**AMENDED
AND RESTATED**
 
 **CERTIFICATE
OF DESIGNATION OF**
 
 **RIGHTS
AND PREFERENCES OF**
 
 **SERIES
B PREFERRED STOCK OF**
 
 **ALLION
HEALTHCARE, INC.**
 
 **(Under
Section 151 of the**
 **Delaware
General Corporation Law)**
 
 Allion
Healthcare, Inc., a corporation organized and existing under the laws of the
State of Delaware (the "Corporation"), hereby certifies that the following
resolutions were adopted by the Board of Directors of the
Corporation:
 
 **RESOLVED**,
that the Certificate of Designation of Rights and Preferences of Series B
Preferred Stock of the Corporation, filed by the Secretary of State of Delaware
on April 25, 2001, is hereby amended and restated in its entirety to read as
follows; and
 
 **RESOLVED**,
that pursuant to the authority expressly granted to and vested in the Board of
Directors of the Corporation (the "Board of Directors") by the provisions of the
Amended and Restated Certificate of Incorporation (the "Certificate of
Incorporation"), there is hereby created, out of the 5,000,000 shares of
Preferred Stock, par value $0.001 per share, of the Corporation authorized in
the Certificate of Incorporation (the "Preferred Stock"), a series of Preferred
Stock consisting of 666,668 shares, which series shall have the following
designation, powers, preferences and relative, participating, optional or other
rights, and the following qualifications, limitations and restrictions (in
addition to any powers, preferences and relative, participating optional or
other rights, and the following qualifications, limitations and restrictions,
set forth in the Certificate of Incorporation):
 
 **1. Designation; Number of
Shares**. 666,668 shares of Preferred Stock
shall be designated the "Series B Preferred Stock" (the "Series B Preferred
Stock").
 
 **2. Ranking**. All of the preferential
amounts to be paid to the holders of the Series B Preferred Stock as provided in
this Certificate of Designation shall be paid or set apart for payment (i) on a
pari passu basis with the Series A Preferred Stock and (ii) before the payment
or setting apart for payment of any amount for, or the distribution of any
property of the Corporation to, the holders of any class of series of Common
Stock (as defined below) or other class or series of capital stock of the
Corporation other than the Series A Preferred Stock, whether now or hereafter
authorized, ranking junior as to liquidation rights to the Series B Preferred
Stock.
 
 
 **3. Dividends**. In the event any
dividends (other than dividends payable in Common Stock)
are declared with respect to the common stock, par value $0.001 per share, of
the Corporation (the "Common Stock"), the holders of the Series B Preferred
Stock as of the record date established by the Board of Directors for such
dividend shall be entitled to receive as dividends (the "Dividends") an amount
(whether in the form of cash, securities or other property) equal to the amount
(and in the form) of the dividends that such holder would have received had the
Series B Preferred Stock been converted into Common Stock as of the date
immediately prior to the record date of such dividend, such Dividends to be
payable on the payment date of the dividend established by the Board of
Directors (the "Dividend Payment Date"). The record date for any such Dividends
shall be the record date for the applicable dividend, and any such Dividend
shall be payable to the persons in whose name the Series B Preferred Stock is
registered at the close of business on the applicable record date.
  **4. Liquidation,
Dissolution or Winding Up**. The Series A Preferred Stock and
Series B Preferred Stock to receive their respective liquidation preference
shall rank pari passu in connection with any liquidation, dissolution or winding
up of the Corporation. In the event of any liquidation, dissolution or winding
up of the Corporation, whether voluntary or involuntary, before any distribution
may be made with respect to the Common Stock or any other series of capital
stock of the Corporation ranking junior as to liquidation rights to the Series A
Preferred Stock or Series B Preferred Stock, the holders of each share of (i)
Series A Preferred Stock shall be entitled to be paid out of the assets of the
Corporation available for distribution to holders of the Corporation's capital
stock of all classes, whether such assets are capital, surplus or capital
earnings, on a pari passu basis with the shares of Series B Preferred Stock and
as a liquidation preference an amount equal to $2.00 per share on the Series A
Preferred Stock (as adjusted for stock splits, stock dividends and the like)
plus all declared and unpaid dividends thereon, if any, since the date of the
issue up to and including the date full payment shall be tendered to the holders
of the Series A Preferred Stock with respect to such liquidation, dissolution or
winding up and (ii) Series B Preferred Stock shall be entitled to be paid out of
the assets of the Corporation available for distribution to holders of the
Corporation's capital stock of all classes, whether such assets are capital,
surplus or capital earnings, on a pari passu basis with the shares of Series A
Preferred Stock as a liquidation preference an amount equal to $3.00 per share
on the Series B Preferred Stock (as adjusted for stock splits, stock dividends
and the like) plus all declared and unpaid dividends thereon, if any, since the
date of issue up to and including the date full payment shall be tendered to the
holders of the Series B Preferred Stock with respect to such liquidation,
dissolution or winding up (the "Series B Liquidation Preference"). If, upon any
liquidation, dissolution or winding up of the Corporation, the amounts payable
with respect to the Series B Preferred Stock are not paid in full, the holders
of the Series B Preferred Stock shall share ratably in any distribution of
assets in proportion to the full respective preferential amounts to which they
are otherwise entitled to receive.
 
