock Units,  and any and all  outstanding  issuance and  forfeiture
conditions on any Stock Grants and Performance Units on such date  automatically
shall be deemed  satisfied  in full on such date,  and the Board  shall have the
right (to the extent expressly  required as part of such  transaction) to cancel
such Options,  Restricted Stock Units, Stock Appreciation  Rights,  Stock Grants
and  Performance  Units after  providing  each Key Employee a reasonable  period
(which period shall not be less than 30 days) to exercise his or her Options and
Stock  Appreciation  Rights  and to take  such  other  action  as  necessary  or

                                       17
<PAGE>

appropriate to receive the Stock subject to any Restricted  Stock Units or Stock
Grants or the cash  subject  to any  Performance  Units.  ss. 17.  AMENDMENT  OR
TERMINATION  This  Plan may be  amended  by the  Board  from time to time to the
extent that the Board deems necessary or appropriate;  provided, however, (1) no
amendment  shall be made absent the approval of the  shareholders  of MIM to the
extent such approval is required under applicable law and (2) no amendment shall
be made to ss. 16 on or after any date described in ss. 16 which might adversely
affect any rights which  otherwise vest on such date. The Board also may suspend
granting  Options,   Stock  Appreciation  Rights,   Restricted  Stock  Units  or
Performance  Units or making  Stock  Grants  under this Plan at any time and may
terminate this Plan at any time; provided, however, the Board shall not have the
right unilaterally to modify, amend or cancel any Option, Restricted Stock Unit,
Stock  Appreciation Right or Performance Unit granted or Stock Grant made before
such suspension or termination  unless (x) the Key Employee  consents in writing
to such modification, amendment or cancellation or (y) there is a dissolution or
liquidation of MIM or a transaction described in ss. 15 or ss. 16.

                                    ss. 18.

                                 MISCELLANEOUS

         18.1  Shareholder  Rights.  No Key Employee  shall have any rights as a
shareholder  of MIM as a result of the grant of an Option or a Restricted  Stock
Unit or Stock  Appreciation  Right  pending  the  actual  delivery  of the Stock
subject to such Option,  Restricted  Stock Unit or Stock  Appreciation  Right to
such Key Employee. Subject to ss. 10.3, a Key Employee's rights as a shareholder
in the shares of Stock  underlying a Stock Grant which is effective shall be set
forth in the related Stock Grant Certificate.

         18.2 No  Contract  of  Employment.  The grant of an Option,  Restricted
Stock Unit, Stock Appreciation Right or a Performance Unit or a Stock Grant to a
Key Employee  under this Plan shall not  constitute a contract of employment and
shall not confer on a Key  Employee  any rights upon his or her  termination  of
employment  in  addition to those  rights,  if any,  expressly  set forth in the
related  Option   Certificate,   Restricted   Stock  Unit   Certificate,   Stock
Appreciation  Right Certificate,  Stock Grant  Certificate,  or Performance Unit
agreement.

                                       18
<PAGE>

         18.3 Withholding.  Each Option,  Stock Appreciation  Right,  Restricted
Stock  Unit,  Performance  Unit and Stock  Grant,  shall be made  subject to the
condition  that the Key  Employee  consents  to  whatever  action the  Committee
directs to satisfy  the  minimum  statutory  federal  and state tax  withholding
requirements,  if any,  which MIM  determines  are applicable to the exercise of
such Option or Stock Appreciation  Right, the payment of shares upon the vesting
of such Restricted  Stock Unit, the  satisfaction  of any forfeiture  conditions
with  respect to Stock  subject to a Stock  Grant  issued in the name of the Key
Employee,  or to the payment for the Performance Units. The Committee also shall
have the right to provide in an Option  Certificate,  Stock  Appreciation  Right
Certificate,  Restricted Stock Unit  Certificate,  Stock Grant  Certificate,  or
Performance Unit agreement that a Key Employee may elect to satisfy such minimum
statutory federal and state tax withholding  requirements through a reduction in
the cash or the number of shares of Stock actually  transferred to him or to her
under this Plan. No withholding  shall be effected under this Plan which exceeds
the minimum statutory federal and state withholding requirements.

