ALLIED HEALTHCARE PRODUCTS, INC.
                        1994 EMPLOYEE STOCK OPTION PLAN


                               November 19, 1996


Mr. Uma N. Aggarwal
Allied Healthcare Products, Inc.
1720 Sublette Avenue
St. Louis, Missouri  63110-

Dear Mr. Aggarwal:

            I am pleased to inform you that  Allied  Healthcare  Products,  Inc.
(the  "Company") has granted you a  non-qualified  stock option under the Allied
Healthcare  Products,  Inc.  1994  Employee  Stock Option Plan,  as amended (the
"Plan") to purchase  100,000 shares of Common Stock,  par value $0.01 per share,
of the Company at a price of $6.875 per share.

            This option is granted to you as part of the Company's  compensation
program  for key  employees.  The  purpose of the Plan is to allow  certain  key
employees,  upon whose  efforts  the  Company is  dependent  for the  successful
conduct of its business,  to derive financial  benefit from  appreciation in the
value  of the  Company's  stock  and to  encourage  them to  take a  proprietary
interest in the Company and remain in its employ. You are under no obligation to
exercise this option.

            It is important to note that when you exercise  your option you will
be taxed (including withholding taxes) on the difference between the fair market
value and the exercise price.  Further,  when you dispose of the stock, you will
also be taxed to the extent the sales  proceeds  exceed the sum of the price you
paid for the shares and the gain you paid tax on at the time of exercise.

            Subject to compliance  with the terms and  conditions of this letter
and the Plan,  you will become  entitled to exercise your option with respect to
the number of shares and as of the dates indicated below:

         DATE OPTION BECOMES EXERCISABLE                        NUMBER OF SHARES
                November 19, 1998                                    25,000
                November 19, 1999                                    25,000
                November 19, 2000                                    25,000
                November 19, 2001                                    25,000

            The option may be  exercised in whole or in part at any time or from
time to time after the date it becomes exercisable,  but the option shall not be
exercised after November 19, 2006.


<PAGE>


            The  procedure for exercise of this option is set forth in the Plan.
Please note that, although you must return a signed copy of this letter in order
to validate  your  option,  that act does not  constitute  the  exercise of this
option nor does it in any way obligate you to exercise the option.

            This letter  constitutes  a  Non-Qualified  Stock  Option  Agreement
between you and the  Company  and  incorporates  the Plan by  reference.  Please
indicate your agreement to the terms and conditions set forth in this letter and
in the  Plan by  signing  the  accompanying  copy of this  letter  in the  space
indicated below and returning it to the Company, Attention: Frederick H. Atwood,
by December 15, 1996. No part of this option is exercisable  until a signed copy
of this letter is received by the Company.



                                               Very truly yours,


                                               /s/ Dennis W. Sheehan

                                               Dennis W. Sheehan
                                               Chairman of the Board




Enclosure: Copy of the Employee Stock Option Plan





            The undersigned hereby acknowledges  receipt of the foregoing letter
and Plan and agrees to be bound by all of the terms and  conditions set forth in
this letter and in the Plan.



----------------------                                    ----------------------
        (Date)                                                  (Signature)


<PAGE>

                                    EXHIBIT




Allied Healthcare Products, Inc.
1720 Sublette Avenue
St. Louis, Missouri 63110

                   Re: EXERCISE OF NON-QUALIFIED STOCK OPTION

Gentlemen:

            I hereby  exercise the Option granted to me under the  Non-Qualified
Stock Option Agreement dated  ___________________,  to purchase ______ shares of
Allied Healthcare  Products,  Inc. common stock,  $0.01 par value per share (the
"Common Stock"), with respect to _______ shares of Common Stock for an aggregate
purchase price of $_________.  As consideration for such shares, I have enclosed
payment in the amount of $__________.

            Please issue in my name and send the  certificates  representing the
shares purchased by my exercise of this Non-Qualified  Stock Option to me at the
address indicated below.



Date:_________________                       _______________________________
                                             Optionee, _____________________

                                             _______________________________
                                             _______________________________
                                             _______________________________
                                             Address