 After the
payment of the Series B Liquidation Preference shall have been made in full to
the holders of the Series B Preferred Stock, the holders of the Series B
Preferred Stock shall be entitled to no further participation in the
distribution of the assets of the Corporation, and the remaining assets of the
Corporation legally available for distribution to its stockholders shall be
distributed among the holders of other classes of securities of the Corporation
in accordance with their respective terms.
 
 -2-
 **5. Conversion**. The holders of the Series
B Preferred Stock shall have the following conversion rights:
 
 (a)
    **Voluntary
      Conversion**.Each holder of
      shares of Series B Preferred Stock may elect at any time to convert the
      shares of Series B Preferred Stock then held by such holder into a number
      of shares of Common Stock computed by multiplying the number of shares of
      Series B Preferred Stock to be converted by their applicable Conversion
      Value (as defined below) and dividing the result by the applicable
      conversion price for the Series B Preferred Stock (the “Series B
      Conversion Price)” then in effect. The “Conversion Value” of the Series B
      Preferred Stock shall e $3.00 per share. The Series B Conversion Prices
      shall initially be $3.00 per share and shall be subject to adjustment as
      hereinafter provided. The conversion rate for each series of Series B
      Preferred Stock shall initially be one-to-one. If a holder of Series B
      Preferred Stock elects to convert Series B Preferred Stock at a time when
      there are any declared and unpaid dividends or other amounts due on such
      shares, such dividends and other amounts shall be paid in full by the
      Corporation in connection with such
conversion.
  (b)
    **Automatic
      Conversion**.Each share of
      Series B Preferred Stock outstanding shall automatically be converted into
      the number of shares of Common Stock into which such shares are
      convertible as computed according to the formula set forth in Section 5(a)
      hereof at the then effective applicable Series B Conversion Price upon the
      earlier of
  (i)
    the
      date specified by the holders of at least two-thirds of shares of Series B
      Preferred Stock then outstanding, or
  (ii)
    immediately
      prior to the closing of an underwritten public offering of shares of the
      Corporation’s Common Stock pursuant to an effective registration statement
      under the Securities Act of 1933, as amended, which results in gross
      proceeds to the Corporation of at lease $10,000,000 (a “Qualified Public
      Offering”).
  (c)
    **Procedure
      for Voluntary Conversion**.Upon
      election to convert pursuant to Sections 5(a) or 5(b)(i), the relevant
      holder or holders of Series B Preferred Stock shall surrender the
      certificate or certificates representing the Series B Preferred Stock
      being converted, duly assigned or endorsed for transfer to the Corporation
      (or accompanied by duly executed stock powers relating thereto), at the
      principal executive office of the Corporation or the offices of the
      transfer agent for the Series B Preferred Stock or such office or offices
      in the continental United States of an agent for conversion, in each case
      as is from time to time designated by notice to the holders of the Series
      B Preferred Stock by the Corporation, or in the event the certificate or
      certificates are lost, stolen or missing, shall deliver an affidavit or
      agreement satisfactory to the Corporation to indemnify the Corporation
      from any loss incurred by it in connection therewith (an “Affidavit of
      Loss”) with respect to such certificates. The issuance by the Corporation
      of Common Stock upon a conversion of Series B Preferred Stock upon
      election to convert pursuant to Sections 5(a) or 5(b)(i) hereof shall be
      effective as of the surrender of the certificate or certificates for the
      Series B Preferred Stock to be converted, duly assigned or endorsed for
      transfer to the Corporation (or accompanied by duly executed stock powers
      relating thereto), or as of the delivery of an Affidavit of Loss. Upon
      surrender of a certificate representing Series B Preferred Stock for
      conversion, or delivery of an Affidavit of Loss, the Corporation shall
      issue and send by hand delivery, by courier or by first class mail
      (postage prepaid) to the holder thereof or to such holder’s designee, at
      the address designated by such holder, certificates for the number of
      shares of Common Stock to which such holder shall be entitled upon
      conversion plus a cash payment in the amount of any declared but unpaid
      dividends and other amounts as contemplated by Sections 5(a) or 5(b)(i) in
      respect of the shares of Series B Preferred Stock. Notwithstanding the
      foregoing, in the event of an automatic conversion pursuant to Section
      5(b)(i) the outstanding shares of such applicable Series B Preferred Stock
      shall be converted automatically without any further action by the holders
      of such shares and whether or not the certificates representing such
      shares are surrendered to the Corporation or its transfer agent and all
      rights with respect to such applicable Series B Preferred Stock shall
      terminate, except any of the rights of the holders thereof upon surrender
      of their certificate or certificates therefor or delivery of an Affidavit
      of Loss thereof to receive certificates for the number of shares of Common
      Stock into which such shares of Series B Preferred Stock has been
      converted plus all declared but unpaid dividends and other amounts as
      contemplated by Section 5(b)(i) in respect of the shares of Series B
      Preferred Stock which are converted. The issuance of certificates for
      Common Stock upon conversion of Series B Preferred Stock will be made
      without charge to the holders of such shares for any issuance [ILLEGIBLE]
      in respect thereof or other costs incurred by the Corporation in
      connection with such conversion and the related issuance of such stock.
  -3-
 (d)
    **Procedure
      for Automatic Conversion on Qualified Public
      Offering**.As of, and in all
      cases subject to, the closing of a Qualified Public Offering (the
      “Automatic Conversion Date”), all outstanding shares of Series B Preferred
      Stock shall be converted automatically into shares of Common Stock as set
      forth in Section 5(b)(ii) hereof and without any further action by the
      holders of such shares and whether or not the certificates representing
      such shares of Series B Preferred Stock are surrendered to the Corporation