         18.4  Construction.  All  references to sections  (ss.) are to sections
(ss.) of this Plan  unless  otherwise  indicated.  This Plan shall be  construed
under the laws of the State of Delaware.  Finally,  each term set forth in ss. 2
shall have the meaning set forth  opposite  such term for  purposes of this Plan
and, for purposes of such definitions, the singular shall include the plural and
the plural shall include the singular.

         18.5 Other Conditions.  Each Option Certificate,  Restricted Stock Unit
Certificate, Stock Appreciation Right Certificate or Stock Grant Certificate may
require  that a Key  Employee  (as a condition to the exercise of an Option or a
Stock Appreciation Right, the payment of shares upon the vesting of a Restricted
Stock Unit or the  issuance of Stock  subject to a Stock  Grant)  enter into any
agreement  or make such  representations  prepared  by MIM,  including  (without
limitation)  any  agreement  which  restricts  the  transfer  of Stock  acquired
pursuant  to the  exercise  of an  Option,  Restricted  Stock  Unit  or a  Stock
Appreciation Right or a Stock Grant or provides for the repurchase of such Stock
by MIM.

                                       19
<PAGE>

         18.6  Rule  16b-3.  The  Committee  shall  have the  right to amend any
Option,  Stock  Grant,  Restricted  Stock  Unit or Stock  Appreciation  Right to
withhold or otherwise restrict the transfer of any Stock or cash under this Plan
to a Key Employee as the  Committee  deems  appropriate  in order to satisfy any
condition or requirement  under Rule 16b-3 to the extent Rule 16 of the 1934 Act
might be applicable to such grant or transfer.

         18.7 Loans.  If approved  by the  Committee,  MIM may lend money to, or
guarantee  loans made by a third party to, any Key  Employee to finance all or a
part of the  exercise of any Option  granted  under this Plan or the purchase of
any Stock  subject to a Stock  Grant  under this Plan,  and the  exercise  of an
Option or the  purchase  of any such  Stock with the  proceeds  of any such loan
shall be treated as an exercise or purchase for cash under this Plan.

         IN WITNESS  WHEREOF,  MIM  Corporation  has caused its duly  authorized
officer to execute this Plan to evidence its adoption of this Plan.

                  MIM CORPORATION
                  By:   ___________________________
                  Date: ___________________________

                                       20EXHIBIT
10.10.BA

 

 

DEBT
CONVERSION AGREEMENT

 

THIS DEBT
CONVERSION AGREEMENT (the “Agreement”) is made and entered into effective as of
the 22nd day of July, 2003, by and between ANTHONY M. FRANK KEOGH PLAN UTA
CHARLES SCHWAB & CO., INC. (hereinafter referred to as “Buyer”) and
ELECTROPURE, INC., a California corporation (hereinafter referred to as
“Electropure” or the “Company”).

 

R
E C I T A L S

 

WHEREAS, Buyer loaned the Company One Million
Dollars ($1,000,000) under the terms of that certain 8% Three-Year Convertible
Term Note dated January 17, 2001 (the “Term Note”).

 

WHEREAS, on or about September 16, 2002, the
Company repaid Four Hundred Thousand Dollars ($400,000) of the principal
balance due on said Term Note to Buyer and issued an 8% Convertible Term Note
to Buyer for the remaining principal sum of Six Hundred Thousand Dollars
($600,000).

 

WHEREAS, as of June 30, 2003, a total of
$12,000.00 in interest accrued on the above loan is due and payable to Buyer by
the Company.

 

WHEREAS, Buyer wishes to convert all of the
interest accrued on the Term Note through June 30, 2003 into shares of
Electropure, Inc. Common Stock and the Company wishes to issue such shares to
extinguish the debt owed Buyer.

 

NOW,
THEREFORE, in consideration of the foregoing and of the mutual obligations
herein contained, it is agreed as follows:

 

1.             CONVERSION

 

(a)           On the effective
date set forth above, Buyer hereby converts all of the $12,000.00 in interest
accrued on the Term Note into Shares of Electropure, Inc. Common Stock, $0.01
par value, at an effective conversion rate of $0.20 per share, for a total of
60,000 Shares (the “Shares”).

 

(b)           The Shares shall
have the rights, preferences, privileges, restrictions and other terms set
forth in the By-laws of the Company.