      or its transfer agent. On the Automatic Conversion date, all rights with
      respect to the Series B Preferred Stock so converted shall terminate,
      except any of the rights of the holders thereof upon surrender of their
      certificate or certificates therefore or delivery of an Affidavit of Loss
      thereof to receive certificates for the number of shares of Common Stock
      into which such Series B Preferred Stock has been converted plus all
      declared but unpaid dividends and other amounts as contemplated by Section
      5(b)(ii). If so required by the Corporation, certificates surrendered for
      conversion shall be endorsed or accompanied by a written instrument or
      instruments of transfer, in form satisfactory to the Corporation, duly
      executed by the registered holder or by his, her or its attorney duly
      authorized in writing. Upon surrender of such certificates or Affidavit of
      Loss the Corporation shall issue and deliver to such holder, promptly at
      such office and in its name as shown on such surrendered certificate or
      certificates, a certificate or certificates for the number of shares of
      Common Stock into which the shares of the Series B Preferred Stock
      surrendered are convertible on the Automatic Conversion Date and shall pay
      all declared but unpaid dividends and other amounts as contemplated by
      Section 5(b)(ii) in respect of the shares of Series B Preferred Stock
      which are converted. The issuance of certificates for Common Stock upon
      conversion of Series B Preferred Stock will be made without charge to the
      holders of such shares for any issuance tax in respect thereof or other
      costs incurred by the Corporation in connection with such conversion and
      the related issuance of such stock.
  (e)
    **Fractional
      Shares**. The Corporation
      shall not be obligated to deliver to holders of Series B Preferred Stock
      any fractional share of Common Stock issuable upon any conversion of such
      Series B Preferred Stock, but in lieu thereof may make a cash payment in
      respect thereof in any manner permitted by
law.
  -4-
 (f)
    **Reservation
      of Common Stock**. The Corporation
      shall at all times reserve and keep available out of its authorized and
      unissued Common Stock, solely for issuance upon the conversion of Series B
      Preferred Stock as herein provided, free from any preemptive rights or
      other obligations, such number of shares of Common Stock as shall from
      time to time be issuable upon the conversion of all the Series B Preferred
      Stock then outstanding provided that the shares of Common Stock so
      received shall not be reduced or affected in any manner whatsoever so long
      as any shares of Series B Preferred Stock are outstanding. The Corporation
      shall prepare and shall use its best efforts to obtain and keep in force
      such governmental or regulatory permits or other authorizations as may be
      required by law, and shall comply with all requirements as to
      registration, qualification or listing of the Common Stock, in order to
      enable the Corporation lawfully to issue and deliver to each holder of
      record of Series B Preferred Stock such number of shares of its Common
      Stock as shall from time to time be sufficient to effect the conversion of
      all Series B Preferred Stock then outstanding and convertible into shares
      of Common Stock.
  (g)
    **Adjustments
      to Series B Conversion Price**. The Series B
      Conversion Price in effect from time to time shall be subject to
      adjustment as follows:
  (i)
    **Stock
      Dividends, Subdivisions and Combinations**. Upon the issuance
      of additional shares of Common Stock as a dividend or other distribution
      on outstanding Common Stock, the subdivision of outstanding shares of
      Common Stock into a greater number of shares of Common Stock, or the
      combination of outstanding shares of Common Stock into a smaller number of
      shares of the Common Stock, the applicable Series B Conversion Prices
      shall, simultaneously with the happening of such dividend, subdivision or
      split be adjusted by multiplying the then effective Series B Conversion
      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. An adjustment made pursuant to
      this Section 5(g)(i) shall be given effect, upon payment of such a
      dividend or distribution, as of the record date for the determination of
      stockholders entitled to receive such dividend or distribution (on a
      retroactive basis) and in the case of a subdivision or combination shall
      become effective immediately as of the effective date thereof.
  (h)
    **Other
      Adjustments**. In the event the
      Corporation shall make or issue, or fix a record date for the
      determination of holders of Common Stock entitled to receive, a dividend
      or other distribution payable in securities of the Corporation other than
      shares of the Common Stock, then and in each such event lawful and
      adequate provision shall be made so that the holders of Series B Preferred
      Stock shall receive upon conversion thereof in addition to the number of
      shares of Common Stock receivable thereupon, the number of securities of
      the Corporation which they would have received had their Series B
      Preferred Stock been converted into Common Stock on the date of such event
      and had they thereafter, during the period from the date of such event to
      and including the date of conversion retained such securities receivable
      by them as aforesaid during such periods, giving application to all
      adjustments called for during such period under this Section 5 as applied
      to such distributed securities.
  -5-
 If the
Common Stock issuable upon the conversion of the Series B Preferred Stock shall
be changed into the same or different number of shares of any class or classes
of stock, whether by reclassification or otherwise (other than a subdivision or
combination of shares or stock dividend provided for above, or a reorganization,
merger, consolidation or sale of assets provided for elsewhere in this Section
5(h)), then and in each such event the holder of each share of Series B
Preferred Stock shall have the right thereafter to convert such shares into the
kind and amount of shares of stock and other securities and property receivable
upon such reorganization, reclassification or other change, by holders of the
number of shares of Common Stock into which such shares of Series B Preferred
Stock might have been converted immediately prior to such reorganization,
reclassification or change, all subject to further adjustment as provided
herein.
 
 (i)
    **Mergers
      and Other Reorganizations**. If at any time or
      from time to time there shall be a capital reorganization of the Common
      Stock (other than a subdivision, combination, reclassification or exchange
      of shares provided for in Section 5(g) hereof) or a merger or
      consolidation of the Corporation with or into another corporation or the
      acquisition of the Corporation or the sale of all or substantially all of
      the Corporation's properties and assets to any other person, then, as a
      part of and as a condition to the effectiveness of such reorganization,
      merger, consolidation, acquisition or sale, lawful and adequate provision
      shall be made so that the holders of the Series B Preferred Stock shall
      thereafter be entitled to receive upon conversion of the Series B
      Preferred Stock, the number of shares of stock or other securities or
      property of the Corporation or of the successor corporation resulting from
      such recapitalization, merger, consolidation or sale, to which a holder of
      Common Stock deliverable upon conversion would have been entitled on such
      capital reorganization, merger, consolidation or sale. In any such case,
      appropriate provisions shall be made with respect to the rights of the
      holders of the Series B Preferred Stock after the reorganization, merger,
      consolidation, acquisition or sale to the end that the provisions of this
      Section 5 (including without limitation provisions for adjustment of the
      Series B Conversion Price and the number of shares purchasable upon
      conversion of the Series B Preferred Stock) shall thereafter be
      applicable, as nearly as can be, with respect to any shares of stock,
      securities or assets to be deliverable thereafter upon the conversion of
      the Series B Preferred Stock.
  (j)
    **No
      Impairment**. The Corporation
      will not, by amendment of its Certificate of Incorporation or through any
      reorganization, transfer of assets, consolidation, merger, dissolution,
      issue or sale of securities or any other voluntary action, avoid or seek
      to avoid the observance or performance of any of the terms to be observed
      or performed hereunder by the Corporation, but will at all times in good
      faith assist in the carrying out of all of the provisions of this Section
      5 and in the taking of all such actions as may be necessary or appropriate
      in order to protect the rights of the holders of the Series B Preferred
      Stock against impairment.
  -6-
 (k)
    **Notices
      of Adjustments**.****In
      each case of an adjustment or readjustment of the Series B Conversion
      Price, the Corporation will furnish each holder of Series B Preferred
      Stock with a certificate, prepared by the chief financial officer of the
      Corporation, showing such adjustment or readjustment, and stating in
      detail the facts upon which such adjustment or readjustment is
      based.
  **6.** **Voting
Rights** . Except as otherwise
required by law, each holder of Series B Preferred Stock shall be entitled to
vote on all matters and each such holder shall be entitled to that number of
votes equal to the largest number of whole shares of Common Stock into which
such holder’s shares of Series B Preferred Stock could be converted pursuant to
the provisions of Section 5 hereof, at the record date for the determination of
stockholders entitled to vote on such matter, or if no such record date is
established, at the date such vote is taken or any written consent of
stockholders is solicited. Except as otherwise expressly provided herein or as
required by law, the holders of Series B Preferred Stock and Common Stock shall
vote together as a single class on all matters.
 