 

(c)           Upon conversion
hereby and pursuant to the Debt Conversion Agreements previously entered into
between the parties, Buyer acknowledges that all interest accrued and due
through June 30, 2003 pursuant to the terms of the 8% Three-Year Convertible
Term Note and the 8% Convertible Term Note entered into between the parties on
January 17, 2001 and September 16, 2002, respectively, (the “Notes”) has been
satisfied in full by the Company.  Buyer
also acknowledges that pursuant to these Debt Conversion Agreements any default
by Electropure for failure to pay interest due on the Notes through June 30,
2003 has been cured.

 

1

 

2.             REPRESENTATIONS AND WARRANTIES OF
BUYER           Buyer
represents and warrants to the Company:

 

(a)           The Shares are being
acquired by Buyer for investment for an indefinite period, for Buyer’s own
account, not as a nominee or agent, and not with a view to the sale or
distribution of any part thereof, and the Buyer has no present intention of
selling, granting participations in, or otherwise distributing the same except
as may be permitted by the Securities Act of 1933, as amended (the “Act”).

 

(b)           Buyer does not have
any contract, undertaking, agreement or arrangement with any person to sell,
transfer, or grant participation to such person or to any third person, with
respect to the Shares.

 

(c)           That Buyer
understands that the Shares have not been registered under the Securities Act
of 1933, as amended (the “Act”), in reliance upon the exemptions from the
registration provisions of the Act contained in Section 4 (2) thereof, and any
continued reliance on such exemption is predicated on the representations of
the Buyer set forth herein.

 

(d)           Buyer understands
that the Shares must be held indefinitely unless the sale or other transfer
thereof is subsequently registered under the Act, as amended, or an exemption
from such registration is available. 
Buyer further understands that the Company is under no obligation to
register the Securities on its behalf or to assist him in complying with any
exemption from registration except as otherwise provided herein.

 

(e)           Buyer (i) has
adequate means of providing for his current needs and possible contingencies,
(ii) has no need for liquidity in this investment, (iii) is able to bear the
substantial economic risks of an investment in the Shares for an indefinite
period, (iv) at the present time, can afford a complete loss of such
investment, and (v) does not have an overall commitment to investments which
are not readily marketable that is disproportionate to Buyer’s net worth, and
Buyer’s investment in the Shares will not cause such overall commitment to
become excessive.

 

(f)            Buyer is an
“accredited investor” (as defined in Regulation D promulgated under the
Act)  and the undersigned’s total
investment in the Shares does not exceed 10% of the Buyer’s net worth.

 

(g)           Buyer recognizes
that the Company has had only limited revenues to date and that the Shares as
an investment involve significant risks.

 

(h)           Buyer will not
transfer the Shares without registering them under applicable federal and state
securities laws unless the transfer is exempt from registration.  Buyer realizes that the Company may not
allow a transfer of Shares unless the transferee is also an “accredited
investor”.  Buyer understands that
legends will be placed on certificates representing the Shares, with respect to
the above restrictions on resale or other disposition of the Shares and that
stop transfer instructions have or will be placed with respect to the Shares so
as to restrict the assignment, resale or other disposition thereof.

 

2

 

(i)            The Company will
direct its transfer agent to, or will itself, place such a stop transfer order
in its books respecting transfer of the Shares, and the certificate or
certificates representing the Shares will bear the following legend or a legend
substantially similar thereto:

 

“THESE
SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.  THEY MAY NOT BE SOLD OR OFFERED FOR SALE IN
THE ABSENCE OF:  (1) AN EFFECTIVE
REGISTRATION STATEMENT AS TO THE SECURITIES UNDER THE ACT, OR (2) AN OPINION
OF  COUNSEL SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED.”

 

(j)            That Buyer
understands that Rule 144, promulgated by the Securities and Exchange
Commission under the Act, may not be currently available for sale of the
Shares, and there is no assurance that it will be available at any particular
time in the future.  If and when Rule
144 is available for sale of the Common Stock underlying the Shares, such sales
in reliance upon Rule 144 may only be (i) in limited quantities after the
Shares have been held for one (1) year after being sold by the Company, or (ii)
in unlimited quantities by non-affiliates after the Shares have been held for
two (2) years after being sold by the Company, in each case in accordance with
the conditions of the Rule, all of which must be met (including the
requirement, if applicable, that adequate information concerning the Company is
then available to the public).  The
Company and Buyer acknowledges that the Company has no obligation to
supply the information required for sales under Rule 144.