 **7.** **No
Reissuance of Series B Preferred Stock** . No share or shares of the
Series B Preferred Stock acquired by the Corporation by reason of redemption,
purchase, conversion or otherwise shall be reissued, and all such shares shall
be canceled, retired and eliminated from the shares which the Corporation shall
be authorized to issue. The Corporation may from time to time take such
appropriate corporate action as may be necessary to reduce the authorized number
of shares of the Series B Preferred Stock accordingly.
 
 **8.** **Notices
of Record Date** . In the event (i) the
corporation establishes a record date to determine the holders of any class of
securities who are entitled to receive any dividend or other distribution or
(ii) there occurs any capital reorganization of the Corporation, any
reclassification or recapitalization of the capital stock of the Corporation,
any merger or consolidation of the Corporation, any acquisition of the
Corporation, any transfer of all or substantially all of the assets of the
Corporation to any other Corporation entity or person, any sale of a majority of
the voting securities of the Corporation in one or a series of related
transactions or any voluntary or involuntary dissolution, liquidation or winding
up of the Corporation, the Corporation shall mail to each holder of Series B
Preferred Stock at least (20) days prior to the record date specified therein, a
notice specifying (a) the date of such record date for the purpose of such
dividend or distribution and a description of such dividend or distribution, (b)
the date on which any such reorganization, reclassification, transfer,
consolidation, merger, acquisition, sale, dissolution, liquidation or winding up
is expected to become effective, and (c) the time, if any, that is to be fixed,
as to when the holders of record of Common Stock (or other securities) shall be
entitled to exchange their shares of Common Stock (or other securities) for
securities or other property deliverable upon such reorganization,
reclassification, transfer, consolidation, merger, acquisition, sale,
dissolution, liquidation or winding up.
 
 Ÿ  Ÿ  Ÿ  Ÿ  Ÿ
  
 -7-
 **IN
WITNESS WHEREOF**, the undersigned has executed this Amended and Restated
Certificate of Designation this 30 th day of
October, 2001.
 
 ****/s/ Michael F. MoranMichael F. MoranPresident and Chief Executive
Officer
  
 
 -8-