 

(k)           The Purchase Price
to be paid by Buyer to Company for the Shares has been determined by Buyer as
fair and appropriate based solely upon Buyer’s independent investigation and
due diligence of the Company, and neither Buyer nor the Company nor any of
their agents, including, without limitation, any of their officers, directors,
employees, accountants and attorneys, has made any representations or
warranties whatsoever in connection with the sale of the Shares by the Company
to Buyer.  Buyer has had sufficient
opportunity in connection with the sale of the Shares to review the Company’s
business and affairs (including, without limitation, the Company’s financial
statements and other information).  The
Buyer has had answered to his satisfaction any questions with respect to the
Company’s business and affairs.  Buyer
further has had the opportunity to obtain independent financial, legal,
accounting, business, tax and other appropriate advice with respect to the
transactions contemplated by this Agreement, and is not relying upon the
Company or any of its agents in any manner in connection with same.

 

3.             REGISTRATION RIGHTS                The
Company agrees to include for registration under the Act all of the Shares
issued hereby in the next Registration Statement filed by the Company with the
Securities and Exchange Commission.

 

4.             REPRESENTATIONS AND WARRANTIES OF ELECTROPURE

 

(a)           Electropure is a corporation duly
organized and validly existing under the laws of the State of California
without limit as to duration of its existence, and is authorized and in good
standing to do business in no other state; Electropure has the corporate power
and adequate authority, rights and franchise to own its property and to carry
on its business as now conducted; and, subject to ratification

 

3

 

by its Board of Directors,
Electropure has the corporate power and adequate authority to enter into this
Agreement.

 

(b)           The execution and delivery of this
Agreement and subject to (1) ratification by the Board of Directors of the
Company and (2) filing the Certificate with the California Secretary of State,
the performance of the provisions of this Agreement are not in contravention of
or in conflict with any law or regulation or any term or provision of
Electropure’s Articles of Incorporation or By-Laws and are duly authorized and
do not require the consent or approval of any governmental body or other
regulatory authority; and this Agreement is a valid, binding and legal
obligation of Electropure, enforceable in accordance with the terms herein.

 

5.             ENTIRE AGREEMENT  This
Agreement embodies the entire agreement and understanding between the parties
hereto with respect to the subject matter hereof and supersedes all prior and
contemporaneous agreements and understandings relating to such subject matter.

 

6.             AMENDMENT  This
Agreement may not be amended except by written document executed by the
parties.

 

7.             SUBJECT HEADINGS  Subject
headings are included for convenience only and shall not be deemed part of this
Agreement.

 

8.           SEVERABILITY  If any provision of
this Agreement shall be held unenforceable as applied to any circumstance, the
remainder of this Agreement and the application of such provision to other
circumstances shall be interpreted so as best to effect the intent of the
parties.  The parties further agree to
replace any such unenforceable provision with an enforceable provision (and to
take such other action) which will achieve, to the extent possible, the
purposes of the unenforceable provision.

 

9.             GOVERNING LAW  This
Agreement shall be governed by and construed under the laws of the State of
California in force from time to time.

 

10.          PARTIES BOUND  This
Agreement is binding on and shall inure to the benefit of the parties and their
respective successors, assign, heirs, and legal representatives.

 

11.          SURVIVAL  The representations, warranties,
covenants, and agreements contained in this Agreement shall survive the
consummation of the transactions contemplated hereby.

 

12.          COUNTERPARTS  This Agreement may
be executed in one or more counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same
instrument.

 

4

 

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

 

	
  COMPANY:

  	
  BUYER:

  
	
   

  	
   

  
	
  ELECTROPURE, INC.

  	
  ANTHONY M. FRANK
  KEOGH PLAN

  
	
   

  	
  UTA CHARLES SCHWAB
  & CO., INC.

  
	
   

  	
   

  
	
  /S/ CATHERINE PATTERSON

  	
   

  	
  /A/ ANTHONY M. FRANK

  	
   

  
	
  Catherine Patterson, Chief Financial Officer

  	
  Anthony M. Frank, Trustee

  
	
  23456 South Pointe Drive

  	
  101 Montgomery Street

  
	
  Laguna Hills, CA 92653-1512

  	
  San Francisco, CA 94104

  
				

 

5

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